Risk-Based Capital Standards: Construction Loans on Presold Residential Properties; Junior Liens on 1-to 4-Family Residential Properties; and Investments in Mutual Funds; Leverage Capital Standards: Tier 1 Leverage Ratio

The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTS) (collectively, the agencies) are amending their respective risk- based and leverage capital standards for banks and thrifts (institutions).<SUP>1</SUP> This final rule represents a significant step in implementing section 303 of the Riegle Community Development and Regulatory Improvement Act of 1994, which requires the agencies to work jointly to make uniform their regulations and guidelines implementing common statutory or supervisory policies. The intended effect of this final rule is to make the risk-based capital treatments for construction loans on presold residential properties, real estate loans secured by junior liens on 1-to 4-family residential properties, and investments in mutual funds consistent among the agencies. It is also intended to simplify and make uniform the agencies' Tier 1 leverage capital standards. ---------------------------------------------------------------------------