WASHINGTON — The Federal Reserve Board and Office of the Comptroller of the Currency are extending the comment deadline for a proposal to adjust a key capital measure for large banks.
The Fed and OCC issued their proposal last month to change the enhanced Supplementary Leverage Ratio, or eSLR, from a fixed ratio applied to all global systemically important banks to a variable ratio based in part on banks’ G-SIB capital surcharge. The regulator extended the comment period from May 21 to June 25 amid concerns that stakeholders need more time.
The federal bank regulators have been divided over the proposal. Fed Gov. Lael Brainard voted against the plan, saying it was inconsistent with the current climate. The Federal Deposit Insurance Corp. also withheld support, with FDIC Chairman Martin Gruenberg saying the proposal would require big banks to hold $121 billion less in Tier 1 capital. Their views were echoed by former FDIC Chairman Sheila Bair and Thomas Hoenig, the agency's former vice chairman.
But backers of the plan say those concerns are unfounded. Fed Vice Chairman for Supervision Randal Quarles suggested in a speech earlier this month that the total capital reductions at the bank holding company level would be far less, on the order of about $400 million across all eight holding companies. Stakeholders are at odds about which figure more closely represents the actual release of capital, and the subject is likely to be at the heart of many comments the agency will receive.
The Charleston-based company agreed to pay $267 million to acquire Piedmont Bank in Peachtree Corners, Georgia. It's United's 34th deal, but the first since 2021.
The Puerto Rico-based company's board of directors has given an additional title to COO Javier Ferrer, naming him president as of May 9. His career path closely resembles that of his boss, CEO Ignacio Alvarez.
Truist Financial completes the sale of its remaining stake in Truist Insurance Holdings; City National Bank has hired Rick Bechtel as executive vice president and head of mortgage and residential lending; Associated Bank names Chun Schiros as its first chief analytics officer; and more in the weekly banking news roundup.
Max Levchin, CEO of the buy now/pay later lender, said recent tests show young adults prefer interacting with intelligent chatbots over phone-based agents, but the company doesn't foresee major cost savings from generative AI for a few more years.
When the Trump tax cuts expire next year, the White House will ask for higher corporate taxes and a buyback tax as Congress enters one of its biggest economic fights of the decade, which will have major implications for bankers.
Large banks, particularly those with over $100 billion in assets, see increasing supervisory shortcomings related to interest rate and liquidity risks, governance and risk control issues, and cite cybersecurity, CRE values, and remote work trends as potential hazards in the future.