[Federal Register Volume 86, Number 10 (Friday, January 15, 2021)]
[Rules and Regulations]
[Pages 3761-3762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00906]


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FEDERAL RESERVE SYSTEM

12 CFR Part 217

[Docket R-1703]
RIN 7100-AF77


Regulatory Capital Rule: Eligible Retained Income; Correction

AGENCY: Board of Governors of the Federal Reserve System.

[[Page 3762]]


ACTION: Final rule; correcting amendments.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
is correcting changes to the definition of eligible retained income in 
the capital rule. This definition is used for calculating limitations 
on capital distributions and discretionary bonus payments and was 
adopted in an interim final rule published on March 18, 2020, and as a 
final rule published on October 8, 2020.

DATES: This correction is effective January 15, 2021.

FOR FURTHER INFORMATION CONTACT: Benjamin McDonough, Associate General 
Counsel, (202) 452-2036; Mark Buresh, Senior Counsel, (202) 452-5270; 
or Andrew Hartlage, Counsel, (202) 452-6483, Legal Division, Board of 
Governors of the Federal Reserve System, 20th Street and Constitution 
Avenue NW, Washington, DC 20551. Users of Telecommunications Device for 
the Deaf (TDD) only, call (202) 263-4869.

SUPPLEMENTARY INFORMATION: The Board of Governors of the Federal 
Reserve System (Board) is issuing this correction to the definition of 
eligible retained income in the capital rule, 12 CFR part 217. This 
definition is used for calculating limitations on capital distributions 
and discretionary bonus payments and was adopted as an interim final 
rule published on March 18, 2020 (ERI interim final rule),\1\ and as a 
final rule published on October 8, 2020 (ERI final rule).\2\ In the ERI 
interim final rule, the Board, together with the Office of the 
Comptroller of the Currency (OCC) and the Federal Deposit Insurance 
Corporation (FDIC, and together with the Board and the OCC, the 
agencies), revised the definition of eligible retained income at 
section __.11(a)(2)(i) of the capital rule on an interim basis and 
sought comment on the revisions. In the ERI final rule, the agencies 
adopted these changes to the definition of eligible retained income, 
introduced through the ERI interim final rule, without change.
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    \1\ Regulatory Capital Rule: Eligible Retained Income, 85 FR 
15909 (March 20, 2020).
    \2\ Regulatory Capital Rule and Total Loss-Absorbing Capacity 
Rule: Eligible Retained Income, 85 FR 63423 (October 8, 2020). The 
final rule is effective January 1, 2021.
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    On March 20, 2020, the Board published in the Federal Register a 
final rule, effective May 18, 2020, implementing the stress capital 
buffer requirement in the capital rule (SCB final rule), which revised 
section 217.11 of the Board's capital rule generally. The SCB final 
rule revised the definition of eligible retained income in section 
217.11 of the Board's capital rule in a manner inconsistent with the 
the Board's intent in the ERI interim final rule and the ERI final 
rule. The Board is issuing this notice to correct the definition of 
eligible retained income so that it is consistent with the definition 
established by the ERI interim final rule and affirmed by the ERI final 
rule.

List of Subjects in 12 CFR Part 217

    Administrative practice and procedure; Banks, banking; Capital; 
Federal Reserve System; Holding companies.

12 CFR Chapter II

Authority and Issuance

    For the reasons set forth in the Supplementary Information, chapter 
II of title 12 of the Code of Federal Regulations is amended as 
follows:

PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND 
LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q)

0
1. The authority citation for part 217 continues to read as follows:

    Authority:  12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a, 
1818, 1828, 1831n, 1831o, 1831p-1, 1831w, 1835, 1844(b), 1851, 3904, 
3906-3909, 4808, 5365, 5368, 5371, 5371 note; and Pub. L. 116-136, 
134 Stat. 281.


0
2. Section 217.11 is amended by revising paragraph (a)(2)(i) to read as 
follows:


Sec.  217.11  Capital conservation buffer, countercyclical capital 
buffer amount, and GSIB surcharge.

    (a) * * *
    (2) * * *
    (i) Eligible retained income. The eligible retained income of a 
Board-regulated institution is the greater of:
    (A) The Board-regulated institution's net income, calculated in 
accordance with the instructions to the FR Y-9C or Call Report, as 
applicable, for the four calendar quarters preceding the current 
calendar quarter, net of any distributions and associated tax effects 
not already reflected in net income; and
    (B) The average of the Board-regulated institution's net income, 
calculated in accordance with the instructions to the FR Y-9C or Call 
Report, as applicable, for the four calendar quarters preceding the 
current calendar quarter.
* * * * *
    By order of the Board of Governors of the Federal Reserve System, 
acting through the Secretary of the Board under delegated authority.

Ann Misback,
Secretary of the Board.
[FR Doc. 2021-00906 Filed 1-14-21; 8:45 am]
BILLING CODE 6210-01-P