Basel III Impact Study Act

Summary: Basel III Impact Study Act - Directs the federal banking agencies (the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation [FDIC]), before issuing any final rule amending their general risk-based capital requirements for revising advanced-approaches risk-based capital requirements, determining risk-weighted assets, and determining minimum regulatory capital ratios as proposed in certain August and June 2012 notices of proposed rule making (NPRs), to study and report to Congress on the impact of the NPRs on the minimum regulatory capital requirements of insured depository institutions and insured depository institution holding companies.  Requires the banking agencies to determine current capital levels at covered financial institutions and separately identify specific provisions of: (1) the Basel III framework devised by the Basel Committee on Banking Supervision; (2) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank); and (3) estimate and evaluate their impact as well as the cumulative impact of the NPRs and the identified provisions on required regulatory capital levels, capital quality, asset quality, and risk management at covered U.S. financial institutions. Permits the banking agencies to solicit participation in the study from insured depository institutions and insured depository institution holding companies provided that such request does not impose an undue burden upon participants and is entered into on a voluntary basis.Amends the International Lending Supervision Act of 1983 to revise capital adequacy requirements by directing the banking agencies to seek to ensure that any differences in rules implementing the capital standards do not: (1) give competitive advantages to any class or group of institutions unless otherwise required by federal law, or (2) undermine Dodd-Frank requirements for enhanced supervision and prudential standards.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Basel III Impact Study Act''.

SEC. 2. STUDY REQUIRED.

    The Office of the Comptroller of the Currency, the Board of 
Governors of the Federal Reserve System, and the Federal Deposit 
Insurance Corporation (in this Act referred to as the ``Federal banking 
agencies'') shall conduct the study and issue the report to Congress 
required by section 3 prior to issuing any final rule amending general 
risk-based capital requirements for--
            (1) revising the advanced-approaches risk-based capital 
        requirements, as proposed in the Advanced Approaches Risk-Based 
        Capital Rule of Notice of Proposed Rulemaking issued in June 
        2012 and published in the Federal Register on August 30, 2012 
        (in this Act referred to as the ``Advanced Approach NPR'');
            (2) determining risk-weighted assets, as proposed in the 
        Standardized Approach for Risk-Weighted Assets Notice of 
        Proposed Rulemaking issued in June 2012 and published in the 
        Federal Register on August 30, 2012 (in this Act referred to as 
        the ``Standardized Approach NPR''); and
            (3) determining minimum regulatory capital ratios, as 
        proposed in the Regulatory Capital, Implementation of Basel 
        III, Minimum Regulatory Capital Ratios, Capital Adequacy, 
        Transition Provisions, and Prompt Corrective Action Notice of 
        Proposed Rulemaking issued in June 2012 and published in the 
        Federal Register on August 30, 2012 (in this Act referred to as 
        the ``Basel III NPR'' and collectively with the Advanced 
        Approach NPR and the Standardized Approach NPR, the ``NPRs'').

SEC. 3. STUDY AND REPORT.

    (a) Study.--
            (1) In general.--The Federal banking agencies shall jointly 
        conduct a quantitative impact study of the effect of the NPRs 
        on the minimum regulatory capital requirements of insured 
        depository institutions and insured depository institution 
        holding companies.
            (2) Scope of study.--As part of the study required by this 
        subsection, the Federal banking agencies shall--
                    (A) determine current capital levels (as of 
                December 31, 2012) at financial institutions covered by 
                such report;
                    (B) separately identify specific provisions in--
                            (i) the Basel III framework devised by the 
                        Basel Committee on Banking Supervision (in this 
                        Act referred to as the ``Basel III 
                        provisions''); and
                            (ii) the Dodd-Frank Wall Street Reform and 
                        Consumer Protection Act, and of amendments made 
                        by that Act (in this Act referred to as the 
                        ``Dodd-Frank provisions'', and collectively 
                        with the Basel III provisions, referred to as 
                        the ``identified provisions'') which shall 
                        include from the Dodd-Frank Wall Street Reform 
                        and Consumer Protection Act, and the amendments 
                        made by that Act--
                                    (I) section 115 (regarding enhanced 
                                supervision and prudential standards);
                                    (II) section 165 (regarding 
                                enhanced supervision and prudential 
                                standards);
                                    (III) section 166 (regarding early 
                                remediation requirements);
                                    (IV) section 171 (regarding 
                                leverage and risk-based capital 
                                requirements);
                                    (V) section 619 (regarding 
                                prohibitions on proprietary trading and 
                                certain relationships with hedge funds 
                                and private equity funds);
                                    (VI) section 939 (regarding the 
                                removal of statutory references to 
                                credit ratings);
                                    (VII) section 941 (regarding 
                                regulation of credit risk retention and 
                                exemption of qualified residential 
                                mortgages); and
                                    (VIII) section 1412 (regarding safe 
                                harbor and rebuttable presumptions for 
                                qualified mortgages); and
                    (C) estimate and evaluate the impact of such 
                identified provisions on affected United States 
                institutions in accordance with this section.
            (3) Contents of study.--The Federal banking agencies 
        shall--
                    (A) in conducting the study required by this 
                section, determine and estimate the likely cumulative 
                impact of the NPRs and the identified provisions on 
                required regulatory capital levels, capital quality, 
                asset quality, and risk management at covered United 
                States financial institutions; and
                    (B) based on such findings, provide an assessment 
                regarding--
                            (i) changes to required capital levels in 
                        the aggregate, per asset class and institution 
                        size based on the Basel III provisions, the 
                        Dodd-Frank provisions, and separately, on the 
                        identified provisions;
                            (ii) the aggregate increase or decrease of 
                        total risk-weighted asset levels for the 
                        institutions to which the Advanced Approach NPR 
                        and the Standardized Approach NPR would be 
                        applicable based on their size and asset class;
                            (iii) whether the NPRs and identified 
                        provisions will cause capital levels at covered 
                        institutions to fluctuate with more frequency 
                        or by greater amounts than the current rules 
                        and indicate what, if any, safety and soundness 
                        issues such fluctuations raise for financial 
                        institutions or the financial system, including 
                        a determination of whether such fluctuations 
                        will make the United States financial system 
                        more or less safe than the current rules;
                            (iv) whether the NPRs and the identified 
                        provisions will result in the discontinuation 
                        of the use of certain risk management tools by 
                        covered financial institutions and the impact 
                        on the safety and soundness of financial 
                        institutions and the financial system;
                            (v) the cumulative impact that the NPRs and 
                        the identified provisions will have on--
                                    (I) the United States economic 
                                growth, in general, and specifically, 
                                on the Gross Domestic Product;
                                    (II) availability and cost of 
                                credit in low- and moderate-income 
                                areas; and
                                    (III) availability and cost of 
                                residential mortgages, home equity 
                                lines of credit, auto loans, student 
                                loans, and commercial loans, including 
                                small business credit;
                            (vi) the variance in required capital 
                        levels, assets, and asset quality between 
                        institutions that implement the advanced 
                        approaches or approaches to risk weighting of 
                        assets, as proposed in the Advanced Approaches 
                        NPR, and those that use the standardized 
                        approach, as proposed in the Standardized 
                        Approach NPR, and the impact on competition 
                        between entities using different approaches; 
                        and
                            (vii) historical probability of default and 
                        loss given default of residential mortgage 
                        loans and the proposed risk weightings in the 
                        Standardized Approach NPR, and whether such 
                        proposed risk weightings are appropriately and 
                        fairly calibrated.
            (4) Voluntary participation.--In carrying out the study 
        required by this section, the Federal banking agencies--
                    (A) shall rely on data available to the agencies 
                through call reports and other data gathering processes 
                already employed by the Federal banking agencies; and
                    (B) may seek input and participation from insured 
                depository institutions and insured depository 
                institution holding companies, provided that such 
                request shall not impose undue burden on participating 
                institutions and that participation in the study by any 
                insured depository institutions or insured depository 
                institution holding companies shall be voluntary.
    (b) Report.--
            (1) In general.--Not later than 9 months after the date of 
        enactment of this Act, the Federal banking agencies shall issue 
        a report to the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial Services 
        of the House of Representatives on the results of the study 
        required by subsection (a).
            (2) Contents.--The Federal banking agencies shall include 
        the methodologies and assumptions used in the study, as well as 
        the required elements of the study listed in subsection (a) in 
        the report required in this subsection.

SEC. 4. COMPETITIVE EQUALITY.

    Section 908(a)(1) of the International Lending Supervision Act of 
1983 (12 U.S.C. 3907(a)(1)) is amended by adding at the end the 
following: ``Each appropriate Federal banking agency shall, consistent 
with safety and soundness, seek to ensure that any differences in rules 
implementing the capital standards required under this section or other 
provisions of Federal law for banking institutions, savings 
associations, bank holding companies, and savings and loan holding 
companies do not give competitive advantages to any class or group of 
such institutions, associations, or companies, unless required by other 
Federal law, and do not undermine any requirements for enhanced 
supervision and prudential standards required by section 115 of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 
5325).''.