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§ 1865. —  Prior approval for investments in bank service companies. - US § 1865. —  Prior approval for investments in bank service companies. - US Code : CHAN ROBLES VIRTUAL LAW LIBRARY

[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 12USC1865]

 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER 18--BANK SERVICE COMPANIES
 
Sec. 1865. Prior approval for investments in bank service 
        companies
        

(a) Approval of Federal banking agency

    No insured bank shall invest in the capital stock of a bank service 
company that performs any service under authority of subsection (c), 
(d), or (e) of section 1864 of this title without prior notice, as 
determined by the bank's appropriate Federal banking agency.

(b) Approval of Board

    No insured bank shall invest in the capital stock of a bank service 
company that performs any service under authority of section 1864(f) of 
this title and no bank service company shall perform any activity under 
section 1864(f) of this title without the prior approval of the Board.

(c) Considerations in determining approval

    In determining whether to approve or deny any application for prior 
approval or whether to approve or disapprove any notice under this 
section, the Board or the appropriate Federal banking agency, as the 
case may be, is authorized to consider the financial and managerial 
resources and future prospects of the bank or banks and bank service 
company involved, including the financial capability of the bank to make 
a proposed investment under this chapter, and possible adverse effects 
such as undue concentration of resources, unfair or decreased 
competition, conflicts of interest, or unsafe or unsound banking 
practices.

(d) Failure to act on application for approval

    In the event the Board or the appropriate Federal banking agency, as 
the case may be, fails to act on any application under this section 
within ninety days of the submission of a complete application to the 
agency, the application shall be deemed approved.

(Pub. L. 87-856, Sec. 5, Oct. 23, 1962, 76 Stat. 1133; Pub. L. 95-630, 
title III, Sec. 308, Nov. 10, 1978, 92 Stat. 3677; Pub. L. 97-320, title 
VII, Sec. 709, Oct. 15, 1982, 96 Stat. 1542; Pub. L. 103-325, title III, 
Sec. 323, Sept. 23, 1994, 108 Stat. 2227; Pub. L. 104-208, div. A, title 
II, Sec. 2613(f), Sept. 30, 1996, 110 Stat. 3009-478.)


                               Amendments

    1996--Pub. L. 104-208 substituted ``companies'' for ``corporations'' 
in section catchline and ``company'' for ``corporation'' wherever 
appearing in text.
    1994--Subsec. (a). Pub. L. 103-325, Sec. 323(1), substituted ``prior 
notice, as determined by'' for ``the prior approval of''.
    Subsec. (c). Pub. L. 103-325, Sec. 323(2), inserted ``or whether to 
approve or disapprove any notice'' after ``approval''.
    1982--Pub. L. 97-320 substituted provisions relating to prior 
approval for investments in bank service corporations for provisions 
relating to regulation and examination of bank services for a regularly 
examined bank or its subsidiary or affiliate whether performed on or off 
its premises. See section 1867(c) of this title.
    1978--Pub. L. 95-630 among other changes, substituted provisions 
requiring banks regularly examined by a Federal supervisory agency, 
which cause to be performed, by contract or otherwise, any bank service 
for itself, to notify such supervisory agency of the existence of a 
service relationship within 30 days after making such service contract 
or performance of service, whichever occurs first for provisions 
requiring that no bank subject to examination by a Federal supervisory 
agency may cause to be performed, by contract or otherwise, any bank 
service for itself unless satisfactory assurances are furnished to such 
supervisory agency by both the bank and the party performing such 
services that the performances thereof will be subject to regulation and 
examination by such agency to the same extent as if such services were 
being performed by the bank itself.


                    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.

                  Section Referred to in Other Sections

    This section is referred to in sections 1863, 1864 of this title.




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