Fed: Eligible Firms May Resume Dividends, Share Repurchases in July

The Federal Reserve said today that it will lift its temporary restrictions on bank holding companies’ dividends and share repurchases after June 30 for firms that pass the current round of stress tests. Firms whose capital levels fall below required levels in the stress tests will remain subject to the restrictions, which the Fed imposed protectively at the outset of the COVID crisis. Once restrictions are lifted, firms’ capital distributions will again be subject to the stress capital buffer.

“The banking system continues to be a source of strength and returning to our normal framework after this year’s stress test will preserve that strength,” said Fed Vice Chairman for Supervision Randal Quarles.