by Regulation KK is a regulation issued by the Federal Reserve Board (FRB) that applies to savings and loan holding companies (SLHCs). SLHCs are companies that own one or more savings associations or savings banks and also engage in other activities such as operating non-depository subsidiaries.
The purpose of Regulation KK is to provide a framework for the supervision of SLHCs, in order to ensure the safety and soundness of the institutions they own and the protection of depositors. The regulation sets out the requirements and restrictions that SLHCs must comply with in order to conduct their business activities.
Key provisions of Regulation KK include:
- Capital requirements: SLHCs must maintain sufficient capital to support the operations of their subsidiaries and to protect depositors.
- Risk-based assessment: SLHCs must have a risk management system in place to identify and manage the risks associated with their activities.
- Transparency: SLHCs must disclose information about their financial condition and operations to the FRB and to the public.
- Diversification: SLHCs are generally restricted from engaging in activities that are not closely related to the business of savings associations.
- Mergers and acquisitions: SLHCs must obtain prior approval from the FRB before acquiring or merging with other companies.
- Holding company supervision: SLHCs are subject to regular examination and supervision by the FRB to ensure compliance with regulations.
Regulation KK applies only to SLHCs and their non-depository subsidiaries and not to other types of financial holding companies, such as bank holding companies.
In summary, Regulation KK is a federal regulation that applies to savings and loan holding companies (SLHCs) and provides a framework for the supervision of SLHCs to ensure the safety and soundness of the institutions they own, and to protect depositors.
