Agencies’ Capital Proposals Much Advanced but Warrant Further Improvements
June 18, 2026 / Source: CSBS
Washington, D.C. – In a comment letter today, the Conference of State Bank Supervisors (CSBS) recommended additional measures that the federal banking agencies should take to provide community banks with a simplified regulatory capital framework as they revise the risk-based capital rules.
CSBS supports the proposals’ goal of enhancing the risk sensitivity, consistency, and transparency of the risk-based capital framework. However, important adjustments to the proposals are necessary to promote a level playing field between large and small banking organizations.
CSBS recommends that the agencies:
- Increase the number of community banks eligible for the Community Bank Leverage Ratio framework,
- Adopt the proposed capital treatment of mortgage exposures and mortgage servicing assets,
- Maintain the current treatment of unused credit commitments with a maturity less than one year rather than increasing the credit conversion factor for these exposures,
- Allow smaller banks to avail themselves of the expanded risk-based approach’s favorable capital treatment of investment grade corporate exposures,
- Index dollar-based thresholds to keep pace with inflation and economic growth, and
- Ensure equal capital treatment of exposures to state-chartered trusts and national trust companies.
Read CSBS statements and comments on Capital Standards