WASHINGTON (CN) – Bank holding companies with more than $50 billion in assets will have to submit annual capital plans to the Federal Reserve and notify the regulator before making any major capital disbursements such as stock-buy backs or dividend payments, under new rules adopted by the Fed’s Board of Governors.
The Fed proposedthe capital plans in June, and made only minor revisions after reviewing public comments on the proposal. The revisions mostly consist of clarifications to the applicability of previous guidance letters on capital distributions and a detailed description of the data required in the plan submissions.
Another change creates a limited exception allowing banks that are meeting their baseline capital projects to make capital distributions greater than those detailed in the plans, so long as they are less than 1 percent times the tier 1 capital the bank holding company declares in its first quarter reports.
The final rule is effective Dec. 30, 2011.
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