Basel III Impact Study Act - Directs the federal banking agencies (the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation [FDIC]), before issuing any final rule amending their general risk-based capital requirements for revising advanced-approaches risk-based capital requirements, determining risk-weighted assets, and determining minimum regulatory capital ratios as proposed in certain August and June 2012 notices of proposed rule making (NPRs), to study and report to Congress on the impact of the NPRs on the minimum regulatory capital requirements of insured depository institutions and insured depository institution holding companies.
Requires the banking agencies to determine current capital levels at covered financial institutions and separately identify specific provisions of: (1) the Basel III framework devised by the Basel Committee on Banking Supervision; (2) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank); and (3) estimate and evaluate their impact as well as the cumulative impact of the NPRs and the identified provisions on required regulatory capital levels, capital quality, asset quality, and risk management at covered U.S. financial institutions.
Permits the banking agencies to solicit participation in the study from insured depository institutions and insured depository institution holding companies provided that such request does not impose an undue burden upon participants and is entered into on a voluntary basis.
Amends the International Lending Supervision Act of 1983 to revise capital adequacy requirements by directing the banking agencies to seek to ensure that any differences in rules implementing the capital standards do not: (1) give competitive advantages to any class or group of institutions unless otherwise required by federal law, or (2) undermine Dodd-Frank requirements for enhanced supervision and prudential standards.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 737 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 737
To require the Federal banking agencies to conduct a quantitative
impact study on the cumulative effect of the Basel III framework
devised by the Basel Committee on Banking Supervision before issuing
final rules amending the agencies' general risk-based capital
requirements for determining risk-weighted assets, as proposed in the
Advanced Approaches Risk-Based Capital Rules Notice of Proposed
Rulemaking, the Standardized Approach for Risk-Weighted Assets 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 SENATE OF THE UNITED STATES
April 16, 2013
Mr. Shelby introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To require the Federal banking agencies to conduct a quantitative
impact study on the cumulative effect of the Basel III framework
devised by the Basel Committee on Banking Supervision before issuing
final rules amending the agencies' general risk-based capital
requirements for determining risk-weighted assets, as proposed in the
Advanced Approaches Risk-Based Capital Rules Notice of Proposed
Rulemaking, the Standardized Approach for Risk-Weighted Assets 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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Basel III Impact Study Act''.
SEC. 2. STUDY REQUIRED.
The Office of the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System, and the Federal Deposit
Insurance Corporation (in this Act referred to as the ``Federal banking
agencies'') shall conduct the study and issue the report to Congress
required by section 3 prior to issuing any final rule amending general
risk-based capital requirements for--
(1) revising the advanced-approaches risk-based capital
requirements, as proposed in the Advanced Approaches Risk-Based
Capital Rule of Notice of Proposed Rulemaking issued in June
2012 and published in the Federal Register on August 30, 2012
(in this Act referred to as the ``Advanced Approach NPR'');
(2) determining risk-weighted assets, as proposed in the
Standardized Approach for Risk-Weighted Assets Notice of
Proposed Rulemaking issued in June 2012 and published in the
Federal Register on August 30, 2012 (in this Act referred to as
the ``Standardized Approach NPR''); and
(3) determining minimum regulatory capital ratios, as
proposed in the Regulatory Capital, Implementation of Basel
III, Minimum Regulatory Capital Ratios, Capital Adequacy,
Transition Provisions, and Prompt Corrective Action Notice of
Proposed Rulemaking issued in June 2012 and published in the
Federal Register on August 30, 2012 (in this Act referred to as
the ``Basel III NPR'' and collectively with the Advanced
Approach NPR and the Standardized Approach NPR, the ``NPRs'').
SEC. 3. STUDY AND REPORT.
(a) Study.--
(1) In general.--The Federal banking agencies shall jointly
conduct a quantitative impact study of the effect of the NPRs
on the minimum regulatory capital requirements of insured
depository institutions and insured depository institution
holding companies.
(2) Scope of study.--As part of the study required by this
subsection, the Federal banking agencies shall--
(A) determine current capital levels (as of
December 31, 2012) at financial institutions covered by
such report;
(B) separately identify specific provisions in--
(i) the Basel III framework devised by the
Basel Committee on Banking Supervision (in this
Act referred to as the ``Basel III
provisions''); and
(ii) the Dodd-Frank Wall Street Reform and
Consumer Protection Act, and of amendments made
by that Act (in this Act referred to as the
``Dodd-Frank provisions'', and collectively
with the Basel III provisions, referred to as
the ``identified provisions'') which shall
include from the Dodd-Frank Wall Street Reform
and Consumer Protection Act, and the amendments
made by that Act--
(I) section 115 (regarding enhanced
supervision and prudential standards);
(II) section 165 (regarding
enhanced supervision and prudential
standards);
(III) section 166 (regarding early
remediation requirements);
(IV) section 171 (regarding
leverage and risk-based capital
requirements);
(V) section 619 (regarding
prohibitions on proprietary trading and
certain relationships with hedge funds
and private equity funds);
(VI) section 939 (regarding the
removal of statutory references to
credit ratings);
(VII) section 941 (regarding
regulation of credit risk retention and
exemption of qualified residential
mortgages); and
(VIII) section 1412 (regarding safe
harbor and rebuttable presumptions for
qualified mortgages); and
(C) estimate and evaluate the impact of such
identified provisions on affected United States
institutions in accordance with this section.
(3) Contents of study.--The Federal banking agencies
shall--
(A) in conducting the study required by this
section, determine and estimate the likely cumulative
impact of the NPRs and the identified provisions on
required regulatory capital levels, capital quality,
asset quality, and risk management at covered United
States financial institutions; and
(B) based on such findings, provide an assessment
regarding--
(i) changes to required capital levels in
the aggregate, per asset class and institution
size based on the Basel III provisions, the
Dodd-Frank provisions, and separately, on the
identified provisions;
(ii) the aggregate increase or decrease of
total risk-weighted asset levels for the
institutions to which the Advanced Approach NPR
and the Standardized Approach NPR would be
applicable based on their size and asset class;
(iii) whether the NPRs and identified
provisions will cause capital levels at covered
institutions to fluctuate with more frequency
or by greater amounts than the current rules
and indicate what, if any, safety and soundness
issues such fluctuations raise for financial
institutions or the financial system, including
a determination of whether such fluctuations
will make the United States financial system
more or less safe than the current rules;
(iv) whether the NPRs and the identified
provisions will result in the discontinuation
of the use of certain risk management tools by
covered financial institutions and the impact
on the safety and soundness of financial
institutions and the financial system;
(v) the cumulative impact that the NPRs and
the identified provisions will have on--
(I) the United States economic
growth, in general, and specifically,
on the Gross Domestic Product;
(II) availability and cost of
credit in low- and moderate-income
areas; and
(III) availability and cost of
residential mortgages, home equity
lines of credit, auto loans, student
loans, and commercial loans, including
small business credit;
(vi) the variance in required capital
levels, assets, and asset quality between
institutions that implement the advanced
approaches or approaches to risk weighting of
assets, as proposed in the Advanced Approaches
NPR, and those that use the standardized
approach, as proposed in the Standardized
Approach NPR, and the impact on competition
between entities using different approaches;
and
(vii) historical probability of default and
loss given default of residential mortgage
loans and the proposed risk weightings in the
Standardized Approach NPR, and whether such
proposed risk weightings are appropriately and
fairly calibrated.
(4) Voluntary participation.--In carrying out the study
required by this section, the Federal banking agencies--
(A) shall rely on data available to the agencies
through call reports and other data gathering processes
already employed by the Federal banking agencies; and
(B) may seek input and participation from insured
depository institutions and insured depository
institution holding companies, provided that such
request shall not impose undue burden on participating
institutions and that participation in the study by any
insured depository institutions or insured depository
institution holding companies shall be voluntary.
(b) Report.--
(1) In general.--Not later than 9 months after the date of
enactment of this Act, the Federal banking agencies shall issue
a report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives on the results of the study
required by subsection (a).
(2) Contents.--The Federal banking agencies shall include
the methodologies and assumptions used in the study, as well as
the required elements of the study listed in subsection (a) in
the report required in this subsection.
SEC. 4. COMPETITIVE EQUALITY.
Section 908(a)(1) of the International Lending Supervision Act of
1983 (12 U.S.C. 3907(a)(1)) is amended by adding at the end the
following: ``Each appropriate Federal banking agency shall, consistent
with safety and soundness, seek to ensure that any differences in rules
implementing the capital standards required under this section or other
provisions of Federal law for banking institutions, savings
associations, bank holding companies, and savings and loan holding
companies do not give competitive advantages to any class or group of
such institutions, associations, or companies, unless required by other
Federal law, and do not undermine any requirements for enhanced
supervision and prudential standards required by section 115 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C.
5325).''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
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