After extensive negotiations between Sens. Collins (R-ME) and Brown (D-OH), consensus legislation has been introduced to address the application of the “Collins Amendment,” to insurance companies that own insured depository institutions or are systemically-designated.  The Federal Reserve has argued that the treatment initially proposed in the U.S. Basel III advanced proposal, required application of the Collins Amendment to these depository institution holding companies (DIHCs) and non-banks deemed systemically-important financial institutions (SIFIs) by the FSOC, thus making bank capital the binding regulatory-capital requirement. In the final version of the advanced rules, the FRB committed to consider this going forward, but expressed considerable doubt about the application of the Collins Amendment.  If this legislation were enacted, the FRB would be freed from this constraint should it determine that this was appropriate for risk-based or leverage capital purposes wherever it chose to make any such distinctions.

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