How Do I Comply?



Laws, Regulations and Policies

The main governing statute for savings and loan holding companies (SLHCs) is the Home Owners' Loan Act. Other statutes apply to both SLHCs and bank holding companies (BHCs), such as the Change in Bank Control Act and the Management Interlocks Act.

On August 12, 2011, the Board of Governors (Board) of the Federal Reserve issued an interim final rule establishing regulations for SLHCs. The interim final rule implemented the transfer from the Office of Thrift Supervision (OTS) to the Board the regulations necessary to supervise SLHCs and established Regulation LL and Regulation MM.

Regulation Y does not apply to SLHCs and, although SLHCs are similar to BHCs, SLHCs are not subject to the Bank Holding Company Act. In particular, SLHCs may engage in a wider array of activities than those permissible for BHCs and may have concentrations in real estate lending that are not typical for BHCs.

Moreover, unlike BHCs, SLHCs are currently not subject to regulatory consolidated capital requirements, nor have they previously been subject to a formal source-of-strength doctrine. Guidance for assessing the capital adequacy of SLHCs is included in Attachment C to SR 11-11/CA 11-5, Supervision of Savings and Loan Holding Companies.

The Dodd-Frank Wall Street Reform and Consumer Protection Act transferred all supervisory guidance applicable to SLHCs to the Board on the July 21, 2011, transfer date. Both the Board's and the OTS's supervisory guidance is largely based on principles of safety and soundness.

Accordingly, the majority of Board guidance for BHCs should be equally relevant for the operations of SLHCs. The Board currently is reviewing OTS guidance and, as a general matter, has found that much of it is similar to that of the Board or was issued on an interagency basis. As noted in SR 11-11/CA 11-5, the Board intends to publish more detailed information about the application of Board supervisory guidance to SLHCs at a later date.

During the first supervisory cycle, examiners should evaluate an SLHC using the same safety-and-soundness and consumer compliance risk management principles that are applied to a BHC. The principles to be applied during the first supervisory cycle are largely set forth in the following documents:

Federal Reserve Bank Holding Company Supervision Manual:

SLHCs preparing for Federal Reserve inspections may find it helpful to become familiar with the above guidance, in addition to SR 11-11/CA 11-5, Regulation LL, and Regulation MM.