Fed Rule on Trust-Preferred Securities Good News for Community Banks
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| Stephen J. Coukos (coukos@gcglaw.com) is a shareholder-director in the Boston office of Gallagher, Callahan & Gartrell, a New England law firm focused on community banks. |
By Stephen J. Coukos
The Federal Reserve Board recently adopted a final rule that generally retains the Tier 1 capital treatment of trust-preferred securities issued by bank holding companies, while also providing for stricter quantitative limits and clearer qualitative standards. The final rule comes nearly a year after the Fed initially issued its proposal to retain the Tier 1 capital treatment of trust-preferred securities in response to issues raised by changes in the accounting treatment of trust-preferred securities and the trusts from which they are issued.
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