FCC eliminates use of Weiss ratings as standard for banks

The Federal Communications Commission eliminated the use of the Weiss ratings as the standard for U.S. banks to be considered “acceptable to FCC” for purposes of issuing qualifying program letters of credit.

New Standard: Rules will be modified to make a bank acceptable to the FCC if it is a U.S. bank insured by FDIC that meets the criteria to be considered “well capitalized” as determined by the FDIC, OCC, and Federal Reserve.

Background: The FCC had proposed that banks providing a letter of credit to carriers participating in certain FCC programs, such as its Rural Digital Opportunity Fund, must have a Weiss bank safety rating of B- or better.

ICBA Advocacy: In an August comment letter to the FCC and in a joint letter with more than 70 state banking associations, ICBA said Weiss was ill-suited to rating bank safety because its ratings were not sufficiently rigorous or transparent and its impartiality was in question. ICBA noted that an unregulated cryptocurrency received an A- rating from Weiss while thousands of regulated financial institutions had a safety rating lower than B-.