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1 H.R. 2121, Pension, Endowment, and Mutual Fund Access to Banking Act 1 (February 23, 2018)

handle is hein.congrec/pemfua0001 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE COST ESTIMATE February 23, 2018 H.R. 2121 Pension, Endowment, and Mutual Fund Access to Banking Act As ordered reported by the House Committee on Financial Services on October 12, 2017 SUMMARY H.R. 2121 would adjust the calculation of a financial ratio called the supplementary leverage ratio (SLR), for certain banks that engage predominately in banking activities that the bill defines as custody, safekeeping, and asset serving.1 The bill would permit certain large financial institutions to omit cash balances held at the Federal Reserve and other central banks from their SLR calculations. Currently, all assets must be included in the denominator of that ratio. CBO estimates that enacting H.R. 2121 would increase deficits by $45 million over the 2018-2027 period. That amount includes a net increase in direct spending of $50 million and an increase in revenues of $5 million. Most of those costs would be recovered from financial institutions in years after 2027. Because enacting the bill would affect direct spending and revenues, pay-as-you-go procedures apply. CBO estimates that enacting H.R. 2121 would not increase net direct spending or on- budget deficits by more than $2.5 billion in any of the four consecutive 10-year periods beginning in 2028. H.R. 2121 contains no intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA). If the Federal Deposit Insurance Corporation (FDIC) increases fees to offset some of the costs of implementing the bill, H.R. 2121 would increase the cost of an existing mandate on the depository and large financial institutions that are required to pay those fees. Using information from the affected agencies, CBO estimates that the incremental cost of the mandate would fall well below the annual threshold for private-sector mandates established in UMRA ($156 million in 2017, adjusted annually for inflation). 1. The SLR is a capital-to-assets ratio that accounts for derivatives and other commitments that are not typically included in a bank's leverage ratio calculation.

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