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e-CFR data is current as of August 6, 2020

Title 12Chapter IISubchapter APart 252 → Subpart U


Title 12: Banks and Banking
PART 252—ENHANCED PRUDENTIAL STANDARDS (REGULATION YY)


Subpart U—Debt-to-Equity Limits for U.S. Bank Holding Companies and Foreign Banking Organizations


Contents
§252.220   Debt-to-equity limits for U.S. bank holding companies.
§252.221   Debt-to-equity limits for foreign banking organizations.

Source: Reg. YY, 79 FR 17337, Mar. 27, 2014, unless otherwise noted.

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§252.220   Debt-to-equity limits for U.S. bank holding companies.

(a) Definitions—(1) Debt-to-equity ratio means the ratio of a company's total liabilities to a company's total equity capital less goodwill.

(2) Debt and equity have the same meaning as “total liabilities” and “total equity capital,” respectively, as reported by a bank holding company on the FR Y-9C.

(b) Notice and maximum debt-to-equity ratio requirement. The Council, or the Board on behalf of the Council, will provide written notice to a bank holding company to the extent that the Council makes a determination, pursuant to section 165(j) of the Dodd-Frank Act, that a bank holding company poses a grave threat to the financial stability of the United States and that the imposition of a debt-to-equity requirement is necessary to mitigate such risk. Beginning no later than 180 days after receiving written notice from the Council or from the Board on behalf of the Council, the bank holding company must achieve and maintain a debt-to-equity ratio of no more than 15-to-1.

(c) Extension. The Board may, upon request by the bank holding company for which the Council has made a determination pursuant to section 165(j) of the Dodd-Frank Act, extend the time period for compliance established under paragraph (b) of this section for up to two additional periods of 90 days each, if the Board determines that the identified company has made good faith efforts to comply with the debt-to-equity ratio requirement and that each extension would be in the public interest. Requests for an extension must be received in writing by the Board not less than 30 days prior to the expiration of the existing time period for compliance and must provide information sufficient to demonstrate that the bank holding company has made good faith efforts to comply with the debt-to-equity ratio requirement and that each extension would be in the public interest.

(d) Termination. The debt-to-equity ratio requirement in paragraph (b) of this section shall cease to apply to a bank holding company as of the date it receives notice from the Council of a determination that the bank holding company no longer poses a grave threat to the financial stability of the United States and that the imposition of a debt-to-equity requirement is no longer necessary.

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§252.221   Debt-to-equity limits for foreign banking organizations.

(a) Definitions. For purposes of this subpart, the following definitions apply:

(1) Debt and equity have the same meaning as “total liabilities” and “total equity capital,” respectively, as reported by a U.S. intermediate holding company or U.S. subsidiary on the FR Y-9C, or other reporting form prescribed by the Board.

(2) Debt-to-equity ratio means the ratio of total liabilities to total equity capital less goodwill.

(3) Eligible assets and liabilities of all U.S. branches and agencies of a foreign bank have the same meaning as in §252.158(a).

(b) Notice and maximum debt-to-equity ratio requirement. Beginning no later than 180 days after receiving written notice from the Council or from the Board on behalf of the Council that the Council has made a determination, pursuant to section 165(j) of the Dodd-Frank Act, that the foreign banking organization poses a grave threat to the financial stability of the United States and that the imposition of a debt-to-equity requirement is necessary to mitigate such risk:

(1) The U.S. intermediate holding company, or if the foreign banking organization has not established a U.S. intermediate holding company, and any U.S. subsidiary (excluding any section 2(h)(2) company or DPC branch subsidiary, if applicable), must achieve and maintain a debt-to-equity ratio of no more than 15-to-1; and

(2) The U.S. branches and agencies of the foreign banking organization must maintain eligible assets in its U.S. branches and agencies that, on a daily basis, are not less than 108 percent of the average value over each day of the previous calendar quarter of the total liabilities of all branches and agencies operated by the foreign banking organization in the United States.

(c) Extension. The Board may, upon request by a foreign banking organization for which the Council has made a determination pursuant to section 165(j) of the Dodd-Frank Act, extend the time period for compliance established under paragraph (b) of this section for up to two additional periods of 90 days each, if the Board determines that such company has made good faith efforts to comply with the debt to equity ratio requirement and that each extension would be in the public interest. Requests for an extension must be received in writing by the Board not less than 30 days prior to the expiration of the existing time period for compliance and must provide information sufficient to demonstrate that the foreign banking organization has made good faith efforts to comply with the debt-to-equity ratio requirement and that each extension would be in the public interest.

(d) Termination. The requirements in paragraph (b) of this section cease to apply to a foreign banking organization as of the date it receives notice from the Council of a determination that the company no longer poses a grave threat to the financial stability of the United States and that imposition of the requirements in paragraph (b) of this section are no longer necessary.

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