2:26 PM » JOBS Act Delivers Needed Red Tape Relief to Small Banks
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The bipartisan JOBS Act arrives just in time to help small, community banks as they are "struggling to stay profitable in a period of low interest rates, stagnant lending and rising compliance costs from other new regulations," the Wall Street Journal reports. The JOBS (Jumpstart Our Business Startups) Act originated in the Financial Services Committee and is the culmination of an initiative started by Chairman Spencer Bachus last year to promote small business capital formation. The Wall Street Journal article takes particular note of one provision of the JOBS Act that raises the number of shareholders at which small banks must register with the SEC from 500 shareholders to 2,000. The change frees up small banks to raise capital by attracting new investors without taking on the red tape burdens that come with mandatory SEC registration and reporting. Filing quarterly and annual financial reports alone with the SEC can cost small banks as much as $200,000 a year. This Wall Street Journal report follows: Small Banks Get a Freer Hand April 23, 2012 By ROBIN SIDEL Jim Stein no longer has to worry when one of his shareholders dies or gets divorced. As chief executive of Bank of Houston, Mr. Stein used to fret about tripping a regulation that required the community bank to register with the Securities and Exchange Commission if it has more than 500 shareholders. The bank, a unit of BOH Holdings Inc., carefully maintained its shareholder count at 350 because it wanted to avoid the cost and hassle of registering. But the level was always at risk of rising. "One shareholder could turn into four through unexpected consequences," Mr. Stein said. Now, Mr. Stein and other small-bank CEOs can stop counting shareholders as closely and turning potential investors away at the door. The JOBS Act signed into law this month includes a provision that raises the number of shareholders at which small banks must register with the SEC to 2,000. The JOBS Act aims...