This bill would require the Federal Reserve to expand its policy statement on the allowable debt levels of small bank holding companies to apply to firms with less than $5 billion in assets, rather than only firms with less than $1 billion in assets. The change would take effect within six months.
Covered banks would be prohibited from engaging in significantly leveraged (i.e. financed with debt) nonbanking activities, and wouldn’t be able to have a substantial amount of outstanding debt held by the public.
Any small bank holding company that is covered by the Federal Reserve’s policy statement would be exempt from the leverage and risk-based capital requirements established by the Dodd-Frank Wall Street Reform and Consumer Protection Act.