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With an Impending Sunset of the Federal Thrift Charter -- the Case for Conversion

February 23, 2011

By Kevin L. Petrasic and Helen Y. Lee

While a new regulatory framework for the U.S. banking system continues to emerge in the wake of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA), the future impact of the DFA reforms remains unclear. There are hundreds of regulations to be written by the various federal agencies required to implement the legislation. Nonetheless, the banking industry and broader financial services sectors have begun the arduous task of preparing for and anticipating the changes mandated by the legislation. The DFA significantly impacts all players in the banking industry, but thrifts and their holding companiesare faced with unique considerations with respect to how the law affects their future business operations. This article addresses these issues, including the business and legal considerations applicable to thrifts and savings and loan holding companies (SLHCs), as well as the longer term viability and retention of the federal thrift charter.