Earlier this month,  the IRS finally withdrew its proposed rule relating to the TEFRA disallowance. The rule, which dates back to August 2006, would have forced Subchapter S banks to apply the 20% TEFRA disallowance not just for the first three years after the bank’s S election, but every year thereafter in which it had interest expense attributable to certain tax-exempt municipal securities. Withdrawal of the proposed rule represents the final chapter in what became a hotly-contested dispute between the Sub S bank community and the IRS—one that ultimately went as far as the U.S. Seventh Circuit Court of Appeals in Chicago.  Read more

U.S. Congressman Francisco “Quico” Canseco (TX), member of the House Financial Services Committee, has accepted the Subchapter S Bank Association’s invitation to speak at the 14th Annual Conference on November 7 in San Antonio.   Read more

The line up of speakers has been set for the 14th Annual Conference of the Subchapter S Bank Association  and registration is now open for the event, November 6-8, 2011 at the Hyatt Regency Hill Country Resort in San Antonio, TX.    Read more

On Monday, June 13, 2011, the Federal Reserve Board issued an interim final rule allowing small bank holding companies organized as S corporations to exclude debt issued to Treasury under the Small Business Lending Fund (SBLF) from the definition of “debt” under the Federal Reserve’s Small Bank Holding Company Policy Statement. In effect, SBLF debt will not be included in the debt-to-equity calculation applicable to small bank holding companies.   Read more

Late Thursday afternoon, the Treasury Department finally released a term sheet for Subchapter S banks and mutuals, allowing them to participate in the Small Business Lending Fund (SBLF). The application deadline for both S corporations and mutuals is June 6, 2011. Though many Sub S banks have been anxiously awaiting this term sheet for months now, most will be exceedingly disappointed to learn that the funds will only qualify for Tier 2 capital treatment.  Read more