(a) Capital conservation and countercyclical capital buffer.
(1) From January 1, 2014 through December 31, 2015, a national bank or Federal savings association is not subject to limits on distributions and discretionary bonus payments under §3.11 of subpart B of this part notwithstanding the amount of its capital conservation buffer or any applicable countercyclical capital buffer amount.
(2) Beginning January 1, 2016 through December 31, 2018 a national bank's or Federal savings association's maximum payout ratio shall be determined as set forth in Table 1 to §3.300.
Table 1 to §3.300
| Transition period |
Capital conservation buffer | Maximum payout ratio (as a percentage of eligible retained income) |
|---|---|---|
| Calendar year 2016 | Greater than 0.625 percent (plus 25 percent of any applicable countercyclical capital buffer amount) | No payout ratio limitation applies under this section. |
| Less than or equal to 0.625 percent (plus 25 percent of any applicable countercyclical capital buffer amount), and greater than 0.469 percent (plus 17.25 percent of any applicable countercyclical capital buffer amount) | 60 percent. | |
| Less than or equal to 0.469 percent (plus 17.25 percent of any applicable countercyclical capital buffer amount), and greater than 0.313 percent (plus 12.5 percent of any applicable countercyclical capital buffer amount) | 40 percent. | |
| Less than or equal to 0.313 percent (plus 12.5 percent of any applicable countercyclical capital buffer amount), and greater than 0.156 percent (plus 6.25 percent of any applicable countercyclical capital buffer amount) | 20 percent. | |
| Less than or equal to 0.156 percent (plus 6.25 percent of any applicable countercyclical capital buffer amount) | 0 percent. | |
| Calendar year 2017 | Greater than 1.25 percent (plus 50 percent of any applicable countercyclical capital buffer amount) | No payout ratio limitation applies under this section. |
| Less than or equal to 1.25 percent (plus 50 percent of any applicable countercyclical capital buffer amount), and greater than 0.938 percent (plus 37.5 percent of any applicable countercyclical capital buffer amount) | 60 percent. | |
| Less than or equal to 0.938 percent (plus 37.5 percent of any applicable countercyclical capital buffer amount), and greater than 0.625 percent (plus 25 percent of any applicable countercyclical capital buffer amount) | 40 percent. | |
| Less than or equal to 0.625 percent (plus 25 percent of any applicable countercyclical capital buffer amount), and greater than 0.313 percent (plus 12.5 percent of any applicable countercyclical capital buffer amount) | 20 percent. | |
| Less than or equal to 0.313 percent (plus 12.5 percent of any applicable countercyclical capital buffer amount) | 0 percent. | |
| Calendar year 2018 | Greater than 1.875 percent (plus 75 percent of any applicable countercyclical capital buffer amount) | No payout ratio limitation applies under this section. |
| Less than or equal to 1.875 percent (plus 75 percent of any applicable countercyclical capital buffer amount), and greater than 1.406 percent (plus 56.25 percent of any applicable countercyclical capital buffer amount) | 60 percent. | |
| Less than or equal to 1.406 percent (plus 56.25 percent of any applicable countercyclical capital buffer amount), and greater than 0.938 percent (plus 37.5 percent of any applicable countercyclical capital buffer amount) | 40 percent. | |
| Less than or equal to 0.938 percent (plus 37.5 percent of any applicable countercyclical capital buffer amount), and greater than 0.469 percent (plus 18.75 percent of any applicable countercyclical capital buffer amount) | 20 percent. | |
| Less than or equal to 0.469 percent (plus 18.75 percent of any applicable countercyclical capital buffer amount) | 0 percent. |
(b) [Reserved]
(c) Non-qualifying capital instruments.
(1)-(3) [Reserved]
(4) Depository institutions.
(i) Beginning on January 1, 2014, a depository institution that is an advanced approaches national bank or Federal savings association, and beginning on January 1, 2015, all other depository institutions, may include in regulatory capital debt or equity instruments issued prior to September 12, 2010 that do not meet the criteria for additional tier 1 or tier 2 capital instruments in §3.20 but that were included in tier 1 or tier 2 capital respectively as of September 12, 2010 (non-qualifying capital instruments issued prior to September 12, 2010) up to the percentage of the outstanding principal amount of such non-qualifying capital instruments as of January 1, 2014 in accordance with Table 9 to §3.300.
(ii) Table 9 to §3.300 applies separately to tier 1 and tier 2 non-qualifying capital instruments.
(iii) The amount of non-qualifying capital instruments that cannot be included in additional tier 1 capital under this section may be included in tier 2 capital without limitation, provided that the instruments meet the criteria for tier 2 capital instruments under §3.20(d).
Table 9 to §3.300
| Transition period (calendar year) | Percentage of non-qualifying capital instruments includable in additional tier 1 or tier 2 capital | |
|---|---|---|
| Calendar year 2014 | 80 | |
| Calendar year 2015 | 70 | |
| Calendar year 2016 | 60 | |
| Calendar year 2017 | 50 | |
| Calendar year 2018 | 40 | |
| Calendar year 2019 | 30 | |
| Calendar year 2020 | 20 | |
| Calendar year 2021 | 10 | |
| Calendar year 2022 and thereafter | 0 |
(d) [Reserved]
(e) Prompt corrective action. For purposes of 12 CFR part 6, a national bank or Federal savings association must calculate its capital measures and tangible equity ratio in accordance with the transition provisions in this section.
(f) A national bank or Federal savings association that is not an advanced approaches national bank or Federal savings association may apply the treatment under §§3.21 and 3.22(c)(2), (5), (6), and (d)(2) applicable to an advanced approaches national bank or Federal savings association during the calendar quarter beginning January 1, 2020. During the quarter beginning January 1, 2020, a national bank or Federal savings association that makes such an election must deduct 80 percent of the amount otherwise required to be deducted under §3.22(d)(2) and must apply a 100 percent risk weight to assets not deducted under §3.22(d)(2). In addition, during the quarter beginning January 1, 2020, a national bank or Federal savings association that makes such an election must include in its regulatory capital 20 percent of any minority interest that exceeds the amount of minority interest includable in regulatory capital under §3.21 as it applies to an advanced approaches national bank or Federal savings association. A national bank or Federal savings association that is not an advanced approaches national bank or Federal savings association must apply the treatment under §§3.21 and 3.22 applicable to a national bank or Federal savings association that is not an advanced approaches national bank or Federal savings association beginning April 1, 2020, and thereafter.
(g) SA-CCR. An advanced approaches national bank or Federal savings association may use CEM rather than SA-CCR for purposes of §§3.34(a) and 3.132(c) until January 1, 2022. An advanced approaches national bank or Federal savings association must provide prior notice to the OCC if it decides to begin using SA-CCR before January 1, 2022. On January 1, 2022, and thereafter, an advanced approaches national bank or Federal savings association must use SA-CCR for purposes of §§3.34(a), 3.132(c), and 3.133(d). Once an advanced approaches national bank or Federal savings association has begun to use SA-CCR, the advanced approaches national bank or Federal savings association may not change to use CEM.
(h) Default fund contributions. Prior to January 1, 2022, a national bank or Federal savings association that calculates the exposure amounts of its derivative contracts under the standardized approach for counterparty credit risk in §3.132(c) may calculate the risk-weighted asset amount for a default fund contribution to a QCCP under either method 1 under §3.35(d)(3)(i) or method 2 under §3.35(d)(3)(ii), rather than under §3.133(d).
[78 FR 62157, 62273, Oct. 11, 2013, as amended at 82 FR 55315, Nov. 21, 2017; 84 FR 35258, July 22, 2019; 84 FR 61807, Nov. 13, 2019; 85 FR 4414, Jan. 24, 2020]
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