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The Federal Reserve, the central bank of the United States, provides the nation with a
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Home > News & Events > Press Releases

Press Release
November 05, 2014

Federal Reserve Board issues final rule to
implement section 622 of the Dodd-Frank Act
For release at 10:30 a.m. EST
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The Federal Reserve Board on Wednesday issued a final rule to
implement section 622 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, which generally prohibits a financial company
from combining with another company if the ratio of the resulting
company's liabilities exceeds 10 percent of the aggregate consolidated
liabilities of all financial companies.
While the final rule is substantially similar to the proposal issued in May,
the Board made changes in response to comments. Under the final rule,
if a financial company has reached the 10 percent concentration limit,
the company could not acquire control of another company under
merchant banking authority. The final rule also adds an exemption to
clarify that a financial company may continue to engage in securitization
activities if it has reached the limit.
Similar to the proposal, liabilities of a financial institution are generally
defined as the difference between its risk-weighted assets, as adjusted
to reflect exposures deducted from regulatory capital, and its total
regulatory capital. Firms not subject to consolidated risk-based capital
rules would measure liabilities using generally accepted accounting
standards.
Financial companies subject to the limit include insured depository
institutions, bank holding companies, savings and loan holding

companies, foreign banking organizations, companies that control
insured depository institutions, and nonbank financial companies
designated by the Financial Stability Oversight Council for Board
supervision.
The final rule will be effective on January 1, 2015.
For media inquiries, call 202-452-2955.
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Last Update: November 05, 2014

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