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U.S. Code as of:
01/19/04
Section 1841. Definitions
(a)(1) Except as provided in paragraph (5) of this subsection,
"bank holding company" means any company which has control over any
bank or over any company that is or becomes a bank holding company
by virtue of this chapter.
(2) Any company has control over a bank or over any company if -
(A) the company directly or indirectly or acting through one or
more other persons owns, controls, or has power to vote 25 per
centum or more of any class of voting securities of the bank or
company;
(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) (!1) of the Federal Reserve Act.
(H) An industrial loan company, industrial bank, or other
similar institution which is -
(i) an institution organized under the laws of a State
which, on March 5, 1987, had in effect or had under
consideration in such 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) (!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 (!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 (!2) of this title.
(j) Definition of Savings Associations and Related Term. - The
term "savings association" or "insured institution" means -
(1) any Federal savings association or Federal savings bank;
(2) any building and loan association, savings and loan
association, homestead association, or cooperative bank if such
association or cooperative bank is a member of the 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.
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