Regulatory Modernization and Relief for Mutual Holding Companies

Key dates

2026-08-04

Publication of the Federal Reserve Board notice of proposed rulemaking ‘Regulatory Modernization and Relief for Mutual Holding Companies’ in the Federal Register (91 FR 49490; FR Doc. 2026-15774) amending Regulations Q (12 CFR part 217) and MM (12 CFR part 239).

2026-10-05 Deadline

Comment deadline for submitting responses to the Federal Reserve Board on the proposed amendments to Regulations Q and MM (Docket No. R-1895; RIN 7100-AH26).

Suggested considerations

• Compliance teams at mutual holding companies and savings and loan holding companies may wish to review the proposed amendments to Regulation MM (12 CFR part 239), particularly the sections on dividend waivers, mutual-to-stock conversion processes, post-conversion restrictions, chartering requirements for subsidiary holding companies, and updated model charters and bylaws, to assess operational and governance impacts.
• Firms planning or contemplating mutual-to-stock conversions should consider comparing their current conversion documentation, use of FR MM-PS, FR MM-OC and FR MM-OF forms, and liquidation account methodologies with the proposed streamlined forms, corrected liquidation account calculations, and revised rules on stock pricing, repurchases, offers and sales, employee stock ownership plan financing and benefit plans.
• Institutions that issue, or are considering issuing, mutual capital certificates should review the proposed Appendices B and C to Regulation Q (12 CFR part 217) to evaluate whether their existing or planned instrument terms align with the model key terms for qualification as Common Equity Tier 1 or Additional Tier 1 capital, including permanence, loss-absorption, distributions and redemption features.
• Subsidiary holding companies of thrift mutual holding companies may wish to analyze the proposed elimination of the federal charter requirement and related changes to Subpart C of Regulation MM to determine chartering options, corporate structure implications, and any needed updates to organizational documents and regulatory commitments.
• Governance and legal teams at MHCs could review the proposed revisions to membership rights, proxy processes, postal mail requirements, voluntary dissolution, and the model charter and bylaws in Appendices A, C and D to Regulation MM, with a view to aligning internal policies and corporate governance frameworks with the modernized regime once finalized.
• Risk and capital management functions at bank holding companies, savings and loan holding companies and state member banks should consider evaluating capital planning assumptions and buffers in light of the clarified eligibility of mutual capital instruments as regulatory capital under Regulation Q, and identify any systems or reporting changes that may be required if the proposal is adopted.
• All affected firms may wish to prepare internal impact assessments and, where appropriate, draft comment letters addressing specific elements of Regulations Q and MM (Docket No. R-1895; RIN 7100-AH26), including any perceived risks around conflicts of interest, reduced accountability, or adjustment costs noted in the economic analysis.
• Compliance monitoring teams should plan to track the rulemaking through the comment close date and subsequent Federal Reserve actions so that, if the proposal is finalized, implementation plans can be developed for policy updates, staff training and revisions to regulatory reporting and capital instrument documentation.

What changed

The NPR proposes targeted amendments to Regulation MM (12 CFR part 239) governing mutual holding companies (MHCs), including eliminating certain dividend waiver requirements that currently apply to MHCs and their subsidiary holding companies, and revising post-conversion restrictions to reduce burdens following mutual-to-stock conversions. It would simplify and streamline conversion processes under Subpart E of Regulation MM by addressing the definition of qualifying deposits, revising and consolidating prescribed forms (FR MM-PS, FR MM-OC, FR MM-OF), eliminating Form OC and Form OF, correcting a mathematical error in liquidation account calculations, and updating rules on stock repurchases, pricing of conversion shares, offers and sales of stock, loans to tax‑qualified employee stock owne

Who is affected

• Savings and loan holding companies organized in mutual form subject to Regulation MM (12 CFR part 239)
• Mutual holding companies and their subsidiary holding companies supervised by the Federal Reserve Board
• Bank holding companies and savings and loan holding companies that issue or may issue mutual capital certificates qualifying as regulatory capital under Regulation Q (12 CFR part 217)
• State member banks that rely on mutual capital instruments qualifying as Common Equity Tier 1 or Additional Tier 1 capital under Regulation Q

Related regulations

• Regulation Q (12 CFR part 217)
• Regulation MM (12 CFR part 239)
• Riegle Community Development and Regulatory Improvement Act of 1994
• Providing Accountability Through Transparency Act of 2023