While noting that it appreciates the bank regulators’ intent in their recent proposal to raise the thresholds at which bank directors or other management officials are prohibited from serving at more than one depository institution or holding company—and expressing support for an inflation-indexed increase in the thresholds—the American Bankers Association today cautioned against an arbitrary asset threshold for defining a community bank.
Currently, directors or management officials working at an institution with more than $2.5 billion in total assets may not simultaneously serve at an unaffiliated depository organization with more than $1.5 billion in total assets. The agencies proposed in December to raise both of those thresholds to $10 billion in total assets.
Instead, ABA suggested defining the major assets prohibition threshold as a share of total banking industry assets. Setting them at 0.1% of total industry assets would currently place them at $17.9 billion in assets, and would not require notice-and-comment rulemaking for annual adjustments. ABA also recommended exempting non-U.S. affiliates from management interlock requirements. For more information, contact ABA’s Shaun Kern.