Traditional Banking Regulatory Relief Act of 2015

Summary: Traditional Banking Regulatory Relief Act of 2015  This bill amends the Federal Deposit Insurance Act (FDIA) to prescribe capital requirements for traditional banking organizations (TBOs) at a minimum simple leverage ratio of no less than 10%. A TBO is any bank holding company, savings and loan holding company, bank, or savings association that individually (and when including its parent, subsidiaries, and affiliates) meets the following criteria:  has zero trading assets and zero trading liabilities, does not engage in swaps or security-based swaps other than those referencing interest rates or foreign exchange swaps, and   has a total gross notional exposure of swaps and security-based swaps of not more than $3 billion.  &quot;Simple leverage ratio&quot; means:  total equity less goodwill and deferred tax assets, divided by   total assets less goodwill and deferred tax assets, as measured by generally accepted accounting principles.   A TBO meeting this minimum simple leverage ratio may notify the federal banking agencies to maintain it as the sole measure of its capital adequacy. The risk-based capital requirement shall not apply to it. If the TBO fails to maintain the minimum simple leverage ratio, it shall remain exempt from the risk-based capital requirement for an 18-month grace period. The bill grants a TBO with a simple leverage ratio of 8% or more a phase-in period of 18 months after enactment of this bill within which to elect to meet the minimum simple leverage ratio as its sole measure of capital adequacy.   The federal banking agencies, with respect to reports of condition, shall permit a reduced reporting requirement for a TBO electing to maintain a simple leverage ratio as its sole measure of capital adequacy.  The 18-month on-site examination cycle shall apply to TBOs (and, as under current law, to insured depository institutions whose assets total less than $1 billion) if the appropriate federal banking agency believes this is consistent with the TBO's safety and soundness.  The bill repeals the authority of federal banking agencies, at their discretion, to increase the maximum asset amount of insured depository institutions for certain purposes.  The Dodd-Frank Wall Street Reform and Consumer Protection Act is amended to exempt TBOs from mandatory annual stress tests.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Traditional Banking Regulatory 
Relief Act of 2015''.

SEC. 2. REGULATORY RELIEF FOR TRADITIONAL BANKING ORGANIZATIONS.

    (a) Regulatory Capital Requirements.--
            (1) In general.--Section 18 of the Federal Deposit 
        Insurance Act (12 U.S.C. 1828) is amended by adding at the end 
        the following new subsection:
    ``(aa) Treatment of Traditional Banking Organizations.--
            ``(1) Regulatory capital requirements.--
                    ``(A) Simple leverage ratio.--The appropriate 
                Federal banking agencies shall issue regulations 
                establishing a minimum simple leverage ratio at no less 
                than 10 percent. The simple leverage ratio requirement 
                shall be consistent with regulations promulgated 
                pursuant to section 38 (relating to prompt corrective 
                action).
                    ``(B) Application to traditional banking 
                organization.--Notwithstanding any other provision of 
                law, a traditional banking organization that meets the 
                minimum simple leverage ratio established under 
                subparagraph (A) may elect, by notice to the 
                appropriate Federal banking agencies, to maintain the 
                minimum simple leverage ratio as its sole measure of 
                capital adequacy.
                    ``(C) Exemption from risk-based capital 
                requirement.--The risk-based capital requirement in 
                section 38(c)(1)(A) shall not apply to a traditional 
                banking organization that makes an election under 
                subparagraph (B) and complies with regulations issued 
                in accordance with this paragraph.
                    ``(D) Grace period.--A traditional banking 
                organization that makes an election under subparagraph 
                (B) and fails to maintain the minimum simple leverage 
                ratio described in subparagraph (A) (as determined by 
                the first quarterly report of condition issued after 
                making such an election) shall be exempt from the risk-
                based capital requirement in section 38(c)(1)(A) for a 
                period of 18 months beginning on the date of such 
                determination.
            ``(2) Reservation of authority.--Notwithstanding any other 
        provision of this subsection, an appropriate Federal banking 
        agency may require additional capital adequacy measures 
        applicable to a newly chartered traditional banking 
        organization or for an individual traditional banking 
        organization if such measures are required to ensure the safety 
        and soundness of the banking organization or to prevent an 
        unacceptable risk to the Deposit Insurance Fund.
            ``(3) Definitions.--
                    ``(A) Traditional banking organization.--The term 
                `traditional banking organization' means any bank 
                holding company, savings and loan holding company, 
                bank, or savings association that individually, and 
                when including its parent, subsidiaries, and all 
                affiliates, meets the following requirements:
                            ``(i) Has zero trading assets and zero 
                        trading liabilities.
                            ``(ii) Does not engage in swaps or 
                        security-based swaps (as such terms are defined 
                        in section 1a of the Commodity Exchange Act (7 
                        U.S.C. 1a)), other than swaps or security-based 
                        swaps referencing interest rates or foreign 
                        exchange swaps (as such terms are defined in 
                        such section).
                            ``(iii) Has a total gross notional exposure 
                        of swaps and security-based swaps of not more 
                        than $3,000,000,000.
                    ``(B) Simple leverage ratio.--
                            ``(i) In general.--The term `simple 
                        leverage ratio' means--
                                    ``(I) total equity less goodwill 
                                and deferred tax assets, divided by
                                    ``(II) total assets less goodwill 
                                and deferred tax assets,
                        as measured by generally accepted accounting 
                        principles.
                            ``(ii) Measurements.--For purposes of 
                        measuring the simple leverage ratio capital 
                        requirements of a traditional banking 
                        organization, the appropriate Federal banking 
                        agencies may, by regulation, require--
                                    ``(I) the exclusion, from total 
                                equity, of other intangible assets; or
                                    ``(II) the addition, to total 
                                assets, of off-balance sheet items.
                            ``(iii) Rule of construction.--The simple 
                        leverage ratio shall not be construed to be a 
                        generally applicable leverage capital 
                        requirement for purposes of section 171 of the 
                        Dodd-Frank Wall Street Reform and Consumer 
                        Protection Act (12 U.S.C. 5371).''.
            (2) Phase-in for certain organizations.--
                    (A) In general.--Notwithstanding the minimum simple 
                leverage ratio requirement under section 18(aa)(1)(B) 
                of the Federal Deposit Insurance Act, a traditional 
                banking organization with a simple leverage ratio of 8 
                percent or more may make an election under such section 
                18(aa)(1)(B) during the 18-month period beginning on 
                the date of the enactment of this Act.
                    (B) Requirement to meet the minimum simple leverage 
                ratio.--A traditional banking organization making an 
                election pursuant to subparagraph (A) shall have until 
                the end of the 18-month period described under 
                subparagraph (A) to meet the minimum simple leverage 
                ratio, or the organization's election under section 
                18(aa)(1)(B) of the Federal Deposit Insurance Act shall 
                be terminated.
                    (C) Definitions.--For purposes of this paragraph:
                            (i) Minimum simple leverage ratio.--The 
                        term ``minimum simple leverage ratio'' means 
                        the minimum simple leverage ratio established 
                        under section 18(aa)(1)(A) of the Federal 
                        Deposit Insurance Act.
                            (ii) Other terms.--The terms ``simple 
                        leverage ratio'' and ``traditional banking 
                        organization'' have the meaning given those 
                        terms, respectively, under section 18(aa)(3) of 
                        the Federal Deposit Insurance Act.
    (b) Short Form Call Report.--Section 7(a) of the Federal Deposit 
Insurance Act (12 U.S.C. 1817(a)) is amended by adding at the end the 
following:
            ``(12) Short form reporting.--The appropriate Federal 
        banking agencies shall issue regulations allowing for a reduced 
        reporting requirement for a traditional banking organization 
        that elects to maintain a simple leverage ratio as its sole 
        measure of capital adequacy pursuant to section 18(aa).''.
    (c) On-Site Examinations.--Section 10(d) of the Federal Deposit 
Insurance Act (12 U.S.C. 1820(d)) is amended--
            (1) in paragraph (4)--
                    (A) in the paragraph heading, by inserting ``and 
                traditional banking organizations'' after ``certain 
                small institutions'';
                    (B) in subparagraph (A), by inserting ``or is a 
                traditional banking organization defined in section 
                18(aa)(3)'' after ``$1,000,000,000'';
                    (C) by striking subparagraph (B) and redesignating 
                subparagraphs (C) through (E) as subparagraphs (B) 
                through (D), respectively;
                    (D) in subparagraph (B) (as so redesignated), by 
                striking ``condition'' and all that follows through 
                ``$200,000,000'' and inserting ``condition was found to 
                be outstanding or good'';
                    (E) in subparagraph (C) (as so redesignated), by 
                striking ``and'' at the end;
                    (F) in subparagraph (D) (as so redesignated), by 
                striking the period at the end and inserting ``; and''; 
                and
                    (G) by adding at the end the following new 
                subparagraph:
                    ``(E) the appropriate Federal banking agency 
                believes the 18-month period is consistent with the 
                safety and soundness of the banking organization.''; 
                and
            (2) by striking paragraph (10).
    (d) Stress Testing.--Section 165(i)(2)(A) of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (12 U.S.C. 5365(i)(2)(A)) is 
amended by inserting ``, unless such companies are traditional banking 
organizations (as defined in section 18(aa)(3) of the Federal Deposit 
Insurance Act)'' after ``annual stress tests''.
    (e) Technical Amendment.--Section 18 of the Federal Deposit 
Insurance Act (12 U.S.C. 1828) is amended by moving subsection (y) so 
as to appear above subsection (z).