Publications

On September 22, 2008, the Federal Reserve Board issued a long-awaited policy statement that addresses equity investments in banks and bank holding companies. As described in the attached memorandum, the policy statement makes three significant changes to the terms on which investors can make investments in bank holding companies without being deemed to have acquired “control” and thereby becoming bank holding companies themselves: (i) an investor that will have a seat on a bank holding company's board of directors can now own up to 24.9% of the outstanding voting shares of the bank holding company, which is an increase from the prior limit of 10%; (ii) an investor can own up to 33% of the total equity of a bank holding company, as opposed to the current limit of 24.9%, provided that the investment does not include ownership of 15% or more of any class of voting securities of the target; and (iii) an investor will be permitted to actively attempt to influence certain governance matters of the bank holding company and will no longer be required to be a completely passive investor.