The federal banking agencies issued a final rule today that permits banking organizations not subject to the advanced approaches capital rules to adopt simplifications to the calculation of their regulatory capital beginning January 1, 2020, rather than April 1, 2020 as was originally finalized in July 2019.

Adopted as part of the agencies’ ongoing efforts to meaningfully reduce regulatory burden on small and mid-sized banking organizations, the capital simplifications rule revises certain aspects of the capital rules, particularly the capital treatment of mortgage servicing assets, certain deferred tax assets, investments in the capital instruments of unconsolidated financial institutions, and minority interests.  Under today’s final rule, banking organizations that do not elect to adopt the revisions early must do so beginning April 1, 2020.

The agencies also issued modifications today to the community bank leverage ratio required under the Economic Growth, Regulatory Relief, and Consumer Protection Act.