FRB Delays Effective Date of Final Rule Revising "Control" Regulations

The Federal Reserve Board ("FRB") delayed the effective date for its final rule revising the control framework under the Bank Holding Company Act and the Home Owners' Loan Act (i.e., determining whether a company has the ability to exercise a controlling influence on another company). The effective date has been extended from April 1, 2020 to September 30, 2020.

According to the FRB, the purpose of extending the effective date is to provide regulated financial institutions with additional time to assess the impact of these amendments on investments and client relationships, given interruptions posed by the COVID-19 pandemic.

As previously covered, the rule is designed to enhance the transparency and consistency of the FRB's control framework and encourage permissible investments in and by banking organizations.