This story appeared in Bank Digest.
The Federal Reserve Board has issued an interim final rule that permits bank holding companies (BHCs) that are S-Corps or that are organized in mutual form to include in Tier 1 capital all subordinated debt issued to Treasury under the Troubled Asset Relief Program (TARP), provided that the subordinated debt will count toward the limit on the amount of other restricted core capital elements includible in Tier 1 capital. The interim final rule also will allow small bank holding companies that are S-Corps or that are organized in mutual form to exclude subordinated debt issued to Treasury under TARP from treatment as “debt” for purposes of the debt-to-equity standard under the Fed’s Small Bank Holding Company Policy Statement.
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20090522a2.pdf