|
U.S. Code as of:
01/19/04
Section 1844. Administration
(a) Registration of bank holding company
Within one hundred and eighty days after May 9, 1956, or within
one hundred and eighty days after becoming a bank holding company,
whichever is later, each bank holding company shall register with
the Board on forms prescribed by the Board, which shall include
such information with respect to the financial condition and
operations, management, and intercompany relationships of the bank
holding company and its subsidiaries, and related matters, as the
Board may deem necessary or appropriate to carry out the purposes
of this chapter. The Board may, in its discretion, extend the time
within which a bank holding company shall register and file the
requisite information. A declaration filed in accordance with
section 1843(l)(1)(C) of this title shall satisfy the requirements
of this subsection with regard to the registration of a bank
holding company but not any requirement to file an application to
acquire a bank pursuant to section 1842 of this title.
(b) Regulations and orders
The Board is authorized to issue such regulations and orders as
may be necessary to enable it to administer and carry out the
purposes of this chapter and prevent evasions thereof.
(c) Reports and examinations
(1) Reports
(A) In general
The Board, from time to time, may require a bank holding
company and any subsidiary of such company to submit reports
under oath to keep the Board informed as to -
(i) its financial condition, systems for monitoring and
controlling financial and operating risks, and transactions
with depository institution subsidiaries of the bank holding
company; and
(ii) compliance by the company or subsidiary with
applicable provisions of this chapter or any other Federal
law that the Board has specific jurisdiction to enforce
against such company or subsidiary.
(B) Use of existing reports
(i) In general
For purposes of compliance with this paragraph, the Board
shall, to the fullest extent possible, accept -
(I) reports that a bank holding company or any subsidiary
of such company has provided or been required to provide to
other Federal or State supervisors or to appropriate
self-regulatory organizations;
(II) information that is otherwise required to be
reported publicly; and
(III) externally audited financial statements.
(ii) Availability
A bank holding company or a subsidiary of such company
shall provide to the Board, at the request of the Board, a
report referred to in clause (i).
(iii) Reports filed with other agencies
(I) In general
In the event that the Board requires a report under this
subsection from a functionally regulated subsidiary of a
bank holding company of a kind that is not required by
another Federal or State regulatory authority or an
appropriate self-regulatory organization, the Board shall
first request that the appropriate regulatory authority or
self-regulatory organization obtain such report.
(II) Availability from other subsidiary
If the report is not made available to the Board, and the
report is necessary to assess a material risk to the bank
holding company or any of its depository institution
subsidiaries or compliance with this chapter or any other
Federal law that the Board has specific jurisdiction to
enforce against such company or subsidiary or the systems
described in paragraph (2)(A)(ii)(II), the Board may
require such functionally regulated subsidiary to provide
such a report to the Board.
(2) Examinations
(A) Examination authority for bank holding companies and
subsidiaries
Subject to subparagraph (B), the Board may make examinations
of each bank holding company and each subsidiary of such
holding company in order -
(i) to inform the Board of the nature of the operations and
financial condition of the holding company and such
subsidiaries;
(ii) to inform the Board of -
(I) the financial and operational risks within the
holding company system that may pose a threat to the safety
and soundness of any depository institution subsidiary of
such holding company; and
(II) the systems for monitoring and controlling such
risks; and
(iii) to monitor compliance with the provisions of this
chapter or any other Federal law that the Board has specific
jurisdiction to enforce against such company or subsidiary
and those governing transactions and relationships between
any depository institution subsidiary and its affiliates.
(B) Functionally regulated subsidiaries
Notwithstanding subparagraph (A), the Board may make
examinations of a functionally regulated subsidiary of a bank
holding company only if -
(i) the Board has reasonable cause to believe that such
subsidiary is engaged in activities that pose a material risk
to an affiliated depository institution;
(ii) the Board reasonably determines, after reviewing
relevant reports, that examination of the subsidiary is
necessary to adequately inform the Board of the systems
described in subparagraph (A)(ii)(II); or
(iii) based on reports and other available information, the
Board has reasonable cause to believe that a subsidiary is
not in compliance with this chapter or any other Federal law
that the Board has specific jurisdiction to enforce against
such subsidiary, including provisions relating to
transactions with an affiliated depository institution, and
the Board cannot make such determination through examination
of the affiliated depository institution or the bank holding
company.
(C) Restricted focus of examinations
The Board shall, to the fullest extent possible, limit the
focus and scope of any examination of a bank holding company to
-
(i) the bank holding company; and
(ii) any subsidiary of the bank holding company that could
have a materially adverse effect on the safety and soundness
of any depository institution subsidiary of the holding
company due to -
(I) the size, condition, or activities of the subsidiary;
or
(II) the nature or size of transactions between the
subsidiary and any depository institution that is also a
subsidiary of the bank holding company.
(D) Deference to bank examinations
The Board shall, to the fullest extent possible, for the
purposes of this paragraph, use the reports of examinations of
depository institutions made by the appropriate Federal and
State depository institution supervisory authority.
(E) Deference to other examinations
The Board shall, to the fullest extent possible, forego an
examination by the Board under this paragraph and instead
review the reports of examination made of -
(i) any registered broker or dealer by or on behalf of the
Securities and Exchange Commission;
(ii) any registered investment adviser properly registered
by or on behalf of either the Securities and Exchange
Commission or any State;
(iii) any licensed insurance company by or on behalf of any
State regulatory authority responsible for the supervision of
insurance companies; and
(iv) any other subsidiary that the Board finds to be
comprehensively supervised by a Federal or State authority.
(3) Capital
(A) In general
The Board may not, by regulation, guideline, order, or
otherwise, prescribe or impose any capital or capital adequacy
rules, guidelines, standards, or requirements on any
functionally regulated subsidiary of a bank holding company
that -
(i) is not a depository institution; and
(ii) is -
(I) in compliance with the applicable capital
requirements of its Federal regulatory authority (including
the Securities and Exchange Commission) or State insurance
authority;
(II) properly registered as an investment adviser under
the Investment Advisers Act of 1940 [15 U.S.C. 80b-1 et
seq.], or with any State; or
(III) is licensed as an insurance agent with the
appropriate State insurance authority.
(B) Rule of construction
Subparagraph (A) shall not be construed as preventing the
Board from imposing capital or capital adequacy rules,
guidelines, standards, or requirements with respect to -
(i) activities of a registered investment adviser other
than with respect to investment advisory activities or
activities incidental to investment advisory activities; or
(ii) activities of a licensed insurance agent other than
insurance agency activities or activities incidental to
insurance agency activities.
(C) Limitations on indirect action
In developing, establishing, or assessing bank holding
company capital or capital adequacy rules, guidelines,
standards, or requirements for purposes of this paragraph, the
Board may not take into account the activities, operations, or
investments of an affiliated investment company registered
under the Investment Company Act of 1940 [15 U.S.C. 80a-1 et
seq.], unless the investment company is -
(i) a bank holding company; or
(ii) controlled by a bank holding company by reason of
ownership by the bank holding company (including through all
of its affiliates) of 25 percent or more of the shares of the
investment company, and the shares owned by the bank holding
company have a market value equal to more than $1,000,000.
(4) Functional regulation of securities and insurance activities
(A) Securities activities
Securities activities conducted in a functionally regulated
subsidiary of a depository institution shall be subject to
regulation by the Securities and Exchange Commission, and by
relevant State securities authorities, as appropriate, subject
to section 6701 of title 15, to the same extent as if they were
conducted in a nondepository institution subsidiary of a bank
holding company.
(B) Insurance activities
Subject to section 6701 of title 15, insurance agency and
brokerage activities and activities as principal conducted in a
functionally regulated subsidiary of a depository institution
shall be subject to regulation by a State insurance authority
to the same extent as if they were conducted in a nondepository
institution subsidiary of a bank holding company.
(5) Definition
For purposes of this subsection, the term "functionally
regulated subsidiary" means any company -
(A) that is not a bank holding company or a depository
institution; and
(B) that is -
(i) a broker or dealer that is registered under the
Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.];
(ii) a registered investment adviser, properly registered
by or on behalf of either the Securities and Exchange
Commission or any State, with respect to the investment
advisory activities of such investment adviser and activities
incidental to such investment advisory activities;
(iii) an investment company that is registered under the
Investment Company Act of 1940 [15 U.S.C. 80a-1 et seq.];
(iv) an insurance company, with respect to insurance
activities of the insurance company and activities incidental
to such insurance activities, that is subject to supervision
by a State insurance regulator; or
(v) an entity that is subject to regulation by the
Commodity Futures Trading Commission, with respect to the
commodities activities of such entity and activities
incidental to such commodities activities.
(d) Reports to the Congress; recommendations
Before the expiration of two years following May 9, 1956, and
each year thereafter in the 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 (!1) adverse effect on the
financial condition of the insurance company or the broker,
dealer, investment company, or investment adviser, as the case
may be.
(2) Notice to State insurance authority or SEC required
If the Board requires a bank holding company, or an affiliate
of a bank holding company, that is an insurance company or a
broker, dealer, investment company, or investment adviser
described in paragraph (1)(A) to provide funds or assets to a
depository institution subsidiary of the holding company pursuant
to any regulation, order, or other action of the Board referred
to in paragraph (1), the Board shall promptly notify the State
insurance authority for the insurance company, the Securities and
Exchange Commission, or State securities regulator, as the case
may be, of such requirement.
(3) Divestiture in lieu of other action
If the Board receives a notice described in paragraph (1)(B)
from a State insurance authority or the Securities and Exchange
Commission with regard to a bank holding company or affiliate
referred to in that paragraph, the Board may order the bank
holding company to divest the depository institution not later
than 180 days after receiving the notice, or such longer period
as the Board determines consistent with the safe and sound
operation of the depository institution.
(4) Conditions before divestiture
During the period beginning on the date an order to divest is
issued by the Board under paragraph (3) to a bank holding company
and ending on the date the divestiture is completed, the Board
may impose any conditions or restrictions on the holding
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.
|
|