On December 9, 2016, the US Federal Reserve Board invited comment on a proposal to fully apply the Federal Reserve Board's existing rating system for bank holding companies to savings and loan holding companies.
The Dodd-Frank Act transferred responsibility for the regulation and supervision of savings and loan holding companies to the Federal Reserve Board, effective July 2011. Since then, the Federal Reserve Board has applied its rating system to savings and loan holding companies on an "indicative" basis that describes how the savings and loan holding company would be rated. However, the assignment of an unsatisfactory indicative rating has not automatically triggered supervisory action.
The Federal Reserve Board's rating system is in part used to determine the safety and soundness of a financial institution, as well as potential supervisory responses. Fully applying the rating system to both bank holding companies and savings and loan holding companies will help ensure consistent standards and supervision.
The proposal would fully apply the rating system to most savings and loan holding companies supervised by the Federal Reserve Board. However, it would not apply to savings and loan holding companies engaged in significant insurance or commercial activities. These firms would instead continue to receive indicative ratings.
Comments on the proposed rule must be received no later than February 13, 2017.
The proposed rule is available at: https://www.federalreserve.gov/newsevents/press/bcreg/bcreg20161209a1.pdf.
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