Fed Modernizes Mutual Holding Company Rules – Snore Fest
Published Date: 8/4/2026
Proposed Rule
Summary
The Board invites comment on a notice of proposed rulemaking (proposal) to modernize the regulatory framework applicable to mutual holding companies (MHCs), primarily through proposed revisions to Regulation MM (12 CFR part 239), which governs the formation, operations, activities, and conversion of savings and loan holding companies in mutual form. The proposal would amend Regulation MM by, among other things, eliminating certain dividend waiver requirements, reducing burden associated with conversions from mutual-to-stock form, revising certain post-conversion restrictions, eliminating the requirement that subsidiary holding companies of MHCs obtain federal charters, and revising and clarifying other provisions of the regulation. The proposal also would amend the capital rule (12 CFR part 217) to clarify that certain mutual capital instruments may qualify as regulatory capital and to codify model term sheets for mutual capital certificates as appendices to the regulation.
Analyzed Economic Effects
6 provisions identified: 6 benefits, 0 costs, 0 mixed.
Mutual Capital Instruments Count as Regulatory Capital
The Board proposes to amend 12 CFR 217.20(b)(1), (c)(1), and (d)(1) to clarify that special deposits and mutual capital certificates issued by mutual banking organizations can qualify as common equity tier 1, additional tier 1, or tier 2 capital if they meet the rule's qualifying criteria. Board staff published model term sheets in October 2025 to guide these instruments and sought comment (staff requested comments by June 30, 2026); the proposal would codify model term sheets as appendices and the proposal itself is open for comment until October 5, 2026.
Easier Dividend Waivers for MHCs
If you run a thrift mutual holding company (MHC), the Board proposes to remove the annual member‑vote requirement for legacy waiver MHCs (those that waived dividends before December 1, 2009) and, for non‑legacy waiver MHCs, allow waivers if the institution affirms a member vote held within the past 10 years with approval by a majority of votes cast. Legacy waiver MHCs would still provide a 30‑day notice to the Board and all dividend waivers remain subject to safety‑and‑soundness limits; legacy MHCs would also have to disclose potential conflict‑of‑interest issues to new members when accounts are opened.
Model Term Sheets & Charter Options Added
The Board would add mutual capital certificate model term sheets as appendices to the capital rule and update the Model Charter to include optional language authorizing mutual capital certificates. Institutions would not be required to adopt the Model Charter language, and charter amendments consistent with the revised Model Charter generally would require only 30 days' prior notice under section 239.14(a)(2)(ii) rather than a formal application.
Drop Federal‑Charter Requirement for Subsidiaries
The proposal would eliminate the requirement that subsidiary (mid‑tier) holding companies of mutual holding companies obtain federal charters, reducing a prior chartering constraint on structuring MHC organizations.
Lower Burden for Mutual‑to‑Stock Conversions
The Board proposes to reduce regulatory burden associated with conversions from mutual‑to‑stock form and to revise certain post‑conversion restrictions; the proposal references issues such as the current 5 percent limit on repurchasing shares in the first year after conversion. The intent is to make conversions less costly and more flexible for mutual institutions.
Target MHC Members Keep Membership Rights
If a thrift mutual holding company (MHC) acquires another thrift MHC, the proposal would require that members of the target MHC receive the same membership rights in the acquiring MHC as the acquiring MHC's members, whether the thrift subsidiaries are merged or continue as separate institutions.
Personalized for You
How does this regulation affect your finances?
Personalize government policy and PRIA will tell you what this federal register document means for your household, plus every other regulation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.
Key Dates
Related Federal Register Documents
2025-21626, Regulatory Capital Rule: Modifications to the Enhanced Supplementary Leverage Ratio Standards for U.S. Global Systemically Important Bank Holding Companies and Their Subsidiary Depository Institutions; Total Loss-Absorbing Capacity and Long-Term Debt Requirements for U.S. Global Systemically Important Bank Holding Companies
Big U.S. banks that are super important to the economy are getting new rules to keep them safer and stronger. These changes tweak how much money they must keep on hand and how they handle long-term debt, helping prevent financial trouble. The new rules kick in soon and could affect how these banks manage billions in assets and debt.
2026-15777, Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks; Bank Holding Companies
The Board is inviting public comment on proposed amendments to Regulation O, which governs loans by member banks to their insiders and insiders of their affiliates. The proposed amendments would update and modernize the regulation, increase transparency by clarifying requirements and incorporating existing interpretations, and promote efficiency by reducing regulatory burden. The proposed amendments also would incorporate existing statutory requirements that are not currently reflected in the regulation. Moreover, the proposed amendments would update several outdated dollar-based thresholds in Regulation O and index these thresholds going forward. In addition, the proposed amendments would address the application of Regulation O to member banks that lend to companies that are presumed to be controlled by large asset management companies through passive investment funds. Finally, the proposed amendments would revise and reorganize the regulation to streamline the text and make it more accessible.
2026-14373, Formations of, Acquisitions by, and Mergers of Bank Holding Companies
Some companies want to become bank holding companies or buy banks, and the Federal Reserve is checking their applications. If you have thoughts, you can send comments by August 17, 2026. This affects banks and their owners, and the process helps keep banking safe and fair.
2026-14060, Inflation Adjustments for Civil Money Penalties
The Federal Reserve announced that civil money penalties won’t go up in 2026 because inflation data wasn’t available due to a government shutdown. This means businesses and individuals facing these penalties will see the same amounts as in 2025. The freeze keeps things steady until new inflation numbers come in next year.
2026-14064, Formations of, Acquisitions by, and Mergers of Bank Holding Companies
Some companies want to become bank holding companies or buy banks, and the Federal Reserve is reviewing their applications. If you have thoughts, you can send comments by August 12, 2026. This affects banks, their owners, and the public, with no direct costs but important changes in who controls banks.
2026-13904, Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB
The Federal Reserve Board is updating and extending its Census and Survey of Finance Companies for three more years, starting with the September 2026 survey. This affects finance companies and lenders who provide data to help the government understand the finance industry better. The changes aim to keep the information fresh and useful without adding extra costs or delays.
Previous / Next Documents
Previous: 2026-15758, Establishment of Class C Airspace and Removal of Class D Airspace; Wilmington International Airport, NC
This action proposes to establish Class C airspace and remove Class D airspace at Wilmington International Airport (ILM), NC. The FAA is proposing this action to enhance the efficient management of air traffic operations and reduce the potential for midair collision in the Wilmington, NC, terminal area. The Class C airspace would replace the existing Class D airspace at ILM. In addition, the non-regulatory Terminal Radar Service Area (TRSA) would be removed.
Next: 2026-15777, Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks; Bank Holding Companies
The Board is inviting public comment on proposed amendments to Regulation O, which governs loans by member banks to their insiders and insiders of their affiliates. The proposed amendments would update and modernize the regulation, increase transparency by clarifying requirements and incorporating existing interpretations, and promote efficiency by reducing regulatory burden. The proposed amendments also would incorporate existing statutory requirements that are not currently reflected in the regulation. Moreover, the proposed amendments would update several outdated dollar-based thresholds in Regulation O and index these thresholds going forward. In addition, the proposed amendments would address the application of Regulation O to member banks that lend to companies that are presumed to be controlled by large asset management companies through passive investment funds. Finally, the proposed amendments would revise and reorganize the regulation to streamline the text and make it more accessible.