Yesterday, March 31, 2020, the Board of Governors of the Federal Reserve System (the “Board”) announced a six-month delay in the effective date of its final rule implementing a revised control framework. Previously, in January, the Board unanimously approved a final rule establishing a comprehensive, simplified framework for determining when an investor company exhibits control over an investee company for the purposes of the Bank Holding Company Act and the Home Owners’ Loan Act. The final rule was set to go into effect today, April 1. Yesterday’s action delays the effective date until September 30, 2020.
In an associated Federal Register notice, the Board indicated that the delay is intended to “allow companies additional time to consult with Board staff about existing investments and relationships,” which will afford companies “greater flexibility to focus on COVID-19-related issues.” The announcement is the latest in a series of efforts by legislators and financial regulators to delay or ease regulatory requirements in response to the ongoing global pandemic. These efforts include relief from the application of the Current Expected Credit Losses methodology beyond that provided for in Section 4014 of the recently-passed CARES Act, a 30-day extension for certain banking organizations to file call reports or FR Y-9C reports for the first quarter of 2020, a six-month delay in implementation of changes to the Board’s Payment System Risk Policy for intraday credit, Consumer Financial Protection Bureau no-action relief allowing for late filing of Home Mortgage Disclosure Act data, and Commodity Futures Trading Commission no-action relief allowing for late filing of Dodd-Frank Act compliance reports.