Federal Reserve Proposes to Clarify and Revise Control Framework
View Debevoise Update
Key takeaways:
- Yesterday, the Federal Reserve Board (the “FRB”) proposed a new, comprehensive framework for determining “control” under the Bank Holding Company Act and Home Owners’ Loan Act.
- The proposal is intended to simplify and clarify the FRB’s standards for determining whether a company exercises a controlling influence over the management or policies of another company and, therefore, “controls” the other company under the BHC Act or HOLA.
- The proposal would codify certain aspects of the FRB’s controlling influence precedent and, at the same time, would make some significant changes, including with respect to de-control (i.e., the so-called “tear-down” rules).