Wednesday, June 19, 2013

Senate Legislation Would Extend to Thrifts the JOBS Act Shareholder Thresholds for SEC Registration

Senators Pat Toomey (R-PA) and Mark Pryor (D-AR) have introduced bi-partisan legislation that would extend to savings and loan institutions the JOBS Act shareholder thresholds for SEC registration and deregistration. The Holding Company Registration Threshold Equalization Act, S.872, corrects the inadvertent omission of thrifts from the new shareholder thresholds contained in the JOBS Act and thereby effects Congressional intent. S. 872 is a companion bill to H.R. 801, which was recently unanimously reported out of the House Financial Services Committee to the House floor.

Currently, Section 601 of the JOBS Act raises the number of shareholders permitted to invest in a community bank before triggering SEC reporting and registration from 500 to 2000. It also requires termination of a security registration in the case of a bank or bank holding company if the number of holders of a class of security drops below 1200. S. 872 would extend these shareholder thresholds to savings and loan associations.

Rep. Ann Wagner (R-MO), a co-sponsor of the House legislation, noted that these JOBS Act provisions lift outdated burdens off of small lenders and help increase capital raising. She noted that many community banks have already taken advantage of the new shareholder threshold provisions. Thrifts were intended to be included in the new thresholds, she said, since they are regulated like banks and are subject to the same reporting requirements.

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