Raised Bill No. 1087 Summary

• Effective October 1, 2023, changes Connecticut banking law to use "capital and surplus" instead of "equity capital and reserves for loan and lease losses" as the standard calculation basis for loan and investment limitations

• Allows Connecticut banks to elect by January 1, 2024 to use "equity capital and adjusted allowances for credit losses" as an alternative calculation method, with options to switch back to capital and surplus

• Updates definitions in Connecticut banking statutes to add new term "Capital and surplus" defined per 12 CFR 1.2, and renumbers existing definitions accordingly

• Applies changes to loan limitations under Section 36a-262 (limits on loans to one obligor), mortgage lending rules (Section 36a-261), and investment limitations for debt securities (Section 36a-275), equity securities (Section 36a-276), and other investments (Section 36a-277)

• Permits banks to make three types of elections regarding calculation methods, with written notice to the Banking Commissioner required, allowing flexibility in how banks compute compliance with regulatory capital requirements