12 USC 1831w – Safety and soundness firewalls applicable to financial subsidiaries of banks
(a) In general
An insured State bank may control or hold an interest in a subsidiary that engages in activities as principal that would only be permissible for a national bank to conduct through a financial subsidiary if—
(1) the State bank and each insured depository institution affiliate of the State bank are well capitalized (after the capital deduction required by paragraph (2));
(2) the State bank complies with the capital deduction and financial statement disclosure requirements in section 24a(c) of this title;
(3) the State bank complies with the financial and operational safeguards required by section 24a(d) of this title; and
(4) the State bank complies with the amendments to sections 23A and 23B of the Federal Reserve Act [12 U.S.C. 371c and 371c-1] made by section 121(b) of the Gramm-Leach-Bliley Act.
(b) Preservation of existing subsidiaries
Terms Used In 12 USC 1831w
- affiliate: has the meaning given to such term in section 1841(k) of this title. See 12 USC 1813
- control: has the meaning given to such term in section 1841 of this title. See 12 USC 1813
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- deposit: means &mdash. See 12 USC 1813
- insured depository institution: includes any uninsured branch or agency of a foreign bank or a commercial lending company owned or controlled by a foreign bank for purposes of section 1818 of this title. See 12 USC 1813
- National Bank: A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. Source: OCC
- State: means any State of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands. See 12 USC 1813
- State bank: means any bank, banking association, trust company, savings bank, industrial bank (or similar depository institution which the Board of Directors finds to be operating substantially in the same manner as an industrial bank), or other banking institution which&mdash. See 12 USC 1813
Notwithstanding subsection (a), an insured State bank may retain control of a subsidiary, or retain an interest in a subsidiary, that the State bank lawfully controlled or acquired before November 12, 1999, and conduct through such subsidiary any activities lawfully conducted in such subsidiary as of such date.
(c) Definitions
For purposes of this section, the following definitions shall apply:
(1) Subsidiary
The term “subsidiary” means any company that is a subsidiary (as defined in section 1813(w)(4) of this title) of 1 or more insured banks.
(2) Financial subsidiary
The term “financial subsidiary” has the meaning given the term in section 24a(g) of this title.
(d) Preservation of authority
(1) This chapter
No provision of this section shall be construed as superseding the authority of the Federal Deposit Insurance Corporation to review subsidiary activities under section 1831a of this title.
(2) Federal Reserve Act
No provision of this section shall be construed as affecting the applicability of the 20th undesignated paragraph of section 9 of the Federal Reserve Act [12 U.S.C. 335].