# Capital Adequacy Guidelines; Small Bank Holding Company Policy Statement: Treatment of Subordinated Securities Issued to the United States Treasury Under the Emergency Economic Stabilization Act of 2008
> **US Federal Reserve System** · Interim final rule with request for public comment. · Published 2009-06-01 · Effective 2009-06-01 · 74 FR 26077
## Document
- **Document number:** E9-12626
- **Category:** final-rule
- **Agency:** US Federal Reserve System
- **Federal Register citation:** 74 FR 26077
- **CFR reference:** 12 CFR 225
- **Publication date:** 2009-06-01
- **Effective date:** 2009-06-01
- **Docket:** Regulation Y
## Abstract

The Board has adopted, and is seeking public comment on an interim final rule (interim final rule or rule) to support in a timely manner, the full implementation and acceptance of the capital purchase program of the U.S. Department of Treasury (Treasury) and promote the stability of banking organizations and the financial system. This rule permits bank holding companies that have made a valid election to be taxed under Subchapter S of Chapter 1 of the U.S. Internal Revenue Code (S-Corp BHCs) and bank holding companies organized in mutual form (Mutual BHCs) to include the full amount of any new subordinated debt securities issued to the Treasury under the capital purchase program announced by the Secretary of the Treasury on October 14, 2008 (Subordinated Securities) in tier 1 capital for purposes of the Board's risk-based and leverage capital guidelines for bank holding companies, provided that the Subordinated Securities will count toward the limit on the amount of other restricted core capital elements includable in tier 1 capital; and allows bank holding companies that are subject to the Board's Small Bank Holding Company Policy Statement and that are S- Corps or Mutual BHCs to exclude the Subordinated Securities from treatment as debt for purposes of the debt-to-equity standard under the Small Bank Holding Company Policy Statement.

## Source
- [Federal Register document](https://www.federalregister.gov/documents/2009/06/01/E9-12626/capital-adequacy-guidelines-small-bank-holding-company-policy-statement-treatment-of-subordinated)
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