On July 9, 2019, the Federal Reserve, the OCC, and the FDIC jointly issued a final rule designed to simplify compliance with certain aspects of the agencies’ capital rules for non-advanced approaches banking organizations relating to the threshold deductions for mortgage servicing assets, deferred tax assets arising from temporary differences that a banking organization could not realize through net operating loss carry backs, and investments in the capital of unconsolidated financial institutions, as well as the inclusion of minority interest in regulatory capital. The final rule also includes a significant change to the prior approval requirement in the Federal Reserve’s capital rules for common stock repurchases, as described in our recent Memorandum to Clients. Except in connection with this change, the agencies adopted the proposal, as described in our prior Memorandum to Clients, without substantial modification. The provisions of the final rule relating to the threshold deductions and minority interest are effective April 1, 2020. Various technical amendments in the final rule, as well as the elimination of the standalone prior approval requirement for common stock repurchases in the Federal Reserve’s capital rules, are effective October 1, 2019, but banking organizations may elect to adopt these amendments prior to the effective date.