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Financial Services Law Insights and Observations

Federal Reserve issues interim final rule providing relief for small bank holding companies

Agency Rule-Making & Guidance Federal Reserve S. 2155 Bank Holding Companies EGRRCPA

Agency Rule-Making & Guidance

On August 28, the Federal Reserve Board issued an interim final rule to raise the asset threshold from $1 billion to $3 billion under the agency’s Small Bank Holding Company and Savings and Loan Holding Company Policy Statement. The interim final rule implements a provision in the Economic Growth, Regulatory Relief, and Consumer Protection Act (previously Senate bill S.2155), and applies to savings and loan holding companies with total consolidated assets of less than $3 billion. Under the interim final rule, small bank holding companies will be permitted to operate with higher levels of debt, making it easier to facilitate ownership transfers. However, the Fed noted that exempt holding companies’ depository institutions will still be required to meet minimum capital requirements. Comments are due by October 29.