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From Banking and Finance Law Daily, January 30, 2015

Fed proposal will simplify reporting requirements for small bank holding companies

By Colleen M. Svelnis, J.D.

The Federal Reserve Board has issued a proposed rule that would raise the threshold for applicability under the Fed’s Small Bank Holding Company Policy Statement from $500 million to $1 billion and would expand the scope of the Policy Statement to include savings and loan holding companies that otherwise meet its requirements. The Fed also adopted an interim final rule exempting savings and loan holding companies that meet the qualitative requirements in the Policy Statement but have less than $500 million in total consolidated assets from the Fed’s regulatory capital requirements. Additionally, the Fed reduced reporting requirements for certain bank holding companies and savings and loan holding companies.

The change will enable smaller bank holding companies to be regulated under the Small Bank Holding Company Statement, which allows simplified reporting requirements and less stringent capital standards that reflect the traditional banking services that these smaller banks provide. Under this Statement, the Fed has proposed to eliminate quarterly consolidated financial reporting requirements for these institutions, and instead require parent-only financial statements.

The Fed will accept comments on both the proposed rule and the interim final rule through March 4, 2015.

Policy Statement. The Policy Statement facilitates the transfer of ownership of small community banks by allowing their holding companies to operate with higher levels of debt than would otherwise be permitted. Institutions subject to the Policy Statement are not subject to the Fed’s regulatory capital requirements. Bank holding companies with less than $500 million in total consolidated assets are not currently subject to the Policy Statement.

P.L. 113-250. The proposed rule and interim final rule would implement Public Law 113-250, enacting H.R. 3329 (See Banking and Finance Law Daily, Dec. 19, 2014).

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