In Brief: All of Servicing Assets Can Be Tier 1 Capital

Federal regulators issued a final rule Tuesday that doubles to 100% the amount of servicing assets, including purchased credit card relationships, that banks and thrifts may count as Tier 1 capital.

However, regulators said all servicing assets must be discounted by 10%. Purchased credit card relationships and nonmortgage servicing assets may make up no more than 25% of Tier 1 capital. The rule is effective Oct. 1, but early adoption is permitted.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER