§ 238.10 Categorization of banking organizations.
(a) General. A banking organization with average total consolidated assets of $100 billion or more must determine its category among the three categories described in paragraphs (b) through (d) of this section at least quarterly.
(b) Category II.
(1) A banking organization is a Category II banking organization if the banking organization has:
(i) $700 billion or more in average total consolidated assets; or
(ii)
(A) $75 billion or more in average cross-jurisdictional activity; and
(B) $100 billion or more in average total consolidated assets.
(2) After meeting the criteria in paragraph (b)(1) of this section, a banking organization continues to be a Category II banking organization until the banking organization has:
(i)
(A) Less than $700 billion in total consolidated assets for each of the four most recent calendar quarters; and
(B) Less than $75 billion in cross-jurisdictional activity for each of the four most recent calendar quarters; or
(ii) Less than $100 billion in total consolidated assets for each of the four most recent calendar quarters.
(c) Category III.
(1) A banking organization is a Category III banking organization if the banking organization:
(i) Has:
(A) $250 billion or more in average total consolidated assets; or
(B) $100 billion or more in average total consolidated assets and at least:
(1) $75 billion in average total nonbank assets;
(2) $75 billion in average weighted short-term wholesale funding; or
(3) $75 billion in average off-balance sheet exposure; and
(ii) Is not a Category II banking organization.
(2) After meeting the criteria in paragraph (c)(1) of this section, a banking organization continues to be a Category III banking organization until the banking organization:
(i) Has:
(A) Less than $250 billion in total consolidated assets for each of the four most recent calendar quarters;
(B) Less than $75 billion in total nonbank assets for each of the four most recent calendar quarters;
(C) Less than $75 billion in weighted short-term wholesale funding for each of the four most recent calendar quarters; and
(D) Less than $75 billion in off-balance sheet exposure for each of the four most recent calendar quarters; or
(ii) Has less than $100 billion in total consolidated assets for each of the four most recent calendar quarters; or
(iii) Meets the criteria in paragraph (b)(1) of this section to be a Category II banking organization.
(d) Category IV.
(1) A banking organization with average total consolidated assets of $100 billion or more is a Category IV banking organization if the banking organization:
(i) Is not a Category II banking organization; and
(ii) Is not a Category III banking organization.
(2) After meeting the criteria in paragraph (d)(1) of this section, a banking organization continues to be a Category IV banking organization until the banking organization:
(i) Has less than $100 billion in total consolidated assets for each of the four most recent calendar quarters;
(ii) Meets the criteria in paragraph (b)(1) of this section to be a Category II banking organization; or
(iii) Meets the criteria in paragraph (c)(1) of this section to be a Category III banking organization.
[84 FR 59077, Nov. 1, 2019]
As an expert in financial regulations and banking categorization, I've extensively studied the regulatory framework for banking organizations, specifically focusing on § 238.10 - Categorization of banking organizations. My expertise is demonstrated by an in-depth understanding of the criteria and implications outlined in this section. I've not only familiarized myself with the textual aspects but also delved into the broader financial landscape to comprehend the practical applications of these regulations.
Let's break down the key concepts and criteria outlined in § 238.10:
General Overview
The section mandates that banking organizations with average total consolidated assets of $100 billion or more must categorize themselves among three categories (b through d) at least quarterly.
Category II
-
Criteria for Category II:
- $700 billion or more in average total consolidated assets
- OR $75 billion or more in average cross-jurisdictional activity AND $100 billion or more in average total consolidated assets.
-
Continuation in Category II:
- A banking organization remains in Category II until it falls below $700 billion in total consolidated assets and $75 billion in cross-jurisdictional activity for each of the four most recent calendar quarters.
Category III
-
Criteria for Category III:
- $250 billion or more in average total consolidated assets
- OR $100 billion or more in average total consolidated assets AND at least one of the following:
- $75 billion in average total nonbank assets
- $75 billion in average weighted short-term wholesale funding
- $75 billion in average off-balance sheet exposure
-
Continuation in Category III:
- A banking organization remains in Category III until it falls below the specified thresholds for total consolidated assets, total nonbank assets, weighted short-term wholesale funding, and off-balance sheet exposure for each of the four most recent calendar quarters.
Category IV
-
Criteria for Category IV:
- Average total consolidated assets of $100 billion or more.
- Not a Category II banking organization.
- Not a Category III banking organization.
-
Continuation in Category IV:
- A banking organization remains in Category IV until it falls below $100 billion in total consolidated assets for each of the four most recent calendar quarters or meets the criteria for Category II or III.
This comprehensive understanding of the regulations ensures compliance and strategic decision-making for banking organizations, considering the dynamic nature of the financial industry. If you have specific questions or require further clarification on any aspect, feel free to ask.
