I 

113TH CONGRESS 

1ST SESSION H. R. 1221 

To require the Federal banking agencies to conduct an impact study on 

the cumulative effect of certain provisions of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act before issuing final rules amending 

the agencies’ general risk-based capital requirements for determining 

risk-weighted assets as proposed in the Standardized Approach for Risk 

Weighted Assets Notice of Proposed Rulemaking and the Advanced Approaches Risk-based Capital Rule; Market Risk Capital Rule Notice 

of Proposed Rulemaking, and the Implementation of Basel III, Minimum 

Regulatory Capital Ratios Notice of Proposed Rulemaking issued in 

June 2012, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 15, 2013 

Mr. FINCHER introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To require the Federal banking agencies to conduct an impact study on the cumulative effect of certain provisions 

of the Dodd-Frank Wall Street Reform and Consumer 

Protection Act before issuing final rules amending the 

agencies’ general risk-based capital requirements for determining risk-weighted assets as proposed in the Standardized Approach for Risk Weighted Assets Notice of 

Proposed Rulemaking and the Advanced Approaches 

Risk-based Capital Rule; Market Risk Capital Rule Notice of Proposed Rulemaking, and the Implementation 

of Basel III, Minimum Regulatory Capital Ratios Notice 


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of Proposed Rulemaking issued in June 2012, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Basel III Capital Im5 pact Study Act’’. 

6 SEC. 2. STUDY REQUIRED. 

7 The Office of the Comptroller of the Currency, the 

8 Board of Governors of the Federal Reserve System, and 

9 the Federal Deposit Insurance Corporation (hereinafter, 

10 the ‘‘Federal banking agencies’’) shall conduct the study 

11 and issue the report to Congress required by section 3, 

12 prior to issuing any final rule amending the agencies’ gen13 eral risk-based capital requirements for— 

14 (1) determining risk-weighted assets as pro15 posed in the Standardized Approach for Risk 

16 Weighted Assets Notice of Proposed Rulemaking 

17 issued in June 2012 (hereinafter, the ‘‘Standardized 

18 Approach NPR’’); 

19 (2) determining risk-weighted assets as pro20 posed in the Advanced Approaches Risk-based Cap21 ital Rule; Market Risk Capital Rule Notice of Pro22 posed Rulemaking issued in June 2012 (hereinafter, 

23 the ‘‘Advanced Approach NPR’’); and 


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1 (3) determining minimum regulatory capital ra2 tios as proposed in the Regulatory Capital, Imple3 mentation of Basel III, Minimum Regulatory Capital 

4 Ratios, Capital Adequacy, Transition Provisions, and 

5 Prompt Corrective Action Notice of Proposed Rule6 making issued in June 2012 (hereinafter, the ‘‘Basel 

7 III NPR’’). 

8 SEC. 3. STUDY AND REPORT. 

9 (a) STUDY.— 

10 (1) IN GENERAL.—The Federal banking agen11 cies shall, jointly, conduct a study of the impact of 

12 the Standardized Approach NPR and the Advanced 

13 Approach NPR, respectively, on the minimum regu14 latory capital requirements of insured depository in15 stitutions and insured depository institution holding 

16 companies. As part of this study, the Federal bank17 ing agencies shall separately identify the various 

18 provisions of the Dodd-Frank Wall Street Reform 

19 and Consumer Protection Act, and of amendments 

20 made by that Act, that affect capital quality, capital 

21 levels, asset quality, and the risk management activi22 ties of insured depository institutions and insured 

23 depository holding companies (hereinafter ‘‘identified 

24 provisions’’) and take into consideration the impact 

25 of such provisions. Without excluding any provisions 


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1 the Federal banking agencies identify as affecting 

2 capital quality, capital levels, asset quality, and the 

3 risk management activities of insured depository in4 stitutions and insured depository holding companies, 

5 the identified provisions shall include the following 

6 provisions of the Dodd-Frank Wall Street Reform 

7 and Consumer Protection Act, and the amendments 

8 made by such provisions of such Act: 

9 (A) Section 115 (regarding enhanced su10 pervision and prudential standards). 

11 (B) Section 165 (regarding enhanced su12 pervision and prudential standards). 

13 (C) Section 166 (regarding early remedi14 ation requirements). 

15 (D) Section 171 (regarding leverage and 

16 risk-based capital requirements). 

17 (E) Section 619 (regarding prohibitions on 

18 proprietary trading and certain relationships 

19 with hedge funds and private equity funds). 

20 (F) Section 939 (regarding the removal of 

21 statutory references to credit ratings). 

22 (G) Section 941 (regarding regulation of 

23 credit risk retention and exemption of qualified 

24 residential mortgages). 


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1 (H) Section 1412 (regarding safe harbor 

2 and rebuttable presumptions for qualified mort3 gages). 

4 (2) CONTENTS OF STUDY.—In conducting the 

5 study required in paragraph (1), the Federal bank6 ing agencies shall determine and make projections of 

7 the likely cumulative impact of the Standardized Ap8 proach NPR, the Advanced Approach NPR, the 

9 Basel III NPR, and the identified provisions on re10 quired regulatory capital levels, capital quality, asset 

11 quality, and risk management at covered financial 

12 institutions. Based on these findings, the Federal 

13 banking agencies shall provide an assessment re14 garding— 

15 (A) changes to required capital levels; 

16 (B) the aggregate increase or decrease of 

17 total risk-weighted asset levels for the institu18 tions to which the Standardized Approach NPR 

19 or Advanced Approach NPR would be applica20 ble based on current assets; 

21 (C) whether the NPRs and identified pro22 visions will cause capital levels at covered insti23 tutions to fluctuate with more frequency or by 

24 greater amounts than the current rules and in25 dicate what, if any, safety and soundness issues 


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1 such fluctuations raise for financial institutions 

2 or the financial system; 

3 (D) whether the NPRs and the identified 

4 provisions will result in the discontinuation of 

5 the use of certain risk management tools by 

6 covered financial institutions and the impact on 

7 the safety and soundness of financial institu8 tions and the financial system; 

9 (E) the impact the NPRs and the identi10 fied provisions will have on residential mortgage 

11 lending and home equity lines of credit; 

12 (F) the likely cumulative impact of the 

13 NPRs and the identified provisions will have on 

14 the availability of credit, generally and in low15 and moderate-income areas; 

16 (G) the variance in required capital levels, 

17 assets, and asset quality between institutions 

18 that implement the advanced approaches or ap19 proaches to risk weighting of assets and those 

20 that use the Standardized Approach NPR or 

21 the Advanced Approach NPR and the impact 

22 on competition between entities using different 

23 approaches; and 

24 (H) historical probability of default and 

25 loss given default of residential mortgage loans 


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1 and the proposed risk weightings in the Stand2 ardized Approach NPR and the Advanced Ap3 proach NPR, and whether such proposed risk 

4 weightings are appropriately and fairly cali5 brated. 

6 (3) VOLUNTARY PARTICIPATION.—The Federal 

7 banking agencies may seek input and participation 

8 from insured depository institutions and insured de9 pository institution holding companies, however, par10 ticipation in the study by insured depository institu11 tions and insured depository institution holding com12 panies shall be voluntary. 

13 (b) REPORT.— 

14 (1) IN GENERAL.—The Federal banking agen15 cies shall issue a report to the Committee on Bank16 ing, Housing, and Urban Affairs of the Senate and 

17 the Committee on Financial Services of the House of 

18 Representatives on the results of the study required 

19 by subsection (a). 

20 (2) CONTENTS.—The Federal banking agencies 

21 shall include the methodologies and assumptions 

22 used in the study as well as the required elements 

23 of the study listed in subsection (a) in the report re24 quired in this subsection. 


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1 SEC. 4. COMPETITIVE EQUALITY. 

2 Section 908(a)(1) of the International Lending Su3 pervision Act of 1983 (12 U.S.C. 3907(a)(1)) is amended 

4 by inserting at the end the following: 

5 ‘‘Each appropriate Federal banking agency shall, 

6 consistent with safety and soundness, seek to ensure that 

7 any differences in rules implementing the capital stand8 ards required under this section or other provisions of 

9 Federal law for banking institutions, savings associations, 

10 bank holding companies, and savings and loan holding 

11 companies do not give competitive advantages to any class 

12 or group of such institutions, associations, or companies 

13 unless required by other Federal law, and do not under14 mine any requirements for enhanced supervision and pru15 dential standards required by section 115 of the Dodd16 Frank Wall Street Reform and Consumer Protection Act 

17 (12 U.S.C. 5325).’’. 

Æ 


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