TITLE 12 - US CODE - CHAPTER 17 - BANK HOLDING COMPANIES

12 USC 1841 - Definitions

(a) 
(1) Except as provided in paragraph (5) of this subsection, bank holding company means any company which has control over any bank or over any company that is or becomes a bank holding company by virtue of this chapter.
(2) Any company has control over a bank or over any company if
(A) the company directly or indirectly or acting through one or more other persons owns, controls, or has power to vote 25 per centum or more of any class of voting securities of the bank or company;

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(B) the company controls in any manner the election of a majority of the directors or trustees of the bank or company; or
(C) the Board determines, after notice and opportunity for hearing, that the company directly or indirectly exercises a controlling influence over the management or policies of the bank or company.
(3) For the purposes of any proceeding under paragraph (2)(C) of this subsection, there is a presumption that any company which directly or indirectly owns, controls, or has power to vote less than 5 per centum of any class of voting securities of a given bank or company does not have control over that bank or company.
(4) In any administrative or judicial proceeding under this chapter, other than a proceeding under paragraph (2)(C) of this subsection, a company may not be held to have had control over any given bank or company at any given time unless that company, at the time in question, directly or indirectly owned, controlled, or had power to vote 5 per centum or more of any class of voting securities of the bank or company, or had already been found to have control in a proceeding under paragraph (2)(C).
(5) Notwithstanding any other provision of this subsection
(A) No bank and no company owning or controlling voting shares of a bank is a bank holding company by virtue of its ownership or control of shares in a fiduciary capacity, except as provided in paragraphs (2) and (3) of subsection (g) of this section. For the purpose of the preceding sentence, bank shares shall not be deemed to have been acquired in a fiduciary capacity if the acquiring bank or company has sole discretionary authority to exercise voting rights with respect thereto; except that this limitation is applicable in the case of a bank or company acquiring such shares prior to December 31, 1970, only if the bank or company has the right consistent with its obligations under the instrument, agreement, or other arrangement establishing the fiduciary relationship to divest itself of such voting rights and fails to exercise that right to divest within a reasonable period not to exceed one year after December 31, 1970.
(B) No company is a bank holding company by virtue of its ownership or control of shares acquired by it in connection with its underwriting of securities if such shares are held only for such period of time as will permit the sale thereof on a reasonable basis.
(C) No company formed for the sole purpose of participating in a proxy solicitation is a bank holding company by virtue of its control of voting rights of shares acquired in the course of such solicitation.
(D) No company is a bank holding company by virtue of its ownership or control of shares acquired in securing or collecting a debt previously contracted in good faith, until two years after the date of acquisition. The Board is authorized upon application by a company to extend, from time to time for not more than one year at a time, the two-year period referred to herein for disposing of any shares acquired by a company in the regular course of securing or collecting a debt previously contracted in good faith, if, in the Boards judgment, such an extension would not be detrimental to the public interest, but no such extension shall in the aggregate exceed three years.
(E) No company is a bank holding company by virtue of its ownership or control of any State-chartered bank or trust company which

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(i) is wholly owned by 1 or more thrift institutions or savings banks; and
(ii) is restricted to accepting
(I) deposits from thrift institutions or savings banks;
(II) deposits arising out of the corporate business of the thrift institutions or savings banks that own the bank or trust company; or
(III) deposits of public moneys.
(F) No trust company or mutual savings bank which is an insured bank under the Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.] is a bank holding company by virtue of its direct or indirect ownership or control of one bank located in the same State, if
(i)  such ownership or control existed on December 31, 1970, authorized by applicable State law, and
(ii)  the trust company or mutual savings bank does not after that date acquire an interest in any company that, together with any other interest it holds in that company, will exceed 5 per centum of any class of the voting shares of that company, except that this limitation shall not be applicable to investments of the trust company or mutual savings bank, direct and indirect, which are otherwise in accordance with the limitations applicable to national banks under section 24 of this title.
(6) For the purposes of this chapter, any successor to a bank holding company shall be deemed to be a bank holding company from the date on which the predecessor company became a bank holding company.
(b) Company means any corporation, partnership, business trust, association, or similar organization, or any other trust unless by its terms it must terminate within twenty-five years or not later than twenty-one years and ten months after the death of individuals living on the effective date of the trust but shall not include any corporation the majority of the shares of which are owned by the United States or by any State, and shall not include a qualified family partnership. Company covered in 1970 means a company which becomes a bank holding company as a result of the enactment of the Bank Holding Company Act Amendments of 1970 and which would have been a bank holding company on June 30, 1968, if those amendments had been enacted on that date.
(c) Bank Defined.— 
For purposes of this chapter
(1) In general.— 
Except as provided in paragraph (2), the term bank means any of the following:
(A) An insured bank as defined in section 3(h) of the Federal Deposit Insurance Act [12 U.S.C. 1813 (h)].
(B) An institution organized under the laws of the United States, any State of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands which both
(i) accepts demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties or others; and
(ii) is engaged in the business of making commercial loans.
(2) Exceptions.— 
The term bank does not include any of the following:
(A) A foreign bank which would be a bank within the meaning of paragraph (1) solely because such bank has an insured or uninsured branch in the United States.
(B) An insured institution (as defined in subsection (j) of this section).
(C) An organization that does not do business in the United States except as an incident to its activities outside the United States.
(D) An institution that functions solely in a trust or fiduciary capacity, if
(i) all or substantially all of the deposits of such institution are in trust funds and are received in a bona fide fiduciary capacity;
(ii) no deposits of such institution which are insured by the Federal Deposit Insurance Corporation are offered or marketed by or through an affiliate of such institution;
(iii) such institution does not accept demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties or others or make commercial loans; and
(iv) such institution does not
(I) obtain payment or payment related services from any Federal Reserve bank, including any service referred to in section 11A of the Federal Reserve Act [12 U.S.C. 248a]; or
(II) exercise discount or borrowing privileges pursuant to section 19(b)(7) of the Federal Reserve Act [12 U.S.C. 461 (b)(7)].
(E) A credit union (as described in section 19(b)(1)(A)(iv) of the Federal Reserve Act [12 U.S.C. 461 (b)(1)(A)(iv)]).
(F) An institution, including an institution that accepts collateral for extensions of credit by holding deposits under $100,000, and by other means which
(i) engages only in credit card operations;
(ii) does not accept demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties or others;
(iii) does not accept any savings or time deposit of less than $100,000;
(iv) maintains only one office that accepts deposits; and
(v) does not engage in the business of making commercial loans.
(G) An organization operating under section 25 or section 25(a)1 of the Federal Reserve Act.
(H) An industrial loan company, industrial bank, or other similar institution which is
(i) an institution organized under the laws of a State which, on March 5, 1987, had in effect or had under consideration in such States legislature a statute which required or would require such institution to obtain insurance under the Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.]
(I) which does not accept demand deposits that the depositor may withdraw by check or similar means for payment to third parties;
(II) which has total assets of less than $100,000,000; or
(III) the control of which is not acquired by any company after August 10, 1987; or
(ii) an institution which does not, directly, indirectly, or through an affiliate, engage in any activity in which it was not lawfully engaged as of March 5, 1987, except that this subparagraph shall cease to apply to any institution which permits any overdraft (including any intraday overdraft), or which incurs any such overdraft in such institutions account at a Federal Reserve bank, on behalf of an affiliate if such overdraft is not the result of an inadvertent computer or accounting error that is beyond the control of both the institution and the affiliate, or that is otherwise permissible for a bank controlled by a company described in section 1843 (f)(1) of this title.
(d) Subsidiary, with respect to a specified bank holding company, means
(1)  any company 25 per centum or more of whose voting shares (excluding shares owned by the United States or by any company wholly owned by the United States) is directly or indirectly owned or controlled by such bank holding company, or is held by it with power to vote;
(2)  any company the election of a majority of whose directors is controlled in any manner by such bank holding company; or
(3)  any company with respect to the management of policies of which such bank holding company has the power, directly or indirectly, to exercise a controlling influence, as determined by the Board, after notice and opportunity for hearing.
(e) The term successor shall include any company which acquires directly or indirectly from a bank holding company shares of any bank, when and if the relationship between such company and the bank holding company is such that the transaction effects no substantial change in the control of the bank or beneficial ownership of such shares of such bank. The Board may, by regulation, further define the term successor to the extent necessary to prevent evasion of the purposes of this chapter.
(f) Board means the Board of Governors of the Federal Reserve System.
(g) For the purposes of this chapter
(1) shares owned or controlled by any subsidiary of a bank holding company shall be deemed to be indirectly owned or controlled by such bank holding company; and
(2) shares held or controlled directly or indirectly by trustees for the benefit of
(A)  a company,
(B)  the shareholders or members of a company, or
(C)  the employees (whether exclusively or not) of a company, shall be deemed to be controlled by such company, unless the Board determines that such treatment is not appropriate in light of the facts and circumstances of the case and the purposes of this chapter.
(h) 
(1) Except as provided by paragraph (2), the application of this chapter and of section 371c of this title shall not be affected by the fact that a transaction takes place wholly or partly outside the United States or that a company is organized or operates outside the United States.
(2) Except as provided in paragraph (3), the prohibitions of section 1843 of this title shall not apply to shares of any company organized under the laws of a foreign country (or to shares held by such company in any company engaged in the same general line of business as the investor company or in a business related to the business of the investor company) that is principally engaged in business outside the United States if such shares are held or acquired by a bank holding company organized under the laws of a foreign country that is principally engaged in the banking business outside the United States. For the purpose of this subsection, the term section 2 (h)(2) company means any company whose shares are held pursuant to this paragraph.
(3) Nothing in paragraph (2) authorizes a section 2 (h)(2) company to engage in (or acquire or hold more than 5 percent of the outstanding shares of any class of voting securities of a company engaged in) any banking, securities, insurance, or other financial activities, as defined by the Board, in the United States. This paragraph does not prohibit a section 2 (h)(2) company from holding shares that were lawfully acquired before August 10, 1987.
(4) No domestic office or subsidiary of a bank holding company or subsidiary thereof holding shares of a section 2 (h)(2) company may extend credit to a domestic office or subsidiary of such section 2 (h)(2) company on terms more favorable than those afforded similar borrowers in the United States.
(5) No domestic banking office or bank subsidiary of a bank holding company that controls a section 2 (h)(2) company may offer or market products or services of such section 2 (h)(2) company, or permit its products or services to be offered or marketed by or through such section 2 (h)(2) company, unless such products or services were being so offered or marketed as of March 5, 1987, and then only in the same manner in which they were being offered or marketed as of that date.
(i) Thrift Institution.— 
For purposes of this chapter, the term thrift institution means
(1) any domestic building and loan or savings and loan association;
(2) any cooperative bank without capital stock organized and operated for mutual purposes and without profit;
(3) any Federal savings bank; and
(4) any State-chartered savings bank the holding company of which is registered pursuant to section 1730a2 of this title.
(j) Definition of Savings Associations and Related Term.— 
The term savings association or insured institution means
(1) any Federal savings association or Federal savings bank;
(2) any building and loan association, savings and loan association, homestead association, or cooperative bank if such association or cooperative bank is a member of the Deposit Insurance Fund; and
(3) any savings bank or cooperative bank which is deemed by the Director of the Office of Thrift Supervision to be a savings association under section 1467a (l) of this title.
(k) Affiliate.— 
For purposes of this chapter, the term affiliate means any company that controls, is controlled by, or is under common control with another company.
(l) Savings Bank Holding Company.— 
For purposes of this chapter, the term savings bank holding company means any company which controls one or more qualified savings banks if the aggregate total assets of such savings banks constitute, upon formation of the holding company and at all times thereafter, at least 70 percent of the total assets of such company.
(m) [Repealed]
(n) Incorporated Definitions.— 
For purposes of this chapter, the terms depository institution, insured depository institution, appropriate Federal banking agency, default, in danger of default, and State bank supervisor have the same meanings as in section 3 of the Federal Deposit Insurance Act [12 U.S.C. 1813].
(o) Other Definitions.— 
For purposes of this chapter, the following definitions shall apply:
(1) Capital terms.— 

(A) Insured depository institutions.— 
With respect to insured depository institutions, the terms well capitalized, adequately capitalized, and undercapitalized have the same meanings as in section 38 of the Federal Deposit Insurance Act [12 U.S.C. 1831o].
(B) Bank holding company.— 

(i) Adequately capitalized.— 
With respect to a bank holding company, the term adequately capitalized means a level of capitalization which meets or exceeds all applicable Federal regulatory capital standards.
(ii) Well capitalized.— 
A bank holding company is well capitalized if it meets the required capital levels for well capitalized bank holding companies established by the Board.
(C) Other capital terms.— 
The terms Tier 1 and risk-weighted assets have the meanings given those terms in the capital guidelines or regulations established by the Board for bank holding companies.
(2) Antitrust laws.— 
Except as provided in section 1849 of this title, the term antitrust laws
(A) has the same meaning as in subsection (a) of section 12 of title 15; and
(B) includes section 45 of title 15 to the extent that such section 45 relates to unfair methods of competition.
(3) Branch.— 
The term branch means a domestic branch (as defined in section 3 of the Federal Deposit Insurance Act [12 U.S.C. 1813]).
(4) Home state.— 
The term home State means
(A) with respect to a national bank, the State in which the main office of the bank is located;
(B) with respect to a State bank, the State by which the bank is chartered; and
(C) with respect to a bank holding company, the State in which the total deposits of all banking subsidiaries of such company are the largest on the later of
(i) July 1, 1966; or
(ii) the date on which the company becomes a bank holding company under this chapter.
(5) Host state.— 
The term host State means
(A) with respect to a bank, a State, other than the home State of the bank, in which the bank maintains, or seeks to establish and maintain, a branch; and
(B) with respect to a bank holding company, a State, other than the home State of the company, in which the company controls, or seeks to control, a bank subsidiary.
(6) Out-of-state bank.— 
The term out-of-State bank means, with respect to any State, a bank whose home State is another State.
(7) Out-of-state bank holding company.— 
The term out-of-State bank holding company means, with respect to any State, a bank holding company whose home State is another State.
(8) Lead insured depository institutions.— 

(A) In general.— 
The term lead insured depository institution means the largest insured depository institution controlled by the subject bank holding company at any time, based on a comparison of the average total risk-weighted assets controlled by each insured depository institution during the previous 12-month period.
(B) Branch or agency.— 
For purposes of this paragraph and section 1843 (j)(4) of this title, the term insured depository institution includes any branch or agency operated in the United States by a foreign bank.
(9) Well managed.— 
The term well managed means
(A) in the case of any company or depository institution which receives examinations, the achievement of
(i) a CAMEL composite rating of 1 or 2 (or an equivalent rating under an equivalent rating system) in connection with the most recent examination or subsequent review of such company or institution; and
(ii) at least a satisfactory rating for management, if such rating is given; or
(B) in the case of a company or depository institution that has not received an examination rating, the existence and use of managerial resources which the Board determines are satisfactory.
(10) Qualified family partnership.— 
The term qualified family partnership means a general or limited partnership that the Board determines
(A) does not directly control any bank, except through a registered bank holding company;
(B) does not control more than 1 registered bank holding company;
(C) does not engage in any business activity, except indirectly through ownership of other business entities;
(D) has no investments other than those permitted for a bank holding company pursuant to section 1843 (c) of this title;
(E) is not obligated on any debt, either directly or as a guarantor;
(F) has partners, all of whom are either
(i) individuals related to each other by blood, marriage (including former marriage), or adoption; or
(ii) trusts for the primary benefit of individuals related as described in clause (i); and
(G) has filed with the Board a statement that includes
(i) the basis for the eligibility of the partnership under subparagraph (F);
(ii) a list of the existing activities and investments of the partnership;
(iii) a commitment to comply with this paragraph;
(iv) a commitment to comply with section 7 of the Federal Deposit Insurance Act [12 U.S.C. 1817] with respect to any acquisition of control of an insured depository institution occurring after September 30, 1996; and
(v) a commitment to be subject, to the same extent as if the qualified family partnership were a bank holding company
(I) to examination by the Board to assure compliance with this paragraph; and
(II) to section 8 of the Federal Deposit Insurance Act [12 U.S.C. 1818].
(p) Financial Holding Company.— 
For purposes of this chapter, the term financial holding company means a bank holding company that meets the requirements of section 1843 (l)(1) of this title.
(q) Insurance Company.— 
For purposes of sections 1843 and 1844 of this title, the term insurance company includes any person engaged in the business of insurance to the extent of such activities.
[1] See References in Text note below.
[2] See References in Text note below.

12 USC 1842 - Acquisition of bank shares or assets

(a) Prior approval of Board as necessary; exceptions; disposition, time extension; subsequent approval or disposition upon disapproval 
It shall be unlawful, except with the prior approval of the Board,
(1)  for any action to be taken that causes any company to become a bank holding company;
(2)  for any action to be taken that causes a bank to become a subsidiary of a bank holding company;
(3)  for any bank holding company to acquire direct or indirect ownership or control of any voting shares of any bank if, after such acquisition, such company will directly or indirectly own or control more than 5 per centum of the voting shares of such bank;
(4)  for any bank holding company or subsidiary thereof, other than a bank, to acquire all or substantially all of the assets of a bank; or
(5)  for any bank holding company to merge or consolidate with any other bank holding company. Notwithstanding the foregoing this prohibition shall not apply to
(A)  shares acquired by a bank,
(i)  in good faith in a fiduciary capacity, except where such shares are held under a trust that constitutes a company as defined in section 1841 (b) of this title and except as provided in paragraphs (2) and (3) of section 1841 (g) of this title, or
(ii)  in the regular course of securing or collecting a debt previously contracted in good faith, but any shares acquired after May 9, 1956, in securing or collecting any such previously contracted debt shall be disposed of within a period of two years from the date on which they were acquired;
(B)  additional shares acquired by a bank holding company in a bank in which such bank holding company owned or controlled a majority of the voting shares prior to such acquisition; or
(C)  the acquisition, by a company, of control of a bank in a reorganization in which a person or group of persons exchanges their shares of the bank for shares of a newly formed bank holding company and receives after the reorganization substantially the same proportional share interest in the holding company as they held in the bank except for changes in shareholders interests resulting from the exercise of dissenting shareholders rights under State or Federal law if
(i) immediately following the acquisition
(I) the bank holding company meets the capital and other financial standards prescribed by the Board by regulation for such a bank holding company; and
(II) the bank is adequately capitalized (as defined in section 1831o of this title);
(ii) the holding company does not engage in any activities other than those of managing and controlling banks as a result of the reorganization;
(iii) the company provides 30 days prior notice to the Board and the Board does not object to such transaction during such 30-day period; and
(iv) the holding company will not acquire control of any additional bank as a result of the reorganization..[1] The Board is authorized upon application by a bank to extend, from time to time for not more than one year at a time, the two-year period referred to above for disposing of any shares acquired by a bank in the regular course of securing or collecting a debt previously contracted in good faith, if, in the Boards judgment, such an extension would not be detrimental to the public interest, but no such extension shall in the aggregate exceed three years. For the purpose of the preceding sentence, bank shares acquired after December 31, 1970, shall not be deemed to have been acquired in good faith in a fiduciary capacity if the acquiring bank or company has sole discretionary authority to exercise voting rights with respect thereto, but in such instances acquisitions may be made without prior approval of the Board if the Board, upon application filed within ninety days after the shares are acquired, approves retention or, if retention is disapproved, the acquiring bank disposes of the shares or its sole discretionary voting rights within two years after issuance of the order of disapproval.
(b) Application for approval; notice to Comptroller of Currency or State authority; views and recommendations; disapproval; hearing; order of Board; nonaction deemed grant of application; procedure in emergencies or probable failures requiring immediate Board action and orders 

(1) Notice and hearing requirements 
Upon receiving from a company any application for approval under this section, the Board shall give notice to the Comptroller of the Currency, if the applicant company or any bank the voting shares or assets of which are sought to be required[2] is a national banking association, or to the appropriate supervisory authority of the interested State, if the applicant company or any bank the voting shares or assets of which are sought to be acquired is a State bank, in order to provide for the submission of the views and recommendations of the Comptroller of the Currency or the State supervisory authority, as the case may be. The views and recommendations shall be submitted within thirty calendar days of the date on which notice is given, or within ten calendar days of such date if the Board advises the Comptroller of the Currency or the State supervisory authority that an emergency exists requiring expeditious action. If the thirty-day notice period applies and if the Comptroller of the Currency or the State supervisory authority so notified by the Board disapproves the application in writing within this period, the Board shall forthwith give written notice of that fact to the applicant. Within three days after giving such notice to the applicant, the Board shall notify in writing the applicant and the disapproving authority of the date for commencement of a hearing by it on such application. Any such hearing shall be commenced not less than ten nor more than thirty days after the Board has given written notice to the applicant of the action of the disapproving authority. The length of any such hearing shall be determined by the Board, but it shall afford all interested parties a reasonable opportunity to testify at such hearing. At the conclusion thereof, the Board shall, by order, grant or deny the application on the basis of the record made at such hearing. In the event of the failure of the Board to act on any application for approval under this section within the ninety-one-day period which begins on the date of submission to the Board of the complete record on that application, the application shall be deemed to have been granted. Notwithstanding any other provision of this subsection, if the Board finds that it must act immediately on any application for approval under this section in order to prevent the probable failure of a bank or bank holding company involved in a proposed acquisition, merger, or consolidation transaction, the Board may dispense with the notice requirements of this subsection, and if notice is given, the Board may request that the views and recommendations of the Comptroller of the Currency or the State supervisory authority, as the case may be, be submitted immediately in any form or by any means acceptable to the Board. If the Board has found pursuant to this subsection either that an emergency exists requiring expeditious action or that it must act immediately to prevent probable failure, the Board may grant or deny any such application without a hearing notwithstanding any recommended disapproval by the appropriate supervisory authority.
(2) Waiver in case of bank in danger of closing 
If the Board receives a certification described in section 1823 (f)(8)(D)3 of this title from the appropriate Federal or State chartering authority that a bank is in danger of closing, the Board may dispense with the notice and hearing requirements of paragraph (1) with respect to any application received by the Board relating to the acquisition of such bank, the bank holding company which controls such bank, or any other affiliated bank.
(c) Factors for consideration by Board 

(1) Competitive factors 
The Board shall not approve
(A) any acquisition or merger or consolidation under this section which would result in a monopoly, or which would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of the United States, or
(B) any other proposed acquisition or merger or consolidation under this section whose effect in any section of the country may be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint or[4] trade, unless it finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.
(2) Banking and community factors 
In every case, the Board shall take into consideration the financial and managerial resources and future prospects of the company or companies and the banks concerned, and the convenience and needs of the community to be served.
(3) Supervisory factors 
The Board shall disapprove any application under this section by any company if
(A) the company fails to provide the Board with adequate assurances that the company will make available to the Board such information on the operations or activities of the company, and any affiliate of the company, as the Board determines to be appropriate to determine and enforce compliance with this chapter; or
(B) in the case of an application involving a foreign bank, the foreign bank is not subject to comprehensive supervision or regulation on a consolidated basis by the appropriate authorities in the banks home country.
(4) Treatment of certain bank stock loans 
Notwithstanding any other provision of law, the Board shall not follow any practice or policy in the consideration of any application for the formation of a one-bank holding company if following such practice or policy would result in the rejection of such application solely because the transaction to form such one-bank holding company involves a bank stock loan which is for a period of not more than twenty-five years. The previous sentence shall not be construed to prohibit the Board from rejecting any application solely because the other financial arrangements are considered unsatisfactory. The Board shall consider transactions involving bank stock loans for the formation of a one-bank holding company having a maturity of twelve years or more on a case by case basis and no such transaction shall be approved if the Board believes the safety or soundness of the bank may be jeopardized.
(5) Managerial resources 
Consideration of the managerial resources of a company or bank under paragraph (2) shall include consideration of the competence, experience, and integrity of the officers, directors, and principal shareholders of the company or bank.
(6) Money laundering 
In every case, the Board shall take into consideration the effectiveness of the company or companies in combatting money laundering activities, including in overseas branches.
(d) Interstate banking 

(1) Approvals authorized 

(A) Acquisition of banks 
The Board may approve an application under this section by a bank holding company that is adequately capitalized and adequately managed to acquire control of, or acquire all or substantially all of the assets of, a bank located in a State other than the home State of such bank holding company, without regard to whether such transaction is prohibited under the law of any State.
(B) Preservation of State age laws 

(i) In general Notwithstanding subparagraph (A), the Board may not approve an application pursuant to such subparagraph that would have the effect of permitting an out-of-State bank holding company to acquire a bank in a host State that has not been in existence for the minimum period of time, if any, specified in the statutory law of the host State.
(ii) Special rule for State age laws specifying a period of more than 5 years Notwithstanding clause (i), the Board may approve, pursuant to subparagraph (A), the acquisition of a bank that has been in existence for at least 5 years without regard to any longer minimum period of time specified in a statutory law of the host State.
(C) Shell banks 
For purposes of this subsection, a bank that has been chartered solely for the purpose of, and does not open for business prior to, acquiring control of, or acquiring all or substantially all of the assets of, an existing bank shall be deemed to have been in existence for the same period of time as the bank to be acquired.
(D) Effect on State contingency laws 
No provision of this subsection shall be construed as affecting the applicability of a State law that makes an acquisition of a bank contingent upon a requirement to hold a portion of such banks assets available for call by a State-sponsored housing entity established pursuant to State law, if
(i) the State law does not have the effect of discriminating against out-of-State banks, out-of-State bank holding companies, or subsidiaries of such banks or bank holding companies;
(ii) that State law was in effect as of September 29, 1994;
(iii) the Federal Deposit Insurance Corporation has not determined that compliance with such State law would result in an unacceptable risk to the Deposit Insurance Fund; and
(iv) the appropriate Federal banking agency for such bank has not found that compliance with such State law would place the bank in an unsafe or unsound condition.
(2) Concentration limits 

(A) Nationwide concentration limits 
The Board may not approve an application pursuant to paragraph (1)(A) if the applicant (including all insured depository institutions which are affiliates of the applicant) controls, or upon consummation of the acquisition for which such application is filed would control, more than 10 percent of the total amount of deposits of insured depository institutions in the United States.
(B) Statewide concentration limits other than with respect to initial entries 
The Board may not approve an application pursuant to paragraph (1)(A) if
(i) immediately before the consummation of the acquisition for which such application is filed, the applicant (including any insured depository institution affiliate of the applicant) controls any insured depository institution or any branch of an insured depository institution in the home State of any bank to be acquired or in any host State in which any such bank maintains a branch; and
(ii) the applicant (including all insured depository institutions which are affiliates of the applicant), upon consummation of the acquisition, would control 30 percent or more of the total amount of deposits of insured depository institutions in any such State.
(C) Effectiveness of State deposit caps 
No provision of this subsection shall be construed as affecting the authority of any State to limit, by statute, regulation, or order, the percentage of the total amount of deposits of insured depository institutions in the State which may be held or controlled by any bank or bank holding company (including all insured depository institutions which are affiliates of the bank or bank holding company) to the extent the application of such limitation does not discriminate against out-of-State banks, out-of-State bank holding companies, or subsidiaries of such banks or holding companies.
(D) Exceptions to subparagraph (B) 
The Board may approve an application pursuant to paragraph (1)(A) without regard to the applicability of subparagraph (B) with respect to any State if
(i) there is a limitation described in subparagraph (C) in a State statute, regulation, or order which has the effect of permitting a bank or bank holding company (including all insured depository institutions which are affiliates of the bank or bank holding company) to control a greater percentage of total deposits of all insured depository institutions in the State than the percentage permitted under subparagraph (B); or
(ii) the acquisition is approved by the appropriate State bank supervisor of such State and the standard on which such approval is based does not have the effect of discriminating against out-of-State banks, out-of-State bank holding companies, or subsidiaries of such banks or holding companies.
(E) “Deposit” defined 
For purposes of this paragraph, the term deposit has the same meaning as in section 1813 (l) of this title.
(3) Community reinvestment compliance 
In determining whether to approve an application under paragraph (1)(A), the Board shall
(A) comply with the responsibilities of the Board regarding such application under section 2903 of this title; and
(B) take into account the applicants record of compliance with applicable State community reinvestment laws.
(4) Applicability of antitrust laws 
No provision of this subsection shall be construed as affecting
(A) the applicability of the antitrust laws; or
(B) the applicability, if any, of any State law which is similar to the antitrust laws.
(5) Exception for banks in default or in danger of default 
The Board may approve an application pursuant to paragraph (1)(A) which involves
(A) an acquisition of 1 or more banks in default or in danger of default; or
(B) an acquisition with respect to which assistance is provided under section 1823 (c) of this title;

without regard to subparagraph (B) or (D) of paragraph (1) or paragraph (2) or (3).

(e) Insured depository institution 
Every bank that is a holding company and every bank that is a subsidiary of such a company shall become and remain an insured depository institution as defined in section 1813 of this title.
(f) [Repealed] 
(g) Mutual bank holding company 

(1) Establishment 
Notwithstanding any provision of Federal law other than this chapter, a savings bank or cooperative bank operating in mutual form may reorganize so as to form a holding company.
(2) Regulations 
A bank holding company organized as a mutual holding company shall be regulated on terms, and shall be subject to limitations, comparable to those applicable to any other bank holding company.
[1] So in original.
[2] So in original. Probably should be “acquired”.
[3] See References in Text note below.
[4] So in original. Probably should be “of”.

12 USC 1843 - Interests in nonbanking organizations

(a) Ownership or control of voting shares of any company not a bank; engagement in activities other than banking 
Except as otherwise provided in this chapter, no bank holding company shall
(1) after May 9, 1956, acquire direct or indirect ownership or control of any voting shares of any company which is not a bank, or
(2) after two years from the date as of which it becomes a bank holding company, or in the case of a company which has been continuously affiliated since May 15, 1955, with a company which was registered under the Investment Company Act of 1940 [15 U.S.C. 80a–1 et seq.], prior to May 15, 1955, in such a manner as to constitute an affiliated company within the meaning of that Act, after December 31, 1978, or, in the case of any company which becomes, as a result of the enactment of the Bank Holding Company Act Amendments of 1970, a bank holding company on December 31, 1970, after December 31, 1980, retain direct or indirect ownership or control of any voting shares of any company which is not a bank or bank holding company or engage in any activities other than
(A)  those of banking or of managing or controlling banks and other subsidiaries authorized under this chapter or of furnishing services to or performing services for its subsidiaries, and
(B)  those permitted under paragraph (8) of subsection (c) of this section subject to all the conditions specified in such paragraph or in any order or regulation issued by the Board under such paragraph: Provided, That a company covered in 1970 may also engage in those activities in which directly or through a subsidiary
(i)  it was lawfully engaged on June 30, 1968 (or on a date subsequent to June 30, 1968 in the case of activities carried on as the result of the acquisition by such company or subsidiary, pursuant to a binding written contract entered into on or before June 30, 1968, of another company engaged in such activities at the time of the acquisition), and
(ii)  it has been continuously engaged since June 30, 1968 (or such subsequent date). The Board by order, after opportunity for hearing, may terminate the authority conferred by the preceding proviso on any company to engage directly or through a subsidiary in any activity otherwise permitted by that proviso if it determines, having due regard to the purposes of this chapter, that such action is necessary to prevent undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices; and in the case of any such company controlling a bank having bank assets in excess of $60,000,000 on or after December 31, 1970, the Board shall determine, within two years after such date (or, if later, within two years after the date on which the bank assets first exceed $60,000,000), whether the authority conferred by the preceding proviso with respect to such company should be terminated as provided in this sentence. Nothing in this paragraph shall be construed to authorize any bank holding company referred to in the preceding proviso, or any subsidiary thereof, to engage in activities authorized by that proviso through the acquisition, pursuant to a contract entered into after June 30, 1968, of any interest in or the assets of a going concern engaged in such activities. Any company which is authorized to engage in any activity pursuant to the preceding proviso or subsection (d) of this section but, as a result of action of the Board, is required to terminate such activity may (notwithstanding any otherwise applicable time limit prescribed in this paragraph) retain the ownership or control of shares in any company carrying on such activity for a period of ten years from the date on which its authority was so terminated by the Board. Notwithstanding any other provision of this paragraph, if any company that became a bank holding company as a result of the enactment of the Competitive Equality Amendments of 1987 acquired, between March 5, 1987, and August 10, 1987, an institution that became a bank as a result of the enactment of such Amendments, that company shall, upon enactment of such Amendments, immediately come into compliance with the requirements of this chapter.

The Board is authorized, upon application by a bank holding company, to extend the two year period referred to in paragraph (2) above from time to time as to such bank holding company for not more than one year at a time, if, in its judgment, such an extension would not be detrimental to the public interest, but no such extensions shall in the aggregate exceed three years. Notwithstanding any other provision of this chapter, the period ending December 31, 1980, referred to in paragraph (2) above, may be extended by the Board of Governors to December 31, 1984, but only for the divestiture by a bank holding company of real estate or interests in real estate lawfully acquired for investment or development. In making its decision whether to grant such extension, the Board shall consider whether the company has made a good faith effort to divest such interests and whether such extension is necessary to avert substantial loss to the company.

(b) Statement purporting to represent shares of any company except a bank or bank holding company 
After two years from May 9, 1956, no certificate evidencing shares of any bank holding company shall bear any statement purporting to represent shares of any other company except a bank or a bank holding company, nor shall the ownership, sale, or transfer of shares of any bank holding company be conditioned in any manner whatsoever upon the ownership, sale, or transfer of shares of any other company except a bank or a bank holding company.
(c) Exemptions 
The prohibitions in this section shall not apply to
(i)  any company that was on January 4, 1977, both a bank holding company and a labor, agricultural, or horticultural organization exempt from taxation under section 501 of title 26, or to any labor, agricultural, or horticultural organization to which all or substantially all of the assets of such company are hereafter transferred, or
(ii)  a company covered in 1970 more than 85 per centum of the voting stock of which was collectively owned on June 30, 1968, and continuously thereafter, directly or indirectly, by or for members of the same family, or their spouses, who are lineal descendants of common ancestors; and such prohibitions shall not, with respect to any other bank holding company, apply to
(1) shares of any company engaged or to be engaged solely in one or more of the following activities:
(A)  holding or operating properties used wholly or substantially by any banking subsidiary of such bank holding company in the operations of such banking subsidiary or acquired for such future use; or
(B)  conducting a safe deposit business; or
(C)  furnishing services to or performing services for such bank holding company or its banking subsidiaries; or
(D)  liquidating assets acquired from such bank holding company or its banking subsidiaries or acquired from any other source prior to May 9, 1956, or the date on which such company became a bank holding company, whichever is later;
(2) shares acquired by a bank holding company or any of its subsidiaries in satisfaction of a debt previously contracted in good faith, but such shares shall be disposed of within a period of two years from the date on which they were acquired, except that the Board is authorized upon application by such bank holding company to extend such period of two years from time to time as to such holding company if, in its judgment, such an extension would not be detrimental to the public interest, and, in the case of a bank holding company which has not disposed of such shares within 5 years after the date on which such shares were acquired, the Board may, upon the application of such company, grant additional exemptions if, in the judgment of the Board, such extension would not be detrimental to the public interest and, either the bank holding company has made a good faith attempt to dispose of such shares during such 5-year period, or the disposal of such shares during such 5-year period would have been detrimental to the company, except that the aggregate duration of such extensions shall not extend beyond 10 years after the date on which such shares were acquired;
(3) shares acquired by such bank holding company from any of its subsidiaries which subsidiary has been requested to dispose of such shares by any Federal or State authority having statutory power to examine such subsidiary, but such bank holding company shall dispose of such shares within a period of two years from the date on which they were acquired;
(4) shares held or acquired by a bank in good faith in a fiduciary capacity, except where such shares are held under a trust that constitutes a company as defined in section 1841 (b) of this title and except as provided in paragraphs (2) and (3) of section 1841 (g) of this title;
(5) shares which are of the kinds and amounts eligible for investment by national banking associations under the provisions of section 24 of this title;
(6) shares of any company which do not include more than 5 per centum of the outstanding voting shares of such company;
(7) shares of an investment company which is not a bank holding company and which is not engaged in any business other than investing in securities, which securities do not include more than 5 per centum of the outstanding voting shares of any company;
(8) shares of any company the activities of which had been determined by the Board by regulation or order under this paragraph as of the day before November 12, 1999, to be so closely related to banking as to be a proper incident thereto (subject to such terms and conditions contained in such regulation or order, unless modified by the Board);
(9) shares held or activities conducted by any company organized under the laws of a foreign country the greater part of whose business is conducted outside the United States, if the Board by regulation or order determines that, under the circumstances and subject to the conditions set forth in the regulation or order, the exemption would not be substantially at variance with the purposes of this chapter and would be in the public interest;
(10) shares lawfully acquired and owned prior to May 9, 1956, by a bank which is a bank holding company, or by any of its wholly owned subsidiaries;
(11) shares owned directly or indirectly by a company covered in 1970 in a company which does not engage in any activities other than those in which the bank holding company, or its subsidiaries, may engage by virtue of this section, but nothing in this paragraph authorizes any bank holding company, or subsidiary thereof, to acquire any interest in or the assets of any going concern (except pursuant to a binding written contract entered into before June 30, 1968, or pursuant to another provision of this chapter) other than one which was a subsidiary on June 30, 1968;
(12) shares retained or acquired, or activities engaged in, by any company which becomes, as a result of the enactment of the Bank Holding Company Act Amendments of 1970, a bank holding company on December 31, 1970, or by any subsidiary thereof, if such company
(A) within the applicable time limits prescribed in subsection (a)(2) of this section (i) ceases to be a bank holding company, or (ii) ceases to retain direct or indirect ownership or control of those shares and to engage in those activities not authorized under this section; and
(B) complies with such other conditions as the Board may by regulation or order prescribe;
(13) shares of, or activities conducted by, any company which does no business in the United States except as an incident to its international or foreign business, if the Board by regulation or order determines that, under the circumstances and subject to the conditions set forth in the regulation or order, the exemption would not be substantially at variance with the purposes of this chapter and would be in the public interest; or
(14) shares of any company which is an export trading company whose acquisition (including each acquisition of shares) or formation by a bank holding company has not been disapproved by the Board pursuant to this paragraph, except that such investments, whether direct or indirect, in such shares shall not exceed 5 per centum of the bank holding companys consolidated capital and surplus.
(A) 
(i) No bank holding company shall invest in an export trading company under this paragraph unless the Board has been given sixty days prior written notice of such proposed investment and within such period has not issued a notice disapproving the proposed investment or extending for up to another thirty days the period during which such disapproval may be issued.
(ii) The period for disapproval may be extended for such additional thirty-day period only if the Board determines that a bank holding company proposing to invest in an export trading company has not furnished all the information required to be submitted or that in the Boards judgment any material information submitted is substantially inaccurate.
(iii) The notice required to be filed by a bank holding company shall contain such relevant information as the Board shall require by regulation or by specific request in connection with any particular notice.
(iv) The Board may disapprove any proposed investment only if
(I) such disapproval is necessary to prevent unsafe or unsound banking practices, undue concentration of resources, decreased or unfair competition, or conflicts of interest;
(II) the Board finds that such investment would affect the financial or managerial resources of a bank holding company to an extent which is likely to have a materially adverse effect on the safety and soundness of any subsidiary bank of such bank holding company, or
(III) the bank holding company fails to furnish the information required under clause (iii).
(v) Leverage.— 
The Board may not disapprove any proposed investment solely on the basis of the anticipated or proposed asset-to-equity ratio of the export trading company with respect to which such investment is proposed, unless the anticipated or proposed annual average asset-to-equity ratio is greater than 20-to-1.
(vi) Within three days after a decision to disapprove an investment, the Board shall notify the bank holding company in writing of the disapproval and shall provide a written statement of the basis for the disapproval.
(vii) A proposed investment may be made prior to the expiration of the disapproval period if the Board issues written notice of its intent not to disapprove the investment.
(B) 
(i) The total amount of extensions of credit by a bank holding company which invests in an export trading company, when combined with all such extensions of credit by all the subsidiaries of such bank holding company, to an export trading company shall not exceed at any one time 10 per centum of the bank holding companys consolidated capital and surplus. For purposes of the preceding sentence, an extension of credit shall not be deemed to include any amount invested by a bank holding company in the shares of an export trading company.
(ii) No provision of any other Federal law in effect on October 1, 1982, relating specifically to collateral requirements shall apply with respect to any such extension of credit.
(iii) No bank holding company or subsidiary of such company which invests in an export trading company may extend credit to such export trading company or to customers of such export trading company on terms more favorable than those afforded similar borrowers in similar circumstances, and such extension of credit shall not involve more than the normal risk of repayment or present other unfavorable features.
(C) For purposes of this paragraph, an export trading company
(i) may engage in or hold shares of a company engaged in the business of underwriting, selling, or distributing securities in the United States only to the extent that any bank holding company which invests in such export trading company may do so under applicable Federal and State banking laws and regulations; and
(ii) may not engage in agricultural production activities or in manufacturing, except for such incidental product modification including repackaging, reassembling or extracting byproducts, as is necessary to enable United States goods or services to conform with requirements of a foreign country and to facilitate their sale in foreign countries.
(D) A bank holding company which invests in an export trading company may be required, by the Board, to terminate its investment or may be made subject to such limitations or conditions as may be imposed by the Board, if the Board determines that the export trading company has taken positions in commodities or commodity contracts, in securities, or in foreign exchange, other than as may be necessary in the course of the export trading companys business operations.
(E) Notwithstanding any other provision of law, an Edge Act corporation, organized under section 25(a)1 of the Federal Reserve Act (12 U.S.C. 611–631), which is a subsidiary of a bank holding company, or an agreement corporation, operating subject to section 25 of the Federal Reserve Act [12 U.S.C. 601 et seq.], which is a subsidiary of a bank holding company, may invest directly and indirectly in the aggregate up to 5 per centum of its consolidated capital and surplus (25 per centum in the case of a corporation not engaged in banking) in the voting stock of other evidences of ownership in one or more export trading companies.
(F) For purposes of this paragraph
(i) the term export trading company means a company which does business under the laws of the United States or any State, which is exclusively engaged in activities related to international trade, and which is organized and operated principally for purposes of exporting goods or services produced in the United States or for purposes of facilitating the exportation of goods or services produced in the United States by unaffiliated persons by providing one or more export trade services.[2]
(ii) the term export trade services includes, but is not limited to, consulting, international market research, advertising, marketing, insurance (other than acting as principal, agent or broker in the sale of insurance on risks resident or located, or activities performed, in the United States, except for insurance covering the transportation of cargo from any point of origin in the United States to a point of final destination outside the United States), product research and design, legal assistance, transportation, including trade documentation and freight forwarding, communication and processing of foreign orders to and for exporters and foreign purchasers, warehousing, foreign exchange, financing, and taking title to goods, when provided in order to facilitate the export of goods or services produced in the United States;
(iii) the term bank holding company shall include a bank which
(I)  is organized solely to do business with other banks and their officers, directors, or employees;
(II)  is owned primarily by the banks with which it does business; and
(III)  does not do business with the general public. No such other bank, owning stock in a bank described in this clause that invests in an export trading company, shall extend credit to an export trading company in an amount exceeding at any one time 10 per centum of such other banks capital and surplus; and
(iv) the term extension of credit shall have the same meaning given such term in the fourth paragraph of section 371c3 of this title.
(G) Determination of status as export trading company.— 

(i) Time period requirements.— 
For purposes of determining whether an export trading company is operated principally for the purposes described in subparagraph (F)(i)
(I) the operations of such company during the 2-year period beginning on the date such company commences operations shall not be taken into account in making any such determination; and
(II) not less than 4 consecutive years of operations of such company (not including any portion of the period referred to in subclause (I)) shall be taken into account in making any such determination.
(ii) Export revenue requirements.— 
A company shall not be treated as operated principally for the purposes described in subparagraph (F)(i) unless
(I) the revenues of such company from the export, or facilitating the export, of goods or services produced in the United States exceed the revenues of such company from the import, or facilitating the import, into the United States of goods or services produced outside the United States; and
(II) at least 1/3 of such companys total revenues are revenues from the export, or facilitating the export, of goods or services produced in the United States by persons not affiliated with such company.
(H) Inventory.— 

(i) No general limitation.— 
The Board may not prescribe by regulation any maximum dollar amount limitation on the value of goods which an export trading company may maintain in inventory at any time.
(ii) Specific limitation by order.— 
Notwithstanding clause (i), the Board may issue an order establishing a maximum dollar amount limitation on the value of goods which a particular export trading company may maintain in inventory at any time (after such company has been operating for a reasonable period of time) if the Board finds that, under the facts and circumstances, such limitation is necessary to prevent risks that would affect the financial or managerial resources of an investor bank holding company to an extent which would be likely to have a materially adverse effect on the safety and soundness of any subsidiary bank of such bank holding company. The Board shall include in its annual report to the Congress a description and a statement of the reasons for approval of each activity approved by it by order or regulation under such paragraph during the period covered by the report.
(d) Exemption of company controlling one bank prior to July 1, 1968 
To the extent that such action would not be substantially at variance with the purposes of this chapter and subject to such conditions as it considers necessary to protect the public interest, the Board by order, after opportunity for hearing, may grant exemptions from the provisions of this section to any bank holding company which controlled one bank prior to July 1, 1968, and has not thereafter acquired the control of any other bank in order
(1)  to avoid disrupting business relationships that have existed over a long period of years without adversely affecting the banks or communities involved, or
(2)  to avoid forced sales of small locally owned banks to purchasers not similarly representative of community interests, or
(3)  to allow retention of banks that are so small in relation to the holding companys total interests and so small in relation to the banking market to be served as to minimize the likelihood that the banks powers to grant or deny credit may be influenced by a desire to further the holding companys other interests.
(e) Divestiture of nonexempt shares 
With respect to shares which were not subject to the prohibitions of this section as originally enacted by reason of any exemption with respect thereto but which were made subject to such prohibitions by the subsequent repeal of such exemption, no bank holding company shall retain direct or indirect ownership or control of such shares after five years from the date of the repeal of such exemption, except as provided in paragraph (2) of subsection (a) of this section. Any bank holding company subject to such five-year limitation on the retention of nonbanking assets shall endeavor to divest itself of such shares promptly and such bank holding company shall report its progress in such divestiture to the Board two years after repeal of the exemption applicable to it and annually thereafter.
(f) Certain companies not treated as bank holding companies 

(1) In general 
Except as provided in paragraph (9), any company which
(A) on March 5, 1987, controlled an institution which became a bank as a result of the enactment of the Competitive Equality Amendments of 1987; and
(B) was not a bank holding company on the day before August 10, 1987,

shall not be treated as a bank holding company for purposes of this chapter solely by virtue of such companys control of such institution.

(2) Loss of exemption 
Subject to paragraph (3), a company described in paragraph (1) shall no longer qualify for the exemption provided under that paragraph if
(A) such company directly or indirectly
(i) acquires control of an additional bank or an insured institution (other than an insured institution described in paragraph (10) or (12) of this subsection) after March 5, 1987; or
(ii) acquires control of more than 5 percent of the shares or assets of an additional bank or a savings association other than
(I) shares held as a bona fide fiduciary (whether with or without the sole discretion to vote such shares);
(II) shares held by any person as a bona fide fiduciary solely for the benefit of employees of either the company described in paragraph (1) or any subsidiary of that company and the beneficiaries of those employees;
(III) shares held temporarily pursuant to an underwriting commitment in the normal course of an underwriting business;
(IV) shares held in an account solely for trading purposes;
(V) shares over which no control is held other than control of voting rights acquired in the normal course of a proxy solicitation;
(VI) loans or other accounts receivable acquired in the normal course of business;
(VII) shares or assets acquired in securing or collecting a debt previously contracted in good faith, during the 2-year period beginning on the date of such acquisition or for such additional time (not exceeding 3 years) as the Board may permit if the Board determines that such an extension will not be detrimental to the public interest;
(VIII) shares or assets of a savings association described in paragraph (10) or (12) of this subsection;
(IX) shares of a savings association held by any insurance company, as defined in section 2(a)(17) of the Investment Company Act of 1940 [15 U.S.C. 80a–2 (a)(17)], except as provided in paragraph (11);
(X) shares issued in a qualified stock issuance under section 1467a (q) of this title; and
(XI) assets that are derived from, or incidental to, activities in which institutions described in subparagraph (F) or (H) of section 1841 (c)(2) of this title are permitted to engage; except that the aggregate amount of shares held under this clause (other than under subclauses (I), (II), (III), (IV), (V), and (VIII)) may not exceed 15 percent of all outstanding shares or of the voting power of a savings association;
(B) any bank subsidiary of such company
(i) accepts demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties; and
(ii) engages in the business of making commercial loans (except that, for purposes of this clause, loans made in the ordinary course of a credit card operation shall not be treated as commercial loans); or
(C) after August 10, 1987, any bank subsidiary of such company permits any overdraft (including any intraday overdraft), or incurs any such overdraft in the account of the bank at a Federal reserve bank, on behalf of an affiliate, other than an overdraft described in paragraph (3).
(3) Permissible overdrafts described 
For purposes of paragraph (2)(C), an overdraft is described in this paragraph if
(A) such overdraft results from an inadvertent computer or accounting error that is beyond the control of both the bank and the affiliate;
(B) such overdraft
(i) is permitted or incurred on behalf of an affiliate that is monitored by, reports to, and is recognized as a primary dealer by the Federal Reserve Bank of New York; and
(ii) is fully secured, as required by the Board, by bonds, notes, or other obligations that are direct obligations of the United States or on which the principal and interest are fully guaranteed by the United States or by securities and obligations eligible for settlement on the Federal Reserve book entry system; or
(C) such overdraft
(i) is permitted or incurred by, or on behalf of, an affiliate in connection with an activity that is financial in nature or incidental to a financial activity; and
(ii) does not cause the bank to violate any provision of section 371c or 371c–1 of this title, either directly, in the case of a bank that is a member of the Federal Reserve System, or by virtue of section 18(j) of the Federal Deposit Insurance Act [12 U.S.C. 1828 (j)], in the case of a bank that is not a member of the Federal Reserve System.
(4) Divestiture in case of loss of exemption 
If any company described in paragraph (1) fails to qualify for the exemption provided under paragraph (1) by operation of paragraph (2), such exemption shall cease to apply to such company and such company shall divest control of each bank it controls before the end of the 180-day period beginning on the date on which the company receives notice from the Board that the company has failed to continue to qualify for such exemption, unless, before the end of such 180-day period, the company has
(A) either
(i) corrected the condition or ceased the activity that caused the company to fail to continue to qualify for the exemption; or
(ii) submitted a plan to the Board for approval to cease the activity or correct the condition in a timely manner (which shall not exceed 1 year); and
(B) implemented procedures that are reasonably adapted to avoid the reoccurrence of such condition or activity.
(5) Subsection ceases to apply under certain circumstances 
This subsection shall cease to apply to any company described in paragraph (1) if such company
(A) registers as a bank holding company under section 1844 (a) of this title;
(B) immediately upon such registration, complies with all of the requirements of this chapter, and regulations prescribed by the Board pursuant to this chapter, including the nonbanking restrictions of this section; and
(C) does not, at the time of such registration, control banks in more than one State, the acquisition of which would be prohibited by section 1842 (d) of this title if an application for such acquisition by such company were filed under section 1842 (a) of this title.
(6) Information requirement 
Each company described in paragraph (1) shall, within 60 days after August 10, 1987, provide the Board with the name and address of such company, the name and address of each bank such company controls, and a description of each such banks activities.
(7) Examination 
The Board may, from time to time, examine a company described in paragraph (1), or a bank controlled by such company, or require reports under oath from appropriate officers or directors of such company or bank solely for purposes of assuring compliance with the provisions of this subsection and enforcing such compliance.
(8) Enforcement 

(A) In general 
In addition to any other power of the Board, the Board may enforce compliance with the provisions of this chapter which are applicable to any company described in paragraph (1), and any bank controlled by such company, under section 8 of the Federal Deposit Insurance Act [12 U.S.C. 1818] and such company or bank shall be subject to such section (for such purposes) in the same manner and to the same extent as if such company or bank were a State member insured bank.
(B) Application of other act 
Any violation of this chapter by any company described in paragraph (1), and any bank controlled by such company, may also be treated as a violation of the Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.] for purposes of subparagraph (A).
(C) No effect on other authority 
No provision of this paragraph shall be construed as limiting any authority of the Comptroller of the Currency or the Federal Deposit Insurance Corporation.
(9) Tying provisions 
A company described in paragraph (1) shall be
(A) treated as a bank holding company for purposes of section 106 of the Bank Holding Company Act Amendments of 1970 [12 U.S.C. 1971 et seq.] and section 22(h) of the Federal Reserve Act [12 U.S.C. 375b] and any regulation prescribed under any such section; and
(B) subject to the restrictions of section 106 of the Bank Holding Company Act Amendments of 1970 [12 U.S.C. 1971 et seq.], in connection with any transaction involving the products or services of such company or affiliate and those of a bank affiliate, as if such company or affiliate were a bank and such bank were a subsidiary of a bank holding company.
(10) Exemption unaffected by certain emergency acquisitions 
For purposes of clauses (i) and (ii)(VIII) of paragraph (2)(A), an insured institution is described in this paragraph if
(A) the insured institution was acquired (or any shares or assets of such institution were acquired) by a company described in paragraph (1) in an acquisition under section 1730a (m)4 of this title or section 13(k) of the Federal Deposit Insurance Act [12 U.S.C. 1823 (k)]; and
(B) either
(i) the insured institution is located in a State in which such company controlled a bank on March 5, 1987; or
(ii) the insured institution has total assets of $500,000,000 or more at the time of such acquisition.
(11) Shares held by insurance affiliates 
Shares described in clause (ii)(IX) of paragraph (2)(A) shall not be excluded for purposes of clause (ii) of such paragraph if
(A) all shares held under such clause (ii)(IX) by all insurance company affiliates of such savings association in the aggregate exceed 5 percent of all outstanding shares or of the voting power of the savings association; or
(B) such shares are acquired or retained with a view to acquiring, exercising, or transferring control of the savings association.
(12) Exemption unaffected by certain other acquisitions 
For purposes of clauses (i) and (ii)(VIII) of paragraph (2)(A), an insured institution is described in this paragraph if the insured institution was acquired (or any shares or assets of such institution were acquired) by a company described in paragraph (1)
(A) from the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, or the Director of the Office of Thrift Supervision, in any capacity; or
(B) in an acquisition in which the insured institution has been found to be in danger of default (as defined in section 3 of the Federal Deposit Insurance Act [12 U.S.C. 1813]) by the appropriate Federal or State authority.
(13) Special rule relating to shares acquired in a qualified stock issuance 
A company described in paragraph (1) that holds shares issued in a qualified stock issuance pursuant to section 1467a (q) of this title by any savings association or savings and loan holding company (neither of which is a subsidiary) shall not be deemed to control such savings association or savings and loan holding company solely because such company holds such shares unless
(A) the company fails to comply with any requirement or condition imposed by paragraph (2)(A)(ii)(X) or section 1467a (q) of this title with respect to such shares; or
(B) the shares are acquired or retained with a view to acquiring, exercising, or transferring control of the savings association or savings and loan holding company.
(14) Foreign bank subsidiaries of limited purpose credit card banks 

(A) In general 
An institution described in section 1841 (c)(2)(F) of this title may control a foreign bank if
(i) the investment of the institution in the foreign bank meets the requirements of section 25 or 25A of the Federal Reserve Act [12 U.S.C. 601 et seq., 611 et seq.] and the foreign bank qualifies under such sections;
(ii) the foreign bank does not offer any products or services in the United States; and
(iii) the activities of the foreign bank are permissible under otherwise applicable law.
(B) Other limitations inapplicable 
The limitations contained in any clause of section 1841 (c)(2)(F) of this title shall not apply to a foreign bank described in subparagraph (A) that is controlled by an institution described in such section.
(g) Limitations on certain banks 

(1) In general 
Notwithstanding any other provision of this section (other than the last sentence of subsection (a)(2) of this section), a bank holding company which controls an institution that became a bank as a result of the enactment of the Competitive Equality Amendments of 1987 may retain control of such institution if such institution does not
(A) engage in any activity after August 10, 1987, which would have caused such institution to be a bank (as defined in section 1841 (c) of this title, as in effect before such date) if such activities had been engaged in before such date; or
(B) increase the number of locations from which such institution conducts business after March 5, 1987.
(2) Limitations cease to apply under certain circumstances 
The limitations contained in paragraph (1) shall cease to apply to a bank described in such paragraph at such time as the acquisition of such bank, by the bank holding company referred to in such paragraph, would not be prohibited under section 1842 (d) of this title if
(A) an application for such acquisition were filed under section 1842 (a) of this title; and
(B) such bank were treated as an additional bank (under section 1842 (d) of this title).
(h) Tying provisions 

(1) Applicable to certain exempt institutions and parent companies 
An institution described in subparagraph (D), (F), (G), or (H) of section 1841 (c)(2) of this title shall be treated as a bank, and a company that controls such an institution shall be treated as a bank holding company, for purposes of section 106 of the Bank Holding Company Act Amendments of 1970 [12 U.S.C. 1971 et seq.] and section 22(h) of the Federal Reserve Act [12 U.S.C. 375b] and any regulation prescribed under any such section.
(2) Applicable with respect to certain transactions 
A company that controls an institution described in subparagraph (D), (F), (G), or (H) of section 1841 (c)(2) of this title and any of such companys other affiliates, shall be subject to the tying restrictions of section 106 of the Bank Holding Company Act Amendments of 1970 [12 U.S.C. 1971 et seq.] in connection with any transaction involving the products or services of such company or affiliate and those of such institution, as if such company or affiliate were a bank and such institution were a subsidiary of a bank holding company.
(i) Acquisition of savings associations 

(1) In general 
The Board may approve an application by any bank holding company under subsection (c)(8) of this section to acquire any savings association in accordance with the requirements and limitations of this section.
(2) Prohibition on tandem restrictions 
In approving an application by a bank holding company to acquire a savings association, the Board shall not impose any restriction on transactions between the savings association and its holding company affiliates, except as required under sections 371c and 371c–1 of this title or any other applicable law.
(3) Acquisition of insolvent savings associations 

(A) In general 
Notwithstanding any other provision of this chapter, any qualified savings association which became a federally chartered stock company in December of 1986 and which is acquired by any bank holding company without Federal financial assistance after June 1, 1991, and before March 1, 1992, and any subsidiary of any such association, may after such acquisition continue to engage within the home State of the qualified savings association in insurance agency activities in which any Federal savings association (or any subsidiary thereof) may engage in accordance with the Home Owners Loan Act [12 U.S.C. 1461 et seq.] and regulations pursuant to such Act if the qualified savings association or subsidiary thereof was continuously engaged in such activity from June 1, 1991, to the date of the acquisition.
(B) “Qualified savings association” defined 
For purposes of this paragraph, the term qualified savings association means any savings association that
(i) was chartered or organized as a savings association before June 1, 1991;
(ii) had, immediately before the acquisition of such association by the bank holding company referred to in subparagraph (A), negative tangible capital and total insured deposits in excess of $3,000,000,000; and
(iii) will meet all applicable regulatory capital requirements as a result of such acquisition.
(4) Solicitation of views 

(A) Notice to Director 
Upon receiving any application or notice by a bank holding company to acquire, directly or indirectly, a savings association under subsection (c)(8) of this section, the Board shall solicit comments and recommendations from the Director with respect to such acquisition.
(B) Comment period 
The comments and recommendations of the Director under subparagraph (A) with respect to any acquisition subject to such subparagraph shall be transmitted to the Board not later than 30 days after the receipt by the Director of the notice relating to such acquisition (or such shorter period as the Board may specify if the Board advises the Director that an emergency exists that requires expeditious action).
(5) Examination 

(A) Scope 
The Board shall consult with the Director, as appropriate, in establishing the scope of an examination by the Board of a bank holding company that directly or indirectly controls a savings association.
(B) Access to inspection reports 
Upon the request of the Director, the Board shall furnish the Director with a copy of any inspection report, additional examination materials, or supervisory information relating to any bank holding company that directly or indirectly controls a savings association.
(6) Coordination of enforcement efforts 
The Board and the Director shall cooperate in any enforcement action against any bank holding company that controls a savings association, if the relevant conduct involves such association.
(7) “Director” defined 
For purposes of this section, the term Director means the Director of the Office of Thrift Supervision.
(j) Notice procedures for nonbanking activities 

(1) General notice procedure 

(A) Notice requirement 
Except as provided in paragraph (3), no bank holding company may engage in any nonbanking activity or acquire or retain ownership or control of the shares of a company engaged in activities based on subsection (c)(8) or (a)(2) of this section or in any complementary activity under subsection (k)(1)(B) of this section without providing the Board with written notice of the proposed transaction or activity at least 60 days before the transaction or activity is proposed to occur or commence.
(B) Contents of notice 
The notice submitted to the Board shall contain such information as the Board shall prescribe by regulation or by specific request in connection with a particular notice.
(C) Procedure for agency action 

(i) Notice of disapproval Any notice filed under this subsection shall be deemed to be approved by the Board unless, before the end of the 60-day period beginning on the date the Board receives a complete notice under subparagraph (A), the Board issues an order disapproving the transaction or activity and setting forth the reasons for disapproval.
(ii) Extension of period The Board may extend the 60-day period referred to in clause (i) for an additional 30 days. The Board may further extend the period with the agreement of the bank holding company submitting the notice pursuant to this subsection.
(iii) Determination of period in case of public hearing In the event a hearing is requested or the Board determines that a hearing is warranted, the Board may extend the notice period provided in this subsection for such time as is reasonably necessary to conduct a hearing and to evaluate the hearing record. Such extension shall not exceed the 91-day period beginning on the date that the hearing record is complete.
(D) Approval before end of period 

(i) In general Any transaction or activity may commence before the expiration of any period for disapproval established under this paragraph if the Board issues a written notice of approval.
(ii) Shorter periods by regulation The Board may prescribe regulations which provide for a shorter notice period with respect to particular activities or transactions.
(E) Extension of period 
In the case of any notice to engage in, or to acquire or retain ownership or control of shares of any company engaged in, any activity pursuant to subsection (c)(8) or (a)(2) of this section or in any complementary activity under subsection (k)(1)(B) of this section that has not been previously approved by regulation, the Board may extend the notice period under this subsection for an additional 90 days. The Board may further extend the period with the agreement of the bank holding company submitting the notice pursuant to this subsection.
(2) General standards for review 

(A) Criteria 
In connection with a notice under this subsection, the Board shall consider whether performance of the activity by a bank holding company or a subsidiary of such company can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices.
(B) Grounds for disapproval 
The Board may deny any proposed transaction or activity for which notice has been submitted pursuant to this subsection if the bank holding company submitting such notice neglects, fails, or refuses to furnish the Board all the information required by the Board.
(C) Conditional action 
Nothing in this subsection limits the authority of the Board to impose conditions in connection with an action under this section.
(3) No notice required for certain transactions 
No notice under paragraph (1) of this subsection or under subsection (c)(8) or (a)(2)(B) of this section is required for a proposal by a bank holding company to engage in any activity, other than any complementary activity under subsection (k)(1)(B) of this section, or acquire the shares or assets of any company, other than an insured depository institution or a company engaged in any complementary activity under subsection (k)(1)(B) of this section, if the proposal qualifies under paragraph (4).
(4) Criteria for statutory approval 
A proposal qualifies under this paragraph if all of the following criteria are met:
(A) Financial criteria 
Both before and immediately after the proposed transaction
(i) the acquiring bank holding company is well capitalized;
(ii) the lead insured depository institution of such holding company is well capitalized;
(iii) well capitalized insured depository institutions control at least 80 percent of the aggregate total risk-weighted assets of insured depository institutions controlled by such holding company; and
(iv) no insured depository institution controlled by such holding company is undercapitalized.
(B) Managerial criteria 

(i) Well managed At the time of the transaction, the acquiring bank holding company, its lead insured depository institution, and insured depository institutions that control at least 90 percent of the aggregate total risk-weighted assets of insured depository institutions controlled by such holding company are well managed.
(ii) Limitation on poorly managed institutions Except as provided in paragraph (6), no insured depository institution controlled by the acquiring bank holding company has received 1 of the 2 lowest composite ratings at the later of the institutions most recent examination or subsequent review.
(C) Activities permissible 
Following consummation of the proposal, the bank holding company engages directly or through a subsidiary solely in
(i) activities that are permissible under subsection (c)(8) of this section, as determined by the Board by regulation or order thereunder, subject to all of the restrictions, terms, and conditions of such subsection and such regulation or order; and
(ii) such other activities as are otherwise permissible under this section, subject to the restrictions, terms and conditions, including any prior notice or approval requirements, provided in this section.
(D) Size of acquisition 

(i) Asset size The book value of the total assets to be acquired does not exceed 10 percent of the consolidated total risk-weighted assets of the acquiring bank holding company.
(ii) Consideration The gross consideration to be paid for the securities or assets does not exceed 15 percent of the consolidated Tier 1 capital of the acquiring bank holding company.
(E) Notice not otherwise warranted 
For proposals described in paragraph (5)(B), the Board has not, before the conclusion of the period provided in paragraph (5)(B), advised the bank holding company that a notice under paragraph (1) is required.
(F) Compliance criterion 
During the 12-month period ending on the date on which the bank holding company proposes to commence an activity or acquisition, no administrative enforcement action has been commenced, and no cease and desist order has been issued pursuant to section 8 of the Federal Deposit Insurance Act [12 U.S.C. 1818], against the bank holding company or any depository institution subsidiary of the holding company, and no such enforcement action, order, or other administrative enforcement proceeding is pending as of such date.
(5) Notification 

(A) Commencement of activities approved by rule 
A bank holding company that qualifies under paragraph (4) and that proposes to engage de novo, directly or through a subsidiary, in any activity that is permissible under subsection (c)(8) of this section, as determined by the Board by regulation, may commence that activity without prior notice to the Board and must provide written notification to the Board not later than 10 business days after commencing the activity.
(B) Activities permitted by order and acquisitions 

(i) In general At least 12 business days before commencing any activity pursuant to paragraph (3) (other than an activity described in subparagraph (A) of this paragraph) or acquiring shares or assets of any company pursuant to paragraph (3), the bank holding company shall provide written notice of the proposal to the Board, unless the Board determines that no notice or a shorter notice period is appropriate.
(ii) Description of activities and terms A notification under this subparagraph shall include a description of the proposed activities and the terms of any proposed acquisition.
(6) Recently acquired institutions 
Any insured depository institution which has been acquired by a bank holding company during the 12-month period preceding the date on which the company proposes to commence an activity or acquisition pursuant to paragraph (3) may be excluded for purposes of paragraph (4)(B)(ii) if
(A) the bank holding company has developed a plan for the institution to restore the capital and management of the institution which is acceptable to the appropriate Federal banking agency; and
(B) all such insured depository institutions represent, in the aggregate, less than 10 percent of the aggregate total risk-weighted assets of all insured depository institutions controlled by the bank holding company.
(7) Adjustment of percentages 
The Board may, by regulation, adjust the percentages and the manner in which the percentages of insured depository institutions are calculated under paragraph (4)(B)(i), (4)(D), or (6)(B) if the Board determines that any such adjustment is consistent with safety and soundness and the purposes of this chapter.
(k) Engaging in activities that are financial in nature 

(1) In general 
Notwithstanding subsection (a) of this section, a financial holding company may engage in any activity, and may acquire and retain the shares of any company engaged in any activity, that the Board, in accordance with paragraph (2), determines (by regulation or order)
(A) to be financial in nature or incidental to such financial activity; or
(B) is complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally.
(2) Coordination between the Board and the Secretary of the Treasury 

(A) Proposals raised before the Board 

(i) Consultation The Board shall notify the Secretary of the Treasury of, and consult with the Secretary of the Treasury concerning, any request, proposal, or application under this subsection for a determination of whether an activity is financial in nature or incidental to a financial activity.
(ii) Treasury view The Board shall not determine that any activity is financial in nature or incidental to a financial activity under this subsection if the Secretary of the Treasury notifies the Board in writing, not later than 30 days after the date of receipt of the notice described in clause (i) (or such longer period as the Board determines to be appropriate under the circumstances) that the Secretary of the Treasury believes that the activity is not financial in nature or incidental to a financial activity or is not otherwise permissible under this section.
(B) Proposals raised by the Treasury 

(i) Treasury recommendation The Secretary of the Treasury may, at any time, recommend in writing that the Board find an activity to be financial in nature or incidental to a financial activity.
(ii) Time period for Board action Not later than 30 days after the date of receipt of a written recommendation from the Secretary of the Treasury under clause (i) (or such longer period as the Secretary of the Treasury and the Board determine to be appropriate under the circumstances), the Board shall determine whether to initiate a public rulemaking proposing that the recommended activity be found to be financial in nature or incidental to a financial activity under this subsection, and shall notify the Secretary of the Treasury in writing of the determination of the Board and, if the Board determines not to seek public comment on the proposal, the reasons for that determination.
(3) Factors to be considered 
In determining whether an activity is financial in nature or incidental to a financial activity, the Board shall take into account
(A) the purposes of this chapter and the Gramm-Leach-Bliley Act;
(B) changes or reasonably expected changes in the marketplace in which financial holding companies compete;
(C) changes or reasonably expected changes in the technology for delivering financial services; and
(D) whether such activity is necessary or appropriate to allow a financial holding company and the affiliates of a financial holding company to
(i) compete effectively with any company seeking to provide financial services in the United States;
(ii) efficiently deliver information and services that are financial in nature through the use of technological means, including any application necessary to protect the security or efficacy of systems for the transmission of data or financial transactions; and
(iii) offer customers any available or emerging technological means for using financial services or for the document imaging of data.
(4) Activities that are financial in nature 
For purposes of this subsection, the following activities shall be considered to be financial in nature:
(A) Lending, exchanging, transferring, investing for others, or safeguarding money or securities.
(B) Insuring, guaranteeing, or indemnifying against loss, harm, damage, illness, disability, or death, or providing and issuing annuities, and acting as principal, agent, or broker for purposes of the foregoing, in any State.
(C) Providing financial, investment, or economic advisory services, including advising an investment company (as defined in section 3 of the Investment Company Act of 1940 [15 U.S.C. 80a–3]).
(D) Issuing or selling instruments representing interests in pools of assets permissible for a bank to hold directly.
(E) Underwriting, dealing in, or making a market in securities.
(F) Engaging in any activity that the Board has determined, by order or regulation that is in effect on November 12, 1999, to be so closely related to banking or managing or controlling banks as to be a proper incident thereto (subject to the same terms and conditions contained in such order or regulation, unless modified by the Board).
(G) Engaging, in the United States, in any activity that
(i) a bank holding company may engage in outside of the United States; and
(ii) the Board has determined, under regulations prescribed or interpretations issued pursuant to subsection (c)(13) of this section (as in effect on the day before November 12, 1999) to be usual in connection with the transaction of banking or other financial operations abroad.
(H) Directly or indirectly acquiring or controlling, whether as principal, on behalf of 1 or more entities (including entities, other than a depository institution or subsidiary of a depository institution, that the bank holding company controls), or otherwise, shares, assets, or ownership interests (including debt or equity securities, partnership interests, trust certificates, or other instruments representing ownership) of a company or other entity, whether or not constituting control of such company or entity, engaged in any activity not authorized pursuant to this section if
(i) the shares, assets, or ownership interests are not acquired or held by a depository institution or subsidiary of a depository institution;
(ii) such shares, assets, or ownership interests are acquired and held by
(I) a securities affiliate or an affiliate thereof; or
(II) an affiliate of an insurance company described in subparagraph (I)(ii) that provides investment advice to an insurance company and is registered pursuant to the Investment Advisers Act of 1940 [15 U.S.C. 80b–1 et seq.], or an affiliate of such investment adviser;

as part of a bona fide underwriting or merchant or investment banking activity, including investment activities engaged in for the purpose of appreciation and ultimate resale or disposition of the investment;

(iii) such shares, assets, or ownership interests are held for a period of time to enable the sale or disposition thereof on a reasonable basis consistent with the financial viability of the activities described in clause (ii); and
(iv) during the period such shares, assets, or ownership interests are held, the bank holding company does not routinely manage or operate such company or entity except as may be necessary or required to obtain a reasonable return on investment upon resale or disposition.
(I) Directly or indirectly acquiring or controlling, whether as principal, on behalf of 1 or more entities (including entities, other than a depository institution or subsidiary of a depository institution, that the bank holding company controls) or otherwise, shares, assets, or ownership interests (including debt or equity securities, partnership interests, trust certificates or other instruments representing ownership) of a company or other entity, whether or not constituting control of such company or entity, engaged in any activity not authorized pursuant to this section if
(i) the shares, assets, or ownership interests are not acquired or held by a depository institution or a subsidiary of a depository institution;
(ii) such shares, assets, or ownership interests are acquired and held by an insurance company that is predominantly engaged in underwriting life, accident and health, or property and casualty insurance (other than credit-related insurance) or providing and issuing annuities;
(iii) such shares, assets, or ownership interests represent an investment made in the ordinary course of business of such insurance company in accordance with relevant State law governing such investments; and
(iv) during the period such shares, assets, or ownership interests are held, the bank holding company does not routinely manage or operate such company except as may be necessary or required to obtain a reasonable return on investment.
(5) Actions required 

(A) In general 
The Board shall, by regulation or order, define, consistent with the purposes of this chapter, the activities described in subparagraph (B) as financial in nature, and the extent to which such activities are financial in nature or incidental to a financial activity.
(B) Activities 
The activities described in this subparagraph are as follows:
(i) Lending, exchanging, transferring, investing for others, or safeguarding financial assets other than money or securities.
(ii) Providing any device or other instrumentality for transferring money or other financial assets.
(iii) Arranging, effecting, or facilitating financial transactions for the account of third parties.
(6) Required notification 

(A) In general 
A financial holding company that acquires any company or commences any activity pursuant to this subsection shall provide written notice to the Board describing the activity commenced or conducted by the company acquired not later than 30 calendar days after commencing the activity or consummating the acquisition, as the case may be.
(B) Approval not required for certain financial activities 
Except as provided in subsection (j) of this section with regard to the acquisition of a savings association, a financial holding company may commence any activity, or acquire any company, pursuant to paragraph (4) or any regulation prescribed or order issued under paragraph (5), without prior approval of the Board.
(7) Merchant banking activities 

(A) Joint regulations 
The Board and the Secretary of the Treasury may issue such regulations implementing paragraph (4)(H), including limitations on transactions between depository institutions and companies controlled pursuant to such paragraph, as the Board and the Secretary jointly deem appropriate to assure compliance with the purposes and prevent evasions of this chapter and the Gramm-Leach-Bliley Act and to protect depository institutions.
(B) Sunset of restrictions on merchant banking activities of financial subsidiaries 
The restrictions contained in paragraph (4)(H) on the ownership and control of shares, assets, or ownership interests by or on behalf of a subsidiary of a depository institution shall not apply to a financial subsidiary (as defined in section 24a of this title) of a bank, if the Board and the Secretary of the Treasury jointly authorize financial subsidiaries of banks to engage in merchant banking activities pursuant to section 122 of the Gramm-Leach-Bliley Act.
(l) Conditions for engaging in expanded financial activities 

(1) In general 
Notwithstanding subsection (k), (n), or (o) of this section, a bank holding company may not engage in any activity, or directly or indirectly acquire or retain shares of any company engaged in any activity, under subsection (k), (n), or (o) of this section, other than activities permissible for any bank holding company under subsection (c)(8) of this section, unless
(A) all of the depository institution subsidiaries of the bank holding company are well capitalized;
(B) all of the depository institution subsidiaries of the bank holding company are well managed; and
(C) the bank holding company has filed with the Board
(i) a declaration that the company elects to be a financial holding company to engage in activities or acquire and retain shares of a company that were not permissible for a bank holding company to engage in or acquire before the enactment of the Gramm-Leach-Bliley Act; and
(ii) a certification that the company meets the requirements of subparagraphs (A) and (B).
(2) CRA requirement 
Notwithstanding subsection (k) or (n) of this section, section 24a (a) of this title, or section 46(a) of the Federal Deposit Insurance Act [12 U.S.C. 1831w (a)], the appropriate Federal banking agency shall prohibit a financial holding company or any insured depository institution from
(A) commencing any new activity under subsection (k) or (n) of this section, section 24a (a) of this title, or section 46(a) of the Federal Deposit Insurance Act; or
(B) directly or indirectly acquiring control of a company engaged in any activity under subsection (k) or (n) of this section, section 24a (a) of this title, or section 46(a) of the Federal Deposit Insurance Act (other than an investment made pursuant to subparagraph (H) or (I) of subsection (k)(4) of this section, or section 122 of the Gramm-Leach-Bliley Act, or under section 46(a) of the Federal Deposit Insurance Act by reason of such section 122, by an affiliate already engaged in activities under any such provision);

if any insured depository institution subsidiary of such financial holding company, or the insured depository institution or any of its insured depository institution affiliates, has received in its most recent examination under the Community Reinvestment Act of 1977 [12 U.S.C. 2901 et seq.], a rating of less than satisfactory record of meeting community credit needs.

(3) Foreign banks 
For purposes of paragraph (1), the Board shall apply comparable capital and management standards to a foreign bank that operates a branch or agency or owns or controls a commercial lending company in the United States, giving due regard to the principle of national treatment and equality of competitive opportunity.
(m) Provisions applicable to financial holding companies that fail to meet certain requirements 

(1) In general 
If the Board finds that
(A) a financial holding company is engaged, directly or indirectly, in any activity under subsection (k), (n), or (o) of this section, other than activities that are permissible for a bank holding company under subsection (c)(8) of this section; and
(B) such financial holding company is not in compliance with the requirements of subsection (l)(1) of this section;

the Board shall give notice to the financial holding company to that effect, describing the conditions giving rise to the notice.

(2) Agreement to correct conditions required 
Not later than 45 days after the date of receipt by a financial holding company of a notice given under paragraph (1) (or such additional period as the Board may permit), the financial holding company shall execute an agreement with the Board to comply with the requirements applicable to a financial holding company under subsection (l)(1) of this section.
(3) Board may impose limitations 
Until the conditions described in a notice to a financial holding company under paragraph (1) are corrected, the Board may impose such limitations on the conduct or activities of that financial holding company or any affiliate of that company as the Board determines to be appropriate under the circumstances and consistent with the purposes of this chapter.
(4) Failure to correct 
If the conditions described in a notice to a financial holding company under paragraph (1) are not corrected within 180 days after the date of receipt by the financial holding company of a notice under paragraph (1), the Board may require such financial holding company, under such terms and conditions as may be imposed by the Board and subject to such extension of time as may be granted in the discretion of the Board, either
(A) to divest control of any subsidiary depository institution; or
(B) at the election of the financial holding company instead to cease to engage in any activity conducted by such financial holding company or its subsidiaries (other than a depository institution or a subsidiary of a depository institution) that is not an activity that is permissible for a bank holding company under subsection (c)(8) of this section.
(5) Consultation 
In taking any action under this subsection, the Board shall consult with all relevant Federal and State regulatory agencies and authorities.
(n) Authority to retain limited nonfinancial activities and affiliations 

(1) In general 
Notwithstanding subsection (a) of this section, a company that is not a bank holding company or a foreign bank (as defined in section 3101 (7) of this title) and becomes a financial holding company after November 12, 1999, may continue to engage in any activity and retain direct or indirect ownership or control of shares of a company engaged in any activity if
(A) the holding company lawfully was engaged in the activity or held the shares of such company on September 30, 1999;
(B) the holding company is predominantly engaged in financial activities as defined in paragraph (2); and
(C) the company engaged in such activity continues to engage only in the same activities that such company conducted on September 30, 1999, and other activities permissible under this chapter.
(2) Predominantly financial 
For purposes of this subsection, a company is predominantly engaged in financial activities if the annual gross revenues derived by the holding company and all subsidiaries of the holding company (excluding revenues derived from subsidiary depository institutions), on a consolidated basis, from engaging in activities that are financial in nature or are incidental to a financial activity under subsection (k) of this section represent at least 85 percent of the consolidated annual gross revenues of the company.
(3) No expansion of grandfathered commercial activities through merger or consolidation 
A financial holding company that engages in activities or holds shares pursuant to this subsection, or a subsidiary of such financial holding company, may not acquire, in any merger, consolidation, or other type of business combination, assets of any other company that is engaged in any activity that the Board has not determined to be financial in nature or incidental to a financial activity under subsection (k) of this section, except this paragraph shall not apply with respect to a company that owns a broadcasting station licensed under title III of the Communications Act of 1934 [47 U.S.C. 301 et seq.] and the shares of which are under common control with an insurance company since January 1, 1998, unless such company is acquired by, or otherwise becomes an affiliate of, a bank holding company that, at the time such acquisition or affiliation is consummated, is 1 of the 5 largest domestic bank holding companies (as determined on the basis of the consolidated total assets of such companies).
(4) Continuing revenue limitation on grandfathered commercial activities 
Notwithstanding any other provision of this subsection, a financial holding company may continue to engage in activities or hold shares in companies pursuant to this subsection only to the extent that the aggregate annual gross revenues derived from all such activities and all such companies does not exceed 15 percent of the consolidated annual gross revenues of the financial holding company (excluding revenues derived from subsidiary depository institutions).
(5) Cross marketing restrictions applicable to commercial activities 

(A) In general 
A depository institution controlled by a financial holding company shall not
(i) offer or market, directly or through any arrangement, any product or service of a company whose activities are conducted or whose shares are owned or controlled by the financial holding company pursuant to this subsection or subparagraph (H) or (I) of subsection (k)(4) of this section; or
(ii) permit any of its products or services to be offered or marketed, directly or through any arrangement, by or through any company described in clause (i).
(B) Rule of construction 
Subparagraph (A) shall not be construed as prohibiting an arrangement between a depository institution and a company owned or controlled pursuant to subparagraph (H) or (I) of subsection (k)(4) of this section for the marketing of products or services through statement inserts or Internet websites if
(i) such arrangement does not violate section 106 of the Bank Holding Company Act Amendments of 1970 [12 U.S.C. 1971 et seq.]; and
(ii) the Board determines that the arrangement is in the public interest, does not undermine the separation of banking and commerce, and is consistent with the safety and soundness of depository institutions.
(6) Transactions with nonfinancial affiliates 
A depository institution controlled by a financial holding company may not engage in a covered transaction (as defined in section 371c (b)(7) of this title) with any affiliate controlled by the company pursuant to this subsection.
(7) Sunset of grandfather 
A financial holding company engaged in any activity, or retaining direct or indirect ownership or control of shares of a company, pursuant to this subsection, shall terminate such activity and divest ownership or control of the shares of such company before the end of the 10-year period beginning on November 12, 1999. The Board may, upon application by a financial holding company, extend such 10-year period by a period not to exceed an additional 5 years if such extension would not be detrimental to the public interest.
(o) Regulation of certain financial holding companies 
Notwithstanding subsection (a) of this section, a company that is not a bank holding company or a foreign bank (as defined in section 3101 (7) of this title) and becomes a financial holding company after November 12, 1999, may continue to engage in, or directly or indirectly own or control shares of a company engaged in, activities related to the trading, sale, or investment in commodities and underlying physical properties that were not permissible for bank holding companies to conduct in the United States as of September 30, 1997, if
(1) the holding company, or any subsidiary of the holding company, lawfully was engaged, directly or indirectly, in any of such activities as of September 30, 1997, in the United States;
(2) the attributed aggregate consolidated assets of the company held by the holding company pursuant to this subsection, and not otherwise permitted to be held by a financial holding company, are equal to not more than 5 percent of the total consolidated assets of the bank holding company, except that the Board may increase that percentage by such amounts and under such circumstances as the Board considers appropriate, consistent with the purposes of this chapter; and
(3) the holding company does not permit
(A) any company, the shares of which it owns or controls pursuant to this subsection, to offer or market any product or service of an affiliated depository institution; or
(B) any affiliated depository institution to offer or market any product or service of any company, the shares of which are owned or controlled by such holding company pursuant to this subsection.
[1] See References in Text note below.
[2] So in original. The period probably should be a semicolon.
[3] See References in Text note below.
[4] See References in Text note below.

12 USC 1844 - Administration

(a) Registration of bank holding company 
Within one hundred and eighty days after May 9, 1956, or within one hundred and eighty days after becoming a bank holding company, whichever is later, each bank holding company shall register with the Board on forms prescribed by the Board, which shall include such information with respect to the financial condition and operations, management, and intercompany relationships of the bank holding company and its subsidiaries, and related matters, as the Board may deem necessary or appropriate to carry out the purposes of this chapter. The Board may, in its discretion, extend the time within which a bank holding company shall register and file the requisite information. A declaration filed in accordance with section 1843 (l)(1)(C) of this title shall satisfy the requirements of this subsection with regard to the registration of a bank holding company but not any requirement to file an application to acquire a bank pursuant to section 1842 of this title.
(b) Regulations and orders 
The Board is authorized to issue such regulations and orders as may be necessary to enable it to administer and carry out the purposes of this chapter and prevent evasions thereof.
(c) Reports and examinations 

(1) Reports 

(A) In general 
The Board, from time to time, may require a bank holding company and any subsidiary of such company to submit reports under oath to keep the Board informed as to
(i) its financial condition, systems for monitoring and controlling financial and operating risks, and transactions with depository institution subsidiaries of the bank holding company; and
(ii) compliance by the company or subsidiary with applicable provisions of this chapter or any other Federal law that the Board has specific jurisdiction to enforce against such company or subsidiary.
(B) Use of existing reports 

(i) In general For purposes of compliance with this paragraph, the Board shall, to the fullest extent possible, accept
(I) reports that a bank holding company or any subsidiary of such company has provided or been required to provide to other Federal or State supervisors or to appropriate self-regulatory organizations;
(II) information that is otherwise required to be reported publicly; and
(III) externally audited financial statements.
(ii) Availability A bank holding company or a subsidiary of such company shall provide to the Board, at the request of the Board, a report referred to in clause (i).
(iii) Reports filed with other agencies
(I) In general In the event that the Board requires a report under this subsection from a functionally regulated subsidiary of a bank holding company of a kind that is not required by another Federal or State regulatory authority or an appropriate self-regulatory organization, the Board shall first request that the appropriate regulatory authority or self-regulatory organization obtain such report.
(II) Availability from other subsidiary If the report is not made available to the Board, and the report is necessary to assess a material risk to the bank holding company or any of its depository institution subsidiaries or compliance with this chapter or any other Federal law that the Board has specific jurisdiction to enforce against such company or subsidiary or the systems described in paragraph (2)(A)(ii)(II), the Board may require such functionally regulated subsidiary to provide such a report to the Board.
(2) Examinations 

(A) Examination authority for bank holding companies and subsidiaries 
Subject to subparagraph (B), the Board may make examinations of each bank holding company and each subsidiary of such holding company in order
(i) to inform the Board of the nature of the operations and financial condition of the holding company and such subsidiaries;
(ii) to inform the Board of
(I) the financial and operational risks within the holding company system that may pose a threat to the safety and soundness of any depository institution subsidiary of such holding company; and
(II) the systems for monitoring and controlling such risks; and
(iii) to monitor compliance with the provisions of this chapter or any other Federal law that the Board has specific jurisdiction to enforce against such company or subsidiary and those governing transactions and relationships between any depository institution subsidiary and its affiliates.
(B) Functionally regulated subsidiaries 
Notwithstanding subparagraph (A), the Board may make examinations of a functionally regulated subsidiary of a bank holding company only if
(i) the Board has reasonable cause to believe that such subsidiary is engaged in activities that pose a material risk to an affiliated depository institution;
(ii) the Board reasonably determines, after reviewing relevant reports, that examination of the subsidiary is necessary to adequately inform the Board of the systems described in subparagraph (A)(ii)(II); or
(iii) based on reports and other available information, the Board has reasonable cause to believe that a subsidiary is not in compliance with this chapter or any other Federal law that the Board has specific jurisdiction to enforce against such subsidiary, including provisions relating to transactions with an affiliated depository institution, and the Board cannot make such determination through examination of the affiliated depository institution or the bank holding company.
(C) Restricted focus of examinations 
The Board shall, to the fullest extent possible, limit the focus and scope of any examination of a bank holding company to
(i) the bank holding company; and
(ii) any subsidiary of the bank holding company that could have a materially adverse effect on the safety and soundness of any depository institution subsidiary of the holding company due to
(I) the size, condition, or activities of the subsidiary; or
(II) the nature or size of transactions between the subsidiary and any depository institution that is also a subsidiary of the bank holding company.
(D) Deference to bank examinations 
The Board shall, to the fullest extent possible, for the purposes of this paragraph, use the reports of examinations of depository institutions made by the appropriate Federal and State depository institution supervisory authority.
(E) Deference to other examinations 
The Board shall, to the fullest extent possible, forego an examination by the Board under this paragraph and instead review the reports of examination made of
(i) any registered broker or dealer by or on behalf of the Securities and Exchange Commission;
(ii) any registered investment adviser properly registered by or on behalf of either the Securities and Exchange Commission or any State;
(iii) any licensed insurance company by or on behalf of any State regulatory authority responsible for the supervision of insurance companies; and
(iv) any other subsidiary that the Board finds to be comprehensively supervised by a Federal or State authority.
(3) Capital 

(A) In general 
The Board may not, by regulation, guideline, order, or otherwise, prescribe or impose any capital or capital adequacy rules, guidelines, standards, or requirements on any functionally regulated subsidiary of a bank holding company that
(i) is not a depository institution; and
(ii) is
(I) in compliance with the applicable capital requirements of its Federal regulatory authority (including the Securities and Exchange Commission) or State insurance authority;
(II) properly registered as an investment adviser under the Investment Advisers Act of 1940 [15 U.S.C. 80b–1 et seq.], or with any State; or
(III) is licensed as an insurance agent with the appropriate State insurance authority.
(B) Rule of construction 
Subparagraph (A) shall not be construed as preventing the Board from imposing capital or capital adequacy rules, guidelines, standards, or requirements with respect to
(i) activities of a registered investment adviser other than with respect to investment advisory activities or activities incidental to investment advisory activities; or
(ii) activities of a licensed insurance agent other than insurance agency activities or activities incidental to insurance agency activities.
(C) Limitations on indirect action 
In developing, establishing, or assessing bank holding company capital or capital adequacy rules, guidelines, standards, or requirements for purposes of this paragraph, the Board may not take into account the activities, operations, or investments of an affiliated investment company registered under the Investment Company Act of 1940 [15 U.S.C. 80a–1 et seq.], unless the investment company is
(i) a bank holding company; or
(ii) controlled by a bank holding company by reason of ownership by the bank holding company (including through all of its affiliates) of 25 percent or more of the shares of the investment company, and the shares owned by the bank holding company have a market value equal to more than $1,000,000.
(4) Functional regulation of securities and insurance activities 

(A) Securities activities 
Securities activities conducted in a functionally regulated subsidiary of a depository institution shall be subject to regulation by the Securities and Exchange Commission, and by relevant State securities authorities, as appropriate, subject to section 6701 of title 15, to the same extent as if they were conducted in a nondepository institution subsidiary of a bank holding company.
(B) Insurance activities 
Subject to section 6701 of title 15, insurance agency and brokerage activities and activities as principal conducted in a functionally regulated subsidiary of a depository institution shall be subject to regulation by a State insurance authority to the same extent as if they were conducted in a nondepository institution subsidiary of a bank holding company.
(5) Definition 
For purposes of this subsection, the term functionally regulated subsidiary means any company
(A) that is not a bank holding company or a depository institution; and
(B) that is
(i) a broker or dealer that is registered under the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.];
(ii) a registered investment adviser, properly registered by or on behalf of either the Securities and Exchange Commission or any State, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;
(iii) an investment company that is registered under the Investment Company Act of 1940 [15 U.S.C. 80a–1 et seq.];
(iv) an insurance company, with respect to insurance activities of the insurance company and activities incidental to such insurance activities, that is subject to supervision by a State insurance regulator; or
(v) an entity that is subject to regulation by the Commodity Futures Trading Commission, with respect to the commodities activities of such entity and activities incidental to such commodities activities.
(d) Reports to the Congress; recommendations 
Before the expiration of two years following May 9, 1956, and each year thereafter in the Boards annual report to the Congress, the Board shall report to the Congress the results of the administration of this chapter, stating what, if any, substantial difficulties have been encountered in carrying out the purposes of this chapter, and any recommendations as to changes in the law which in the opinion of the Board would be desirable.
(e) Termination of activities or ownership or control of nonbank subsidiaries constituting serious risk 

(1) Notwithstanding any other provision of this chapter, the Board may, whenever it has reasonable cause to believe that the continuation by a bank holding company of any activity or of ownership or control of any of its nonbank subsidiaries, other than a nonbank subsidiary of a bank, constitutes a serious risk to the financial safety, soundness, or stability of a bank holding company subsidiary bank and is inconsistent with sound banking principles or with the purposes of this chapter or with the Financial Institutions Supervisory Act of 1966, at the election of the bank holding company
(A) order the bank holding company or any such nonbank subsidiaries, after due notice and opportunity for hearing, and after considering the views of the banks primary supervisor, which shall be the Comptroller of the Currency in the case of a national bank or the Federal Deposit Insurance Corporation and the appropriate State supervisory authority in the case of an insured nonmember bank, to terminate such activities or to terminate (within one hundred and twenty days or such longer period as the Board may direct in unusual circumstances) its ownership or control of any such subsidiary either by sale or by distribution of the shares of the subsidiary to the shareholders of the bank holding company; or
(B) order the bank holding company, after due notice and opportunity for hearing, and after consultation with the primary supervisor for the bank, which shall be the Comptroller of the Currency in the case of a national bank, and the Federal Deposit Insurance Corporation and the appropriate State supervisor in the case of an insured nonmember bank, to terminate (within 120 days or such longer period as the Board may direct) the ownership or control of any such bank by such company.

The distribution referred to in subparagraph (A) shall be pro rata with respect to all of the shareholders of the distributing bank holding company, and the holding company shall not make any charge to its shareholders arising out of such a distribution.

(2) The Board may in its discretion apply to the United States district court within the jurisdiction of which the principal office of the holding company is located, for the enforcement of any effective and outstanding order issued under this section, and such court shall have jurisdiction and power to order and require compliance therewith, but except as provided in section 1848 of this title, no court shall have jurisdiction to affect by injunction or otherwise the issuance or enforcement of any notice or order under this section, or to review, modify, suspend, terminate, or set aside any such notice or order.
(f) Powers of Board respecting applications, examinations, or other proceedings 
In the course of or in connection with an application, examination, investigation or other proceeding under this chapter, the Board, or any member or designated representative thereof, including any person designated to conduct any hearing under this chapter, shall have the power to administer oaths and affirmations, to take or cause to be taken depositions, and to issue, revoke, quash, or modify subpenas and subpenas duces tecum; and the Board is empowered to make rules and regulations to effectuate the purposes of this subsection. The attendance of witnesses and the production of documents provided for in this subsection may be required from any place in any State or in any territory or other place subject to the jurisdiction of the United States at any designated place where such proceeding is being conducted. Any party to proceedings under this chapter may apply to the United States District Court for the District of Columbia, or the United States district court for the judicial district or the United States court in any territory in which such proceeding is being conducted or where the witness resides or carries on business, for the enforcement of any subpena or subpena duces tecum issued pursuant to this subsection, and such courts shall have jurisdiction and power to order and require compliance therewith. Witnesses subpenaed under this subsection shall be paid the same fees and mileage that are paid witnesses in the district courts of the United States. Any service required under this subsection may be made by registered mail, or in such other manner reasonably calculated to give actual notice as the Board may by regulation or otherwise provide. Any court having jurisdiction of any proceeding instituted under this subsection may allow to any such party such reasonable expenses and attorneys fees as it deems just and proper. Any person who willfully shall fail or refuse to attend and testify or to answer any lawful inquiry or to produce books, papers, correspondence, memoranda, contracts, agreements, or other records, if in such persons power so to do, in obedience to the subpena of the Board, shall be guilty of a misdemeanor and, upon conviction, shall be subject to a fine of not more than $1,000 or to imprisonment for a term of not more than one year or both.
(g) Authority of State insurance regulator and the Securities and Exchange Commission 

(1) In general 
Notwithstanding any other provision of law, any regulation, order, or other action of the Board that requires a bank holding company to provide funds or other assets to a subsidiary depository institution shall not be effective nor enforceable with respect to an entity described in subparagraph (A) if
(A) such funds or assets are to be provided by
(i) a bank holding company that is an insurance company, a broker or dealer registered under the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], an investment company registered under the Investment Company Act of 1940 [15 U.S.C. 80a–1 et seq.], or an investment adviser registered by or on behalf of either the Securities and Exchange Commission or any State; or
(ii) an affiliate of the depository institution that is an insurance company or a broker or dealer registered under the Securities Exchange Act of 1934, an investment company registered under the Investment Company Act of 1940, or an investment adviser registered by or on behalf of either the Securities and Exchange Commission or any State; and
(B) the State insurance authority for the insurance company or the Securities and Exchange Commission for the registered broker, dealer, investment adviser (solely with respect to investment advisory activities or activities incidental thereto), or investment company, as the case may be, determines in writing sent to the holding company and the Board that the holding company shall not provide such funds or assets because such action would have a material[1] adverse effect on the financial condition of the insurance company or the broker, dealer, investment company, or investment adviser, as the case may be.
(2) Notice to State insurance authority or SEC required 
If the Board requires a bank holding company, or an affiliate of a bank holding company, that is an insurance company or a broker, dealer, investment company, or investment adviser described in paragraph (1)(A) to provide funds or assets to a depository institution subsidiary of the holding company pursuant to any regulation, order, or other action of the Board referred to in paragraph (1), the Board shall promptly notify the State insurance authority for the insurance company, the Securities and Exchange Commission, or State securities regulator, as the case may be, of such requirement.
(3) Divestiture in lieu of other action 
If the Board receives a notice described in paragraph (1)(B) from a State insurance authority or the Securities and Exchange Commission with regard to a bank holding company or affiliate referred to in that paragraph, the Board may order the bank holding company to divest the depository institution not later than 180 days after receiving the notice, or such longer period as the Board determines consistent with the safe and sound operation of the depository institution.
(4) Conditions before divestiture 
During the period beginning on the date an order to divest is issued by the Board under paragraph (3) to a bank holding company and ending on the date the divestiture is completed, the Board may impose any conditions or restrictions on the holding companys ownership or operation of the depository institution, including restricting or prohibiting transactions between the depository institution and any affiliate of the institution, as are appropriate under the circumstances.
(5) Rule of construction 
No provision of this subsection may be construed as limiting or otherwise affecting, except to the extent specifically provided in this subsection, the regulatory authority, including the scope of the authority, of any Federal agency or department with regard to any entity that is within the jurisdiction of such agency or department.
[1] So in original. Probably should be “materially”.

12 USC 1845 - Repealed. Pub. L. 89485, 9, July 1, 1966, 80 Stat. 240

Section, act May 9, 1956, ch. 240, 6, 70 Stat. 137, prohibited any subsidiary bank from lending to or investing in its parent holding company or a fellow subsidiary bank. See section 371c of this title.

12 USC 1846 - Reservation of rights to States

(a) In general 
No provision of this chapter shall be construed as preventing any State from exercising such powers and jurisdiction which it now has or may hereafter have with respect to companies, banks, bank holding companies, and subsidiaries thereof.
(b) State taxation authority not affected 
No provision of this chapter shall be construed as affecting the authority of any State or political subdivision of any State to adopt, apply, or administer any tax or method of taxation to any bank, bank holding company, or foreign bank, or any affiliate of any bank, bank holding company, or foreign bank, to the extent that such tax or tax method is otherwise permissible by or under the Constitution of the United States or other Federal law.

12 USC 1847 - Penalties

(a) Criminal penalty 

(1) Whoever knowingly violates any provision of this chapter or, being a company, violates any regulation or order issued by the Board under this chapter, shall be imprisoned not more than 1 year, fined not more than $100,000 per day for each day during which the violation continues, or both.
(2) Whoever, with the intent to deceive, defraud, or profit significantly, knowingly violates any provision of this chapter shall be imprisoned not more than 5 years, fined not more than $1,000,000 per day for each day during which the violation continues, or both. Every officer, director, agent, and employee of a bank holding company shall be subject to the same penalties for false entries in any book, report, or statement of such bank holding company as are applicable to officers, directors, agents, and employees of member banks for false entries in any books, reports, or statements of member banks under section 1005 of title 18.
(b) Civil money penalty 

(1) Penalty 
Any company which violates, and any individual who participates in a violation of, any provision of this chapter, or any regulation or order issued pursuant thereto, shall forfeit and pay a civil penalty of not more than $25,000 for each day during which such violation continues.
(2) Assessment; etc. 
Any penalty imposed under paragraph (1) may be assessed and collected by the Board in the manner provided in subparagraphs (E), (F), (G), and (I) of section 1818 (i)(2) of this title for penalties imposed (under such section) and any such assessment shall be subject to the provisions of such section.
(3) Hearing 
The company or other person against whom any penalty is assessed under this subsection shall be afforded an agency hearing if such association or person submits a request for such hearing within 20 days after the issuance of the notice of assessment. Section 1818 (h) of this title shall apply to any proceeding under this subsection.
(4) Disbursement 
All penalties collected under authority of this subsection shall be deposited into the Treasury.
(5) “Violate” defined 
For purposes of this section, the term violate includes any action (alone or with another or others) for or toward causing, bringing about, participating in, counseling, or aiding or abetting a violation.
(6) Regulations 
The Board shall prescribe regulations establishing such procedures as may be necessary to carry out this subsection.
(c) Notice under this section after separation from service 
The resignation, termination of employment or participation, or separation of an institution-affiliated party (within the meaning of section 1813 (u) of this title) with respect to a bank holding company (including a separation caused by the deregistration of such a company) shall not affect the jurisdiction and authority of the Board to issue any notice and proceed under this section against any such party, if such notice is served before the end of the 6-year period beginning on the date such party ceased to be such a party with respect to such holding company (whether such date occurs before, on, or after August 9, 1989).
(d) Penalty for failure to make reports 

(1) First tier 
Any company which
(A) maintains procedures reasonably adapted to avoid any inadvertent error and, unintentionally and as a result of such an error
(i) fails to make, submit, or publish such reports or information as may be required under this chapter or under regulations prescribed by the Board pursuant to this chapter, within the period of time specified by the Board; or
(ii) submits or publishes any false or misleading report or information; or
(B) inadvertently transmits or publishes any report which is minimally late,

shall be subject to a penalty of not more than $2,000 for each day during which such failure continues or such false or misleading information is not corrected. The company shall have the burden of proving that an error was inadvertent and that a report was inadvertently transmitted or published late.

(2) Second tier 
Any company which
(A) fails to make, submit, or publish such reports or information as may be required under this chapter or under regulations prescribed by the Board pursuant to this chapter, within the period of time specified by the Board; or
(B) submits or publishes any false or misleading report or information,

in a manner not described in paragraph (1) shall be subject to a penalty of not more than $20,000 for each day during which such failure continues or such false or misleading information is not corrected.

(3) Third tier 
Notwithstanding paragraph (2), if any company knowingly or with reckless disregard for the accuracy of any information or report described in paragraph (2) submits or publishes any false or misleading report or information, the Board may, in its discretion, assess a penalty of not more than $1,000,000 or 1 percent of total assets of such company, whichever is less, per day for each day during which such failure continues or such false or misleading information is not corrected.
(4) Assessment; etc. 
Any penalty imposed under paragraph (1), (2), or (3) shall be assessed and collected by the Board in the manner provided in subsection (b) of this section (for penalties imposed under such subsection) and any such assessment (including the determination of the amount of the penalty) shall be subject to the provisions of such subsection.
(5) Hearing 
Any company against which any penalty is assessed under this subsection shall be afforded an agency hearing if such company submits a request for such hearing within 20 days after the issuance of the notice of assessment. Section 1818 (h) of this title shall apply to any proceeding under this subsection.

12 USC 1848 - Judicial review

Any party aggrieved by an order of the Board under this chapter may obtain a review of such order in the United States Court of Appeals within any circuit wherein such party has its principal place of business or in the Court of Appeals in the District of Columbia, by filing in the court, within thirty days after the entry of the Boards order, a petition praying that the order of the Board be set aside. A copy of such petition shall be forthwith transmitted to the Board by the clerk of the court, and thereupon the Board shall file in the court the record made before the Board, as provided in section 2112 of title 28. Upon the filing of such petition the court shall have the jurisdiction to affirm, set aside, or modify the order of the Board and to require the Board to take such action with regard to the matter under review as the court deems proper. The findings of the Board as to the facts, if supported by substantial evidence, shall be conclusive.

12 USC 1848a - Limitation on rulemaking, prudential, supervisory, and enforcement authority of the Board

(a) Limitation on direct action 
The Board may not prescribe regulations, issue or seek entry of orders, impose restraints, restrictions, guidelines, requirements, safeguards, or standards, or otherwise take any action under or pursuant to any provision of this chapter or section 1818 of this title against or with respect to a functionally regulated subsidiary of a bank holding company unless
(1) the action is necessary to prevent or redress an unsafe or unsound practice or breach of fiduciary duty by such subsidiary that poses a material risk to
(A) the financial safety, soundness, or stability of an affiliated depository institution; or
(B) the domestic or international payment system; and
(2) the Board finds that it is not reasonably possible to protect effectively against the material risk at issue through action directed at or against the affiliated depository institution or against depository institutions generally.
(b) Limitation on indirect action 
The Board may not prescribe regulations, issue or seek entry of orders, impose restraints, restrictions, guidelines, requirements, safeguards, or standards, or otherwise take any action under or pursuant to any provision of this chapter or section 1818 of this title against or with respect to a bank holding company that requires the bank holding company to require a functionally regulated subsidiary of the holding company to engage, or to refrain from engaging, in any conduct or activities unless the Board could take such action directly against or with respect to the functionally regulated subsidiary in accordance with subsection (a) of this section.
(c) Actions specifically authorized 
Notwithstanding subsection (a) or (b) of this section, the Board may take action under this chapter or section 1818 of this title to enforce compliance by a functionally regulated subsidiary of a bank holding company with any Federal law that the Board has specific jurisdiction to enforce against such subsidiary.
(d) Functionally regulated subsidiary defined 
For purposes of this section, the term functionally regulated subsidiary has the meaning given the term in section 1844 (c)(5) of this title.

12 USC 1849 - Saving provision

(a) General rule 
Nothing herein contained shall be interpreted or construed as approving any act, action, or conduct which is or has been or may be in violation of existing law, nor shall anything herein contained constitute a defense to any action, suit, or proceeding pending or hereafter instituted on account of any prohibited antitrust or monopolistic act, action, or conduct, except as specifically provided in this section.
(b) Antitrust review 

(1) In general 
The Board shall immediately notify the Attorney General of any approval by it pursuant to section 1842 of this title of a proposed acquisition, merger, or consolidation transaction and, if the transaction also involves an acquisition under section 1843 of this title, the Board shall also notify the Federal Trade Commission of such approval. If the Board has found that it must act immediately in order to prevent the probable failure of a bank or bank holding company involved in any such transaction, the transaction may be consummated immediately upon approval by the Board. If the Board has advised the Comptroller of the Currency or the State supervisory authority, as the case may be, of the existence of an emergency requiring expeditious action and has required the submission of views and recommendations within ten days, the transaction may not be consummated before the fifth calendar day after the date of approval by the Board. In all other cases, the transaction may not be consummated before the thirtieth calendar day after the date of approval by the Board or, if the Board has not received any adverse comment from the Attorney General of the United States relating to competitive factors, such shorter period of time as may be prescribed by the Board with the concurrence of the Attorney General, but in no event less than 15 calendar days after the date of approval. Any action brought under the antitrust laws arising out of an acquisition, merger, or consolidation transaction approved under section 1842 of this title shall be commenced prior to the earliest time under this subsection at which the transaction approval under section 1842 of this title might be consummated. The commencement of such an action shall stay the effectiveness of the Boards approval unless the court shall otherwise specifically order. In any such action, the court shall review de novo the issues presented. In any judicial proceeding attacking any acquisition, merger, or consolidation transaction approved pursuant to section 1842 of this title on the ground that such transaction alone and of itself constituted a violation of any antitrust laws other than section 2 of title 15, the standards applied by the court shall be identical with those that the Board is directed to apply under section 1842 of this title. Upon the consummation of an acquisition, merger, or consolidation transaction approved under section 1842 of this title in compliance with this chapter and after the termination of any antitrust litigation commenced within the period prescribed in this section, or upon the termination of such period if no such litigation is commenced therein, the transaction may not thereafter be attacked in any judicial proceeding on the ground that it alone and of itself constituted a violation of any antitrust laws other than section 2 of title 15, but nothing in this chapter shall exempt any bank holding company involved in such a transaction from complying with the antitrust laws after the consummation of such transaction.
(2) Section 1823 (f) cases 

(A) If
(i) the Federal Deposit Insurance Corporation learns that a bank insured by such Corporation is in danger of closing; and
(ii) the Corporation is considering assisting the acquisition of such bank and its affiliated banks by another bank or holding company under section 1823 (f) of this title and such acquisition is subject to the approval of the Board under section 1842 of this title;

the Corporation shall immediately notify the Board of such facts.

(B) Upon receipt of notice from the Federal Deposit Insurance Corporation under subparagraph (A) or at such earlier time as deemed appropriate by the Board, the Board shall immediately notify the Attorney General of the United States of the facts concerning the possible acquisition.
(C) Within 5 days of receiving notice under subparagraph (B), the Attorney General shall notify the Board in writing of the Attorney Generals preliminary finding as to the consistency of the possible acquisition with the antitrust laws.
(D) The Board may reduce or eliminate the post-approval waiting period established under paragraph (1) for an acquisition to which this paragraph applies, except that such period may not be eliminated or reduced to less than 5 days without the concurrence of the Attorney General.
(c) Antitrust proceedings; Board and State banking agency as party; representation by counsel 
In any action brought under the antitrust laws arising out of any acquisition, merger, or consolidation transaction approved by the Board under section 1842 of this title, the Board and any State banking supervisory agency having jurisdiction within the State involved, may appear as a party of its own motion and as of right, and be represented by its counsel.
(d) Treatment of merger transactions consummated prior or subsequent to May 9, 1956, and not in litigation prior to July 1, 1966 
Any acquisition, merger, or consolidation of the kind described in section 1842 (a) of this title which was consummated at any time prior or subsequent to May 9, 1956, and as to which no litigation was initiated by the Attorney General prior to July 1, 1966, shall be conclusively presumed not to have been in violation of any antitrust laws other than section 2 of title 15.
(e) Antitrust litigation; substantive law applicable to proceedings pending on or after July 1, 1966, with respect to merger transactions 
Any court having pending before it on or after July 1, 1966, any litigation initiated under the antitrust laws by the Attorney General with respect to any acquisition, merger, or consolidation of the kind described in section 1842 (a) of this title shall apply the substantive rule of law set forth in section 1842 of this title.
(f) “Antitrust laws” defined 
For the purposes of this section, the term antitrust laws means the Act of July 2, 1890 (the Sherman Antitrust Act), the Act of October 15, 1914 (the Clayton Act), and any other Acts in pari materia.

12 USC 1850 - Acquisition of subsidiary and tying arrangement: Federal Reserve Board proceedings; application for authorization; competitor as party in interest and person aggrieved; judicial review

With respect to any proceeding before the Federal Reserve Board wherein an applicant seeks authority to acquire a subsidiary which is a bank under section 1842 of this title or to engage in an activity otherwise prohibited under chapter 22 of this title, a party who would become a competitor of the applicant or subsidiary thereof by virtue of the applicants or its subsidiarys acquisition, entry into the business involved, or activity, shall have the right to be a party in interest in the proceeding and, in the event of an adverse order of the Board, shall have the right as an aggrieved party to obtain judicial review thereof as provided in section 1848 of this title or as otherwise provided by law.