A highway bill recently signed by President Obama includes a number of regulatory relief measures for the banking industry, including:
- An expansion of the number of banks eligible for the 18-month exam cycle by raising the qualifying asset threshold from $500 million to $1 billion
- Correction of a technical error that now equalizes the SEC registration and de-registration thresholds between savings and loan holding companies and bank holding companies
- Reduction of unnecessary privacy notice paperwork
- An expansion of trust preferred securities collateralized debt obligation (TruPS CDO) relief for smaller bank holding companies
- A process for designating an area rural for purposes of Consumer Financial Protection Bureau (CFPB) exemptions
The most controversial measure is a provision that cuts the dividends on the Federal Reserve Bank stock that national banks and other Fed member banks are required to hold for banks with more than $10 billion in assets. Effective January 1, 2016 the dividend paid to those banks dropped from 6 percent to the latest high yield on 10-year Treasury notes, but no higher than 6 percent. The $10 billion asset threshold would be indexed to inflation. Dividend rates of banks of less than $10 billion in assets will remain unchanged.
For more information on this topic, or to learn how Baker Tilly banking specialists can help, contact our team.