In recent weeks, three Bryan Cave lawyers have briefed state banking association members on the impact the Notices of Proposed Rule Making regarding Basel III could have on banks of all sizes. On July 12, Jonathan Hightower presented via webinar to the Georgia Bankers Association. On August 16, Jonathan Hightower and B.T. Atkinson participated in a live seminar on Basel III presented by the South Carolina Bankers Association that also included presentations by Garry Rank of Elliott Davis, LLP and Jim Mabry of Keefe, Bruyette & Woods. The SCBA program also included a segment advising institutions on how to prepare a comment letter on the proposals for submission to their primary federal banking agency. On August 20, Michael Shumaker and B.T. Atkinson presented via webinar to the North Carolina Bankers Association. In all three programs, bankers were strongly encouraged to submit comments on the proposals by the October 22 deadline, citing specific examples of how the proposed rules could negatively impact their bank. Areas noted for potential comment included:

  • phase-out of trust preferred from Tier 1 capital for institutions having less than $15 billion in assets; 
  • appropriateness of the capital conservation buffer for banking organizations that are not systemically significant; 
  • inclusion of unrealized gains and losses on securities in common equity Tier 1 capital; 
  • whether the exclusion for bank holding companies having total assets of $500 million or less should be increased to $1 billion and include savings and loan holding companies; and 
  • the impact of the proposed risk-weighting of first and second lien mortgages on product availability and the anticipated burdens of implementation.

Links to related Financial Institution Letters:

FIL-25-2012:  Regulatory Capital Rules:  Regulatory Capital, implementation of Basel III, Minimum Regulatory Capital Ratios, Capital Adequacy, and Transition Provisions

FIL-27-2012:  Regulatory Capital Rules:  Standardized Approach for Risk-Weighted Assets; Market Discipline and Disclosure Requirements