ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release February 1, 2001 #01-09
E-mail: [email protected]

ACB EXPRESSES CONCERN OVER CAPITAL PROPOSAL

Press Release Tools
	E-mail This Press Release
	Printer-Friendly Format

Editors, Reporters:

America’s Community Bankers, expressing concern that proposed options for a simplified capital framework for community banks could result in higher capital requirements, has urged the federal banking agencies to go back to the drawing board.

“We oppose the development of any capital rule for, as yet undefined, non-complex institutions that would replace the currently workable system with a standard that is overly-simplified, not risk-based, inflexible and unadaptable to the nature and complexity of businesses conducted by a wide variety of community banks,” ACB said in comments to the agencies’ advance notice of proposed rulemaking.

ACB said it particularly opposes the option of exclusive reliance on using a simple leverage ratio to measure capital adequacy.

Instead, ACB recommended adding more flexibility to the existing risk-based system and providing ways to tailor capital requirements to the risks posed by individual institutions, much like the approach of the Basel Committee proposal. This would include permitting less complex institutions, at their option, to develop an internal risk model.

As examples of this flexible and measured approach, ACB also urged the agencies to consider lowering the risk weightings on certain highly collateralized commercial, consumer and construction loans and residential and commercial real estate loans, and on retail certificates of deposit maintained at other depository institutions.

ACB’s Comment Letter is ATTACHED.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

-30-