Thursday, February 27, 2014
Fed Announces New Transparency Policy
The Federal Reserve Board announced on Monday that it will begin publishing a semi-annual report providing information on applications and notices filed with the Federal Reserve for approval of activities such as mergers, acquisitions, and formation of holding companies. According to the announcement (published as SR letter 14-2), the purpose of the new report will be to “enhance transparency in the Federal Reserve’s applications process and provide the banking industry and general public with better insight into the issues that could prevent the Federal Reserve from acting favorably on a proposal.”
When Federal Reserve staff recommend denial of a proposal to the Board, the filer is notified and given the option to withdraw the application or notice. Withdrawn applications are typically noted on the Fed’s public H.2 Release. The new semi-annual report will provide data on the number of approvals, denials, and withdrawals, as well as information on the reasons for withdrawals. As noted in the SR letter, some of the common issues resulting in the withdrawal of an application include less-than-satisfactory ratings for safety and soundness, consumer compliance issues, financial and managerial factors, and violations of the Bank Secrecy Act.
For more information, you can read the full SR letter on the Fed’s website.
Posted by Robert Clark