12 U.S.C. § 1831w — Safety and soundness firewalls applica-

Page 1194 TITLE 12—BANKS AND BANKING § 1831w have to take direct or indirect action with re- spect to holding companies and their function- ally regulated subsidiaries; shall also limit whatever authority that a Fed- eral banking agency might otherwise have under any statute or regulation to require reports, make examinations, impose capital require- ments, or take any other direct or indirect ac- tion with respect to any functionally regulated affiliate of a depository institution, subject to the same standards and requirements as are ap- plicable to the Board under those provisions. (b) Certain exemption authorized No provision of this section shall be construed as preventing the Corporation, if the Corpora- tion finds it necessary to determine the condi- tion of a depository institution for insurance purposes, from examining an affiliate of any de- pository institution, pursuant to section 1820(b)(4) of this title, as may be necessary to disclose fully the relationship between the de- pository institution and the affiliate, and the ef- fect of such relationship on the depository insti- tution. (c) Definitions For purposes of this section, the following definitions shall apply: (1) Functionally regulated subsidiary The term ‘‘functionally regulated sub- sidiary’’ has the meaning given the term in section 1844(c)(5) of this title. (2) Functionally regulated affiliate The term ‘‘functionally regulated affiliate’’ means, with respect to any depository institu- tion, any affiliate of such depository institu- tion that is— (A) not a depository institution holding company; and (B) a company described in any clause of section 1844(c)(5)(B) of this title. (Sept. 21, 1950, ch. 967, § 2[45], as added Pub. L. 106–102, title I, § 112(b), Nov. 12, 1999, 113 Stat. 1367.) Editorial Notes REFERENCES IN TEXT Section 1848a of this title, referred to in subsec. (a)(3), was repealed by Pub. L. 111–203, title VI, § 604(c)(2), July 21, 2010, 124 Stat. 1601. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective 120 days after Nov. 12, 1999, see sec- tion 161 of Pub. L. 106–102, set out as an Effective Date of 1999 Amendment note under section 24 of this title. § 1831w. Safety and soundness firewalls applica- ble to financial subsidiaries of banks (a) In general An insured State bank may control or hold an interest in a subsidiary that engages in activi- ties as principal that would only be permissible for a national bank to conduct through a finan- cial subsidiary if— (1) the State bank and each insured deposi- tory 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 finan- cial and operational safeguards required by section 24a(d) of this title; and (4) the State bank complies with the amend- ments 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), 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 be- fore November 12, 1999, and conduct through such subsidiary any activities lawfully con- ducted 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 con- strued as superseding the authority of the Federal Deposit Insurance Corporation to re- view subsidiary activities under section 1831a of this title. (2) Federal Reserve Act No provision of this section shall be con- strued 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, § 2[46], as added Pub. L. 106–102, title I, § 121(d)(1), Nov. 12, 1999, 113 Stat. 1380.) Editorial Notes REFERENCES IN TEXT Section 121(b) of the Gramm-Leach-Bliley Act, re- ferred 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. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective 120 days after Nov. 12, 1999, see sec- tion 161 of Pub. L. 106–102, set out as an Effective Date of 1999 Amendment note under section 24 of this title. § 1831x. Insurance customer protections (a) Regulations required (1) In general The Federal banking agencies shall prescribe and publish in final form, before the end of the