Publications

On January 30, 2020, the Federal Reserve adopted a rulemaking that would clarify and, in some respects, revise its existing framework for determining whether a company has the ability to exercise a “controlling influence” over another company for purposes of the Bank Holding Company Act (“BHC Act”) and the Home Owners’ Loan Act (“HOLA”). The final rule, which is largely similar to the Federal Reserve’s proposed rulemaking issued in May 2019, includes a tiered framework of major factors and thresholds generally structured so that, as an investor’s ownership percentage in a target company increases, the investor’s additional relationships and other controlling influence factors with the target company must decrease in order to avoid a presumption of control. Consistent with the proposal, the final rule also includes several other presumptions of control, new rules for how a company can terminate an existing control relationship, and additional provisions to clarify how the presumptions would apply in particular circumstances.