12 CFR § 628.23 - Limit on inclusion of third-party capital in total (tier 1 and tier 2) capital.

---
identifier: "/us/cfr/t12/s628.23"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "12 CFR § 628.23 - Limit on inclusion of third-party capital in total (tier 1 and tier 2) capital."
title_number: 12
title_name: "Banks and Banking"
section_number: "628.23"
section_name: "Limit on inclusion of third-party capital in total (tier 1 and tier 2) capital."
chapter_name: "FARM CREDIT ADMINISTRATION"
subchapter_number: "B"
subchapter_name: "FARM CREDIT SYSTEM"
part_number: "628"
part_name: "CAPITAL ADEQUACY OF SYSTEM INSTITUTIONS"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "Secs. 1.5, 1.7, 1.10, 1.11, 1.12, 2.2, 2.3, 2.4, 2.5, 2.12, 3.1, 3.7, 3.11, 3.25, 4.3, 4.3A, 4.9, 4.14B, 4.25, 5.9, 5.17, 8.0, 8.3, 8.4, 8.6, 8.8, 8.10, 8.12 of the Farm Credit Act (12 U.S.C. 2013, 2015, 2018, 2019, 2020, 2073, 2074, 2075, 2076, 2093, 2122, 2128, 2132, 2146, 2154, 2154a, 2160, 2202b, 2211, 2243, 2252, 2279aa, 2279aa-3, 2279aa-4, 2279aa-6, 2279aa-8, 2279aa-10, 2279aa-12); sec. 301(a), Pub. L. 100-233, 101 Stat. 1568, 1608 as amended by sec. 301(a), Pub. L. 103-399, 102 Stat 989, 993 (12 U.S.C. 2154 note); sec. 939A, Pub. L. 111-203, 124 Stat. 1326, 1887 (15 U.S.C. 78o-7 note)."
regulatory_source: "81 FR 49779, July 28, 2016, unless otherwise noted."
cfr_part: "628"
---


# 628.23 Limit on inclusion of third-party capital in total (tier 1 and tier 2) capital.

The combined amount of third-party capital instruments that a System institution may include in total (tier 1 and tier 2) capital is equal to the greater of the following:

(a) The then existing limit, if any; or

(b) The lesser of:

(1) Forty percent of total capital, calculated by taking two thirds of the average of the previous 4 quarters of total capital reported on the institution's Call Report filed with the FCA, less any amounts of third-party capital reported in total capital; or

(2) The average of the previous 4 quarters of CET1 capital reported on its Call Report filed with the FCA.

(c) *Treatment of assets that are deducted*. A System institution must exclude from total risk-weighted assets any item deducted from regulatory capital under this section.