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Bank Board Votes to Issue Rules On Capital Standards

October 6, 1987

WASHINGTON (AP) _ The federal agency that regulates the troubled savings and loan association industry has decided to propose new rules establishing minimum capital standards for S&Ls.

The Federal Home Loan Bank Board voted unanimously Monday to issue the group of proposals and take public comments for 30 days. It also set Nov. 3-4 for public hearings on the measures before deciding whether to implement them as written or with modifications.

The bank board was empowered to establish minimum capital levels for S&Ls in new banking legislation passed by Congress last summer.

The proposals adopted Monday did not establish a specific capital level, but the board said in a statement that it continued to believe that ″it is imperative that all insured institutions achieve a minimum 6 percent capital level as quickly as feasible.″

The proposed new rules would give the federal regulators the latitude to vary the minimum capital requirements based on particular circumstances at an individual S&L.

The bank board also proposed rules to give well-managed S&Ls operating in economically depressed areas extra time to meet the minimum capital requirements. This would apply primarily to savings associations in farm and energy states.

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