This month’s column highlights a few regulatory changes that happened in 2020 affecting international banks operating in the United States and previews a few things of interest for 2021.

Looking Back at 2020

Federal Reserve Board’s “control” regulations: In January 2020, the Federal Reserve Board issued its long-anticipated final regulations clarifying and simplifying the standards under which one company controls a banking organization or another company. Previously, the Federal Reserve Board had developed general standards that were used to evaluate situations that fell outside of the statutory definition of control in the Bank Holding Company Act. The final rule divides the analysis of whether control exists in a particular situation into three sections, depending on ownership of 5% or more, 10% or more, or 15% or more, of the outstanding securities of any class of voting shares by one company of a second company. At each such ownership level, there is a list of additional factors that need to be considered in order to determine whether there is control. The rule was effective on April 1, 2020.

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