Some small bank holding companies could soon be seeing less of their federal examiners.
The Federal Reserve Board announced Thursday that it's changing the review process for "shell" bank holding companies. A shell holding company is defined as one with less than $1 billion of assets, having insignificant outstanding debt, and engaging in no significant nonbank activity.
Under the new rules, which take effect Nov. 30, Fed examiners will only do an on-site review of a shell holding company if it is having significant problems. Otherwise, all examinations will be done off-site.
"We viewed this as a more efficient use of our own resources," said Richard Spillenkothen, director of supervision at the Federal Reserve. He added that the rule changewill free up examiners to spend more time looking at "higher risk activity."