ICBA News Release
FOR IMMEDIATE RELEASE
ICBA Supports OTS Proposal on Optional Charter Provisions for Mutual Holding
Washington, D.C. (Aug. 28, 2007) —The Independent Community Bankers of America (ICBA) commended the Office of Thrift Supervision for proposing an optional charter provision for mutual holding companies (MHC) because it would reduce the opportunity for a minority stockholder to exercise undue influence over the mutual holding company.
“The current regulations which place the minority stockholder limit at 10 percent of all the shares of the mutual holding company subsidiary, instead of 10 percent of the subsidiary’s minority shares, provide an opportunity for minority stockholders in a mutual offering to take unfair advantage of their position and make unreasonable demands on the recently converted mutual holding company,” ICBA said in a letter to OTS.
The OTS proposal adds a provision to its MHC regulations, which could be adopted only by companies in the MHC structure, that would provide that no entity, person or group acting in concert could acquire more than 10 percent of the outstanding minority stock of a subsidiary MHC during the five years following a minority stock issuance. If a stockholder violated this charter provision, the stockholder would not be permitted to vote any stock acquired in excess of the limit. This charter limit would not apply to the stockholdings of the parent MHC or to stock held by Employee Stock Ownership Plans (ESOPs).
The Independent Community Bankers of America, the nation’s voice for community banks, represents 5,000 community banks of all sizes and charter types throughout the United States and is dedicated exclusively to representing the interests of the community banking industry and the communities and customers we serve.