Federal Banking Agencies Provide Guidance On CBLR Framework

In an interagency statement, Federal banking agencies provided information and guidance on the use of the two-quarter grace period under the optional community bank leverage ratio ("CBLR") framework once temporary relief measures expire on December 31, 2021.

The agencies specified that a banking organization electing the optional CBLR framework will be subject to the 9 percent CBLR requirement and must use total consolidated assets as of the report date to determine eligibility. The CBLR framework includes a two-quarter grace period allowing banking organizations extra time to build capital and manage their balance sheets to either remain in the framework or comply with the generally applicable risk-based and leverage capital requirements.