{"data":{"id":"us/12-cfr-1240.100","jurisdiction":"us","citation":"12 CFR 1240.100","heading":"Purpose, applicability, and principle of conservatism.","body":"(a) Purpose. This subpart establishes:\n(1) Minimum requirements for using Enterprise-specific internal risk measurement and management processes for calculating risk-based capital requirements; and\n(2) Methodologies for the Enterprises to calculate their advanced approaches total risk-weighted assets.\n(b) Applicability. (1) This subpart applies to each Enterprise.\n(2) An Enterprise must also include in its calculation of advanced credit risk-weighted assets under this subpart all covered positions, as defined in subpart F of this part.\n(c) Principle of conservatism. Notwithstanding the requirements of this subpart, an Enterprise may choose not to apply a provision of this subpart to one or more exposures provided that:\n(1) The Enterprise can demonstrate on an ongoing basis to the satisfaction of FHFA that not applying the provision would, in all circumstances, unambiguously generate a risk-based capital requirement for each such exposure greater than that which would otherwise be required under this subpart;\n(2) The Enterprise appropriately manages the risk of each such exposure;\n(3) The Enterprise notifies FHFA in writing prior to applying this principle to each such exposure; and\n(4) The exposures to which the Enterprise applies this principle are not, in the aggregate, material to the Enterprise.","path":["Title 12—Banks and Banking","CHAPTER XII—FEDERAL HOUSING FINANCE AGENCY","SUBCHAPTER C—ENTERPRISES","PART 1240—CAPITAL ADEQUACY OF ENTERPRISES","Subpart E—Risk-Weighted Assets—Internal Ratings-Based and Advanced Measurement Approaches"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-12.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:24:16Z","sha256":"7992f5d0a5f1b78513d79e1b3c42a628cd6cbc6681b3120595fbaadd79a55ca1","source_id":"us-cfr","stale":true,"prev":"us/12-cfr-1240.63","next":"us/12-cfr-1240.101"},"notice":"GroundRules: Original legal text. Not legal advice."}