The banking and thrift agencies on Monday proposed standardizing risk-based capital rules for mutual fund investments and some residential property loans.

Under the proposal, capital requirements for state-chartered institutions could be lowered as much as 80% for the portion of mutual fund holdings in U.S. government bonds and other low-risk investments. National banks and thrifts already get similar breaks.

The capital requirement for construction loans on residential property would be cut in half when a builder sells the property. Currently, some agencies reduce the capital requirement only if the property is sold before a builder receives the loan.

All second mortgage loans on one- to four-family residential properties would have to meet the standard $8 capital requirement for every $100 of assets. Two agencies currently cut that requirement in half if a mortgage meets "prudent" underwriting standards.

The agencies also proposed simplifying their leveraged capital standards so that the healthiest institutions have to hold a 3% ratio of equity capital to assets and all others have to maintain a 4% ratio.

Comments are due Dec. 26.

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