Regulators also developed a community bank guide, which outlined the relevant provisions for smaller, noncomplex institutions and compared the new requirements to the previous standards. 1 In addition, the Federal Reserve Board recently issued a final rule raising the limit on the maximum size of banks covered by our Small Bank Holding Company Statement.
2 This policy statement, originally issued in 1980, fosters local ownership of small community banks. While the Board generally discourages the use of debt by bank holding companies to finance acquisitions, it recognizes that the limited access small institutions have to equity funding means that such firms often must rely on acquisition debt to accomplish a transfer of ownership.