CBLR
Minimum CBLR Ratio required under normal circumstances and what it is for 2020 and 2021
9 percent normally
*8 percent for Q2 through YE 2020
*8.50 percent for 2021
*In accordance with the CARES Act
Legal Lending Limit Calculation
15 percent of Capital and Surplus but when meeting certain requirements, an additional 10 percent is allowed
Some types of loans have special limits: refer to Part 32.3 - Lending Limits
The font style and size for the ROE
12 - Times New Roman
"If you haven't started studying by this day, then you are already behind"
-Richard
(what day/date?)
Day 1
The timeline of when a bank opts in/out before the CBLR or generally applicable capital rules become applicable
Opt in - A qualifying community banking organization becomes subject to the community bank leverage ratio framework when it makes an election (at the time the call report is submitted)
Opt Out - Same and they can opt out of the CBLR framework between reporting periods by providing its capital ratios under the generally applicable capital rule to its appropriate regulators at that time
Conformance/non-conformance is allowed to be used in the ROE under what circumstances?
Guidelines incorporated into Regulations (Ex: Appendix B to Part 364 - IT)
Reference to practices of management/bank vs Board approved policies
The number of ED Modules required under the RD Memo for ED Modules as a National Standard and the section that must be filled out
What is 11 and CADFs (Core Analysis Decision Factors)
The 2 ways PPP fee income can be recognized
All up front or deferred (amortized over the life of the loan)
Refer to our accounting SME, R Doyle, for complete explanations :)
We can still apply risk-based capital standards to an electing institution (True or False)
Generally False - Such actions conflict with the statutory mandate provided in the EGRRCPA and the FDIC's implementing regulations
Outstanding enforcement actions take precedence over CBLR framework when they require higher leverage amounts or total capital. The bank MUST comply with the enforcement action and CBLR. The RD's may consider requests to amend outstanding actions.
MOU does not count as it is informal action
Everything that is in scope and on the discuss only list gets classified into these. (What are the names?)
Pass, Special Mention, Substandard, Doubtful, Loss
How to treat ratios and rounding in the ROE
Generally / Critical - X.XX
Non-critical / imprecise - X (whole number)
AFS Debt Securities are reported at this value/cost for Call Report Schedule RC-K
Amortized Cost
A CBLR bank that ceases to meet any qualifying criteria in a future period and that has a leverage ratio greater than ___% will be allowed a grace period of _____ to satisfy the CBLR criteria again or switch back to the generally applicable capital requirements
8 percent and two reporting periods
Are the following pages mandatory in the ROE?
1- MRBA
2 - Examination Data and Ratios (EDR)
3 - Comparative Statements of Financial Condition
4 - Concentrations
5 - Capital Calculations
1 - MRBA - Yes, when applicable
2 - EDR - Yes
3 - Comp. Statements - No
4 - Concentrations - Yes, when applicable
5 - Capital Calculations - No
SAER Item number and name that needs to be marked as "yes" due to COVID-19
#112 Adverse External Factors
Goodwill can be amortized (True or False)
True! Well... It depends!
In 2014,the FASB re-allowed private companies to elect to amortize goodwill on a straight-line basis over 10 years. However, the election is not required
3 of the 5 requirements needed to elect CBLR are...
1- Leverage ratio greater than 9 percent
2- Less than $10 billion in average total consolidated assets (TCA)
3- OBS exposures of 25 percent or less of TCA
4- Trading assets plus trading liabilities of 5 percent or less of TCA
5- Not an advanced approaches banking organization
The Weekly Status Update is due by ____. The update starts _____ and ends ________.
The update is sent to ____ and the amount of information in the update should be _____.
Thursdays 10am
Starts on the 1st week "onsite" and ends when the exam is complete and the ROE is sent up.
The update is sent to ALL Houston Supervisors and should be brief.
Refer to 7/10/2020 email from Richard
What is wrong and why? (Could be more than 1)
The examiners cited 14 deficiencies.
The board has 11 Directors.
The bank employs nine people.
Twenty examiners attended the field office meeting.
Primary liquidity includes Federal Funds Sold.
The board has 11 Directors.
Should say Board.
AND
Primary liquidity includes Federal Funds Sold.
Only Federal should be capitalized unless referring to account title.
The number of FinCEN BSA Compliance Program Pillars and their names
5 pillars:
BSA/AML Designated officer
System of Internal Controls
Independent Testing
Training
Beneficial Ownership