On January 30, 2020, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) adopted a final rule (the “Final Rule”) revising the “controlling influence” prong of its “control” rules under the Bank Holding Company Act of 1956, as amended (the “BHC Act”).
The Final Rule largely adopts the proposed rule, issued by the Federal Reserve in April 2019 (the “Proposed Rule”), reaffirms the Federal Reserve’s conceptual framework for analyzing “controlling influence,” and rejects a number of banking industry recommendations for liberalization. Our Memorandum to Clients, published on April 24, 2019, discusses key aspects of the Proposed Rule.
The Final Rule will be effective on April 1, 2020.