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Time for a Change the Thrift Charter and Strategic Considerations for Conversion

The Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) is having a significant impact throughout the financial services industry, but its effects are particularly acute for the U.S. thrift industry. In particular, significant changes in the regulation of thrifts and their holding companies pose unique considerations with respect to how the law affects their future business operations. In light of these changes, the most important question for thrifts and their parent holding companies (SLHCs) is whether it makes business sense to continue to operate as a thrift in light of the few remaining advantages and mounting disadvantages of the thrift charter relative to a commercial bank charter. This article examines the business and legal considerations applicable to thrifts and SLHCs, as well as issues regarding the longer-term viability and retention of the thrift charter.

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