The Federal Reserve seeks public input on modernizing regulations for depositor-owned mutual banks, which hold over 90 percent of assets under $3 billion.
The Federal Reserve Board proposed modernizing rules for mutual banking organizations, which are owned by depositors rather than shareholders. Over 90 percent of these institutions have less than $3 billion in total assets, and current regulations date back to 1993 without updates.
The proposal aims to reduce procedural burdens and clarify regulatory capital requirements. The Fed assumed oversight of mutual banks from the Office of Thrift Supervision in 2011, but rules have remained unchanged, creating complexity for smaller institutions.
Vice Chair for Supervision Michelle W. Bowman stated the changes would support growth while preserving the unique depositor-owned structure. The proposal also seeks to increase flexibility for capital-raising efforts.