Answer:
A two-quarter grace period (which begins at of the end of the calendar quarter in which the electing banking organization ceases to satisfy any of the qualifying criteria) to either meet the qualifying criteria again or to comply with the generally applicable capital rule.
Grace period applies when a banking organization’s leverage ratio is 9 percent or less but greater than 8 percent.
A banking organization that fails to maintain a leverage ratio greater than 8 percent would not be permitted to use the grace period and must comply with the generally applicable capital rule, and file the appropriate regulatory reports.
Grace period does not apply in the case of a merger or acquisition.
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New Regulatory Capital Rules for Community Banks
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