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Regulatory Modernization and Relief for Mutual Holding Companies
Plain English Summary
The regulatory framework for mutual holding companies (MHCs) is being updated, which will mainly affect these companies and their operations. The proposed changes include removing certain requirements for dividend waivers, making it easier for MHCs to convert to stock companies, and clarifying rules about capital instruments. This means MHCs will have fewer restrictions and more flexibility in their operations. Insurance agents should stay informed about these changes as they could impact how MHCs operate and interact with the insurance market.
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The Board invites comment on a notice of proposed rulemaking (proposal) to modernize the regulatory framework applicable to mutual holding companies (MHCs), primarily through proposed revisions to Regulation MM (12 CFR part 239), which governs the formation, operations, activities, and conversion of savings and loan holding companies in mutual form. The proposal would amend Regulation MM by, among other things, eliminating certain dividend waiver requirements, reducing burden associated with conversions from mutual-to-stock form, revising certain post-conversion restrictions, eliminating the requirement that subsidiary holding companies of MHCs obtain federal charters, and revising and clarifying other provisions of the regulation. The proposal also would amend the capital rule (12 CFR part 217) to clarify that certain mutual capital instruments may qualify as regulatory capital and to codify model term sheets for mutual capital certificates as appendices to the regulation.