US (United States) Code. Title 12. Chapter 17: Bank holding companies

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # Banks and banking

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12 USC CHAPTER 17 - BANK HOLDING COMPANIES 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

.

-HEAD-

CHAPTER 17 - BANK HOLDING COMPANIES

-MISC1-

Sec.

1841. Definitions.

1842. Acquisition of bank shares or assets.

(a) Prior approval of Board as necessary; exceptions;

disposition, time extension; subsequent

approval or disposition upon 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.

(c) Factors for consideration by Board.

(d) Interstate banking.

(e) Insured depository institution.

(f) Repealed.

(g) Mutual bank holding company.

1843. Interests in nonbanking organizations.

(a) Ownership or control of voting shares of any

company not a bank; engagement in activities

other than banking.

(b) Statement purporting to represent shares of any

company except a bank or bank holding company.

(c) Exemptions.

(d) Exemption of company controlling one bank prior

to July 1, 1968.

(e) Divestiture of nonexempt shares.

(f) Certain companies not treated as bank holding

companies.

(g) Limitations on certain banks.

(h) Tying provisions.

(i) Acquisition of savings associations.

(j) Notice procedures for nonbanking activities.

(k) Engaging in activities that are financial in

nature.

(l) Conditions for engaging in expanded financial

activities.

(m) Provisions applicable to financial holding

companies that fail to meet certain

requirements.

(n) Authority to retain limited nonfinancial

activities and affiliations.

(o) Regulation of certain financial holding

companies.

1844. Administration.

(a) Registration of bank holding company.

(b) Regulations and orders.

(c) Reports and examinations.

(d) Reports to the Congress; recommendations.

(e) Termination of activities or ownership or control

of nonbank subsidiaries constituting serious

risk.

(f) Powers of Board respecting applications,

examinations, or other proceedings.

(g) Authority of State insurance regulator and the

Securities and Exchange Commission.

1845. Repealed.

1846. Reservation of rights to States.

(a) In general.

(b) State taxation authority not affected.

1847. Penalties.

(a) Criminal penalty.

(b) Civil money penalty.

(c) Notice under this section after separation from

service.

(d) Penalty for failure to make reports.

1848. Judicial review.

1848a. Limitation on rulemaking, prudential, supervisory, and

enforcement authority of the Board.

(a) Limitation on direct action.

(b) Limitation on indirect action.

(c) Actions specifically authorized.

(d) Functionally regulated subsidiary defined.

1849. Saving provision.

(a) General rule.

(b) Antitrust review.

(c) Antitrust proceedings; Board and State banking

agency as party; representation by counsel.

(d) Treatment of merger transactions consummated

prior or subsequent to May 9, 1956, and not in

litigation prior to July 1, 1966.

(e) Antitrust litigation; substantive law applicable

to proceedings pending on or after July 1,

1966, with respect to merger transactions.

(f) ''Antitrust laws'' defined.

1850. Acquisition of subsidiary and tying arrangement: Federal

Reserve Board proceedings; application for authorization;

competitor as party in interest and person aggrieved; judicial

review.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 215a-2, 304, 619, 1467a,

1817, 1818, 1828a, 1831k, 3101, 3105, 3106, 3107 of this title;

title 15 section 80b-2; title 26 section 246A.

-CITE-

12 USC Sec. 1841 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

-HEAD-

Sec. 1841. Definitions

-STATUTE-

(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;

(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 Board's 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 -

(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) (FOOTNOTE 1) of the Federal Reserve Act.

(FOOTNOTE 1) See References in Text note below.

(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 State's 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

institution's 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.

(I) The Investors Fiduciary Trust Company, located in Kansas

City, Missouri, so long as such institution -

(i) engages only in trust, fiduciary, and agency activities

in which it was lawfully engaged on March 5, 1987;

(ii) engages in such activities only at the same number of

locations at which such activities were conducted on such

date;

(iii) does not accept demand deposits other than demand

deposits which are maintained by such institution in -

(I) a trust or fiduciary capacity;

(II) the institution's capacity as a custodian or as a

paying, transfer, shareholder servicing, securities

clearing, escrow, or dividend disbursing agent; or

(III) any capacity which is incidental to the trust or

fiduciary activities of the institution;

(iv) does not engage in the business of making commercial

loans;

(v) does not exercise discount or borrowing privileges

pursuant to section 19(b)(7) of the Federal Reserve Act (12

U.S.C. 461(b)(7)); and

(vi) is not directly or indirectly controlled by any

company other than a company which directly or indirectly

controlled such institution on March 5, 1987.

(J) A savings bank (as defined in section 3(g) of the Federal

Deposit Insurance Act (12 U.S.C. 1813(g))) which -

(i) is an insured bank (as defined in section 3(h) of such

Act (12 U.S.C. 1813(h)));

(ii) is a subsidiary of the Great Western Financial

Corporation as a result of an approval in writing by the

State bank supervisor of the State of New York before June

30, 1987;

(iii) meets or exceeds the investment requirements which an

insured institution must meet in order to be a qualified

thrift lender under section 1730a(o) (FOOTNOTE 1) of this

title; and

(iv) does not, directly, or through insurance products such

savings bank receives from or provides to the Great Western

Financial Corporation, engage in the sale or underwriting of

insurance,

except that this subparagraph shall cease to apply with respect

to such savings bank or any successor institution if any

deposits of any other subsidiary or affiliate of the Great

Western Financial Corporation which are subject to an

assessment of an insurance premium under subsection (b) or (c)

of section 1727 (FOOTNOTE 1) of this title are, directly or

indirectly by any device whatsoever, transferred to or acquired

by such savings bank or any successor institution which would

have the effect of materially reducing such premium

assessments. The exemption provided by this subparagraph shall

cease to apply if Great Western Financial Corporation uses such

savings bank or any successor institution as a vehicle to move

such Corporation from Federal Savings and Loan Insurance

Corporation insurance to Federal Deposit Insurance Corporation

insurance.

(3) District bank. - The term ''District bank'' means any bank

operating under the Code of Law for the District of Columbia.

(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.

(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 1730a (FOOTNOTE 2) of

this title.

(FOOTNOTE 2) See References in Text note below.

(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 Savings

Association 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) Qualified Savings Bank. - For purposes of this chapter, the

term ''qualified savings bank'' -

(1) means any savings bank (as defined in section 3(g) of the

Federal Deposit Insurance Act (12 U.S.C. 1813(g))) which was

organized on or before March 5, 1987; and

(2) includes any cooperative bank that is an insured bank (as

defined in section 3(h) of the Federal Deposit Insurance Act (12

U.S.C. 1813(h))) and any interim savings bank that is established

to facilitate a corporate reorganization, or the formation of a

holding company, involving a savings bank described in paragraph

(1).

(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.

-SOURCE-

(May 9, 1956, ch. 240, Sec. 2, 70 Stat. 133; Pub. L. 89-485, Sec.

1-6, July 1, 1966, 80 Stat. 236, 237; Pub. L. 91-607, title I, Sec.

101, Dec. 31, 1970, 84 Stat. 1760; Pub. L. 95-188, title III, Sec.

301(b), Nov. 16, 1977, 91 Stat. 1389; Pub. L. 95-369, Sec. 8(e),

Sept. 17, 1978, 92 Stat. 623; Pub. L. 97-320, title I, Sec. 118(b),

title III, Sec. 333, title IV, Sec. 404(d)(1), Oct. 15, 1982, 96

Stat. 1479, 1504, 1512; Pub. L. 100-86, title I, Sec. 101(a), (e),

title II, Sec. 205(a), Aug. 10, 1987, 101 Stat. 554, 562, 584; Pub.

L. 101-73, title VI, Sec. 602(a), Aug. 9, 1989, 103 Stat. 409; Pub.

L. 103-328, title I, Sec. 101(c), Sept. 29, 1994, 108 Stat. 2341;

Pub. L. 104-208, div. A, title II, Sec. 2207, 2208(b), 2304(b),

2610, 2704(d)(17), Sept. 30, 1996, 110 Stat. 3009-406, 3009-408,

3009-425, 3009-475, 3009-495; Pub. L. 106-102, title I, Sec.

103(c)(1), 107(c), 119, title VII, Sec. 724, Nov. 12, 1999, 113

Stat. 1351, 1359, 1373, 1471.)

-REFTEXT-

REFERENCES IN TEXT

This chapter, referred to in subsecs. (a)(1), (4), (c), and (g)

to (p), was in the original ''this Act'', meaning act May 9, 1956,

ch. 240, 70 Stat. 133, as amended, known as the Bank Holding

Company Act of 1956, which enacted this chapter and sections 1101

to 1103 of Title 26, Internal Revenue Code, and enacted provisions

set out as notes under this section. For complete classification

of this Act to the Code, see Short Title note set out below and

Tables.

The Federal Deposit Insurance Act, referred to in subsecs.

(a)(5)(F) and (c)(2)(H)(i), is act Sept. 21, 1950, ch. 967, Sec. 2,

64 Stat. 873, as amended, which is classified generally to chapter

16 (Sec. 1811 et seq.) of this title. For complete classification

of this Act to the Code, see Short Title note set out under section

1811 of this title and Tables.

Enactment of the Bank Holding Company Act Amendments of 1970,

referred to in subsec. (b), means enactment of Pub. L. 91-607, on

Dec. 31, 1970. For classification of Pub. L. 91-607, see Short

Title of 1970 Amendment note below.

Section 25 of the Federal Reserve Act, referred to in subsec.

(c)(2)(G), is classified to subchapter I (Sec. 601 et seq.) of

chapter 6 of this title. Section 25(a) of the Federal Reserve Act,

which is classified to subchapter II (Sec. 611 et seq.) of chapter

6 of this title, was renumbered section 25A of that act by Pub. L.

102-242, title I, Sec. 142(e)(2), Dec. 19, 1991, 105 Stat. 2281.

Sections 1727 and 1730a of this title, referred to in subsecs.

(c)(2)(J) and (i)(4), were repealed by Pub. L. 101-73, title IV,

Sec. 407, Aug. 9, 1989, 103 Stat. 363.

A section 2(h)(2) company, referred to in subsec. (h)(3) to (5),

is defined in subsec. (h)(2) of this section.

-MISC2-

AMENDMENTS

1999 - Subsec. (a)(5)(E)(i). Pub. L. 106-102, Sec. 724, inserted

''1 or more'' before ''thrift institutions''.

Subsec. (c)(2)(H). Pub. L. 106-102, Sec. 107(c), inserted '', or

that is otherwise permissible for a bank controlled by a company

described in section 1843(f)(1) of this title'' before period at

end of concluding provisions.

Subsec. (n). Pub. L. 106-102, Sec. 103(c)(1)(A), inserted ''

'depository institution','' after ''the terms''.

Subsec. (o)(1)(A). Pub. L. 106-102, Sec. 119, substituted

''section 38'' for ''section 38(b)''.

Subsecs. (p), (q). Pub. L. 106-102, Sec. 103(c)(1)(B), added

subsecs. (p) and (q).

1996 - Subsec. (b). Pub. L. 104-208, Sec. 2610(1), inserted '',

and shall not include a qualified family partnership'' after ''by

any State''.

Subsec. (c)(2)(F). Pub. L. 104-208, Sec. 2304(b), inserted '',

including an institution that accepts collateral for extensions of

credit by holding deposits under $100,000, and by other means''

after ''An institution'' in introductory provisions.

Subsec. (g)(3). Pub. L. 104-208, Sec. 2207, struck out par. (3)

which read as follows: ''shares transferred after January 1, 1966,

by any bank holding company (or by any company which, but for such

transfer, would be a bank holding company) directly or indirectly

to any transferee that is indebted to the transferor, or has one or

more officers, directors, trustees, or beneficiaries in common with

or subject to control by the transferor, shall be deemed to be

indirectly owned or controlled by the transferor unless the Board,

after opportunity for hearing, determines that the transferor is

not in fact capable of controlling the transferee.''

Subsec. (j)(2). Pub. L. 104-208, Sec. 2704(d)(17), which directed

substitution of ''Deposit Insurance Fund'' for ''Savings

Association Insurance Fund'', was not executed. See Effective Date

of 1996 Amendment note below.

Subsec. (o)(1). Pub. L. 104-208, Sec. 2208(b)(1), added heading

and text of par. (1) and struck out heading and text of former par.

(1). Text read as follows: ''The term 'adequately capitalized'

means a level of capitalization which meets or exceeds all

applicable Federal regulatory capital standards.''

Subsec. (o)(8), (9). Pub. L. 104-208, Sec. 2208(b)(2), added

pars. (8) and (9).

Subsec. (o)(10). Pub. L. 104-208, Sec. 2610(2), added par. (10).

1994 - Subsecs. (n), (o). Pub. L. 103-328 added subsecs. (n) and

(o).

1989 - Subsec. (j). Pub. L. 101-73 amended subsec. (j) generally,

substituting provisions defining ''saving association'' or

''insured institution'' for provisions defining ''insured

institution''.

1987 - Subsec. (a)(5)(E). Pub. L. 100-86, Sec. 101(e), amended

subpar. (E) generally. Prior to amendment, subpar. (E) read as

follows: ''No company is a bank holding company by virtue of its

ownership or control of any State chartered bank or trust company

which is wholly owned by thrift institutions and which restricts

itself to the acceptance of deposits from thrift institutions,

deposits arising out of the corporate business of its owners, and

deposits of public moneys.''

Subsec. (c). Pub. L. 100-86, Sec. 101(a)(1), amended subsec. (c)

generally. Prior to amendment, subsec. (c) read as follows: ''

'Bank' means any 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, except an institution the accounts of

which are insured by the Federal Savings and Loan Insurance

Corporation or an institution chartered by the Federal Home Loan

Bank Board, which (1) accepts deposits that the depositor has a

legal right to withdraw on demand, and (2) engages in the business

of making commercial loans. Such term does not include any

organization operating under section 25 or section 25 (a) of the

Federal Reserve Act, or any organization which does not do business

within the United States except as an incident to its activities

outside the United States. 'District bank' means any bank organized

or operating under the Code of Law for the District of Columbia.

The term 'bank' also includes a State chartered bank or a national

banking association which is owned exclusively (except to the

extent directors' qualifying shares are required by law) by other

depository institutions or by a bank holding company which is owned

exclusively by other depository institutions and is organized to

engage exclusively in providing services for other depository

institutions and their officers, directors, and employees.''

Subsec. (h)(2). Pub. L. 100-86, Sec. 205(a), added par. (2) and

struck out former par. (2) which read as follows: ''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, except that (1)

such exempt foreign company (A) 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 a bank holding company may do so under this chapter and under

regulations or orders issued by the Board under this chapter, and

(B) may engage in the United States in any banking or financial

operations or types of activities permitted under section

1843(c)(8) of this title or in any order or regulation issued by

the Board under such section only with the Board's prior approval

under that section, and (2) no domestic office or subsidiary of a

bank holding company or subsidiary thereof holding shares of such

company may extend credit to a domestic office or subsidiary of

such exempt company on terms more favorable than those afforded

similar borrowers in the United States.''

Subsec. (h)(3) to (5). Pub. L. 100-86, Sec. 205(a), added pars.

(3) to (5).

Subsec. (i). Pub. L. 100-86, Sec. 101(a)(2), amended subsec. (i)

generally. Prior to amendment, subsec. (i) read as follows: ''The

term 'thrift institution' means (1) a domestic building and loan or

savings and loan association, (2) a cooperative bank without

capital stock organized and operated for mutual purposes and

without profit, (3) a mutual savings bank not having capital stock

represented by shares or (4) a Federal savings bank.''

Subsecs. (j) to (m). Pub. L. 100-86, Sec. 101(a)(3), added

subsecs. (j) to (m).

1982 - Subsec. (c). Pub. L. 97-320, Sec. 404(d)(1), inserted

references to State chartered banks and national banking

associations as being included in definition of ''bank''.

Pub. L. 97-320, Sec. 333, excepted from term ''bank'' an

institution the accounts of which are insured by the Federal

Savings and Loan Insurance Corporation or an institution chartered

by the Federal Home Loan Bank Board.

Subsec. (i)(4). Pub. L. 97-320, Sec. 118(b), added cl. (4).

1978 - Subsec. (h). Pub. L. 95-369 designated existing provisions

as par. (1), substituted ''Except as provided by paragraph (2), the

application'' for ''The application''; struck out a proviso holding

the prohibitions of section 1843 not applicable to shares of any

company organized under the laws of a foreign country not doing

business within the United States, if such shares are held or

acquired by a bank holding company principally engaged in banking

business outside the United States; and added par. (2).

1977 - Subsec. (a)(5)(D). Pub. L. 95-188 authorized the Board to

extend the time for disposition of acquired shares for not more

than one year at a time and three years in the aggregate.

1970 - Subsec. (a). Pub. L. 91-607, Sec. 101(a), in revising the

provisions, added par. (1) definition of bank holding company;

incorporated provisions of former cl. (1) in provisions designated

as par. (2)(A), inserting text respecting company acting through

one or more other persons, substituting ''power to vote'' for

''holds with power to vote'' and provision for voting of any class

of voting securities of the bank or company for prior provision for

voting of voting shares of each of two or more banks; incorporated

former provisions of former cl. (2) in provisions designated as

par. (2)(B), providing for election of trustees and substituting

bank or company for directors of each of two or more banks

designated cl. (A) as par. (5)(A), inserting provision that

acquisition of shares shall not be deemed acquisition of shares in

a fiduciary capacity if the banks or company has sole discretionary

authority to exercise voting rights with respect thereto, and

making such limitation applicable to bank or company acquiring the

shares prior to Dec. 31, 1970, where there is right of divestiture

of voting rights and there is a failure to exercise that right

within reasonable time not exceeding one year after Dec. 31, 1970;

incorporated former cls. (B) and (C) in provisions designated as

pars. (5)(B) and (C); added par. (5)(D) to (F); and designated

concluding part of first sentence as par. (6), substituting ''from

the date on which'' for ''from the date as of which''.

Subsec. (b). Pub. L. 91-607, Sec. 101(b), redefined term

''company'' to include ''partnership'', which has been expressly

excluded, and inserted definition of ''company covered in 1970''.

Subsec. (c). Pub. L. 91-607, Sec. 101(c), redefined term ''bank''

to mean any institution organized under Federal, State, District of

Columbia, etc., laws, designated existing provisions as cl. (1),

added cl. (2), and excepted from exclusion from such term an

organization which does business within the United States as an

incident to its activities outside the United States.

Subsec. (d)(3). Pub. L. 91-607, Sec. 101(d), added cl. (3).

Subsec. (i). Pub. L. 91-607, Sec. 101(e), added subsec. (i).

1966 - Subsec. (a). Pub. L. 89-485, Sec. 1, struck out provision

placing within the classification of bank holding company any

company for the benefit of whose shareholders or members 25 per

centum or more of the voting shares of each of two or more banks or

a bank holding company is held by trustees, struck out provision

exempting from classification as bank holding companies any

companies that are registered under the Investment Company Act of

1940, and were so registered prior to May 15, 1955 (or which is

affiliated with any such company in such manner as to constitute an

affiliated company within the meaning of that Act), unless that

company (or affiliated company), as the case may be, directly owns

25 per centum or more of the voting shares of each of two or more

banks, struck out provision exempting from classification as bank

holding companies any companies having 80 per centum or more of

their total assets composed of holdings in the field of

agriculture, substituted voting shares for shares in the

description of the securities the ownership or control of which, in

a fiduciary capacity, would be exempted from causing the formation

of a bank holding company, added ''company'' to ''bank'' as the

business entities eligible for the fiduciary ownership exemption,

and inserted reference in the fiduciary ownership exemption to

pars. (2) and (3) of subsec. (g) of this section.

Subsec. (b). Pub. L. 89-485, Sec. 2, exempted from definition of

''company'' any trust which by its terms 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, and struck out the exemption formerly granted to nonprofit

religious, charitable, and educational organizations.

Subsec. (c). Pub. L. 89-485, Sec. 3, substituted ''any

institution that accepts deposits that the depositor has a legal

right to withdraw on demand'' for ''any national banking

institution or any state bank, savings bank, or trust company'' in

the definition of ''bank'' and extended the exemption for foreign

banking corporations to include ''agreement'' foreign banking

corporations under section 25 of the Federal Reserve Act.

Subsec. (d). Pub. L. 89-485, Sec. 4, inserted provision relating

to indirect ownership or control and the holding of power to vote

to direct ownership or control as the methods by which the holding

of 25 per centum or more of voting shares in a company will qualify

that company as a subsidiary, and struck out provisions under which

any company 25 per centum or more of whose voting shares are held

by trustees for the benefit of the shareholders or members of a

bank holding company qualifies as a subsidiary.

Subsec. (g). Pub. L. 89-485, Sec. 5, 6, substituted provisions

setting out treatment to be accorded shares owned or controlled by

subsidiaries of bank holding companies, shares held or controlled

by trustees for the benefit of companies, shareholders or members

of companies, and employees of companies, and shares transferred

after January 1, 1966, by bank holding companies to transferees

that are indebted to the transferor or have one or more officers,

directors, trustees, or beneficiaries in common with the transferor

for provisions defining ''agriculture''.

Subsec. (h). Pub. L. 89-485, Sec. 6, added subsec. (h).

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by sections 103(c)(1), 107(c), and 119 of Pub. L.

106-102 effective 120 days after Nov. 12, 1999, see section 161 of

Pub. L. 106-102, set out as a note under section 24 of this title.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by section 2704(d)(17) of Pub. L. 104-208 effective

Jan. 1, 1999, if no insured depository institution is a savings

association on that date, see section 2704(c) of Pub. L. 104-208,

set out as a note under section 1821 of this title.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-328 effective at end of 1-year period

beginning on Sept. 29, 1994, see section 101(e) of Pub. L. 103-328,

set out as a note under section 1828 of this title.

SHORT TITLE OF 1988 AMENDMENT

Pub. L. 100-418, title III, Sec. 3401, Aug. 23, 1988, 102 Stat.

1384, provided that: ''This subtitle (subtitle E (Sec. 3401, 3402)

of title III of Pub. L. 100-418, amending section 1843 of this

title) may be cited as the 'Export Trading Company Act Amendments

of 1988'.''

SHORT TITLE OF 1982 AMENDMENT

Pub. L. 97-290, title II, Sec. 201, Oct. 8, 1982, 96 Stat. 1235,

provided that: ''This title (enacting section 635a-4 of this title,

amending sections 372 and 1843 of this title, and enacting

provisions set out as notes under section 1843 of this title) may

be cited as the 'Bank Export Services Act'.''

SHORT TITLE OF 1970 AMENDMENT

Section 1 of Pub. L. 91-607 provided: ''That this Act (enacting

chapter 22 (Sec. 1971 et seq.) and section 1850 of this title and

sections 324b and 324c of former Title 31, Money and Finance,

amending sections 1841 to 1843 and 1849 of this title and sections

324, 391 of former Title 31, repealing sections 316 and 458 of

former Title 31, enacting provisions set out as notes under

sections 317e and 391 of former Title 31, and amending provisions

set out as a note under section 405a-1 of former Title 31) may be

cited as the 'Bank Holding Company Act Amendments of 1970'.''

SHORT TITLE

Section 1 of act May 9, 1956, provided: ''That this Act (enacting

this chapter and sections 1101 to 1103 of Title 26, Internal

Revenue Code) may be cited as the 'Bank Holding Company Act of

1956'.''

SEPARABILITY

Section 12 of act May 9, 1956, provided that: ''If any provision

of this Act (enacting this chapter and sections 1101 to 1103 of

Title 26, Internal Revenue Code), or the application of such

provision to any person or circumstance, shall be held invalid, the

remainder of the Act, and the application of such provision to

persons or circumstances other than those to which it is held

invalid, shall not be affected thereby.''

-TRANS-

TRANSFER OF FUNCTIONS

Federal Savings and Loan Insurance Corporation abolished and

functions transferred, see sections 401 to 406 of Pub. L. 101-73,

set out as a note under section 1437 of this title.

-MISC5-

TRANSITIONAL RULE FOR 1987 AMENDMENT

Section 101(h) of Pub. L. 100-86 provided that:

''(1) Delay in application of amendment to certain institutions.

- If -

''(A) on March 5, 1987, an institution was not a bank (as

defined in section 2(c) of the Bank Holding Company Act of 1956

(12 U.S.C. 1841(c))), as in effect on such date; and

''(B) any person which had a controlling interest in such

institution on March 5, 1987, made a public announcement before

such date that the transfer or other disposition of such person's

controlling interest in such institution was being considered,

the institution shall not become a bank (for purposes of the Bank

Holding Company Act of 1956 (12 U.S.C. 1841 et seq.)) due to the

amendment made to such section 2(c) by this section before the date

on which such institution fails to meet any requirement of

paragraph (2).

''(2) Requirements for application of subsection. - This

subsection shall not apply with respect to any institution

described in paragraph (1) unless -

''(A) the transfer or other disposition of the controlling

interest referred to in such paragraph is completed, or an

agreement to make such transfer or other disposition is in effect

(or is subject only to final approval by the appropriate Federal

and State regulatory agencies), before the end of the 180-day

period beginning on the date of the enactment of this title (Aug.

10, 1987);

''(B) a written notice by the person acquiring a controlling

interest in such institution (pursuant to the transfer or other

disposition described in subparagraph (A)) of such person's

intention to operate such institution as an institution described

in section 2(c)(2)(F) of the Bank Holding Company Act of 1956, as

in effect after the enactment of this title is filed with the

Board before the end of the 7-day period beginning on the later

of the date of such transfer (or other disposition) or the date

of the enactment of this title; and

''(C) the operation of such institution as an institution

described in such section 2(c)(2)(F) begins before the end of the

180-day period beginning on the date the transfer (or other

disposition) described in subparagraph (A) is completed.

''(3) Controlling interest. - For purposes of this subsection, a

person has a controlling interest in any institution if such person

controls -

''(A) such institution; or

''(B) any company which controls such institution,

as determined in accordance with the provisions of subsections (b)

and (g) of section 2 of the Bank Holding Company Act of 1956.''

MORATORIUM ON CERTAIN NONBANKING ACTIVITIES

Pub. L. 100-86, title II, Sec. 201-203, Aug. 10, 1987, 101 Stat.

581-584, provided for the period of Mar. 6, 1987, to Mar. 1, 1988,

a moratorium on certain nonbanking activities, including expansion

of activities of foreign banks and authority of Federal banking

agencies to authorize or allow certain security, insurance, or real

estate activities.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 24a, 72, 248, 375b, 619,

1441a, 1467a, 1813, 1818, 1820a, 1823, 1831o, 1831u, 1834a, 1835a,

1842, 1843, 1971, 2903, 3101, 3102, 3106, 3401, 3413, 4702 of this

title; title 7 sections 1a, 2, 2016; title 15 sections 78c, 78q,

80a-10, 1639, 6713, 6716; title 26 sections 304, 864.

-CITE-

12 USC Sec. 1842 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

-HEAD-

Sec. 1842. Acquisition of bank shares or assets

-STATUTE-

(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.. (FOOTNOTE 1)

(FOOTNOTE 1) So in original.

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 Board's 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

(FOOTNOTE 2) is a national banking association or a District

bank, 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.

(FOOTNOTE 2) So in original. Probably should be ''acquired''.

(2) Waiver in case of bank in danger of closing

If the Board receives a certification described in section

1823(f)(8)(D) (FOOTNOTE 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.

(FOOTNOTE 3) See References in Text note below.

(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 (FOOTNOTE 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.

(FOOTNOTE 4) So in original. Probably should be ''of''.

(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 bank's 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 bank's 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 appropriate 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 applicant's 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.

-SOURCE-

(May 9, 1956, ch. 240, Sec. 3, 70 Stat. 134; Pub. L. 89-485, Sec.

7, July 1, 1966, 80 Stat. 237; Pub. L. 91-607, title I, Sec. 102,

Dec. 31, 1970, 84 Stat. 1763; Pub. L. 95-188, title III, Sec.

301(a), 302, Nov. 16, 1977, 91 Stat. 1388, 1389; Pub. L. 96-221,

title VII, Sec. 712(b), (c), 713, Mar. 31, 1980, 94 Stat. 189, 190;

Pub. L. 97-320, title I, Sec. 118(c), 141(a)(4), title IV, Sec.

404(d)(2), Oct. 15, 1982, 96 Stat. 1479, 1489, 1512; Pub. L.

100-86, title I, Sec. 101(d), 107(b), title V, Sec. 502(h)(1),

509(a), Aug. 10, 1987, 101 Stat. 561, 579, 628, 635; Pub. L.

101-73, title VI, Sec. 602(b), Aug. 9, 1989, 103 Stat. 409; Pub. L.

102-242, title II, Sec. 202(d), 210, Dec. 19, 1991, 105 Stat. 2290,

2298; Pub. L. 103-325, title III, Sec. 319(a), 322(c)(1), Sept. 23,

1994, 108 Stat. 2224, 2227; Pub. L. 103-328, title I, Sec. 101(a),

Sept. 29, 1994, 108 Stat. 2339; Pub. L. 106-102, title I, Sec. 105,

118, Nov. 12, 1999, 113 Stat. 1359, 1373; Pub. L. 107-56, title

III, Sec. 327(a)(1), Oct. 26, 2001, 115 Stat. 318.)

-REFTEXT-

REFERENCES IN TEXT

Section 1823(f)(8)(D) of this title, referred to in subsec.

(b)(2), which defined ''bank in danger of closing'', was repealed

by Pub. L. 101-73, title II, Sec. 217(5)(H), Aug. 9, 1989, 103

Stat. 257.

-MISC2-

AMENDMENTS

2001 - Subsec. (c)(6). Pub. L. 107-56 added par. (6).

1999 - Subsec. (f). Pub. L. 106-102, Sec. 118, amended subsec.

(f) generally, substituting ''(f) (Repealed).'' for provisions

relating to authorized activities of qualified savings banks which

are subsidiaries of bank holding companies.

Subsec. (g)(2). Pub. L. 106-102, Sec. 105, amended heading and

text of par. (2) generally. Prior to amendment, text read as

follows: ''A corporation organized as a holding company under this

subsection shall be regulated on the same terms and be subject to

the same limitations as any other holding company which controls a

savings bank.''

1994 - Subsec. (a). Pub. L. 103-325, Sec. 319(a), substituted

''(B)'' for ''or (B)'' and added subpar. (C).

Subsec. (d). Pub. L. 103-328 amended subsec. (d) generally.

Prior to amendment, subsec. (d) read as follows: ''Notwithstanding

any other provision of this section, no application (except an

application filed as a result of a transaction authorized under

section 1823(f) of this title) shall be approved under this section

which will permit any bank holding company or any subsidiary

thereof to acquire, directly or indirectly, any voting shares of,

interest in, or all or substantially all of the assets of any

additional bank located outside the State in which the operations

of such bank holding company's banking subsidiaries were

principally conducted on July 1, 1966, or the date on which such

company became a bank holding company, whichever is later, unless

the acquisition of such shares or assets of a State bank by an

out-of-State bank holding company is specifically authorized by the

statute laws of the State in which such bank is located, by

language to that effect and not merely by implication. For the

purposes of this section, the State in which the operations of a

bank holding company's subsidiaries are principally conducted is

that State in which total deposits of all such banking subsidiaries

are largest.''

Subsec. (e). Pub. L. 103-325, Sec. 322(c)(1), struck out after

first sentence ''This subsection does not apply to a bank described

in the last sentence of section 1841(c) of this title.''

1991 - Subsec. (c). Pub. L. 102-242, Sec. 202(d), inserted

heading, inserted par. (1) designation and heading, redesignated

former pars. (1) and (2) as subpars. (A) and (B), respectively,

inserted par. (2) designation and heading, added par. (3), and

inserted par. (4) designation and heading.

Subsec. (c)(5). Pub. L. 102-242, Sec. 210, added par. (5).

1989 - Subsec. (e). Pub. L. 101-73, which directed the

substitution of ''an insured depository institution as defined in

section 1813 of this title'' for ''an insured bank as defined in

section 1813(h) of this title'', was executed by making the

substitution for ''an insured bank as such term is defined in

section 1813(h) of this title'', as the probable intent of

Congress.

1987 - Pub. L. 100-86, Sec. 509(a), repealed Pub. L. 97-320, Sec.

141. See 1982 Amendment note below.

Subsec. (b). Pub. L. 100-86, Sec. 502(h)(1), designated existing

provisions as par. (1) and added par. (2).

Subsec. (f). Pub. L. 100-86, Sec. 101(d), added subsec. (f).

Subsec. (g). Pub. L. 100-86, Sec. 107(b), added subsec. (g).

1982 - Subsec. (d). Pub. L. 97-320, Sec. 118(c), inserted

''(except an application filed as a result of a transaction

authorized under section 1823(f) of this title)'' after ''no

application''.

Pub. L. 97-320, Sec. 141(a)(4), which directed that, effective

Oct. 13, 1986, the provisions of law amended by section 118 of Pub.

L. 97-320 shall be amended to read as they would without such

amendment, was repealed by Pub. L. 100-86, Sec. 509(a). See

Effective and Termination Dates of 1982 Amendment note and

Extension of Emergency Acquisition and Net Worth Guarantee

Provisions of Pub. L. 97-320 note set out under section 1464 of

this title.

Subsec. (e). Pub. L. 97-320, Sec. 404(d)(2), inserted ''This

subsection does not apply to a bank described in the last sentence

of section 1841(c) of this title.''

1980 - Subsec. (c). Pub. L. 96-221, Sec. 713, inserted provisions

relating to applications for the formation of one-bank holding

companies.

Subsec. (d). Pub. L. 96-221, Sec. 712(b), (c), temporarily

designated existing provisions as par. (1) and added par. (2). See

Termination Date of 1980 Amendment note set out below.

1977 - Subsec. (a). Pub. L. 95-188, Sec. 301(a), authorized the

Board to extend the time for disposition of acquired shares for not

more than one year at a time and three years in the aggregate.

Subsec. (b). Pub. L. 95-188, Sec. 302, inserted provision for

alternative submission of views and recommendations within ten

calendar days of the date on which notice is given if the Board

advises the appropriate supervisory authority that an emergency

exists requiring expeditious action, substituted ''shall, by

order,'' for ''shall by order'' and inserted provisions respecting

procedure in emergencies or probable failures requiring immediate

Board action and orders.

1970 - Subsec. (a). Pub. L. 91-607, Sec. 102(1), inserted

provision deeming acquisition of bank shares after Dec. 31, 1970,

as not being in good faith in a fiduciary capacity if acquiring

bank or company has sole discretionary authority to exercise voting

rights with respect thereto, and provision for subsequent approval

of retention of acquired shares upon application filed within 90

days of acquisition and disposition of shares or sole discretionary

voting rights within two years after order in an event of

disapproval.

Subsec. (b). Pub. L. 91-607, Sec. 102(2), inserted provision

deeming an application for approval as granted where Board has not

acted on application within 91 day period beginning on date of

submission to Board of complete record on application.

Subsec. (e). Pub. L. 91-607, Sec. 102(3), added subsec. (e).

1966 - Subsec. (a). Pub. L. 89-485, Sec. 7(a), (b), expanded the

list of acts requiring prior approval of the Board by including

therein any action that causes a bank to become a subsidiary of a

bank holding company and substituted provisions excepting shares

that are held under a trust that constitutes a company as defined

in section 1841(b) of this title and excepting shares as provided

in pars. (2) and (3) of section 1841(g) of this title from the

effect of the clause lifting the requirements of prior Board

approved in the case of shares acquired by a bank in good faith in

a fiduciary capacity for provisions excepting shares held for the

benefit of the shareholders of a bank from the effect of the

clause.

Subsec. (c). Pub. L. 89-485, Sec. 7(c), inserted provision

prohibiting any acquisition, merger, or consolidation that would

result in a monopoly or would further any combination or conspiracy

to monopolize the banking business in any part of the United States

or would substantially lessen competition or in any manner be in

restraint of trade unless the public interest clearly outweighed

the anticompetitive effects and substituted provisions requiring

the Board to take into consideration the financial and managerial

resources and future prospects of the company or bank concerned and

the convenience and needs of the community to be served for

provisions requiring the Board to take into consideration the

financial history of the company or bank concerned, its prospects,

the character of its management, the needs of the community, and

the public interest.

Subsec. (d). Pub. L. 89-485, Sec. 7(d), substituted provisions

restricting expansion to state in which the operations of the bank

holding company's banking subsidiaries were principally conducted,

defined, as that state in which total deposits of all such banking

subsidiaries were largest, on July 1, 1966, or the date on which

the company became a bank holding company, whichever is later, for

provisions restricting expansion to state in which the holding

company maintains its principal office and place of business or in

which it conducts its principal operations.

EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT

Amendments by title III of Pub. L. 107-56 to terminate effective

on and after the first day of fiscal year 2005 if Congress enacts a

joint resolution that such amendments no longer have the force of

law, see section 303 of Pub. L. 107-56, set out as a Four-Year

Congressional Review; Expedited Consideration note under section

5311 of Title 31, Money and Finance.

Pub. L. 107-56, title III, Sec. 327(a)(2), Oct. 26, 2001, 115

Stat. 319, provided that: ''The amendment made by paragraph (1)

(amending this section) shall apply with respect to any application

submitted to the Board of Governors of the Federal Reserve System

under section 3 of the Bank Holding Company Act of 1956 (12 U.S.C.

1842) after December 31, 2001, which has not been approved by the

Board before the date of enactment of this Act (Oct. 26, 2001).''

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by Pub. L. 106-102 effective 120 days after Nov. 12,

1999, see section 161 of Pub. L. 106-102, set out as a note under

section 24 of this title.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-328 effective at end of 1-year period

beginning on Sept. 29, 1994, see section 101(e) of Pub. L. 103-328,

set out as a note under section 1828 of this title.

TERMINATION DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-221 repealed on Oct. 1, 1981, see section

712(c) of Pub. L. 96-221, set out as a note under section 27 of

this title.

EXTENSION OF EMERGENCY ACQUISITION AND NET WORTH GUARANTEE

PROVISIONS OF PUB. L. 97-320

No amendment made by section 141(a) of Pub. L. 97-320, set out as

a note under section 1464 of this title, as in effect before Aug.

10, 1987, to any other provision of law to be deemed to have taken

effect before such date and any such provision of law to be in

effect as if no such amendment had been made before such date, see

section 509(c) of Pub. L. 100-86, set out as a note under section

1464 of this title.

No amendment made by section 141(a) of Pub. L. 97-320, set out as

a note under section 1464 of this title, as in effect on the day

before Oct. 8, 1986, to any other provision of law to be deemed to

have taken effect before such date and any such provision of law to

be in effect as if no such amendment had taken effect before such

date, see section 1(c) of Pub. L. 99-452, set out as a note under

section 1464 of this title.

Section 141(a) of Pub. L. 97-320, set out as a note under section

1464 of this title, as in effect on the day after Aug. 27, 1986,

applicable as if included in Pub. L. 97-320 on Oct. 15, 1982, with

no amendment made by such section to any other provision of law to

be deemed to have taken effect before Aug. 27, 1986, and any such

provision of law to be in effect as if no such amendment had taken

effect before Aug. 27, 1986, see section 1(c) of Pub. L. 99-400,

set out as a note under section 1464 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 619, 1815, 1817, 1823,

1828b, 1843, 1844, 1849, 1850, 2902, 3105 of this title; title 15

sections 18a, 77c.

-CITE-

12 USC Sec. 1843 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

-HEAD-

Sec. 1843. Interests in nonbanking organizations

-STATUTE-

(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 company's 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 Board's 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 company's 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 company's business operations.

(E) Notwithstanding any other provision of law, an Edge Act

corporation, organized under section 25(a) (FOOTNOTE 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.

(FOOTNOTE 1) See References in Text note below.

(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. (FOOTNOTE 2)

(FOOTNOTE 2) So in original. The period probably should be a

semicolon.

(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 bank's capital and

surplus; and

(iv) the term ''extension of credit'' shall have the same

meaning given such term in the fourth paragraph of section

371c (FOOTNOTE 3) of this title.

(FOOTNOTE 3) See References in Text note below.

(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 company's 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 company's total

interests and so small in relation to the banking market to be

served as to minimize the likelihood that the bank's powers to

grant or deny credit may be influenced by a desire to further the

holding company's 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 company's 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 bank's

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) (FOOTNOTE 4) of this title or section 13(k) of the

Federal Deposit Insurance Act (12 U.S.C. 1823(k)); and

(FOOTNOTE 4) See References in Text note below.

(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), (H),

(I), or (J) 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), (H), (I), or (J) of section

1841(c)(2) of this title and any of such company's 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 institution's 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 subsection (k)(4)(I) 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.

-SOURCE-

(May 9, 1956, ch. 240, Sec. 4, 70 Stat. 135; Pub. L. 89-485, Sec.

8, July 1, 1966, 80 Stat. 238; Pub. L. 91-607, title I, Sec. 103,

Dec. 31, 1970, 84 Stat. 1763; Pub. L. 95-188, title III, Sec.

301(c), Nov. 16, 1977, 91 Stat. 1389; Pub. L. 95-630, title I, Sec.

112, Nov. 10, 1978, 92 Stat. 3671; Pub. L. 96-221, title VII, Sec.

701(b), Mar. 31, 1980, 94 Stat. 186; Pub. L. 97-290, title II, Sec.

203, Oct. 8, 1982, 96 Stat. 1236; Pub. L. 97-320, title I, Sec.

118(a), 141(a)(4), title IV, Sec. 433(b), title VI, Sec. 601, Oct.

15, 1982, 96 Stat. 1479, 1489, 1527, 1536; Pub. L. 97-457, Sec. 30,

Jan. 12, 1983, 96 Stat. 2511; Pub. L. 99-514, Sec. 2, Oct. 22,

1986, 100 Stat. 2095; Pub. L. 100-86, title I, Sec. 101(b), (c),

title V, Sec. 502(h)(2), 509(a), Aug. 10, 1987, 101 Stat. 557, 628,

635; Pub. L. 100-418, title III, Sec. 3402, Aug. 23, 1988, 102

Stat. 1384; Pub. L. 101-73, title VI, Sec. 601(a), 603, 604(b),

title XII, Sec. 1219, Aug. 9, 1989, 103 Stat. 408, 409, 411, 546;

Pub. L. 102-242, title IV, Sec. 461, Dec. 19, 1991, 105 Stat. 2384;

Pub. L. 102-550, title XVI, Sec. 1606(h)(1), Oct. 28, 1992, 106

Stat. 4089; Pub. L. 103-325, title III, Sec. 346, Sept. 23, 1994,

108 Stat. 2239; Pub. L. 104-208, div. A, title II, Sec. 2203(d),

2208(a), 2215, 2304(a), 2612, Sept. 30, 1996, 110 Stat. 3009-404,

3009-406, 3009-413, 3009-425, 3009-476; Pub. L. 106-102, title I,

Sec. 102(a), 103(a), (c)(2), 107(a), (b), (d)-(f), Nov. 12, 1999,

113 Stat. 1341, 1342, 1351, 1359-1361.)

-REFTEXT-

REFERENCES IN TEXT

The Investment Company Act of 1940, referred to in subsec.

(a)(2), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, as

amended, which is classified generally to subchapter I (Sec. 80a-1

et seq.) of chapter 2D of Title 15, Commerce and Trade. For

complete classification of this Act to the Code, see section 80a-51

of Title 15 and Tables.

Enactment of the Bank Holding Company Act Amendments of 1970,

referred to in subsecs. (a)(2) and (c)(12), means enactment of Pub.

L. 91-607 on Dec. 31, 1970. For classification of Pub. L. 91-607,

see Short Title of 1970 Amendment note set out under section 1841

of this title.

Enactment of the Competitive Equality Amendments of 1987,

referred to in subsecs. (a)(2), (f)(1)(A), and (g)(1), means

enactment of title I of Pub. L. 100-86, Aug. 10, 1987, 101 Stat.

554. For classification of title I of Pub. L. 100-86, see Short

Title of 1987 Amendment note set out under section 226 of this

title and Tables.

Section 25 of the Federal Reserve Act, referred to in subsecs.

(c)(14)(E) and (f)(14)(A)(i), is classified to subchapter I (Sec.

601 et seq.) of chapter 6 of this title. Section 25(a) of the

Federal Reserve Act (12 U.S.C. 611-631), referred to in subsec.

(c)(14)(E), was renumbered section 25A of the Federal Reserve Act

by Pub. L. 102-242, title I, Sec. 142(e)(2), Dec. 19, 1991, 105

Stat. 2281 and is classified to subchapter II (Sec. 611 et seq.) of

chapter 6 of this title.

Section 371c of this title, referred to in subsec.

(c)(14)(F)(iv), was amended generally by Pub. L. 97-320, title IV,

Sec. 410(b), Oct. 15, 1982, 96 Stat. 1515, and, as so amended, no

longer contains undesignated pars. and no longer defines

''extension of credit''.

The Federal Deposit Insurance Act, referred to in subsec.

(f)(8)(B), is act Sept. 21, 1950, ch. 967, Sec. 2, 64 Stat. 873, as

amended, which is classified generally to chapter 16 (Sec. 1811 et

seq.) of this title. For complete classification of this Act to

the Code, see Short Title note set out under section 1811 of this

title and Tables.

Section 106 of the Bank Holding Company Act Amendments of 1970,

referred to in subsecs. (f)(9)(A), (h) and (n)(5)(B)(i), is Pub. L.

91-607, title I, Sec. 106, Dec. 31, 1970, 84 Stat. 1766, as

amended, which is classified generally to chapter 22 (Sec. 1971 et

seq.) of this title.

Section 1730a of this title, referred to in subsec. (f)(10)(A),

was repealed by Pub. L. 101-73, title IV, Sec. 407, Aug. 9, 1989,

103 Stat. 363.

The Home Owners' Loan Act, referred to in subsec. (i)(3)(A), is

act June 13, 1933, ch. 64, 48 Stat. 128, as amended, which is

classified generally to chapter 12 (Sec. 1461 et seq.) of this

title. For complete classification of this Act to the Code, see

section 1461 of this title and Tables.

The Gramm-Leach-Bliley Act, referred to in subsecs. (k)(3)(A),

(7) and (l)(1)(C)(i), (2)(B), is Pub. L. 106-102, Nov. 12, 1999,

113 Stat. 1338. Section 122 of the Act is set out as a note below.

For complete classification of this Act to the Code, see Short

Title of 1999 Amendment note set out under section 1811 of this

title and Tables.

The Investment Advisers Act of 1940, referred to in subsec.

(k)(4)(H)(ii)(II), is title II of act Aug. 22, 1940, ch. 686, 54

Stat. 847, as amended, which is classified generally to subchapter

II (Sec. 80b-1 et seq.) of chapter 2D of Title 15, Commerce and

Trade. For complete classification of this Act to the Code, see

section 80b-20 of Title 15 and Tables.

The Community Reinvestment Act of 1977, referred to in subsec.

(l)(2), is title VIII of Pub. L. 95-128, Oct. 12, 1977, 91 Stat.

1147, as amended, which is classified generally to chapter 30 (Sec.

2901 et seq.) of this title. For complete classification of this

Act to the Code, see Short Title note set out under section 2901 of

this title and Tables.

The Communications Act of 1934, referred to in subsec. (n)(3), is

act June 19, 1934, ch. 652, 48 Stat. 1964, as amended. Title III

of the Act is classified generally to subchapter III (Sec. 301 et

seq.) of chapter 5 of Title 47, Telegraphs, Telephones, and

Radiotelegraphs. For complete classification of this Act to the

Code, see section 609 of Title 47 and Tables.

-MISC2-

AMENDMENTS

1999 - Subsec. (c)(8). Pub. L. 106-102, Sec. 102(a), amended par.

(8) generally, substituting present provisions for provisions which

exempted from prohibitions of this section shares of any bank

holding company the activities of which were determined to be so

closely related to banking or managing or controlling banks as to

be a proper incident thereto, which further provided that for

purposes of this subsection it was not closely related to banking

or managing or controlling banks for a bank holding company to

provide insurance as a principal, agent, or broker except in

certain circumstances, which further provided factors to consider

in determining whether a particular activity is a proper incident

to banking or managing or controlling banks, and which further

provided notice and other procedural requirements in making such

determinations.

Subsec. (f)(2). Pub. L. 106-102, Sec. 107(d)(1), added

introductory provisions and struck out former introductory

provisions which read as follows: ''Paragraph (1) shall cease to

apply to any company described in such paragraph if - ''.

Subsec. (f)(2)(A)(ii)(XI). Pub. L. 106-102, Sec.

107(d)(2)(A)-(C), added subcl. (XI).

Subsec. (f)(2)(B), (C). Pub. L. 106-102, Sec. 107(d)(2)(D), (3),

added subpars. (B) and (C) and struck out former subpar. (B) which

read as follows: ''any bank subsidiary of such company fails to

comply with the restrictions contained in paragraph (3)(B).''

Subsec. (f)(3). Pub. L. 106-102, Sec. 107(a), (b), added par. (3)

and struck out heading and text of former par. (3) which related to

limitation on banks controlled by paragraph (1) companies.

Subsec. (f)(4). Pub. L. 106-102, Sec. 107(e), reenacted heading

without change and amended text of par. (4) generally. Prior to

amendment, text read as follows: ''If any company described in

paragraph (1) loses the exemption provided under such paragraph by

operation of paragraph (2), such company shall divest control of

each bank it controls within 180 days after such company becomes a

bank holding company due to the loss of such exemption.''

Subsec. (f)(14). Pub. L. 106-102, Sec. 107(f), added par. (14).

Subsec. (j)(1)(A), (E). Pub. L. 106-102, Sec. 103(c)(2)(A),

inserted ''or in any complementary activity under subsection

(k)(1)(B) of this section'' after ''subsection (c)(8) or (a)(2) of

this section''.

Subsec. (j)(3). Pub. L. 106-102, Sec. 103(c)(2)(B), inserted '',

other than any complementary activity under subsection (k)(1)(B) of

this section,'' after ''to engage in any activity'' and ''or a

company engaged in any complementary activity under subsection

(k)(1)(B) of this section'' after ''insured depository

institution''.

Subsecs. (k) to (o). Pub. L. 106-102, Sec. 103(a), added subsecs.

(k) to (o).

1996 - Subsec. (c)(2). Pub. L. 104-208, Sec. 2215, struck out

''for not more than one year at a time'' before ''if, in its

judgment,'' and substituted ''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'' for ''but no such extensions shall extend beyond a date

five years''.

Subsec. (c)(8). Pub. L. 104-208, Sec. 2612, substituted ''(and

opportunity for hearing in the case of an acquisition of a savings

association)'' for ''and opportunity for hearing''.

Subsec. (f)(3)(B)(iv). Pub. L. 104-208, Sec. 2304(a), struck out

cl. (iv) which read as follows: ''increase its assets at an annual

rate of more than 7 percent during any 12-month period beginning

after the end of the 1-year period beginning on August 10, 1987.''

Subsec. (i)(4) to (7). Pub. L. 104-208, Sec. 2203(d), added pars.

(4) to (7).

Subsec. (j)(1)(A). Pub. L. 104-208, Sec. 2208(a)(1), substituted

''Except as provided in paragraph (3), no'' for ''No''.

Subsec. (j)(3) to (7). Pub. L. 104-208, Sec. 2208(a)(2), added

pars. (3) to (7).

1994 - Subsec. (c). Pub. L. 103-325, Sec. 346(2), struck out

before last sentence ''In the event of the failure of the Board to

act on any application for an order under paragraph (8) of this

subsection 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.''

Subsec. (j). Pub. L. 103-325, Sec. 346(1), added subsec. (j).

1992 - Subsec. (i)(3). Pub. L. 102-550, Sec. 1606(h)(1), amended

directory language of Pub. L. 102-242, Sec. 461. See 1991 Amendment

note below.

1991 - Subsec. (i)(3). Pub. L. 102-242, Sec. 461, as amended by

Pub. L. 102-550, Sec. 1606(h)(1), added par. (3).

1989 - Subsec. (f)(2)(A)(i). Pub. L. 101-73, Sec. 604(b)(2),

inserted reference to par. (12).

Subsec. (f)(2)(A)(ii). Pub. L. 101-73, Sec. 603(a), amended cl.

(ii) generally. Prior to amendment, cl. (ii) read as follows:

''acquires control of more than 5 percent of the shares or assets

of an additional bank or an insured institution other than -

''(I) shares acquired in a bona fide fiduciary capacity;

''(II) shares held temporarily pursuant to an underwriting

commitment in the normal course of an underwriting business;

''(III) shares held in an account solely for trading purposes;

''(IV) loans or other accounts receivable acquired in the

normal course of business; and

''(V) shares or assets of an insured institution described in

paragraph (10) of this subsection; or''.

Subsec. (f)(3)(B)(ii). Pub. L. 101-73, Sec. 1219, added cl. (ii)

and struck out former cl. (ii) which read as follows: ''offer or

market products or services of an affiliate that are not

permissible for bank holding companies to provide under subsection

(c)(8) of this section, or permit its products or services to be

offered or marketed by or through an affiliate (other than an

affiliate that engages only in activities permissible for bank

holding companies under subsection (c)(8) of this section), 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;''.

Subsec. (f)(10). Pub. L. 101-73, Sec. 603(b)(1), substituted

''and (ii)(VIII)'' for ''and (ii)(V)'', and in subpar. (A) inserted

reference to section 13(k) of the Federal Deposit Insurance Act.

Subsec. (f)(11). Pub. L. 101-73, Sec. 603(b)(2), added par. (11).

Subsec. (f)(12), (13). Pub. L. 101-73, Sec. 604(b)(1), added

pars. (12) and (13).

Subsec. (i). Pub. L. 101-73, Sec. 601(a), added subsec. (i).

1988 - Subsec. (c)(14)(A). Pub. L. 100-418, Sec. 3402(b), added

cl. (v) and redesignated former cls. (v) and (vi) as (vi) and

(vii), respectively.

Subsec. (c)(14)(G). Pub. L. 100-418, Sec. 3402(a), added subpar.

(G).

Subsec. (c)(14)(H). Pub. L. 100-418, Sec. 3402(c), added subpar.

(H).

1987 - Pub. L. 100-86, Sec. 509(a), repealed Pub. L. 97-320, Sec.

141. See 1982 Amendment note below.

Subsec. (a)(2). Pub. L. 100-86, Sec. 101(b), inserted at end

''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.''

Subsec. (c)(8). Pub. L. 100-86, Sec. 502(h)(2), struck out

semicolon at end and substituted a period and following sentences:

''If an application is filed under this paragraph in connection

with an application to make an acquisition pursuant to section

13(f) of the Federal Deposit Insurance Act, the Board may dispense

with the notice and hearing requirement of this paragraph and the

Board may approve or deny the application under this paragraph

without notice or hearing. If an application described in the

preceding sentence is approved, the Board shall publish in the

Federal Register, not later than 7 days after such approval is

granted, the order approving the application and a description of

the nonbanking activities involved in the acquisition;''.

Subsecs. (f) to (h). Pub. L. 100-86, Sec. 101(c), added subsecs.

(f) to (h).

1986 - Subsec. (c). Pub. L. 99-514 substituted ''Internal Revenue

Code of 1986'' for ''Internal Revenue Code of 1954'', which for

purposes of codification was translated as ''title 26'' thus

requiring no change in text.

1983 - Subsec. (c)(8)(F). Pub. L. 97-457, Sec. 30(1), inserted

proviso that such a bank holding company and its subsidiaries may

not engage in sale of life insurance or annuities except as

provided in subparagraph (A), (B), or (C).

Subsec. (c)(8)(G). Pub. L. 97-457, Sec. 30(2), struck out proviso

that such bank holding company and its subsidiaries may not engage

in sale of life insurance or annuities except as provided in

subparagraph (A), (B), or (C).

1982 - Subsec. (a). Pub. L. 97-320, Sec. 433(b), substituted

''December 31, 1984'' for ''December 31, 1982''.

Subsec. (c)(8). Pub. L. 97-320, Sec. 118(a), 601, inserted

specification that providing insurance is not being closely related

to banking or managing or controlling banks for purposes of this

subsection, exceptions thereto in cls. (A) through (G), and the

subsequent proviso relating to the sale of life insurance or

annuities, and inserted provisions relating to dispensation from

the notice and hearing requirement in the event of an emergency.

Pub. L. 97-320, Sec. 141(a)(4), which directed that, effective

Oct. 13, 1986, the provisions of law amended by section 118 of Pub.

L. 97-320 shall be amended to read as they would without such

amendment, was repealed by Pub. L. 100-86, Sec. 509(a). See

Effective and Termination Dates of 1982 Amendment note and

Extension of Emergency Acquisition and Net Worth Guarantee

Provisions of Pub. L. 97-320 note set out under section 1464 of

this title.

Subsec. (c)(14). Pub. L. 97-290 added par. (14).

1980 - Subsec. (a). Pub. L. 96-221 inserted provisions relating

to extension of period ending Dec. 31, 1980, to Dec. 31, 1982.

1978 - Subsec. (c). Pub. L. 95-630 substituted ''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'' for ''The

prohibitions in this section shall not apply to any bank holding

company which is (i) a labor, agricultural, or horticultural

organization and which is exempt from taxation under section 501 of

title 26''.

1977 - Subsec. (c)(2). Pub. L. 95-188 substituted ''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'' for

''shares acquired by a bank in satisfaction of a debt previously

contracted in good faith, but such bank shall dispose of such

shares within a period of two years''.

1970 - Subsec. (a). Pub. L. 91-607, Sec. 103(1), (2), in par. (2)

of first sentence, inserted provision respecting prohibition in the

case of a company which becomes, as a result of the enactment of

the Bank Holding Company Act Amendments of 1970, a bank holding

company on the date of such enactment, after Dec. 31, 1980,

substituted ''engage in any activities'' for ''engage in any

business'', designated existing provisions as cl. (A), substituting

therein ''and other subsidiaries authorized under this chapter or

of furnishing services to or performing services for its

subsidiaries'' for ''or of furnishing services to or performing

services for any bank of which it owns or controls 25 per centum or

more of the voting shares'', added cl. (B) and provisions

respecting activities of a company covered in 1970, and termination

of authority for engaging in the activities, authorization of bank

holding company to engage in activities through acquisition of

interest in or assets of a going concern engaged in the activities,

and retention for period of ten years ownership or control of

shares in a company carrying on the activity, where the activity of

the company has been terminated; and, in second sentence

substituted ''two year period'' for ''period'', respectively.

Subsec. (c). Pub. L. 91-607, Sec. 103(3), (6), designated

existing provisions of text preceding par. (1) as cl. (i) and added

cl. (2), and inserted concluding text following par. (13) deeming

an application under par. (8) as granted upon failure of Board to

act within prescribed period and requiring the Board in the report

to Congress to include a description and a statement of reasons for

approval of each activity under par. (8), respectively.

Subsec. (c)(8). Pub. L. 91-607, Sec. 103(4), inserted provisions

respecting criteria to be used for determining whether particular

activity is proper incident to banking and provision for

differentiation by orders and regulations between de novo

activities and going concern activities, deleted description of

company activities as being of a financial, fiduciary, or insurance

nature, specific language respecting determination on basis of

record made at the hearing, and provision respecting the close

relationship of the activities making it unnecessary for

prohibitions of this section to apply in order to carry out the

purposes of this chapter, substituted ''opportunity for hearing''

for ''hearing'', and provided for determination by regulation.

Subsec. (c)(9). Pub. L. 91-607, Sec. 103(5), extended exemption

to company activities, substituted provision respecting conduct of

greater part of company's business; outside the United States for

prior provision respecting engaging principally in the banking

business outside the United States, and conditioned exemption on

Board determination by regulation or order that the exemption would

not be substantially at variance with the purposes of this chapter

and would be in the public interest.

Subsec. (c)(11) to (13). Pub. L. 91-607, Sec. 103(6), added pars.

(11) to (13).

Subsecs. (d), (e). Pub. L. 91-607, Sec. 103(7), added subsec. (d)

and redesignated former subsec. (d) as (e).

1966 - Subsec. (a). Pub. L. 89-485, Sec. 8(a), extended until

December 31, 1978, the deadline for divestiture by bank holding

companies of their nonbanking interests in the case of any company

that has been continuously affiliated since May 15, 1955, with a

company which was registered under the Investment Company Act of

1940, prior to May 15, 1955, in such a manner as to constitute an

affiliated company within the meaning of that Act.

Subsec. (c). Pub. L. 89-485, Sec. 8(b), limited the exception

granted companies engaged in liquidating assets acquired by the

bank holding company by requiring that, to qualify for the

exception, the company be engaged solely in liquidating assets

acquired from the holding company and its banks or from another

source before it became subject to this chapter and not merely

engaged in the general liquidating business with only a part of its

operations performed for the holding company system, authorized the

grant of one year extensions up to a total of three years to the

two year period allowed for the disposal of shares acquired by a

bank in satisfaction of a debt previously contracted in good faith,

substituted reference, in par. (4), to shares held under a trust

that constitutes a company as defined in section 1841(b) and except

as provided in pars. (2) and (3) of section 1841(g) of this title

for reference to shares held for the benefit of the shareholders of

a bank holding company or any of its subsidiaries, and eliminated

the requirement that, in order to qualify for the exemption

allowing a bank holding company to hold shares in a nonbanking

company, the shares do not exceed 5 per centum of the holding

company's assets in value.

Subsec. (d). Pub. L. 89-485, Sec. 8(c), added subsec. (d).

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by Pub. L. 106-102 effective 120 days after Nov. 12,

1999, see section 161 of Pub. L. 106-102, set out as a note under

section 24 of this title.

EFFECTIVE DATE OF 1992 AMENDMENT

Amendment by Pub. L. 102-550 effective as if included in the

Federal Deposit Insurance Corporation Improvement Act of 1991, Pub.

L. 102-242, as of Dec. 19, 1991, see section 1609(a) of Pub. L.

102-550, set out as a note under section 191 of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, see section 2101 of Pub. L. 95-630, set out as

an Effective Date note under section 375b of this title.

SHORT TITLE OF 1982 AMENDMENT

For short title of title II of Pub. L. 97-290 as the ''Bank

Export Services Act'', see Short Title of 1982 Amendment note set

out under section 1841 of this title.

TERMINATION OF REPORTING REQUIREMENTS

For termination, effective May 15, 2000, of provisions of law

requiring submittal to Congress of any annual, semiannual, or other

regular periodic report listed in House Document No. 103-7 (in

which a report required under subsection (c) (last sentence) of

this section is listed on page 171), see section 3003 of Pub. L.

104-66, as amended, set out as a note under section 1113 of Title

31, Money and Finance.

REPORT TO CONGRESS ON NEW ACTIVITIES OF FINANCIAL HOLDING COMPANIES

Pub. L. 106-102, title I, Sec. 103(d), Nov. 12, 1999, 113 Stat.

1351, provided that:

''(1) In general. - By the end of the 4-year period beginning on

the date of the enactment of this Act (Nov. 12, 1999), the Board of

Governors of the Federal Reserve System and the Secretary of the

Treasury shall submit a joint report to the Congress containing a

summary of new activities, including grandfathered commercial

activities, in which any financial holding company is engaged

pursuant to subsection (k)(1) or (n) of section 4 of the Bank

Holding Company Act of 1956 (12 U.S.C. 1843(k)(1), (n)) (as added

by subsection (a)).

''(2) Other contents. - The report submitted to the Congress

pursuant to paragraph (1) shall also contain the following:

''(A) A discussion of actions by the Board of Governors of the

Federal Reserve System and the Secretary of the Treasury, whether

by regulation, order, interpretation, or guideline or by approval

or disapproval of an application, with regard to activities of

financial holding companies that are incidental to activities

that are financial in nature or complementary to such financial

activities.

''(B) An analysis and discussion of the risks posed by

commercial activities of financial holding companies to the

safety and soundness of affiliate depository institutions.

''(C) An analysis and discussion of the effect of mergers and

acquisitions under section 4(k) of the Bank Holding Company Act

of 1956 (12 U.S.C. 1843(k)) on market concentration in the

financial services industry.''

CONSIDERATION OF MERCHANT BANKING ACTIVITIES BY FINANCIAL

SUBSIDIARIES

Pub. L. 106-102, title I, Sec. 122, Nov. 12, 1999, 113 Stat.

1381, provided that: ''After the end of the 5-year period beginning

on the date of the enactment of the Gramm-Leach-Bliley Act (Nov.

12, 1999), the Board of Governors of the Federal Reserve System and

the Secretary of the Treasury may, if appropriate, after

considering -

''(1) the experience with the effects of financial

modernization under this Act (see Tables for classification) and

merchant banking activities of financial holding companies;

''(2) the potential effects on depository institutions and the

financial system of allowing merchant banking activities in

financial subsidiaries; and

''(3) other relevant facts;

jointly adopt rules that permit financial subsidiaries to engage in

merchant banking activities described in section 4(k)(4)(H) of the

Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)(4)(H)), under

such terms and conditions as the Board of Governors of the Federal

Reserve System and the Secretary of the Treasury jointly determine

to be appropriate.''

MODIFICATION OF PRIOR APPROVALS

Section 601(b) of Pub. L. 101-73 provided that: ''If the Board of

Governors of the Federal Reserve System, in approving an

application by a bank holding company to acquire a savings

association, imposed any restriction that would have been

prohibited under section 4(i)(2) of the Bank Holding Company Act of

1956 (12 U.S.C. 1843(i)(2)) (as added by subsection (a) of this

section) if that section had been in effect when the application

was approved, the Board shall modify that approval in a manner

consistent with that section.''

EXTENSION OF EMERGENCY ACQUISITION AND NET WORTH GUARANTEE

PROVISIONS OF PUB. L. 97-320

No amendment made by section 141(a) of Pub. L. 97-320, set out as

a note under section 1464 of this title, as in effect before Aug.

10, 1987, to any other provision of law to be deemed to have taken

effect before such date and any such provision of law to be in

effect as if no such amendment had been made before such date, see

section 509(c) of Pub. L. 100-86, set out as a note under section

1464 of this title.

No amendment made by section 141(a) of Pub. L. 97-320, set out as

a note under section 1464 of this title, as in effect on the day

before Oct. 8, 1986, to any other provision of law to be deemed to

have taken effect before such date and any such provision of law to

be in effect as if no such amendment had taken effect before such

date, see section 1(c) of Pub. L. 99-452, set out as a note under

section 1464 of this title.

Section 141(a) of Pub. L. 97-320, set out as a note under section

1464 of this title, as in effect on the day after Aug. 27, 1986,

applicable as if included in Pub. L. 97-320 on Oct. 15, 1982, with

no amendment made by such section to any other provision of law to

be deemed to have taken effect before Aug. 27, 1986, and any such

provision of law to be in effect as if no such amendment had taken

effect before Aug. 27, 1986, see section 1(c) of Pub. L. 99-400,

set out as a note under section 1464 of this title.

BANK EXPORT SERVICES

Section 202 of Pub. L. 97-290 provided that: ''The Congress

hereby declares that it is the purpose of this title (enacting

section 635a-4 of this title, amending sections 372 and 1843 of

this title, and enacting provisions set out as notes under section

1843 of this title) to provide for meaningful and effective

participation by bank holding companies, bankers' banks, and Edge

Act (12 U.S.C. 611 et seq.) corporations, in the financing and

development of export trading companies in the United States. In

furtherance of such purpose, the Congress intends that, in

implementing its authority under section 4(c)(14) of the Bank

Holding Company Act of 1956 (subsec. (c)(14) of this section) the

Board of Governors of the Federal Reserve System should pursue

regulatory policies that -

''(1) provide for the establishment of export trading companies

with powers sufficiently broad to enable them to complete with

similar foreign-owned institutions in the United States and

abroad;

''(2) afford to United States commerce, industry, and

agriculture, especially small- and medium-size firms, a means of

exporting at all times;

''(3) foster the participation by regional and smaller banks in

the development of export trading companies; and

''(4) facilitate the formation of joint venture export trading

companies between bank holding companies and nonbank firms that

provide for the efficient combination of complementary trade and

financing services designed to create export trading companies

that can handle all of an exporting company's needs.''

REPORT TO CONGRESS BY FEDERAL RESERVE BOARD REGARDING CHANGES IN

FINANCING OF UNITED STATES EXPORTS

Section 205 of Pub. L. 97-290 required Federal Reserve Board,

within two years after Oct. 8, 1982, to report to Congress its

recommendations with respect to implementation of this section, on

any changes in United States law to facilitate financing of United

States exports, and on effects of ownership of United States banks

by foreign banking organizations affiliated with trading companies

doing business in United States.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 24a, 371c, 635a-4, 1467a,

1815, 1828b, 1841, 1844, 1849, 1864, 1972, 2903, 3105, 3106, 3401

of this title; title 15 sections 18a, 78c, 78q, 6809; title 31

section 5318.

-CITE-

12 USC Sec. 1844 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

-HEAD-

Sec. 1844. Administration

-STATUTE-

(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 Board's 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 bank's 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 person's 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 (FOOTNOTE 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.

(FOOTNOTE 1) So in original. Probably should be ''materially''.

(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

company's 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.

-SOURCE-

(May 9, 1956, ch. 240, Sec. 5, 70 Stat. 137; Pub. L. 95-630, title

I, Sec. 105(a), 106(b), Nov. 10, 1978, 92 Stat. 3646, 3648; Pub. L.

106-102, title I, Sec. 111, 112(a), 116, Nov. 12, 1999, 113 Stat.

1362, 1366, 1372.)

-REFTEXT-

REFERENCES IN TEXT

The Investment Advisers Act of 1940, referred to in subsec.

(c)(3)(A)(ii)(II), is title II of act Aug. 22, 1940, ch. 686, 54

Stat. 847, as amended, which is classified generally to subchapter

II (Sec. 80b-1 et seq.) of chapter 2D of Title 15, Commerce and

Trade. For complete classification of this Act to the Code, see

section 80b-20 of Title 15 and Tables.

The Investment Company Act of 1940, referred to in subsecs.

(c)(3)(C), (5)(B)(iii) and (g)(1)(A), is title I of act Aug. 22,

1940, ch. 686, 54 Stat. 789, as amended, which is classified

generally to subchapter I (Sec. 80a-1 et seq.) of chapter 2D of

Title 15, Commerce and Trade. For complete classification of this

Act to the Code, see section 80a-51 of Title 15 and Tables.

The Securities Exchange Act of 1934, referred to in subsecs.

(c)(5)(B)(i) and (g)(1)(A), is act June 6, 1934, ch. 404, 48 Stat.

881, as amended, which is classified principally to chapter 2B

(Sec. 78a et seq.) of Title 15, Commerce and Trade. For complete

classification of this Act to the Code, see section 78a of Title 15

and Tables.

The Financial Institutions Supervisory Act of 1966, referred to

in subsec. (e)(1), is Pub. L. 89-695, Oct. 16, 1966, 80 Stat. 1028.

For complete classification of this Act to the Code, see Short

Title of 1966 Amendment note set out under section 1464 of this

title and Tables.

-MISC2-

AMENDMENTS

1999 - Subsec. (a). Pub. L. 106-102, Sec. 116(a), inserted at end

''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.''

Subsec. (c). Pub. L. 106-102, Sec. 111, inserted heading and

amended text of subsec. (c) generally. Prior to amendment, text

read as follows: ''The Board from time to time may require reports

under oath to keep it informed as to whether the provisions of this

chapter and such regulations and orders issued thereunder have been

complied with; and the Board may make examinations of each bank

holding company and each subsidiary thereof, the cost of which

shall be assessed against, and paid by, such holding company. The

Board shall, as far as possible, use the report of examinations

made by the Comptroller of the Currency, the Federal Deposit

Insurance Corporation, or the appropriate State bank supervisory

authority for the purposes of this section.''

Subsec. (e)(1). Pub. L. 106-102, Sec. 116(b), in first sentence,

substituted ''Financial Institutions Supervisory Act of 1966, at

the election of the bank holding company - '' along with subpar.

(A) designation and ''order'' for ''Financial Institutions

Supervisory Act of 1966, order'' and ''shareholders of the bank

holding company; or'' along with subpar. (B) for ''shareholders of

the bank holding company.'', designated second sentence as

concluding provisions, and substituted ''The distribution referred

to in subparagraph (A)'' for ''Such distribution''.

Subsec. (g). Pub. L. 106-102, Sec. 112(a), added subsec. (g).

1978 - Subsec. (e). Pub. L. 95-630, Sec. 105(a), added subsec.

(e).

Subsec. (f). Pub. L. 95-630, Sec. 106(b), added subsec. (f).

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by Pub. L. 106-102 effective 120 days after Nov. 12,

1999, see section 161 of Pub. L. 106-102, set out as a note under

section 24 of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630 effective on expiration of 120 days

after Nov. 10, 1978, see section 2101 of Pub. L. 95-630, set out as

an Effective Date note under section 375b of this title.

TERMINATION OF REPORTING REQUIREMENTS

For termination, effective May 15, 2000, of provisions of law

requiring submittal to Congress of any annual, semiannual, or other

regular periodic report listed in House Document No. 103-7 (in

which a report required under subsection (d) of this section is

listed on page 171), see section 3003 of Pub. L. 104-66, as

amended, set out as a note under section 1113 of Title 31, Money

and Finance.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1828, 1831v, 1841, 1843,

1848a of this title; title 7 section 6f.

-CITE-

12 USC Sec. 1845 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

-HEAD-

Sec. 1845. Repealed. Pub. L. 89-485, Sec. 9, July 1, 1966, 80 Stat.

240

-MISC1-

Section, act May 9, 1956, ch. 240, Sec. 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.

-CITE-

12 USC Sec. 1846 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

-HEAD-

Sec. 1846. Reservation of rights to States

-STATUTE-

(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.

-SOURCE-

(May 9, 1956, ch. 240, Sec. 7, 70 Stat. 138; Pub. L. 100-86, title

I, Sec. 101(f), Aug. 10, 1987, 101 Stat. 563; Pub. L. 103-328,

title I, Sec. 101(b), Sept. 29, 1994, 108 Stat. 2341.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-328 designated existing provisions as subsec.

(a), inserted heading, and added subsec. (b).

1987 - Pub. L. 100-86 substituted ''No provision of this chapter

shall'' for ''The enactment by the Congress of this chapter shall

not'' and inserted ''companies,'' before ''banks,''.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-328 effective at end of 1-year period

beginning on Sept. 29, 1994, see section 101(e) of Pub. L. 103-328,

set out as a note under section 1828 of this title.

-CITE-

12 USC Sec. 1847 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

-HEAD-

Sec. 1847. Penalties

-STATUTE-

(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.

-SOURCE-

(May 9, 1956, ch. 240, Sec. 8, 70 Stat. 138; Pub. L. 95-630, title

I, Sec. 106(a), Nov. 10, 1978, 92 Stat. 3647; Pub. L. 97-320, title

IV, Sec. 424(a), (d)(4), Oct. 15, 1982, 96 Stat. 1522, 1523; Pub.

L. 101-73, title IX, Sec. 905(i), 907(j), 911(e), Aug. 9, 1989, 103

Stat. 461, 475, 481.)

-MISC1-

AMENDMENTS

1989 - Subsec. (a). Pub. L. 101-73, Sec. 907(j)(1), substituted

heading and pars. (1) and (2) for first two sentences which read as

follows: ''Any company which willfully violates any provision of

this chapter, or any regulation or order issued by the Board

pursuant thereto, shall upon conviction be fined not more than

$1,000 for each day during which the violation continues. Any

individual who willfully participates in a violation of any

provision of this chapter shall upon conviction be fined not more

than $10,000 or imprisoned not more than one year, or both.''

Subsec. (b). Pub. L. 101-73, Sec. 907(j)(2), added headings and

amended text generally. Prior to amendment, subsec. (b) read as

follows:

''(1) Any company which violates or 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 $1,000 per day for each day

during which such violation continues: Provided, That the Board

may, in its discretion, compromise, modify, or remit any civil

money penalty which is subject to imposition or has been imposed

under authority of this subsection. The penalty may be assessed

and collected by the Board by written notice. As used in the

section, the term 'violates' includes without any limitation any

action (alone or with another or others) for or toward causing,

bringing about, participating in, counseling, or aiding or abetting

a violation.

''(2) In determining the amount of the penalty the Board shall

take into account the appropriateness of the penalty with respect

to the size of financial resources and good faith of the company or

person charged, the gravity of the violation, the history of

previous violations, and such other matters as justice may require.

''(3) The company or person assessed shall be afforded an

opportunity for agency hearing, upon request made within ten days

after issuance of the notice of assessment. In such hearing all

issues shall be determined on the record pursuant to section 554 of

title 5. The agency determination shall be made by final order

which may be reviewed only as provided in section 1848 of this

title. If no hearing is requested as herein provided, the

assessment shall constitute a final and unappealable order.

''(4) If any company or person fails to pay an assessment after

it has become a final and unappealable order, or after the court of

appeals has entered final judgment in favor of the Board, the Board

shall refer the matter to the Attorney General, who shall recover

the amount assessed by action in the appropriate United States

district court. In such action the validity and appropriateness of

the final order imposing the penalty shall not be subject to

review.

''(5) The Board shall promulgate regulations establishing

procedures necessary to implement this subsection.

''(6) All penalties collected under authority of this subsection

shall be covered into the Treasury of the United States.''

Subsec. (c). Pub. L. 101-73, Sec. 905(i), added subsec. (c).

Subsec. (d). Pub. L. 101-73, Sec. 911(e), added subsec. (d).

1982 - Subsec. (b)(1). Pub. L. 97-320 inserted proviso giving the

Board discretionary authority to compromise, etc., any civil money

penalty imposed under this subsection, and substituted ''may be

assessed'' for ''shall be assessed''.

1978 - Pub. L. 95-630 designated existing provisions as subsec.

(a) and added subsec. (b).

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by section 907(j) of Pub. L. 101-73 applicable to

conduct engaged in after Aug. 9, 1989, except that increased

maximum penalties of $5,000 and $25,000 may apply to conduct

engaged in before such date if such conduct is not already subject

to a notice issued by the appropriate agency and occurred after

completion of the last report of the examination of the institution

by the appropriate agency occurring before Aug. 9, 1989, see

section 907(l) of Pub. L. 101-73, set out as a note under section

93 of this title.

Amendment by section 911(e) of Pub. L. 101-73 applicable with

respect to reports filed or required to be filed after Aug. 9,

1989, see section 911(i) of Pub. L. 101-73, set out as a note under

section 161 of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-630, relating to imposition of civil

penalties, applicable to violations occurring or continuing after

Nov. 10, 1978, see section 109 of Pub. L. 95-630, set out as a note

under section 93 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 15 sections 78o-5, 78q.

-CITE-

12 USC Sec. 1848 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

-HEAD-

Sec. 1848. Judicial review

-STATUTE-

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 Board's 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.

-SOURCE-

(May 9, 1956, ch. 240, Sec. 9, 70 Stat. 138; Pub. L. 85-791, Sec.

34, Aug. 28, 1958, 72 Stat. 951; Pub. L. 89-485, Sec. 10, July 1,

1966, 80 Stat. 240.)

-MISC1-

AMENDMENTS

1966 - Pub. L. 89-485 reduced from 60 to 30 days the period

allowed for the filing of a petition to obtain judicial review of a

Board order.

1958 - Pub. L. 85-791 substituted, in second sentence,

''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'' for ''served upon the

Board, and thereupon the Board shall certify and file in the court

a transcript of the record made before the Board'', and in third

sentence, ''such petition'' for ''the transcript''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1844, 1850 of this title.

-CITE-

12 USC Sec. 1848a 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

-HEAD-

Sec. 1848a. Limitation on rulemaking, prudential, supervisory, and

enforcement authority of the Board

-STATUTE-

(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.

-SOURCE-

(May 9, 1956, ch. 240, Sec. 10A, as added Pub. L. 106-102, title I,

Sec. 113, Nov. 12, 1999, 113 Stat. 1368.)

-MISC1-

EFFECTIVE DATE

Section effective 120 days after Nov. 12, 1999, see section 161

of Pub. L. 106-102, set out as an Effective Date of 1999 Amendment

note under section 24 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1831v of this title.

-CITE-

12 USC Sec. 1849 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

-HEAD-

Sec. 1849. Saving provision

-STATUTE-

(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 Board's 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 General's 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.

-SOURCE-

(May 9, 1956, ch. 240, Sec. 11, 70 Stat. 146; Pub. L. 89-485, Sec.

11, July 1, 1966, 80 Stat. 240; Pub. L. 91-607, title I, Sec. 104,

Dec. 31, 1970, 84 Stat. 1766; Pub. L. 95-188, title III, Sec. 303,

Nov. 16, 1977, 91 Stat. 1390; Pub. L. 100-86, title V, Sec.

502(h)(3), Aug. 10, 1987, 101 Stat. 628; Pub. L. 103-325, title

III, Sec. 321(a), Sept. 23, 1994, 108 Stat. 2226; Pub. L. 106-102,

title I, Sec. 131, Nov. 12, 1999, 113 Stat. 1382.)

-REFTEXT-

REFERENCES IN TEXT

Act of July 2, 1890 (the Sherman Antitrust Act), referred to in

subsec. (f), is classified to sections 1 to 7 of Title 15, Commerce

and Trade. For complete classification of this Act to the Code, see

Short Title note set out under section 1 of Title 15 and Tables.

Act of October 15, 1914 (the Clayton Act), referred to in subsec.

(f), is act Oct. 15, 1914, ch. 323, 38 Stat. 730, as amended, which

is classified generally to sections 12, 13, 14 to 19, 20, 21, and

22 to 27 of Title 15, and sections 52 and 53 of Title 29, Labor.

For further details and complete classification of this Act to the

Code, see References in Text note set out under section 12 of Title

15 and Tables.

-MISC2-

AMENDMENTS

1999 - Subsec. (b)(1). Pub. L. 106-102 inserted before period at

end of first sentence ''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''.

1994 - Subsec. (b)(1). Pub. L. 103-325 inserted before period at

end of fourth sentence ''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''.

1987 - Subsec. (b). Pub. L. 100-86 designated existing provisions

as par. (1) and added par. (2).

1977 - Subsec. (b). Pub. L. 95-188 authorized a proposed

acquisition, merger, or consolidation transaction to be consummated

immediately upon approval by the Board where 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; prohibited a transaction from being consummated before

the fifth calendar day after the date of approval by the Board

where 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; continued

for all other cases the thirty day waiting period after date of

approval by the Board for consummation of the transaction; and

substituted provision for commencement of stay actions prior to the

earliest time at which the transaction approval under section 1842

of this title might be consummated for prior provision for

commencement of such stay actions within the thirty-day waiting

period.

1970 - Subsec. (b). Pub. L. 91-607, Sec. 104(a), substituted

''section 1842 of this title'' for ''this chapter'' where appearing

first two times, and inserted ''approved under section 1842 of this

title'' in second sentence before ''shall be commended'' and in

last sentence before ''in compliance with this chapter''.

Subsec. (c). Pub. L. 91-607, Sec. 104(b), substituted ''under

section 1842 of this title'' for ''pursuant to this chapter''.

1966 - Pub. L. 89-485 designated existing provisions as subsec.

(a), inserted ''except as specifically provided in this section'',

and added subsecs. (b) to (f).

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by Pub. L. 106-102 effective 120 days after Nov. 12,

1999, see section 161 of Pub. L. 106-102, set out as a note under

section 24 of this title.

-CITE-

12 USC Sec. 1850 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 17 - BANK HOLDING COMPANIES

-HEAD-

Sec. 1850. Acquisition of subsidiary and tying arrangement: Federal

Reserve Board proceedings; application for authorization;

competitor as party in interest and person aggrieved; judicial

review

-STATUTE-

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 applicant's or its subsidiary's

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.

-SOURCE-

(Pub. L. 91-607, title I, Sec. 105, Dec. 31, 1970, 84 Stat. 1766;

Pub. L. 106-102, title I, Sec. 102(b)(1), Nov. 12, 1999, 113 Stat.

1341.)

-COD-

CODIFICATION

Section was enacted as part of the Bank Holding Company Act

Amendments of 1970, and not as part of the Bank Holding Company Act

of 1956 which comprises this chapter.

-MISC3-

AMENDMENTS

1999 - Pub. L. 106-102 struck out '', to engage directly or

indirectly in a nonbanking activity pursuant to section 1843 of

this title,'' after ''section 1842 of this title''.

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by Pub. L. 106-102 effective 120 days after Nov. 12,

1999, see section 161 of Pub. L. 106-102, set out as a note under

section 24 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1841, 3106 of this title.

-CITE-