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CSBS Urges Federal Regulators to Simplify Capital Rule

This week, JDSupra highlighted state regulators' concerns surrounding a federal agency proposed rule simplifying compliance requirements.

From the article:

In the CSBS’s words, “[t]he staggering complexity of the current regulatory capital rules imposes an unsustainable burden on community banks” and “fail[s] to increase the risk-sensitivity of the capital rules for community banks.” Further, it argues that the “sheer complexity of the capital rules . . . may cause smaller . . . institutions to forego advantageous opportunities due to the uncertainty surrounding their treatment under the . . . capital rules.” Accordingly, the CSBS proposes that the Agencies develop a simplified capital framework for smaller, community banks that would streamline the methodology for calculating risk-weighted assets.

Specifically, JDSupra notes that CSBS is bringing attention to the needs of state-chartered banks:

Although the CSBS’s letter is only a comment to the Agencies’ proposed rule, it does show that regulatory concerns specific to community banks are being brought to the attention of the federal regulators.

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