Regulators released new details on how they will enforce restrictions on charter swaps by troubled banks writes American Banker's Joe Adler.
If a bank or thrift is under an enforcement action, it is banned from converting to a federal or state charter under the Dodd-Frank Act.
However, the law allows for some exceptions, as long as the old and the new regulator agree that the institution is on its way to recovery.
Three federal agencies and the Conference State Bank Supervisions said in a joint statement on Monday such conversions for banks would be allowed in limited cases.
"If the current federal banking agency or state bank supervisor objects to the conversion or the plan, the conversion remains prohibited under" Dodd-Frank, the statement said.
For the full piece see "Charter Conversions for the Sick Will Be 'Rare,' Agencies Say" (may require subscription).