Subject to paragraph (2), a national bank may control a financial subsidiary, or hold an interest in a financial subsidiary.
A national bank may control a financial subsidiary, or hold an interest in a financial subsidiary, only if-
A national bank meets the requirements of this paragraph if the bank is one of the 100 largest insured banks and has not fewer than 1 issue of outstanding debt that meets standards of credit-worthiness or other criteria as the Secretary of the Treasury and the Board of Governors of the Federal Reserve System may jointly establish.
For purposes of this paragraph, the size of an insured bank shall be determined on the basis of the consolidated total assets of the bank as of the end of each calendar year.
The requirement in paragraph (2)(E) shall not apply with respect to the ownership or control of a financial subsidiary that engages in activities described in subsection (b)(1) solely as agent and not directly or indirectly as principal.
Before the end of the 270-day period beginning on November 12, 1999, the Comptroller of the Currency shall, by regulation, prescribe procedures to implement this section.
The dollar amount contained in paragraph (2)(D) shall be adjusted according to an indexing mechanism jointly established by regulation by the Secretary of the Treasury and the Board of Governors of the Federal Reserve System.
Section 1843(l)(2) of this title applies to a national bank that controls a financial subsidiary in the manner provided in that section.
An activity shall be financial in nature or incidental to such financial activity only if-
The Secretary of the Treasury shall notify the Board of, and consult with the Board concerning, any request, proposal, or application under this section for a determination of whether an activity is financial in nature or incidental to a financial activity.
The Secretary of the Treasury shall not determine that any activity is financial in nature or incidental to a financial activity under this section if the Board notifies the Secretary in writing, not later than 30 days after the date of receipt of the notice described in subclause (I) (or such longer period as the Secretary determines to be appropriate under the circumstances) that the Board believes that the activity is not financial in nature or incidental to a financial activity or is not otherwise permissible under this section.
The Board may, at any time, recommend in writing that the Secretary of the Treasury find an activity to be financial in nature or incidental to a financial activity for purposes of this section.
Not later than 30 days after the date of receipt of a written recommendation from the Board under subclause (I) (or such longer period as the Secretary of the Treasury and the Board determine to be appropriate under the circumstances), the Secretary shall determine whether to initiate a public rulemaking proposing that the subject recommended activity be found to be financial in nature or incidental to a financial activity under this section, and shall notify the Board in writing of the determination of the Secretary and, in the event that the Secretary determines not to seek public comment on the proposal, the reasons for that determination.
In determining whether an activity is financial in nature or incidental to a financial activity, the Secretary shall take into account-
The Secretary of the Treasury shall, by regulation or order and in accordance with paragraph (1)(B), define, consistent with the purposes of this Act 1 and the Gramm-Leach-Bliley Act, the following activities as, and the extent to which such activities are, financial in nature or incidental to a financial activity:
In determining compliance with applicable capital standards-
Any published financial statement of a national bank that controls a financial subsidiary shall, in addition to providing information prepared in accordance with generally accepted accounting principles, separately present financial information for the bank in the manner provided in paragraph (1).
A national bank that establishes or maintains a financial subsidiary shall assure that-
If a national bank or insured depository institution affiliate does not continue to meet the requirements of subsection (a)(2)(C) or subsection (d), the Comptroller of the Currency shall promptly give notice to the national bank to that effect describing the conditions giving rise to the notice.
Not later than 45 days after the date of receipt by a national bank of a notice given under paragraph (1) (or such additional period as the Comptroller of the Currency may permit), the national bank shall execute an agreement with the Comptroller of the Currency and any relevant insured depository institution affiliate shall execute an agreement with its appropriate Federal banking agency to comply with the requirements of subsection (a)(2)(C) and subsection (d).
Until the conditions described in a notice under paragraph (1) are corrected-
If the conditions described in a notice to a national bank under paragraph (1) are not corrected within 180 days after the date of receipt by the national bank of the notice, the Comptroller of the Currency may require the national bank, under such terms and conditions as may be imposed by the Comptroller and subject to such extension of time as may be granted in the discretion of the Comptroller, to divest control of any financial subsidiary.
In taking any action under this subsection, the Comptroller shall consult with all relevant Federal and State regulatory agencies and authorities.
A national bank that does not continue to meet standards of credit-worthiness established by the Comptroller of the Currency or other requirement of subsection (a)(2)(E) after acquiring or establishing a financial subsidiary shall not, directly or through a subsidiary, purchase or acquire any additional equity capital of any financial subsidiary until the bank meets such requirements.
For purposes of this subsection, the term "equity capital" includes, in addition to any equity instrument, any debt instrument issued by a financial subsidiary, if the instrument qualifies as capital of the subsidiary under any Federal or State law, regulation, or interpretation applicable to the subsidiary.
For purposes of this section, the following definitions shall apply:
The terms "affiliate", "company", "control", and "subsidiary" have the meanings given those terms in section 1841 of this title.
The terms "appropriate Federal banking agency", "depository institution", "insured bank", and "insured depository institution" have the meanings given those terms in section 1813 of this title.
The term "financial subsidiary" means any company that is controlled by 1 or more insured depository institutions other than a subsidiary that-
The term "eligible debt" means unsecured long-term debt that-
The term "well capitalized" has the meaning given the term in section 1831o of this title.
The term "well managed" means-
1 So in original.
2 So in original. Probably should be "or meet".
12 U.S.C. § 24a
EDITORIAL NOTES
REFERENCES IN TEXTThe Gramm-Leach-Bliley Act, referred to in subsecs. (a)(2)(B)(iii), (b)(2)(A), (3), is Pub. L. 106-102, 113 Stat. 1338. Section 122 of the Act is set out as a note under section 1843 of this title. 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.Section 25 of the Federal Reserve Act, referred to in subsec. (g)(3)(B), is classified to subchapter I (§601 et seq.) of chapter 6 of this title. Section 25A of the Federal Reserve Act is classified to subchapter II (§611 et seq.) of chapter 6 of this title.The Bank Service Company Act, referred to in subsec. (g)(3)(B), is Pub. L. 87-856, Oct. 23, 1962, 76 Stat. 1132, which is classified generally to chapter 18 (§1861 et seq.) of this title. For complete classification of this Act to the Code, see section 1861 of this title and Tables.
PRIOR PROVISIONSA prior section 5136A of the Revised Statutes was renumbered section 5136B by Pub. L. 106-102 and is classified to section 25a of this title.
AMENDMENTS2010-Subsec. (a)(2)(E). Pub. L. 111-203, §939(d)(1), substituted "standards of credit-worthiness established by the Comptroller of the Currency" for "any applicable rating".Subsec. (a)(3). Pub. L. 111-203, §939(d)(2), substituted "Requirement" for "Rating or comparable requirement" in heading.Subsec. (a)(3)(A). Pub. L. 111-203, §939(d)(3), amended subpar. (A) generally. Prior to amendment, text read as follows: "A national bank meets the requirements of this paragraph if- "(i) the bank is 1 of the 50 largest insured banks and has not fewer than 1 issue of outstanding eligible debt that is currently rated within the 3 highest investment grade rating categories by a nationally recognized statistical rating organization; or"(ii) the bank is 1 of the second 50 largest insured banks and meets the criteria set forth in clause (i) or such other criteria as the Secretary of the Treasury and the Board of Governors of the Federal Reserve System may jointly establish by regulation and determine to be comparable to and consistent with the purposes of the rating required in clause (i)."Subsec. (f). Pub. L. 111-203, §939(d)(4), substituted "meet standards of credit-worthiness" for "maintain public rating or" in heading.Subsec. (f)(1). Pub. L. 111-203, §939(d)(5), substituted "standards of credit-worthiness established by the Comptroller of the Currency" for "any applicable rating".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111-203, title IX, §939(g), July 21, 2010, 124 Stat. 1887, provided that: "The amendments made by this section [amending this section, sections 1817, 1831e, and 4519 of this title, sections 78c and 80a-6 of Title 15, Commerce and Trade, and section 286hh of Title 22, Foreign Relations and Intercourse] shall take effect 2 years after the date of enactment of this Act [July 21, 2010]."
EFFECTIVE DATESection 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.
- Director
- The term "Director" means the Director of the Bureau.
- State
- The term "State" means any State, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands or any federally recognized Indian tribe, as defined by the Secretary of the Interior under section 5131(a) of title 25.
- affiliate
- The term "affiliate" means any person that controls, is controlled by, or is under common control with another person.
- credit
- The term "credit" means the right granted by a person to a consumer to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for such purchase.
- person
- The term "person" means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.