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Changes Made to Community Bank Leverage Ratio (CBLR) in Light of COVID-19


Changes were recently made to the community bank leverage ratio (CBLR). On April 6, 2020, the Federal Deposit Insurance Corporation (FDIC), Board of Governors of the Federal Reserve System and Office of the Comptroller of the Currency issued two interim final rules that change the CBLR and implement Section 4012 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The CBLR framework, which took effect January 1, 2020, is an optional framework that can be utilized by banks with assets under $10 billion. The framework is designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework.

In September 2019, qualifying community banking organizations that elected to use the CBLR framework and that maintained a leverage ratio of greater than 9% were considered to have satisfied the risk-based and leverage capital requirements in the generally applicable capital rule.

The interim final rules change the CBLR to 8 percent for 2020, 8.5 percent in 2021 and back to 9 percent in 2022.

If you have questions about how this impacts your institution, please contact Lincoln Gray, Audit Partner and Financial Services Industry Group Leader, at or 314.983.1235.


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