June 13, 2011
Federal Reserve announces adoption of interim final rule pertaining to small bank holding companies
For immediate release
The Federal Reserve Board on Monday announced the adoption of an interim final rule that allows small bank holding companies that are S-Corps or that are organized in mutual form to exclude subordinated debt issued to Treasury under the Small Business Lending Fund (SBLF) from treatment as "debt" for purposes of the debt-to-equity standard under the Board's Small Bank Holding Company Policy Statement.
The SBLF was authorized by the Small Business Jobs Act of 2010 and is administered by the Treasury Department.
The Board also announced its adoption of a final rule that allows bank holding companies that are S-Corps or that are organized in mutual form to include in Tier 1 capital all subordinated debt issued to Treasury under the Troubled Asset Relief Program (TARP), subject to certain limits. The final rule also allows small bank holding companies that are S-Corps or that are organized in mutual form to exclude subordinated debt issued to Treasury under TARP from treatment as "debt" for purposes of the debt-to-equity standard. This rule makes final the interim final rule that the Board adopted in June 2009.
The final rule and the interim final rule will be effective once they are published in the Federal Register, which is expected soon. The Board is, however, seeking public comment on the interim rule. Comments must be submitted by July 30, 2011.
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