FR Y-9C Reporting: An 8% CBLR and a Four-Quarter Grace Period

ByRegReportingDesk
RegReportingDesk card: Federal Reserve, Board of Governors of the Federal Reserve System, United States

FR Y-9C reporting for the 30 September 2026 quarter runs on a rewritten capital section. That day the Federal Reserve Board reposted the form as current and posted instructions labelled “Effective September 2026” and new supplemental instructions for the Consolidated Financial Statements for Holding Companies. The instructions for Schedule HC-R, Part I now carry the community bank leverage ratio (CBLR) rule that the OCC, the Board and the FDIC adopted on 23 April 2026: a leverage ratio requirement of greater than 8 percent in place of greater than 9 percent, and a grace period of four quarters in place of two, effective 1 July 2026.

The reporting surface is smaller than the posting suggests. The form PDF posted as current is the same file as the June 2026 form, so every line item, caption and MDRM code is where it was. The change sits in two pages of HC-R general instructions, one glossary page and the supplemental instructions, which drop their temporary CBLR note now that the instructions carry the rule. The validation-edit appendix bound into the new instruction book is an older set than the one in the June book, and one of its edits still tests the old grace-period floor.

The first report under the new text is the third-quarter FR Y-9C, due on Monday 9 November 2026. For a holding company under $10 billion in total consolidated assets, the 8 percent line decides whether item 31.a can answer yes, and the grace-period rules decide how long it can keep answering yes after a breach.

Related reading: FR 2028 Reporting: New FR 2028D Questions, Redesign Still Pending

FR Y-9C reporting dates around the CBLR change

  • 1 December 2025: the agencies’ CBLR proposal is published in the Federal Register (90 FR 55048).
  • 23 April 2026: the OCC, the Board and the FDIC adopt the final rule without change from the proposal.
  • 29 April 2026: the final rule is published in the Federal Register at 91 FR 22973.
  • June 2026: the FR Y-9C supplemental instructions add a “Community Bank Leverage Ratio” topic pointing to the final rule.
  • 1 July 2026: the final rule takes effect.
  • 30 September 2026: the Board posts the current form, unchanged from June 2026, with updated instructions and new supplemental instructions. The same date is the as-of date for the third-quarter report, the first quarter-end after the rule took effect.
  • 9 November 2026: third-quarter FR Y-9C submission date, 40 calendar days after the as-of date, by 5:00 P.M. at the district Reserve Bank.
  • 16 February 2027: fourth-quarter submission date. Forty-five days after 31 December lands on Sunday 14 February, and Monday 15 February is Washington’s Birthday on the Federal Reserve holiday calendar, so the deadline moves to the next business day.
  • 31 December 2028: the OMB approval expiry printed on the form, OMB number 7100-0128.

The two submission dates are counted from the General Instructions: 40 calendar days after the March, June and September as-of dates, 45 after December, moved to the first business day when the count ends on a weekend or holiday. The same instructions say no extensions of time are granted.

Three documents posted, one of them identical to June

The Board’s FR Y-9C reporting page was last updated on 30 September 2026 and currently presents a current form and instructions together with September 2026 supplemental instructions. Set against the June 2026 versions still listed on the FR Y-9C page, the three documents moved by very different amounts.

  • The form. The PDF posted as current and the June 2026 form have identical SHA-256 hashes. The cover keeps its 03/2026 stamp and the 31 December 2028 approval expiry, and the CBLR block on pages 51 and 52 (Schedule HC-R, Part I, items 31.a to 36) keeps its 03/2024 stamps.
  • The instructions. The cover now reads “Effective September 2026”. Pages HC-R-1 and HC-R-2, glossary page GL-16 and two contents pages carry September 2026 dates. The three Schedule HC-R pages dated June 2026 (HC-R-51, HC-R-52 and HC-R-60) remain in the book.
  • The supplemental instructions. The September 2026 document removes the “Community Bank Leverage Ratio” topic that the June document added, stating that the HC-R instructions have been updated to align with the final rule. Every other topic carries over word for word.

The final rule set this up. Its Paperwork Reduction Act section says the rule adds no new collection of information but requires clarification of the FR Y-9 instructions, which the Board would address separately, and the preamble says the agencies did not expect those clarifications to affect the items CBLR banking organizations report. A team holding its HC-R changes until new MDRM codes or a revised schedule appear is waiting for something the package does not contain.

The posting came a day after the Board updated two other collections on its forms pages, the FR 2028b/s and FR 2028D surveys. Each reissue has to be read against the version it replaces, because the “updated” label on the recent-updates page does not say how much moved.

Schedule HC-R, Part I: the CBLR text before and after

The June 2026 instruction book still described the framework through its pandemic history. Page HC-R-1 recounted the April 2020 interim final rules and the transition back to 9 percent. Page HC-R-2 carried a transition table (greater than 8.5 percent with a 7.5 percent grace floor for 2021, greater than 9 percent with an 8 percent floor for 2022) and described a ratio that “does not fall more than one percentage point below” the requirement during “the two-quarter grace period”, with a worked example set in 2020.

The September 2026 pages remove all of it. The replacement text has three operative statements:

  • A holding company may qualify for the CBLR framework if its leverage ratio is greater than 8 percent (Schedule HC-R, Part I, item 31). The other criteria are unchanged: total consolidated assets under $10 billion (item 32), not an advanced approaches holding company, trading assets plus trading liabilities of 5 percent or less of total consolidated assets (item 33), and off-balance sheet exposures of 25 percent or less (item 34).
  • An electing holding company that temporarily fails a criterion is still deemed well capitalized while it keeps a leverage ratio above 7 percent and is within the applicable four-quarter grace period, subject to the limits in the capital rule.
  • The grace period is available for the current quarter only if the holding company has not used it for eight or more of the twenty quarters ending before that quarter, with a pointer to 12 CFR 217.12(c).

The regulation behind the text changed in the same places. The final rule substitutes 8 percent for 9 percent in 12 CFR 217.12(a)(1) and (a)(2)(i), replaces the two-quarter period in (c)(1) and (c)(2) with four reporting periods on the Call Report or FR Y-9C, lowers the no-grace threshold in (c)(6) from 8 percent to 7 percent, adds the eight-of-twenty limit as (c)(7), and removes the temporary COVID-19 relief in section 217.12(a)(4) and section 217.304, which the preamble notes had expired on 31 December 2021.

The floor change has a direct reporting consequence. Under the 2019 rule an electing holding company in its grace period had to keep a leverage ratio above 8 percent. Now the floor is 7 percent, so a holding company that had elected the CBLR framework and is entitled to use the grace period can have a leverage ratio above 7 percent but at or below 8 percent and remain in the CBLR framework during an available grace quarter, subject to the other limits in 12 CFR 217.12(c). EU readers can compare the job HC-R does with the own funds and leverage templates in our COREP reporting guide; the CBLR election is the switch that turns most of the US schedule off.

How the four-quarter grace period lands on successive FR Y-9C reports

The final rule’s preamble works one example through a calendar year. A holding company that has opted in stops meeting a criterion on 15 February and still fails it at quarter-end. Its grace period begins as of the 31 March quarter-end (grace quarter 1), provided its leverage ratio stays above 7 percent. It may keep using the framework in the June, September and December quarters (grace quarters 2 to 4), and must comply fully with the risk-based framework, reporting requirements included, as of 31 March of the following year unless it meets all the criteria again by then.

On the FR Y-9C that sequence produces two different Schedule HC-R shapes:

  • Each grace quarter: item 31.a stays 1, items 32 to 36 are completed with actual figures, including the one in breach, and items 37 to 53 and Schedule HC-R, Part II stay blank, as the instructions direct for a holding company with a CBLR election in effect.
  • The first quarter after the grace period, if the breach persists: item 31.a becomes 0, items 32 to 36 are skipped, and items 37 to 53 and Part II are completed. That means tier 2 capital, the risk-based ratios and risk-weighted assets by exposure type and risk-weight band, none of which the holding company will have filed for at least four quarters.

Part II is the heavy schedule, and the four-quarter runway is the time the rule gives a holding company to build or revive it. The preamble records two commenters saying the longer period, together with the lower calibration, would let CBLR banking organizations sunset parallel risk-based systems. The preamble answers in two places. It says it has not been the agencies’ policy to require a readiness plan for risk-based capital from organizations that opt in, and in its merger discussion it says a banking organization planning to grow through a merger or acquisition should develop systems to calculate and report risk-based capital to match those plans.

Apart from the eight-of-twenty limit covered in the next section, two situations skip the runway entirely. A holding company whose leverage ratio falls to 7 percent or less has no grace period and must comply with the risk-based framework for the quarter in which it reports that ratio. A holding company that stops qualifying because of a merger or acquisition has no grace period either. The preamble expects it to give pro forma risk-based ratios to its primary federal supervisor in the merger application, where one is required, and to comply fully with risk-based requirements for the reporting period in which the transaction completes.

Counting grace quarters under the eight-of-twenty limit

The new limit is a look-back, and the FR Y-9C has no field for it. Item 31.a records whether an election is in effect at quarter-end; nothing on the form records whether a quarter was a grace quarter. The count lives in the holding company’s own capital records, and the rule defines it closely:

  • A holding company is treated as using one grace quarter each time it does not meet the definition of a qualifying community banking organization at a quarter-end.
  • The window is the twenty quarters ending before the current quarter. For the 30 September 2026 report, that runs from the third quarter of 2021 to the second quarter of 2026.
  • Grace quarters used before 1 July 2026 count, assessed against the CBLR requirement in force at the end of each quarter, including quarters when the requirement was temporarily below 9 percent. The late-2021 quarters in the current window fall in that period, when the requirement was greater than 8.5 percent.
  • Quarters count whether or not an election was in effect in between. The preamble’s example is a banking organization that uses four grace quarters in 2026, reverts to the risk-based framework in 2027 and opts back in during 2028; the 2026 quarters still count in 2028.
  • After a merger, the surviving entity’s history is what counts, and the acquired organization’s grace quarters are disregarded.

A holding company that has already used eight or more of the prior twenty quarters gets no grace period at all. If it fails a criterion at quarter-end, it must comply immediately with the minimum risk-based requirements and report the risk-based capital measures.

The preamble’s own example shows why the log needs dated entries. A banking organization that used the grace period in every quarter of 2027 and 2029 cannot use it in 2030, 2031 or the first quarter of 2032. It becomes eligible again in the second quarter of 2032, when the first quarter of 2027 leaves the window and only seven grace quarters remain inside it.

Validation edits in the new book lag the rule

Every FR Y-9C instruction book closes with the validity and quality edits the Federal Reserve applies, and the September 2026 book carries a different set from June’s. The June 2026 book bound in edits headed “Effective as of June 30, 2026”: 32 pages of validity edits and 105 pages of quality, interseries and intraseries edits. The September 2026 book binds in the set headed “Effective as of March 31, 2026”, at 31 and 103 pages. The eleven edit rows with a 30 June 2026 start date in the June book, added or revised edits on Schedules HC-B, HC-C, HC-H, HC-L and HC-R Part II, do not appear in the September appendix.

Where June revised an edit, the September book prints the earlier wording: quality edit 9406 on Schedule HC-C, items 1 (column A) and 1.a.(1) (column B), reads “should not be null and should not be negative” in the September appendix and “should not be null” in the June one. A team that refreshes its pre-submission checks from the newest instruction book would step back a quarter.

The CBLR edits read the same in both appendices, and three of them sit awkwardly beside the new grace rules. For a holding company that reports item 31.a as 1:

  • Validity edit 5206 requires item 31, the leverage ratio, to be greater than or equal to 8 percent.
  • Validity edit 5216 requires item 33, column B, the trading ratio, to be less than or equal to 5 percent.
  • Validity edit 5218 requires item 34.d, column B, the off-balance sheet ratio, to be less than or equal to 25 percent.

The validity-edit pages in both appendices carry the heading that each edit in the checklist must balance. Read literally, edit 5206 fails a grace-quarter report with a leverage ratio between 7 and 8 percent, a position the new rule permits and the 2019 grace floor did not. Edits 5216 and 5218 carry the same tension for any grace period triggered by the trading or off-balance sheet criterion, under the old rule as well as the new one. The posted documents do not say how the Federal Reserve applies these edits to a holding company in its grace period. A filer expecting to report item 31.a as 1 with any of the three ratios outside its edit bound has a question to settle with its district Reserve Bank before the 9 November submission date.

Glossary page GL-16: reciprocal deposits re-cited

The third restamped page sits in the glossary entry for brokered deposits. The June 2026 text explained the reciprocal-deposit exception through its 2018 origin, section 202 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which amended section 29 of the Federal Deposit Insurance Act for “qualifying institutions”. It cited the FDIC’s definition of reciprocal deposits to section 337.7(e)(2)(v).

The September 2026 text states the exception directly from section 29, for “qualifying holding companies”, and cites the definition to section 337.6(e)(2)(v) of the FDIC’s regulations. That is the section the same entry already used when defining brokered reciprocal deposits by reference to section 327.8(q), so the June page cited two different sections for one definition and the September page cites one.

The reporting location is the same in both versions: brokered reciprocal deposits go in Schedule HC-E, Memorandum items 1 and 2, as brokered deposits. A data dictionary or procedure that quotes section 337.7 now disagrees with the instructions it follows.

Supplemental instructions: the accounting dates that carry over

Apart from the removed CBLR topic, the September 2026 supplemental instructions match June’s. Four FASB updates are listed with effective dates and, for two of them, FR Y-9C placement guidance for early adopters:

  • ASU 2025-08, purchased loans: extends the gross-up approach to purchased seasoned loans and is effective for annual periods beginning after 15 December 2026, which makes the March 2027 report the first one affected for a calendar-year holding company without early adoption. Early adopters report the initial allowance on those loans in Notes to the Income Statement (Other), item 2, alongside initial allowances on purchased credit-deteriorated assets, and the document reminds them that Schedule HC-R, Parts I and II must follow the capital rule.
  • ASU 2025-09, hedge accounting improvements: public business entities from annual periods beginning after 15 December 2026, all other entities one year later, applied prospectively to all hedging relationships.
  • ASU 2025-06, internal-use software: all entities from annual periods beginning after 15 December 2027.
  • ASU 2025-10, government grants: public business entities from annual periods beginning after 15 December 2028, others one year later. Early adopters report income-related grants in Schedule HI, item 5.l or item 7.d, following the gross or net presentation they choose under ASC Topic 832.

The document says the FR Y-9C instructions will be revised for these updates “at a future date”, so for now the supplemental is the only FR Y-9C text on them. It keeps two reminders as well. Non-recurring impairment of other intangible assets can be identified in the Notes to the Income Statement (Other), and non-recurring components of other noninterest expense can be described in Schedule HI, memoranda items 7(n) to 7(p). Amending a filed FR Y-9C to show a debt security in another category retroactively, without documentation of the actual transfer date, is described as inappropriate.

Which FR Y-9C filers the CBLR rewrite reaches

The FR Y-9C is filed quarterly by top-tier bank holding companies, savings and loan holding companies, U.S. intermediate holding companies and securities holding companies with total consolidated assets of $3 billion or more, and by smaller holding companies that their Reserve Bank requires to file or that elect to comply with the Federal Reserve’s capital adequacy guidelines. The CBLR stops at $10 billion and excludes advanced approaches holding companies. The instruction change therefore reaches a band: non-advanced filers between $3 billion and $10 billion, plus any smaller holding company that files at its Reserve Bank’s request or elects to comply with the capital adequacy guidelines and is subject to the capital rule.

The final rule’s economic analysis sizes that band from FR Y-9C data for the quarter ending 30 June 2025. It counts 238 community bank holding companies subject to the capital rule, of which 227 met the size and simplicity thresholds and 165 also had a leverage ratio above 9 percent. Of those 165, 25 had opted in, a participation rate of 16 percent. Across banks and holding companies combined, the same analysis puts participation among qualifying community banking organizations at 48 percent.

The largest FR Y-9C filers face separate Board collections that the CBLR never touches, such as the liquidity data described in our FR 2052a reporting guide. For smaller banks in Europe, the proportionality debate runs through different levers, as in the EBA’s proposals covered in our piece on the EBA Pillar 3 data hub for smaller banks.

Frequently Asked Questions

Our leverage ratio at 30 September 2026 is 8.4 percent and we have never opted in. Can the third-quarter FR Y-9C carry the election?

The HC-R instructions say qualifying holding companies opt into and out of the framework through their FR Y-9C, by making the election in item 31.a. From this quarter a ratio greater than 8 percent meets the leverage criterion, so a holding company that is not an advanced approaches Board-regulated institution and also meets the asset, trading and off-balance sheet criteria can elect on this report and complete items 1 to 36. The same paragraph reserves the Board’s power to disallow an otherwise qualifying holding company’s use of the framework based on its risk profile.

Item 31 rounds to exactly 8.0000 percent and edit 5206 passes. Do we qualify?

Not necessarily. The qualifying criterion in 12 CFR 217.12 requires the holding company’s leverage ratio to be greater than 8 percent, while Schedule HC-R, Part I, item 31 reports that ratio rounded to four decimal places. A reported 8.0000 percent therefore does not by itself show whether the underlying ratio is above 8 percent, and the item 31 instructions say only that the ratio is rounded to four decimal places. Edit 5206 tests the reported item at greater than or equal to 8 percent, so it accepts 8.0000 and does not replace the regulatory eligibility test. A holding company that lands exactly on the boundary has a question to settle with its district Reserve Bank.

Our subsidiary bank files its Call Report under the CBLR framework. Does the holding company’s FR Y-9C have to follow?

The preamble states that banking organizations within a consolidated group may make different CBLR elections, and that the framework stays optional for each qualifying organization regardless of what an affiliated bank or holding company does. It also confirms that the rule does not stop a bank holding company or savings and loan holding company from operating under the Small BHC and SLHC Policy Statement where it meets that statement’s requirements. Item 31.a answers for the holding company alone.

We expect to cross $10 billion through balance sheet growth, with no acquisition involved. Is that a grace-period event?

The preamble lists total assets among the qualifying thresholds whose breach can start the grace period, alongside off-balance sheet exposures and trading activity. The merger exception applies where the organization stops qualifying as a result of a merger or acquisition. Organic growth past $10 billion therefore follows the four-quarter sequence, subject to the 7 percent floor and the eight-of-twenty limit.

We are an insurance savings and loan holding company that files the FR Y-9C. Does any of this apply?

The HC-R general instructions apply the revised capital rules to covered SLHCs, meaning top-tier SLHCs not substantially engaged in insurance or commercial activities. They say insurance SLHCs are not required to complete Schedule HC-R even when they complete other FR Y-9C schedules, and the validity edit for that case requires the HC-R fields to be null for grandfathered unitary and insurance SLHCs that do not file the schedule. The CBLR question does not arise on their report.

The rule took effect on 1 July 2026. Should the 30 June 2026 report be revisited?

The 30 June 2026 report date fell before the effective date, and the June 2026 supplemental instructions described the rule as effective 1 July 2026. Nothing in the posted materials calls for June reports to be amended. The 30 September 2026 report is the first quarter-end at which the 8 percent requirement and the four-quarter grace period apply.

Key Takeaways

  • Prepare the third-quarter 2026 FR Y-9C, due 9 November 2026, on the instructions effective September 2026; the form file is the June 2026 PDF, so mapping and MDRM codes stay as they are.
  • Rerun the item 31.a eligibility test at greater than 8 percent; a holding company between 8 and 9 percent at 30 September can elect for the first time on this report.
  • Build a dated grace-quarter log reaching back to the third quarter of 2021 before relying on the four-quarter period, since the form keeps no count.
  • Treat a leverage ratio of 7 percent or less as the trigger for completing items 37 to 53 and Part II in that same quarter.
  • Use the edit set headed “Effective as of June 30, 2026”, bound in the June 2026 book, as the latest posted baseline for pre-submission checks; the September book’s appendix is the March set.
  • Before filing a grace-quarter report, agree with the district Reserve Bank how edits 5206, 5216 and 5218 apply to the ratio in breach.
  • Replace any reciprocal-deposit reference to 12 CFR 337.7(e)(2)(v) with 337.6(e)(2)(v).
  • Schedule ASU 2025-08 purchased seasoned loan treatment for the March 2027 report unless the holding company adopts early.

Sources and References

Before the 9 November FR Y-9C submission

The FR Y-9C cover requires the chief financial officer, or the person performing that function, to attest that the report was prepared in conformance with the instructions issued by the Federal Reserve System. For the third-quarter 2026 report those are the instructions effective September 2026. Three items need an owner before Monday 9 November: the item 31.a answer tested against greater than 8 percent, a dated grace-quarter log covering the twenty quarters from the third quarter of 2021, and, for any holding company in a grace quarter, the district Reserve Bank’s position on edits 5206, 5216 and 5218.

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

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