Savings and Loan Holding Company - Waiver Request

Section 238.12(d) of Regulation LL (Subpart B - Acquisitions of Saving Association Securities or Assets)

Who must file?

There is no regulatory requirement to file a waiver request. Instead, the Board’s regulations permit the waiver of applications otherwise required by the Home Owners Loan Act (“HOLA”) in certain circumstances. Section 238.12(d) of the Board’s Regulation LL identifies certain savings and loan holding company (“SLHC”) related transactions and the circumstances under which the application normally required by HOLA may be waived. In some cases, an application by the holding company may be waived because the proposed transaction is also subject to approval by a federal banking regulator under section 18(c) of the Federal Deposit Insurance Act (Bank Merger Act or “BMA”) and meets certain other criteria.   

Transactions that meet all of the requirements of section 238.12(d)(2) of Regulation LL ordinarily do not require Federal Reserve approval and are automatically exempt under law. Therefore, the SLHC involved is not required to file a waiver request. Note that section 238.12 of Regulation LL does not provide an automatic waiver comparable to the automatic waiver for bank-to-bank mergers under section 225.12(d)(1) of Regulation Y.

Certain multi-step transactions that meet the requirements of section 238.12(d)(1), may qualify for a waiver of the application requirements under HOLA. A waiver is available under this provision only if the thrift merger is simultaneous with the holding company merger or acquisition and the acquiring company does not hold or operate the target as a separate entity. Note that the transaction must involve a thrift-to-thrift merger, and any transaction involving a bank, whether as the acquirer or the target, would be processed pursuant to section 225.12(d) of Regulation Y. Filers are encouraged to consult the appropriate Reserve Bank for assistance in determining the applicability of waiver provisions, including limited circumstances where the transaction does not conform to the structural criteria for a waiver under section 238.12(d)(1) of Regulation LL. 

For acquisition proposals not qualifying for one of the waiver criteria (or for organizations otherwise directed by the Federal Reserve to do so), a company must file an application for prior Federal Reserve approval under section 238.11 of Regulation LL.

Publication requirements--newspaper/Federal Register

No publication is required.

Required information

There is no standard form requirement for waiver requests under this section. At least 10 days prior to a transaction described in section 238.12(d)(1) of Regulation LL, the acquiring SLHC must provide to the Reserve Bank written notice of the transaction that contains a copy of the filing made to the appropriate federal banking agency under the BMA and a description of the holding company’s involvement in the transaction, including, at a minimum, the purchase price and the funding source.

Processing time frames

Generally, a waiver request that conforms to all of the criteria in section 238.12(d)(1) of Regulation LL would be acted on within 10 days following receipt provided that sufficient time has passed since the filing of the BMA for the Reserve Bank to obtain the views of the primary regulator and Reserve Bank due diligence can be completed. In other cases where certain information cannot be obtained from the requesting SLHC or the other banking agencies or other issues are present that must be resolved, the 10 day prior notice period does not commence with submission of the waiver request. Reserve Bank staff will notify the filer in such instances. The processing clock would start once the waiver is deemed complete and the Reserve Bank has all information necessary to act on the waiver.

Factors reviewed

A waiver cannot be granted in any case in which a HOLA application, if required, would not be approvable. In particular, the Board may require an application under this subpart if it determines that the merger or consolidation would have a significant adverse impact on the financial condition of the savings and loan holding company, or otherwise requires approval under HOLA. 

Consummation period

Proposals granted a waiver from the filing requirements of HOLA may be consummated immediately, subject to the expiration of all other required waiting periods, including the Department of Justice waiting period associated with the BMA filing.