OCC 97-43
Subject: Risk-Based Capital - Section 208 of CDRIA          Description: Final Rule

TO:  Chief Executive Officers of National Banks, Department and
     Division Heads, Examining Personnel and Other Interested
     Parties

On October 24, 1997, the OCC, the Federal Deposit Insurance
Corporation, and the Office of Thrift Supervision (agencies)
published the attached joint final rule.  The final rule,
effective January 1, 1998, adopts without change the OCC's
interim rule (60 FR 47455, September 13, 1995).

Section 208 of the Riegle Community Development and Regulatory
Improvement Act of 1994 required the agencies to change the risk-based capital treatment of transfers of small business
obligations with recourse.  As under the interim rule, this final
rule allows a "qualified insured depository institution" to
include in its risk-weighted assets, for purposes of applicable
capital standards and other capital measures, only the amount of
the retained recourse multiplied by the appropriate risk-weight
percentage.

To qualify, an institution must be either well capitalized
(without considering the effect of this treatment) or, with the
approval of its appropriate federal banking agency, adequately
capitalized.  Further, the depository institution must establish
a non-capital reserve sufficient to meet the reasonable estimated
liability under the recourse arrangement.  The total outstanding
amount of recourse retained by the bank on transfers of small
business obligations to which this final rule applies generally
may not exceed 15 percent of the bank's total risk-based capital.

For further information, contact David Thede, senior attorney,
Securities and Corporate Practices Division (202) 874-5210, or
Tom Rollo, national bank examiner, Capital Policy (202) 874-5070.



                                                      
Emory W. Rushton
Senior    Deputy Comptroller
   Bank Supervision Policy
Date: November 13, 1997  

Attachment   62 FR 55490