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12 U.S.C. § 1861 — Short title and definitions
Federal law — U.S. Code and appendices · legal_authorities
**(a) Short title** This chapter may be cited as the “Bank Service Company Act”.
**(b) Definitions** For the purpose of this chapter—
(1) the term “appropriate Federal banking agency” shall have the meaning provided in [section 1813(q) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813/q&num=0&edition=prelim);
(2) the term “bank service company” means—
(A) any corporation—
(i) which is organized to perform services authorized by this chapter; and
(ii) all of the capital stock of which is owned by 1 or more insured depository institutions; and
(B) any limited liability company—
(i) which is organized to perform services authorized by this chapter; and
(ii) all of the members of which are 1 or more insured depository institutions.
(3) the term “Board” means the Board of Governors of the Federal Reserve System;
(4) the term “depository institution” means, except when such term appears in connection with the term “insured depository institution”, an insured bank, a savings association, a financial institution subject to examination by the appropriate Federal banking agency or the National Credit Union Administration Board, or a financial institution the accounts or deposits of which are insured or guaranteed under State law and are eligible to be insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration Board;
(5) **Insured depository institution.—** — The terms “depository institution” and “savings association” have the same meanings as in [section 1813 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813&num=0&edition=prelim);
(6) the term “invest” includes any advance of funds to a bank service company, whether by
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Source location: Title 12, Chapter 18, § 1861; chapter-018-bank-service-companies.md
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**(a) Short title** This chapter may be cited as the “Bank Service Company Act”.
**(b) Definitions** For the purpose of this chapter—
(1) the term “appropriate Federal banking agency” shall have the meaning provided in [section 1813(q) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813/q&num=0&edition=prelim);
(2) the term “bank service company” means—
(A) any corporation—
(i) which is organized to perform services authorized by this chapter; and
(ii) all of the capital stock of which is owned by 1 or more insured depository institutions; and
(B) any limited liability company—
(i) which is organized to perform services authorized by this chapter; and
(ii) all of the members of which are 1 or more insured depository institutions.
(3) the term “Board” means the Board of Governors of the Federal Reserve System;
(4) the term “depository institution” means, except when such term appears in connection with the term “insured depository institution”, an insured bank, a savings association, a financial institution subject to examination by the appropriate Federal banking agency or the National Credit Union Administration Board, or a financial institution the accounts or deposits of which are insured or guaranteed under State law and are eligible to be insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration Board;
(5) **Insured depository institution.—** — The terms “depository institution” and “savings association” have the same meanings as in [section 1813 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813&num=0&edition=prelim);
(6) the term “invest” includes any advance of funds to a bank service company, whether by the purchase of stock, the making of a loan, or otherwise, except a payment for rent earned, goods sold and delivered, or services rendered prior to the making of such payment;
(7) the term “limited liability company” means any company, partnership, trust, or similar business entity organized under the law of a State (as defined in [section 1813 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813&num=0&edition=prelim)) which provides that a member or manager of such company is not personally liable for a debt, obligation, or liability of the company solely by reason of being, or acting as, a member or manager of such company;
(8) the term “principal investor” means the insured depository institution that has the largest dollar amount invested in the equity of a bank service company. In any case where two or more insured depository institutions have equal dollar amounts invested in a bank service company, the company shall, prior to commencing operations, select one of the insured depository institutions as its principal investor and shall notify the depository institution’s appropriate Federal banking agency of that choice within 5 business days of its selection; and
(9) the terms “State depository institution”, “Federal depository institution”, “State savings association” and “Federal savings association” have the same meanings as in [section 1813 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813&num=0&edition=prelim).
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Federal law — U.S. Code and appendices · legal_authorities
As used in this chapter—
**(a) Definitions of bank and related terms**
(1) **Bank** — The term “bank”—
(A) means any national bank and State bank, and any Federal branch and insured branch;
(B) includes any former savings association.
(2) **State bank** — The term “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—
(A) is engaged in the business of receiving deposits, other than trust funds (as defined in this section); and
(B) is incorporated under the laws of any State or which is operating under the Code of Law for the District of Columbia,
including any cooperative bank or other unincorporated bank the deposits of which were insured by the Corporation on the day before August 9, 1989.
(3) **State** — The term “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.
**(b) Definition of savings associations and related terms**
(1) **Savings association** — The term “savings association” means—
(A) any Federal savings association;
(B) any State savings association; and
(C) any corporation (other than a bank) that the Board of Directors and the Comptroller of the Currency jointly determine to be operating in substantially the same manner as a savings association.
(2) **Federal savings association** — The term “Federal savings association” means any Federal savings association or Federal savings bank which is chartered under [section 1464 of t
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Repealed. Pub. L. 111–139, title I, § 10(a), Feb. 12, 2010, 124 Stat. 21**
**(b) Student loans** For all student loans under part B or D of title IV of the Higher Education Act of 1965 [[20 U.S.C. 1071](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1071&num=0&edition=prelim) et seq., 1087a et seq.] made during the period when a sequestration order under [section 904 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title2-section904&num=0&edition=prelim) is in effect as required by section 902 or 903 of this title, origination fees under sections 438(c)(2) and (6) and 455(c) [[20 U.S.C. 1087–1(c)(2)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1087–1/c/2&num=0&edition=prelim), (6), 1087e(c)] and loan processing and issuance fees under section 428(f)(1)(A)(ii) of that Act [[20 U.S.C. 1078(f)(1)(A)(ii)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/f/1/A/ii&num=0&edition=prelim)] shall each be increased by the uniform percentage specified in that sequestration order, and, for student loans originated during the period of the sequestration, special allowance payments under section 438(b) of that Act [[20 U.S.C. 1087–1(b)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1087–1/b&num=0&edition=prelim)] accruing during the period of the sequestration shall be reduced by the uniform percentage specified in that sequestration order.
**(c) Repealed. Pub. L. 111–139, title I, § 10(c), Feb. 12, 2010, 124 Stat. 22**
**(d) Special rules for Medicare program**
(1) **Calculation of reduction in payment amounts** — To achieve the total percentage reduction in those programs required by section 902 or 903 of this title, subject
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Authorization to conduct in subsidiaries certain activities that are financial in nature**
(1) **In general** — Subject to paragraph (2), a national bank may control a financial subsidiary, or hold an interest in a financial subsidiary.
(2) **Conditions and requirements** — A national bank may control a financial subsidiary, or hold an interest in a financial subsidiary, only if—
(A) the financial subsidiary engages only in—
(i) activities that are financial in nature or incidental to a financial activity pursuant to subsection (b); and
(ii) activities that are permitted for national banks to engage in directly (subject to the same terms and conditions that govern the conduct of the activities by a national bank);
(B) the activities engaged in by the financial subsidiary as a principal do not include—
(i) insuring, guaranteeing, or indemnifying against loss, harm, damage, illness, disability, or death (except to the extent permitted under section 302 or 303(c) of the Gramm-Leach-Bliley Act [[15 U.S.C. 6712](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section6712&num=0&edition=prelim) or 6713(c)]) or providing or issuing annuities the income of which is subject to tax treatment under [section 72 of title 26](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section72&num=0&edition=prelim);
(ii) real estate development or real estate investment activities, unless otherwise expressly authorized by law; or
(iii) any activity permitted in subparagraph (H) or (I) of [section 1843(k)(4) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1843/k/4&num=0&edition=prelim), except activities described in [section 1843(k)(4)(H) of this title](https://uscode.house
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Defined terms** For purposes of this part—
(1) the term “consumer financial protection functions” means—
(A) all authority to prescribe rules or issue orders or guidelines pursuant to any Federal consumer financial law, including performing appropriate functions to promulgate and review such rules, orders, and guidelines; and
(B) the examination authority described in subsection (c)(1), with respect to a person described in [section 5515(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5515/a&num=0&edition=prelim); and
(2) the terms “transferor agency” and “transferor agencies” mean, respectively—
(A) the Board of Governors (and any Federal reserve bank, as the context requires), the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Department of Housing and Urban Development, and the heads of those agencies; and
(B) the agencies listed in subparagraph (A), collectively.
**(b) In general** Except as provided in subsection (c), consumer financial protection functions are transferred as follows:
(1) **Board of Governors**
(A) *Transfer of functions* — All consumer financial protection functions of the Board of Governors are transferred to the Bureau.
(B) *Board of Governors authority* — The Bureau shall have all powers and duties that were vested in the Board of Governors, relating to consumer financial protection functions, on the day before the designated transfer date.
(2) **Comptroller of the Currency**
(A) *Transfer of functions* — All consumer financial protection functions of the Comptroller of the Currency are transferred to the Bureau.
(
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Federal law — U.S. Code and appendices · legal_authorities
Page 1266
TITLE 12—BANKS AND BANKING
§ 1861
guidance regarding the application of this sec-
tion to an individual financial company or to fi-
nancial companies in general.
(e) Council study and rulemaking
(1) Study and recommendations
Not later than 6 months after July 21, 2010,
the Council shall—
(A) complete a study of the extent to
which the concentration limit under this
section would affect financial stability,
moral hazard in the financial system, the ef-
ficiency
and
competitiveness
of
United
States financial firms and financial mar-
kets, and the cost and availability of credit
and other financial services to households
and businesses in the United States; and
(B) make recommendations regarding any
modifications to the concentration limit
that the Council determines would more ef-
fectively implement this section.
(2) Rulemaking
Not later than 9 months after the date of
completion of the study under paragraph (1),
and notwithstanding subsections (b) and (d),
the Board shall issue final regulations imple-
menting this section, which shall reflect any
recommendations by the Council under para-
graph (1)(B).
(May 9, 1956, ch. 240, § 14, as added Pub. L.
111–203, title VI, § 622, July 21, 2010, 124 Stat.
1632.)
Editorial Notes
REFERENCES IN TEXT
The Dodd-Frank Wall Street Reform and Consumer
Protection Act, referred to in subsec. (a)(2)(E), is Pub.
L. 111–203, July 21, 2010, 124 Stat. 1376. Title I of the Act,
known as the Financial Stability Act of 2010, is classi-
fied principally to subchapter I (§ 5311 et seq.) of chap-
ter 53 of this title. For complete classification of title
I to the Code, see Short Title note set out under section
5301 of this title and Tables.
This chapter, referred to in subsec. (a)(2)(F), was in
the orig
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