H.R. 2835: Small Bank Holding Company Relief Act

This bill, known as the Small Bank Holding Company Relief Act, aims to change the regulations governing small bank holding companies. Here are the main points of the bill:

Purpose of the Bill

The primary goal is to raise the threshold for what qualifies as a "small bank holding company." Currently, banks must have consolidated assets under a certain limit to benefit from a more lenient regulatory framework. This bill proposes to increase that limit significantly.

Specific Changes Proposed

• The Federal Reserve is required to revise the existing policy statement regarding small bank holding companies.
• The consolidation asset threshold will be raised to $25 billion from its current level, allowing more banks and holding companies to qualify for these rules.
• The revision must take place within 180 days of the bill's enactment.

Impact on Small Bank Holding Companies

By increasing the threshold to $25 billion, the bill would potentially allow a larger number of small to mid-sized banks to operate with fewer regulatory burdens. This could benefit these institutions by providing them with more flexibility in their operations and possibly aiding their growth prospects.

Regulatory Framework Changes

The bill prompts a revision to the regulatory framework outlined in appendix C to part 225 of title 12 of the Code of Federal Regulations, impacting how small bank holding companies are assessed and governed. Lifting this threshold may promote greater financial stability among smaller institutions.

Broader Implications

Increasing the asset threshold could affect the competitive landscape in the banking sector, potentially leading to changes in market dynamics as more institutions qualify for the relaxed regulations. It also reflects a shift towards encouraging the expansion of small banks while trying to balance oversight and financial stability within the banking system.

Relevant Companies

• BBT (BB&T Corporation) - As a significant player in regional banking, an increase in the asset threshold could impact its regulatory requirements and competitive standing.
• PNC (PNC Financial Services) - Another major regional bank that could see changes in its regulatory obligations if its asset profile fits within the new threshold.