§ 1831w. — Safety and soundness firewalls applicable to financial subsidiaries of banks.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1831w]
TITLE 12--BANKS AND BANKING
CHAPTER 16--FEDERAL DEPOSIT INSURANCE CORPORATION
Sec. 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
Notwithstanding subsection (a) of this section, 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].
(Sept. 21, 1950, ch. 967, Sec. 2[46], as added Pub. L. 106-102, title I,
Sec. 121(d)(1), Nov. 12, 1999, 113 Stat. 1380.)
References in Text
Section 121(b) of the Gramm-Leach-Bliley Act, referred to in subsec.
(a)(4), is section 121(b) of Pub. L. 106-102, title I, Nov. 12, 1999,
113 Stat. 1378, which amended section 371c of this title.
Effective Date
Section 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.
Section Referred to in Other Sections
This section is referred to in section 1843 of this title.
