U.S. Bancorp’s stock was up 7% Tuesday after the bank said in a filing that the U.S. Federal Reserve is not requiring it to meet Category II banking requirements by Dec. 31, 2024, under the Dodd-Frank banking law.
The bank had agreed to submit plans in connection with its December acquisition of MUFG Union Bank.
So far its assets under management have not broken through the threshold of $700 billion in total assets to meet Category II bank guidelines.
The bank said it had received notification on Monday that “consistent with the standards applicable to other Category III institutions … the Federal Reserve will not require the company to meet Category II requirements by Dec. 31, 2024.”
The company is no longer required to submit quarterly implementation plans for complying with the requirement associated with a Category II banking organization, the bank said in the filing. It will only have to comply with Category III requirements.
A spokesperson from the bank did not immediately respond to emails and phone calls from MarketWatch. U.S. Bancorp is scheduled to report third-quarter earnings on Wednesday.
Category II banks are defined as institutions with more than $700 billion of total assets, while Category III banks have more than $250 billion of total assets. U.S. Bancorp had $680 billion of assets as of June 30.
The categories are part of the U.S. banking framework for determining the applicability of regulatory capital and standardized liquidity requirements for large financial institutions.
The Federal Reserve has also proposed a new set of capital requirements for banks, including institutions with as little as $100 billion in assets. The comment period for the roughly 1,100 pages of new regulations ends Nov. 30.
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