Bank Safety Act of 2024

Bill: 118-hr-4206
Sponsor: full_name: Rep. Sherman, Brad [D-CA-32]
Introduced: 2023-06-20
Policy area: Finance and Financial Sector
Subjects: Bank accounts, deposits, capital

Banking and financial institutions regulation
Latest action: action_date: 2024-11-01
text: Placed on the Union Calendar, Calendar No. 612.

Summaries:
action_date: 2023-06-20
action_desc: Introduced in House
text: <p><b>Bank Safety Act of 2023 </b></p> <p>This bill requires additional bank holding companies and insured depository institutions (i.e., those with over $100 billion in assets) to use certain information when calculating capital for purposes of meeting risk-based capital requirements. Specifically, these calculations must include certain unrealized gains and losses (i.e., accumulated other comprehensive income), except for accumulated net gains and losses on cash flow hedges related to items that are not recognized at fair value. Currently, only very large institutions are required to include this type of income in their capital calculations, while other institutions are allowed to opt out.</p>

tv_txt: IB Union Calendar No. 612 118th CONGRESS 2d Session H. R. 4206 [Report No. 118–725] IN THE HOUSE OF REPRESENTATIVES June 20, 2023 Mr. Sherman introduced the following bill; which was referred to the Committee on Financial Services November 1, 2024 Additional sponsor: Mr. Casten November 1, 2024 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed Strike out all after the enacting clause and insert the part printed in italic For text of introduced bill, see copy of bill as introduced on June 20, 2023 A BILL To amend the Financial Stability Act of 2010 to require covered financial institutions to include elements of accumulated other comprehensive income when calculating capital for purposes of meeting capital requirements, and for other purposes.

1. Short title This Act may be cited as the Bank Safety Act of 2024 . 2. Capital requirements relating to accumulated other comprehensive income (a) In general Section 171 of the Financial Stability Act of 2010 ( 12 U.S.C. 5371 ) is amended by adding at the end the following new subsection: (d) Inclusion of elements of accumulated other comprehensive income (1) In general The computation of capital for purposes of meeting capital requirements for a covered financial institution shall include AOCI. (2) Definitions In this subsection: (A) AOCI The term AOCI means— (i) all accumulated other comprehensive income components, except for accumulated net gains and losses on cash flow hedges related to items that are not recognized at fair value; or (ii) such other definition as the Federal banking agencies may establish, by rule. (B) Covered financial institution (i) In general The term covered financial institution means— (I) a depository institution holding company (as defined in section 3 of the Federal Deposit Insurance Act) with total consolidated assets greater than $100,000,000,000; (II) an insured depository institution over which a bank holding company does not have control with total consolidated assets greater than $100,000,000,000; or (III) such other category of depository institution holding companies or insured depository institutions as may be jointly determined by the Federal banking agencies, by rule, based on an analysis of financial risk-related factors. (ii) Exception Unless the Board of Governors determines it to be necessary to ensure the safety and soundness of a covered financial institution, the term covered financial institution does not include a savings and loan holding company— (I) that is substantially engaged in insurance underwriting or commercial activities; or (II) with respect to which the Small Bank Holding Company and Savings and Loan Holding Company Policy Statement of the Board of Governors applies (12 CFR 225 app. C). . (b) Transition provision (1) In general The Federal banking agencies shall, jointly, establish a transition period for the application of the requirement under subsection (d) of section 171 of the Financial Stability Act of 2010 to a covered financial institution (including an opt out institution) that— (A) phases in such requirement over time; and (B) fully applies such requirement to covered financial institutions on or before July 1, 2028. (2) Definitions In this subsection: (A) Covered financial institution The term covered financial institution has the meaning given that term under section 171(d) of the Financial Stability Act of 2010. (B) Federal banking agency The term Federal banking agency has the meaning given that term under section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ). (C) Opt out institution The term opt out institution means a covered financial institution that elected to opt out of the requirement to report accumulated other comprehensive income components pursuant to the rule titled Changes to Applicability Thresholds for Regulatory Capital and Liquidity Requirements (84 Fed. Reg. 59230; November 1, 2019).

November 1, 2024 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

tv_txt: I 118th CONGRESS 1st Session H. R. 4206 IN THE HOUSE OF REPRESENTATIVES June 20, 2023 Mr. Sherman introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Financial Stability Act of 2010 to require covered financial institutions to include elements of accumulated other comprehensive income when calculating capital for purposes of meeting capital requirements, and for other purposes.

1. Short title This Act may be cited as the Bank Safety Act of 2023 . 2. Inclusion of elements of accumulated other comprehensive income in capital requirements for covered financial institutions (a) In general Section 165 of the Financial Stability Act of 2010 ( 12 U.S.C. 5365 ) is amended by adding at the end the following new subsection: (l) Inclusion of elements of accumulated other comprehensive income (1) In general The computation of capital for purposes of meeting capital requirements for a covered financial institution shall include all accumulated other comprehensive income components, except for accumulated net gains and losses on cash flow hedges related to items that are not recognized at fair value. (2) Covered financial institution defined In this subsection, the term covered financial institution means— (A) a bank holding company (as defined in section 2(a) of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1841(a) )) with total consolidated assets greater than $100,000,000,000; (B) a insured depository institution over which a bank holding company does not have control with total consolidated assets greater than $100,000,000,000; or (C) any other bank holding company or insured depository institution, as determined by the appropriate Federal banking agencies. . (b) Applicability A covered financial institution (as defined in section 165(l) of the Financial Stability Act of 2010, as added by this Act) that elected to opt out of the requirement to report accumulated other comprehensive income components pursuant to the rule titled Changes to Applicability Thresholds for Regulatory Capital and Liquidity Requirements (84 Fed. Reg. 59230; November 1, 2019) shall be subject to the requirements of subsection (l) of section 165 of the Financial Stability Act of 2010, as added by this Act, on the effective date described in subsection (c). (c) Effective date The appropriate Federal banking agencies (as defined in section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 )) shall issue final rules to carry out this Act and the amendments made by this Act that shall take effect on a date not earlier than 60 days after the date of the enactment of this Act and not later than December 31, 2024.