Board Requests Comments on Proposal to Expand Definition of Small Bank Holding Companies
September 8, 2005
Circular No. 11729

To All Depository Institutions and Others
Concerned in the Second Federal Reserve District:

The Federal Reserve Board has requested comments on a proposal to raise the asset level for bank holding companies (BHCs) to qualify under the small bank holding company policy statement that was put in place in 1980 to facilitate the transfer of ownership of small community-based banks (Regulation Y, Appendix C).

Currently, the policy statement generally applies to BHCs with pro forma consolidated assets of less than $150 million. The Board is proposing to raise the asset size threshold to $500 million. The proposal also would amend the qualitative criteria used for determining when a BHC with less than $150 million in assets may not qualify for the policy statement provisions.

The Board also is proposing changes to the policy statement that would clarify the treatment of subordinated debt associated with issuances of trust preferred securities. The proposal indicates that such subordinated debt would be considered debt for most purposes under the policy statement, subject to a transition period.

The Board anticipates issuing a separate request for public comment on a proposal that would make related changes in regulatory financial reporting requirements. Under that proposal, qualifying small BHCs would only be required to file parent-only financial data on a semi-annual basis (FR Y-9SP).

Comments are requested within 60 days from today. See the Federal Register notice for details.

Press release OFFSITE
Board’s notice OFFSITE PDF
Federal Register notice OFFSITE

Thomas Oravez
Assistant Vice President
Relationship Management and Applications