Notice2026-00642
Joint Report to Congressional Committees: Differences in Accounting and Capital Standards Among the Federal Banking Agencies as of September 30, 2025; Report to Congressional Committees
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Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
January 15, 2026
Issuing agencies
Treasury DepartmentComptroller of the CurrencyFederal Reserve SystemFederal Deposit Insurance Corporation
Abstract
The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) have prepared this report pursuant to section 37(c) of the Federal Deposit Insurance Act. Section 37(c) requires the agencies to jointly submit an annual report to the Committee on Financial Services of the U.S. House of Representatives and to the Committee on Banking, Housing, and Urban Affairs of the U.S. Senate describing differences among the accounting and capital standards used by the agencies for insured depository institutions (institutions). Section 37(c) requires that this report be published in the Federal Register. The agencies have not identified any material differences among the agencies' accounting and capital standards applicable to the institutions they regulate and supervise.
Full Text
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<title>Federal Register, Volume 91 Issue 10 (Thursday, January 15, 2026)</title>
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[Federal Register Volume 91, Number 10 (Thursday, January 15, 2026)]
[Notices]
[Pages 1789-1791]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-00642]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE CORPORATION
Joint Report to Congressional Committees: Differences in
Accounting and Capital Standards Among the Federal Banking Agencies as
of September 30, 2025; Report to Congressional Committees
AGENCY: Office of the Comptroller of the Currency, Treasury; Board of
Governors of the Federal Reserve System; and Federal Deposit Insurance
Corporation.
ACTION: Report to congressional committees.
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SUMMARY: The Office of the Comptroller of the Currency (OCC), the Board
of Governors of the Federal Reserve System (Board), and the Federal
Deposit Insurance Corporation (FDIC) (collectively, the agencies) have
prepared this report pursuant to section 37(c) of the Federal Deposit
Insurance Act. Section 37(c) requires the agencies to jointly submit an
annual report to the Committee on Financial Services of the U.S. House
of Representatives and to the Committee on Banking, Housing, and Urban
Affairs of the U.S. Senate describing differences among the accounting
and capital standards used by the agencies for insured depository
institutions (institutions). Section 37(c) requires that this report be
published in the Federal Register. The agencies have not identified any
material differences among the agencies' accounting and capital
standards applicable to the institutions they regulate and supervise.
FOR FURTHER INFORMATION CONTACT:
OCC: Jung Sup Kim, Risk Specialist, Capital Policy, (202) 649-6528,
Carl Kaminski, Assistant Director, Chief Counsel's Office, (202) 649-
5869, Ethan Baliff, Senior Policy Accountant, Accounting Policy, (917)
344-3427, Office of the Comptroller of the Currency, 400 7th Street SW,
Washington, DC 20219. If you are deaf, hard of hearing, or have a
speech disability, please dial 7-1-1 to access telecommunications relay
services.
Board: Andrew Willis, Manager, (202) 912-4323, Shooka Saket,
Financial Institution Policy Analyst III, (202) 951-0747, Division of
Supervision and Regulation, Mark Buresh, Senior Special Counsel (202)
452-5270 and Jasmin Keskinen, Counsel, (202) 853-7872, Legal Division,
Board of Governors of the Federal Reserve System, 20th Street and
Constitution Avenue NW, Washington, DC 20551. For users of
Telecommunications Device for the Deaf (TDD) and TTY-TRS, please call
711 from any telephone, anywhere in the United States.
FDIC: Ernest Barkett, Financial Analyst, Division of Risk
Management Supervision, Capital Policy Section, (202) 898-7288; Richard
Smith, Capital Markets Policy Analyst, Division of Risk Management
Supervision, Capital Policy Section, (703) 254-0782; Christine Bouvier,
Assistant Chief Accountant, Division of Risk Management Supervision,
Accounting Policy Section, (202) 898-7289; Merritt Pardini, Counsel,
Legal Division, (202) 898-6680, Federal Deposit Insurance Corporation,
550 17th Street NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION: The text of the report follows:
Report to Congress
Report to the Committee on Financial Services of the U.S. House of
Representatives and to the Committee on Banking, Housing, and Urban
Affairs of the U.S. Senate Regarding Differences in Accounting and
Capital Standards Among the Federal Banking Agencies
Introduction
In accordance with section 37(c) of the Federal Deposit Insurance
Act,\1\ the agencies are submitting this joint report, which covers
differences among their accounting and capital standards existing as of
September 30, 2025, applicable to institutions.\2\ As of September 30,
2025, the agencies have not identified any material differences among
the agencies' accounting standards applicable to institutions.
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\1\ 12 U.S.C. 1831n(c)(1) and (c)(3).
\2\ Although not required under section 37(c), this report
includes descriptions of certain of the Board's capital standards
applicable to depository institution holding companies where such
descriptions are relevant to the discussion of capital standards
applicable to institutions.
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In 2013, the agencies revised the risk-based and leverage capital
rule for institutions (capital rule),\3\ which harmonized the agencies'
capital rule in
[[Page 1790]]
a comprehensive manner.\4\ Since 2013, the agencies have revised the
capital rule on several occasions, further reducing the number of
differences in the agencies' capital rule. Today, only a few
differences remain, which are statutorily mandated for certain
categories of institutions or which reflect certain technical,
generally nonmaterial differences among the agencies' capital rule. No
new material differences were identified in the capital standards
applicable to institutions in this report compared to the previous
report submitted by the agencies pursuant to section 37(c).
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\3\ See 78 FR 62018 (October 11, 2013) (final rule issued by the
OCC and the Board); 78 FR 55340 (September 10, 2013) (interim final
rule issued by the FDIC). The FDIC later issued its final rule in 79
FR 20754 (April 14, 2014). The agencies' respective capital rule is
at 12 CFR part 3 (OCC), 12 CFR part 217 (Board), and 12 CFR part 324
(FDIC). The capital rule applies to institutions, as well as to
certain bank holding companies (BHCs) and savings and loan holding
companies (SLHCs). See also 12 CFR 217.1(c).
\4\ The capital rule reflects the scope of each agency's
regulatory jurisdiction. For example, the Board's capital rule
includes requirements related to BHCs, SLHCs, and state member banks
(SMBs), while the FDIC's capital rule includes provisions for state
nonmember banks and state savings associations, and the OCC's
capital rule includes provisions for national banks and federal
savings associations.
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Differences in the Standards Among the Federal Banking Agencies
Differences in Accounting Standards
As of September 30, 2025, the agencies have not identified any
material differences among themselves in the accounting standards
applicable to institutions.
Differences in Capital Standards
The following are the remaining technical differences among the
capital standards of the agencies' capital rule.\5\
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\5\ Certain minor differences, such as terminology specific to
each agency for the institutions that it supervises, are not
included in this report.
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Definitions
The agencies' capital rule largely contains the same
definitions.\6\ The differences that exist generally serve to
accommodate the different needs of the institutions that each agency
charters, regulates, and/or supervises.
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\6\ See 12 CFR 3.2 (OCC); 12 CFR 217.2 (Board); 12 CFR 324.2
(FDIC).
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The agencies' capital rule has differing definitions of a pre-sold
construction loan. The capital rule of all three agencies provides that
a pre-sold construction loan means any ``one-to-four family residential
construction loan to a builder that meets the requirements of section
618(a)(1) or (2) of the Resolution Trust Corporation Refinancing,
Restructuring, and Improvement Act of 1991 (12 U.S.C. 1831n), and, in
addition to other criteria, the purchaser has not terminated the
contract.'' \7\ The Board's definition provides further clarification
that, if a purchaser has terminated the contract, the institution must
immediately apply a 100 percent risk weight to the loan and report the
revised risk weight in the next quarterly Consolidated Reports of
Condition and Income (Call Report).\8\ Similarly, if the purchaser has
terminated the contract, the OCC and FDIC capital rule would
immediately disqualify the loan from receiving a 50 percent risk
weight, and would apply a 100 percent risk weight to the loan. The
change in risk weight would be reflected in the next quarterly Call
Report. Thus, the minor wording difference between the agencies should
have no practical consequence.
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\7\ 12 CFR 3.2 (OCC); 12 CFR 217.2 (Board); 12 CFR 324.2 (FDIC).
\8\ 12 CFR 217.2.
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Capital Components and Eligibility Criteria for Regulatory Capital
Instruments
While the capital rule generally provides uniform eligibility
criteria for regulatory capital instruments, there are some textual
differences among the agencies' capital rule. The capital rule of each
of the three agencies requires that, for an instrument to qualify as
common equity tier 1 or additional tier 1 capital, cash dividend
payments must be paid out of net income and retained earnings, but the
Board's capital rule also allows cash dividend payments to be paid out
of related surplus.\9\ The provision in the Board's capital rule that
allows dividends to be paid out of related surplus is a difference in
substance among the agencies' capital rule. However, due to the
restrictions on institutions regulated by the Board in separate
regulations, this additional language in the Board's rule has a
practical impact only on BHCs and SLHCs and is not a difference as
applied to institutions. The agencies apply the criteria for
determining eligibility of regulatory capital instruments in a manner
that ensures consistent outcomes for institutions.
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\9\ 12 CFR 217.20(b)(1)(v) and (c)(1)(viii) (Board).
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Both the Board's capital rule and the FDIC's capital rule also
include an additional sentence noting that institutions regulated by
each agency are subject to restrictions independent of the capital rule
on paying dividends out of surplus and/or that would result in a
reduction of capital stock.\10\ These additional sentences do not
create differences in substance between the agencies' capital
standards, but rather note that restrictions apply under separate
regulations.
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\10\ 12 CFR 217.20(b)(1)(v) and (c)(1)(viii) (Board); 12 CFR
324.20(b)(1)(v) and (c)(1)(viii) (FDIC). Although not referenced in
the capital rule, the OCC has similar restrictions on dividends; 12
CFR 5.55 and 5.63. Certain restrictions on the payment of dividends
that apply under separate regulations, and therefore not discussed
in this report, are different among the agencies. Compare 12 CFR
208.5 (Board) and 12 CFR 5.64 (OCC) with 12 CFR 303.241 (FDIC).
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In addition, the Board's capital rule includes a requirement that a
Board-regulated institution must obtain prior approval before redeeming
regulatory capital instruments.\11\ This requirement effectively
applies only to a BHC or an SLHC and is, therefore, not included in the
OCC's and FDIC's capital rule. All three agencies require institutions
to obtain prior approval before redeeming regulatory capital
instruments in other regulations.\12\ The additional provision in the
Board's capital rule, therefore, only has a practical impact on BHCs
and SLHCs and is not a difference as applied to institutions.
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\11\ Board-regulated institution refers to an SMB, a BHC, or an
SLHC. See 12 CFR 217.2; 12 CFR 217.20(f); see also 12 CFR
217.20(b)(1)(iii).
\12\ See 12 CFR 5.46, 5.47, 5.55, and 5.56 (OCC); 12 CFR 208.5
(Board); 12 CFR 303.241 (FDIC).
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Capital Deductions
There is a technical difference between the FDIC's capital rule and
the OCC's and Board's capital rule with regard to an explicit
requirement for deduction of examiner-identified losses. The agencies
require their examiners to determine whether their respective
supervised institutions have appropriately identified losses. The
FDIC's capital rule, however, explicitly requires FDIC-supervised
institutions to deduct identified losses from common equity tier 1
capital elements, to the extent that the institutions' common equity
tier 1 capital would have been reduced if the appropriate accounting
entries had been recorded.\13\ Generally, identified losses are those
items that an examiner determines to be chargeable against income,
capital, or general valuation allowances.
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\13\ 12 CFR 324.22(a)(9).
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For example, identified losses may include, among other items,
assets classified as loss, off-balance-sheet items classified as loss,
any expenses that are necessary for the institution to record in order
to replenish its general valuation allowances to an adequate level, and
estimated losses on contingent liabilities. The Board and the OCC
expect their supervised institutions to promptly recognize examiner-
identified losses, but the requirement is not explicit under their
capital rule. Instead, the Board and the OCC apply their supervisory
authorities to ensure that their supervised institutions charge off any
identified losses.
Subsidiaries of Savings Associations
There are special statutory requirements for the agencies' capital
[[Page 1791]]
treatment of a savings association's investment in or credit to its
subsidiaries as compared with the capital treatment of such
transactions between other types of institutions and their
subsidiaries. Specifically, the Home Owners' Loan Act (HOLA)
distinguishes between subsidiaries of savings associations engaged in
activities that are permissible for national banks and those engaged in
activities that are not permissible for national banks.\14\
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\14\ 12 U.S.C. 1464(t)(5).
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When subsidiaries of a savings association are engaged in
activities that are not permissible for national banks, the parent
savings association generally must deduct the parent's investment in
and extensions of credit to these subsidiaries from the capital of the
parent savings association.\15\ If a subsidiary of a savings
association engages solely in activities permissible for national
banks, no deduction is required, and investments in and loans to that
organization may be assigned the risk weight appropriate for the
activity.\16\ As the appropriate Federal banking agencies for Federal
and State savings associations, respectively, the OCC and the FDIC
apply this capital treatment to those types of institutions. The
Board's regulatory capital framework does not apply to savings
associations and, therefore, does not include this requirement.
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\15\ Subsidiaries engaged in activities not permissible for
national banks are considered non-includable subsidiaries.
\16\ A deduction from capital is only required to the extent
that the savings association's investment exceeds the generally
applicable thresholds for deduction of investments in the capital of
an unconsolidated financial institution.
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Tangible Capital Requirement
Federal law subjects savings associations to a specific tangible
capital requirement but does not similarly do so with respect to banks.
Under section 5(t)(2)(B) of HOLA, savings associations are required to
maintain tangible capital in an amount not less than 1.5 percent of
total assets.\17\ The capital rule of the OCC and the FDIC includes a
requirement that savings associations maintain a tangible capital ratio
of 1.5 percent.\18\ This statutory requirement does not apply to banks
and, thus, there is no comparable regulatory provision for banks. The
distinction is of little practical consequence, however, because under
the Prompt Corrective Action (PCA) framework, all institutions are
considered critically undercapitalized if their tangible equity falls
below 2 percent of total assets.\19\ Generally speaking, the
appropriate Federal banking agency must appoint a receiver within 90
days after an institution becomes critically undercapitalized.\20\
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\17\ 12 U.S.C. 1464(t)(1)(A)(ii) and (t)(2)(B).
\18\ 12 CFR 3.10(a)(1)(vi) (OCC); 12 CFR 324.10(a)(1)(vi)
(FDIC). The Board's regulatory capital framework does not apply to
savings associations and, therefore, does not include this
requirement.
\19\ See 12 U.S.C. 1831o(c)(3); see also 12 CFR 6.4 (OCC); 12
CFR 208.45 (Board); 12 CFR 324.403 (FDIC).
\20\ 12 U.S.C. 1831o(h)(3)(A).
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Enhanced Supplementary Leverage Ratio
The agencies adopted enhanced supplementary leverage ratio
standards that took effect beginning on January 1, 2018.\21\ These
standards require certain BHCs to exceed a 5 percent supplementary
leverage ratio to avoid limitations on distributions and certain
discretionary bonus payments and also require the subsidiary
institutions of these BHCs to meet a 6 percent supplementary leverage
ratio to be considered ``well capitalized'' under the PCA
framework.\22\ The rule text establishing the scope of application for
the enhanced supplementary leverage ratio differs among the agencies.
The Board and the FDIC apply the enhanced supplementary leverage ratio
standards for institutions based on parent BHCs being identified as
global systemically important BHCs as defined in 12 CFR 217.2.\23\ The
OCC applies enhanced supplementary leverage ratio standards to the
institution subsidiaries under their supervisory jurisdiction of a top-
tier BHC that has more than $700 billion in total assets or more than
$10 trillion in assets under custody.\24\
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\21\ See 79 FR 24528 (May 1, 2014).
\22\ 12 CFR 6.4(b)(1)(i)(D)(2) (OCC); 12 CFR
208.43(b)(1)(I)(D)(2) (Board); 12 CFR 324.403(b)(1)(ii) (FDIC).
\23\ 12 CFR 208.43(b)(1)(i)(D)(2) (Board); 12 CFR
324.403(b)(1)(ii) (FDIC).
\24\ 12 CFR 6.4(b)(1)(i)(D)(2) (OCC).
Jonathan V. Gould,
Comptroller of the Currency.
Benjamin W. McDonough,
Deputy Secretary of the Board.
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on January 12, 2026.
Jennifer M. Jones,
Deputy Executive Secretary.
[FR Doc. 2026-00642 Filed 1-14-26; 8:45 am]
BILLING CODE 6210-01-P; 6714-01-P; 4810-33-
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.