Bank Holding and Financial Holding Companies: Evaluating the Legal and Business Implications

Developing Legal Strategies to Maximize Opportunities and Manage Risk

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Thursday, January 22, 2009

Course Materials

This seminar will examine the regulatory structure of the Bank Holding Company Act and discuss the benefits, disadvantages and future consequences of becoming a bank holding or financial holding company.


In the wake of the financial crisis and bailout plans, financial institutions are lining up to become bank holding companies. This structure reduces borrowing costs and permits access both to emergency financial support from the Federal Reserve and to bank deposits, more stable sources of funding.

The Bank Holding Company Act (BHCA) imposes a whole new regulatory structure and restrictions on bank holding companies regarding capitalization, debt leverage, and the lines of business they can operate. In turn, the Financial Holding Company (FHC) model provides more flexibility in these areas.

Recent Federal Reserve action has temporarily relaxed certain requirements and restrictions on bank holding companies. More government action in this area is inevitable. Attorneys who advise financial institutions contemplating a move to a BHC or FHC must be well-versed in the BHCA.

Listen as our authoritative panel of attorneys examines the regulatory structure of the Bank Holding Company Act and discusses the advantages and disadvantages of being a bank holding or financial holding company in today's financial environment.



  1. Becoming a BHC or FHC
    1. How to get there
      1. Acquisition
      2. De novo
      3. Conversion
    2. Advantages
      1. Liquidity
        1. TARP
        2. FDIC guaranteed debt
        3. Reputational
    3. Disadvantages
      1. Capital
      2. Leverage
      3. Supervision
      4. Source of strength
    4. Federal Reserve Board Considerations
      1. Structuring
        1. Conforming ownership
        2. Divestiture requirements
      2. Processing
  2. Conforming Activities
    1. Grandfathering
    2. Time to Divest or Restructure
    3. Reallocating Activities
      1. Authorities
      2. Merchant Banking
  3. Investor Considerations
    1. Private Equity Firms
      1. September 22 Policy Statement
    2. Passivity Requirements
    3. Bondholders
      1. Impact of TARP
    4. Others
  4. Savings and Loan Holding Company (SLHC) Options
    1. Advantages
    2. Disadvantages
    3. Differences
      1. Holding company considerations
      2. Investor considerations


The panel will review these and other key questions:

  • What is the regulatory structure of the Banking Holding Company Act?
  • What are the relative advantages and disadvantages of structuring as a Bank Holding or a Financial Holding Company?
  • What factors must be considered for the foreseeable and long-term future in considering the move to the BHC/FHC structure?


Thomas P. Vartanian
Thomas P. Vartanian

Fried Frank

He chairs the firm's Financial Institutions Transactions Group and advises financial services clients in compliance and...  |  Read More

Michael M. Wiseman
Michael M. Wiseman

Sullivan Cromwell

He specializes in banking and financial institutions law, representing domestic and foreign commercial banks,...  |  Read More

Paul L. Lee
Paul L. Lee

Debevoise Plimton

He has extensive experience in the banking industry as a corporate lawyer, both as general counsel and in private...  |  Read More

Peter E. Heyward
Peter E. Heyward


His practice focuses on U.S. and international financial regulation and he has more than 20 years' experience in...  |  Read More

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