Circular
Board Announces Final Rule on Senior Perpetual Preferred Stock Issued by BHCs to Treasury, Interim Final Rule on Subordinated Debt Issued by S-Corp and Mutual BHCs to Treasury
May 22, 2009
Circular No. 12099

The Federal Reserve Board has announced the adoption of a final rule that will allow bank holding companies to include in their Tier 1 capital without restriction senior perpetual preferred stock issued to the U.S. Treasury Department under the Troubled Asset Relief Program (TARP). This rule makes final the interim final rule that the Board adopted in October 2008.

The Board also announced the adoption of an interim final rule that will allow bank holding companies that are S-Corps or that are organized in mutual form to include in Tier 1 capital all subordinated debt issued to Treasury under TARP, provided that the subordinated debt will count toward the limit on the amount of other restricted core capital elements includable in Tier 1 capital. The interim final rule also will allow small bank holding companies that are S-Corps or that are organized in mutual form to exclude subordinated debt issued to Treasury under TARP from treatment as "debt" for purposes of the debt-to-equity standard under the Board's Small Bank Holding Company Policy Statement.

See the press release for full details.

Press release Offsite
Treasury Department Offsite