On April 23, the Board of Governors of the Federal Reserve System proposed revisions to the portions of its regulations that relate to determinations of whether a company has the ability to exercise a controlling influence over another company for purposes of the Bank Holding Company Act or the Home Owners’ Loan Act. The highlight of the proposal is a tiered framework that would substantially revise and clarify the Board’s existing regulatory presumptions of control. The framework—summarized in a single chart—has four tiers, each identified by the threshold percentage level of voting stock held by a potential controlling party. At each level, the framework incorporates the other major factors that the Board has historically viewed as presenting control concerns, such as business relationships and officer/employee interlocks. The proposal also includes a new presumption of noncontrol.
The Federal Reserve will accept comments on the proposal for 60 days after it is published in the Federal Register.
The proposal is available here.
The rule includes a chart showing the revamped four tiers of presumptions concerning control, available here.