WASHINGTON (Reuters) - U.S. banking regulators proposed a rule on Wednesday aimed at easing regulations on capital requirements for smaller banks as part of a broader effort to make it easier for less complex financial institutions to operate.
The proposal would generally only apply to banks with less than $250 billion in total assets and $10 billion in foreign exposure, and would make a series of changes to how those banks must treat capital for regulatory purposes.
The Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency all backed the move to propose new rules and solicit public comment on them.
The proposal is part of a broader effort by bank regulators to streamline their rules for smaller banks, amid complaints that the heightened regulatory environment following the 2007-2009 financial crisis has made it difficult for smaller institutions to comply and compete.
Under the proposal, smaller banks would enjoy simpler definitions across a range of areas when it pertains to how it must comply with capital rules. For example, the proposed rule would tweak capital rules pertaining to construction loans and mortgage servicing assets in an effort to simplify the requirement. Those changes would reduce the risk profile of some types of loans, making it easier for banks to meet capital requirements.
Reporting by Pete Schroeder; editing by Diane Craft