US Federal Reserve Board Issues Interim Final Rule Expanding The Applicability Of The Small Bank Holding Company Policy Statement

Author:Shearman & Sterling LLP
Profession:Shearman & Sterling LLP

On August 28, 2018, the U.S. Board of Governors of the Federal Reserve System issued an interim final rule increasing the asset threshold for the applicability of the Federal Reserve Board's Small Bank Holding Company and Savings and Loan Holding Company Policy Statement (Regulation Y, Appendix C) from $1 billion to $3 billion in total consolidated assets. The interim final rule implements Section 207 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which mandated that the Federal Reserve Board increase the threshold. The policy statement permits the formation and expansion of small bank holding companies with debt levels that are higher than typically permitted for larger bank holding companies, given that smaller institutions often have limited access to equity financing. The current policy statement applies to bank holding companies with less than $1 billion in pro forma total consolidated assets that: are not engaged in significant non-banking activities either directly or through a non-bank subsidiary; do not conduct significant off-balance sheet...

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