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Regulatory

Greenhouse Financial, LLC (GHF)

We at GHF are committed to be in total compliance with the current regulations. From OCC, FRB, FDIC, and state laws and regulations to interpretive letters to regulatory opinions, GHF is researching it all to insure that your financial institution is well grounded in our BOLI products. Dodd-Frank has changed the capital requirements for Tier 1 and Tier 2 capital, and therefore, GHF has to be responsive to the needs of fashioning our products to be in compliance with those requirements. That being said, the OCC has stated that a national bank (to which the FDIC and FRB have always deferred) may purchase for its account investment securities under such limitations and representations as the Comptroller of the Currency may by regulation prescribe under 12 U.S.C. 24 (Seventh). Under this definition, Banks are allowed to purchase BOLI to the extent of 25 percent of capital and unrestricted loan loss reserve.

The Dodd-Frank legislation has allowed the TARP preferred stock to be grandfathered into the new Basel III capital requirements of being additional Tier 1 capital. Additionally, non-cumulative perpetual preferred stock is also allowable as additional Tier 1 capital, and finally subordinated debentures are allowable as Tier 2 capital. The above securities and a mix of governmental issued securities are the plan for the mix of investments for the UIT. Also, Dodd/Frank places the “investment grade” criteria on the banks shoulders, the ability to pay interest and pay back principal in a timely manner is the new prerequisite for purchasing securities.

Compliance with the applicable Federal and State regulations is of the utmost importance with regard to GHF’s products. We will continuously stay abreast of the changes that may occur and advise all parties involved accordingly.


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