H.R. 4206 Text - Reported in House - 118th Congress (2023-2024)

SEC. 2. Capital requirements relating to accumulated other comprehensive income.

(a) In general.—Section 171 of the Financial Stability Act of 2010 (12 U.S.C. 5371) is amended by adding at the end the following new subsection:

“(d) Inclusion of elements of accumulated other comprehensive income.—

“(1) IN GENERAL.—The computation of capital for purposes of meeting capital requirements for a covered financial institution shall include AOCI.

“(2) DEFINITIONS.—In this subsection:

“(A) AOCI.—The term ‘AOCI’ means—

“(i) all accumulated other comprehensive income components, except for accumulated net gains and losses on cash flow hedges related to items that are not recognized at fair value; or

“(ii) such other definition as the Federal banking agencies may establish, by rule.

“(B) COVERED FINANCIAL INSTITUTION.—

“(i) IN GENERAL.—The term ‘covered financial institution’ means—

“(I) a depository institution holding company (as defined in section 3 of the Federal Deposit Insurance Act) with total consolidated assets greater than $100,000,000,000;

“(II) an insured depository institution over which a bank holding company does not have control with total consolidated assets greater than $100,000,000,000; or

“(III) such other category of depository institution holding companies or insured depository institutions as may be jointly determined by the Federal banking agencies, by rule, based on an analysis of financial risk-related factors.

“(ii) EXCEPTION.—Unless the Board of Governors determines it to be necessary to ensure the safety and soundness of a covered financial institution, the term ‘covered financial institution’ does not include a savings and loan holding company—

“(I) that is substantially engaged in insurance underwriting or commercial activities; or

“(II) with respect to which the Small Bank Holding Company and Savings and Loan Holding Company Policy Statement of the Board of Governors applies (12 CFR 225 app. C).”.

(b) Transition provision.—

(1) IN GENERAL.—The Federal banking agencies shall, jointly, establish a transition period for the application of the requirement under subsection (d) of section 171 of the Financial Stability Act of 2010 to a covered financial institution (including an opt out institution) that—

(A) phases in such requirement over time; and

(B) fully applies such requirement to covered financial institutions on or before July 1, 2028.

(2) DEFINITIONS.—In this subsection:

(A) COVERED FINANCIAL INSTITUTION.—The term “covered financial institution” has the meaning given that term under section 171(d) of the Financial Stability Act of 2010.

(B) FEDERAL BANKING AGENCY.—The term “Federal banking agency” has the meaning given that term under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

(C) OPT OUT INSTITUTION.—The term “opt out institution” means a covered financial institution that elected to opt out of the requirement to report accumulated other comprehensive income components pursuant to the rule titled “Changes to Applicability Thresholds for Regulatory Capital and Liquidity Requirements” (84 Fed. Reg. 59230; November 1, 2019).