FDIC, Fed, OCC Propose Revisions to Risk-Weighted Asset Calculations

FDIC Financial Institution Letters

Published March 19th, 2026

Detected March 19th, 2026

Summary

The FDIC, Federal Reserve, and OCC have jointly proposed revisions to the standardized approach for calculating risk-weighted assets and adjustments to regulatory capital definitions. The proposal aims to improve risk sensitivity while maintaining simplicity and includes modifications to risk weights for certain exposures, counterparty credit risk, and securitizations. Comments are due by June 18, 2026.

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What changed

The Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency (OCC) have issued a joint Notice of Proposed Rulemaking (NPR) to revise elements of the standardized approach for calculating risk-weighted assets and to adjust the definition of regulatory capital. Key proposed changes include modifying risk weights for residential mortgage, retail, and corporate exposures, introducing more granular risk factors for residential mortgages based on loan-to-value ratios, and making targeted adjustments to counterparty credit risk and securitization methodologies. The proposal also addresses the recognition of credit risk mitigants and seeks comment on revising the treatment of mortgage servicing assets. Additionally, Category III and IV banking organizations would be required to include most components of Accumulated Other Comprehensive Income (AOCI) in regulatory capital, with a five-year transition period.

This proposal requires immediate attention from compliance officers at FDIC-insured financial institutions subject to risk-based capital requirements (excluding those using the expanded risk-based approach). Key actions include reviewing the proposed changes to risk weights, capital definitions, and specific exposure treatments. The comment period closes on June 18, 2026, and institutions should prepare to submit feedback. Failure to comply with future final rules could result in supervisory actions or penalties related to capital adequacy.

What to do next

Review proposed revisions to risk-weighted asset calculations and regulatory capital definitions.
Prepare and submit comments on the proposed rule by June 18, 2026.
Assess potential impact of proposed changes on the institution's capital framework.

Source document (simplified)

Regulatory Capital Rule: Regulatory Capital and Standardized Approach for Risk-weighted Assets

Laws and Regulations March 19, 2026

Summary:

The Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency jointly issued a proposal that would re vise certain elements of the calculation of risk-weighted assets under the standardized approach and make certain adjustments to the definition of regulatory capital. The revised standardized approach would improve the regulatory capital framework by retaining its simplicity while improving its risk sensitivity.

Statement of Applicability: The contents of, and material referenced in, this FIL apply to FDIC-insured financial institutions that are subject to risk-based capital requirements and do not apply the expanded risk-based approach.

Highlights:

The proposal would modify the risk weights under the current standardized approach for certain residential mortgage exposures, retail exposures, and corporate exposures.
For certain residential mortgage exposures, the proposal would introduce a broader range of risk weights based on more granular risk factors including the use of loan-to-value ratios.
It would also make targeted adjustments to the existing methodologies for determining exposure amounts for counterparty credit risk and risk-weighted asset amounts for securitizations, as well as for recognizing the benefits of certain synthetic risk transactions. The proposal would also adjust the recognition of credit risk mitigants.
Category III and Category IV banking organizations would be required to include most components of AOCI in regulatory capital and would be provided with a five-year transition period.
The proposal also would revise the treatment of mortgage servicing assets by removing the regulatory capital deduction requirement and seek comment on further changes. This revision would apply to all banking organizations, including those electing to use the community bank leverage ratio framework.
Consistent with the expanded risk-based proposal, certain dollar-based thresholds in the capital rule would be adjusted in the future to reflect inflation, pursuant to a pre-determined indexing methodology.
Comments are due June 18, 2026. FIL-8-2026 ## Attachment(s)

Notice of Proposed Rulemaking: Regulatory Capital Rules: Regulatory Capital and Standardized Approach for Risk-weighted Assets