JOBS Act prods more banks to deregister
On several occasions recently, I've noted examples of how the Jumpstart Our Business (JOBS) Act has been received rather tepidly by Wall Street banks and the emerging growth companies the law sought to help, despite really good intentions.
It's nice to now be able to note that in some areas, the law is having the intended results. The Washington Post reports that about 100 small banks have stopped reporting various financial statement details to the SEC in April, when the JOBS Act was enacted. Prior to the enactment, banks with fewer than 300 shareholders could de-register with the SEC and avoid detailed filings. The new law raises the threshold to 1,200 shareholders.
More banks are apparently deciding that they can save lots of money by not registering, which is what the law sought. Most of these banks are tiny, for which $100,000 to $250,000 amounts to massive annual saving. There are critics who favor more disclosure in general, arguing that it acts as deterrent to crime. At least one bank, however, surveyed its shareholders and got the go ahead to deregister.
That the law had the intended consequence in this one area will hardly determine the legacy of the law. But at least it was not a complete failure.
- here's the article