Fed proposes expanded definition of small BHC

Bank News, October, 2005 by Anonymous

A proposal expanding the definition of a small bank holding company under the Fed's Small Bank Holding Company Policy and the risk-based and leverage capital guidelines for bank holding companies has been issued by the Federal Reserve Board. The policy statement facilitates the transfer of ownership of small community banks by permitting debt levels at small BHCs that are higher than what would be permitted for larger BHCs. Because small BHCs may, consistent with the policy statement, operate at a level of leverage that generally is inconsistent with the capital guidelines, the capital guidelines provide an exemption for small BHCs.

Currently, the policy statement and the capital guidelines define a small BHC as one with consolidated assets of less than $150 million. However,...

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