On April 23, 2019, the Federal Reserve Board announced that it had voted to issue a proposal for public comment that would simplify and make more transparent the standards under which the Federal Reserve Board determines that a company controls a banking organization or another company. The concept of control is important for determining if an investment is permissible under the federal banking laws. Under the Bank Holding Company Act, a company is considered to have control over a bank or other company if: (A) the company directly or indirectly or acting through one or more other persons owns, controls, or has power to vote 25% or more of any class of voting securities of the bank or company; (B) the company controls in any manner the election of a majority of the directors or trustees of the bank or company; or (C) the Federal Reserve Board determines, after notice and opportunity for hearing, that the company directly or indirectly exercises a controlling influence over the…
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