Federal banking regulators announced this week that capital requirements set to take effect in January for all but the biggest banks would be suspended under a proposed rule. The proposal applies to Basel III capital requirements for mortgage servicing rights, among other items. The regulators said they are developing a proposal that would simplify capital rules to reduce regulatory burden, particularly for community banks. The proposed suspension generally applies to banks with less than $250 billion in total assets. Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., said...