On December 11, Congress passed legislation redefining the size of smaller institutions allowed to take advantage of the Federal Reserve’s Small Bank Holding Company Policy Statement from less than $500 million to less than $1 billion. The measure requires the Federal Reserve to change its policy statement, thus allowing smaller bank and thrift holding companies to use more debt as a percentage of assets to fund their operations. When signed by the President the old level of $500 million will be replaced by the new limit. In addition to the asset limit, in order to qualify banks and thrifts may not be engaged in significant nonbanking activities, may not conduct significant off-balance sheet activities and may not have a “material” amount of securities outstanding that are registered with the Securities and Exchange Commission. 

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