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§ 1844. —  Administration.



[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 12USC1844]

 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER 17--BANK HOLDING COMPANIES
 
Sec. 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.
---------------------------------------------------------------------------
    \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.

(May 9, 1956, ch. 240, Sec. 5, 70 Stat. 137; Pub. L. 95-630, title I, 
Secs. 105(a), 106(b), Nov. 10, 1978, 92 Stat. 3646, 3648; Pub. L. 106-
102, title I, Secs. 111, 112(a), 116, Nov. 12, 1999, 113 Stat. 1362, 
1366, 1372.)

                       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.


                               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.

                  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.



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