To All Depository Institutions and Others Concerned in the Second Federal Reserve District:
The federal bank and thrift regulatory agencies are extending the applicability date in the interim final rule on the capital treatment of consolidated asset-backed commercial paper (ABCP) programs that was issued on October 1, 2003.
The October 2003 interim final rule amended the agencies' risk-based capital standards by providing an interim capital treatment for assets in ABCP programs that are consolidated onto the balance sheets of sponsoring banks, bank holding companies and thrifts (collectively, sponsoring banking organizations) as a result of Financial Accounting Standards Board Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46).
The interim capital treatment that is being extended allows a sponsoring banking organization to remove the consolidated ABCP program assets from risk-weighted assets for the purpose of calculating its risk-based capital ratios. The October 2003 interim final rule indicated that the capital treatment is applicable only for the regulatory reporting periods ending September 30 and December 31, 2003, and March 31, 2004. This extension permits affected institutions to apply the designated capital treatment through July 1, 2004.
This interim final rule is effective April 26, 2004.
Bank Supervision Officer