U.S. Bank Ratings And Capital Ratios Should Hold Firm Under The Collins Amendment

U.S. banks have recently obtained further clarity on the Collins Amendment--one of the late and more controversial additions to the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Federal Reserve recently issued three notices of proposed rulemaking (NPRs) addressing in detail the capital requirements under the Dodd-Frank Act, including the Collins Amendment (see "For U.S. Banks, It's Finally Time For The Full Basel Rules," published June 18, 2012). The amendment imposes more stringent regulatory capital requirements on financial institutions and equalizes bank and thrift holding companies' capital requirements with the bank and thrift operating company capital requirements. It also disqualifies certain securities, including trust preferred securities (TruPS) and cumulative perpetual preferred stock, from Tier 1 capital. The Federal Reserve,

...U.S. banks have recently obtained further clarity on the Collins Amendment--one of the late and more controversial additions to the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Federal Reserve recently issued three notices of proposed rulemaking (NPRs) addressing in detail the capital requirements under the Dodd-Frank Act, including the Collins Amendment (see "For U.S. Banks, It's Finally Time For The Full Basel Rules," published June 18, 2012). The amendment imposes more stringent regulatory capital requirements on financial institutions and equalizes bank and thrift holding companies' capital requirements with the bank and thrift operating company capital requirements. It also disqualifies certain securities, including trust preferred securities (TruPS) and cumulative perpetual preferred stock, from Tier 1 capital. The Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp. (FDIC) determined that these securities aren't...

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