12 U.S.C. § 1467b — Intermediate holding companies

Page 417 TITLE 12—BANKS AND BANKING § 1467b 1 See References in Text note below. association is subject to any provision of section 10(m)(3) of the Home Owners’ Loan Act [12 U.S.C. 1467a(m)(3)] as in effect on that date, the amendment to this subsection made by section 303 of the Financial In- stitutions Reform, Recovery, and Enforcement Act of 1989 [Pub. L. 101–73], shall not be construed as reducing the period specified in section 10(m)(3) of such Act.’’ CAPITAL RECOVERY; SUBMISSION OF PROPOSED REGULA- TIONS TO CONGRESS; EFFECTIVE DATE; STUDY, RE- PORT, AND CONGRESSIONAL REVIEW Pub. L. 100–86, title IV, § 404(c)–(e), Aug. 10, 1987, 101 Stat. 612, required the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corpora- tion to each submit a report to Congress containing the proposed regulations required to be prescribed under 12 U.S.C. 1467a and 1730i of this title not later than the end of the 90-day period beginning on Aug. 10, 1987; re- quired the regulations to be implemented not later than the end of the 150-day period beginning on Aug. 10, 1987; and required, not later than Jan. 31, 1989, a de- tailed evaluation of, and report the effectiveness of, the regulations in achieving an increased level of capital- ization for thrift institutions. SUNSET AND SAVINGS PROVISION Section ceases to be effective on date that notice of completion of all net new borrowing by Financing Cor- poration is published in Federal Register [Mar. 30, 1992, 57 F.R. 10763], with such termination not to be con- strued to affect or limit any authority of Federal Home Loan Bank Board or Federal Savings and Loan Insur- ance Corporation to prescribe any regulation or engage in any activity with respect to any association or in- sured institution under any other provision of law, see section 416 of Pub. L. 100–86, set out as a note under sec- tion 1441 of this title. § 1467b. Intermediate holding companies (a) Definition For purposes of this section: (1) Financial activities The term ‘‘financial activities’’ means ac- tivities described in clauses (i) and (ii) of sec- tion 1467a(c)(9)(A) of this title. (2) Grandfathered unitary savings and loan holding company The term ‘‘grandfathered unitary savings and loan holding company’’ means a company described in section 1467a(c)(9)(C) of this title. (3) Internal financial activities The term ‘‘internal financial activities’’ in- cludes— (A) internal financial activities conducted by a grandfathered savings and loan holding company or any affiliate; and (B) internal treasury, investment, and em- ployee benefit functions. (b) Requirement (1) In general (A) Activities other than financial activities If a grandfathered unitary savings and loan holding company conducts activities other than financial activities, the Board may require such company to establish and conduct all or a portion of such financial ac- tivities in or through an intermediate hold- ing company, which shall be a savings and loan holding company, established pursuant to regulations of the Board, not later than 90 days (or such longer period as the Board may deem appropriate) after the transfer date.1 (B) Other activities Notwithstanding subparagraph (A), the Board shall require a grandfathered unitary savings and loan holding company to estab- lish an intermediate holding company if the Board makes a determination that the es- tablishment of such intermediate holding company is necessary— (i) to appropriately supervise activities that are determined to be financial activi- ties; or (ii) to ensure that supervision by the Board does not extend to the activities of such company that are not financial ac- tivities. (2) Internal financial activities (A) Treatment of internal financial activities For purposes of this subsection, the inter- nal financial activities of a grandfathered unitary savings and loan holding company shall not be required to be placed in an in- termediate holding company. (B) Grandfathered activities A grandfathered unitary savings and loan holding company may continue to engage in an internal financial activity, subject to re- view by the Board to determine whether en- gaging in such activity presents undue risk to the grandfathered unitary savings and loan holding company or to the financial stability of the United States, if— (i) the grandfathered unitary savings and loan holding company engaged in the ac- tivity during the year before July 21, 2010; and (ii) at least 2⁄3 of the assets or 2⁄3 of the revenues generated from the activity are from or attributable to the grandfathered unitary savings and loan holding company. (3) Source of strength A grandfathered unitary savings and loan holding company that directly or indirectly controls an intermediate holding company es- tablished under this section shall serve as a source of strength to its subsidiary inter- mediate holding company. (4) Parent company reports The Board, may from time to time, examine and require reports under oath from a grand- fathered unitary savings and loan holding company that controls an intermediate hold- ing company, and from the appropriate offi- cers or directors of such company, solely for purposes of ensuring compliance with the pro- visions of this section, including assessing the ability of the company to serve as a source of strength to its subsidiary intermediate hold- ing company as required under paragraph (3) and enforcing compliance with such require- ment. (5) Limited parent company enforcement (A) In general In addition to any other authority of the Board, the Board may enforce compliance Page 418 TITLE 12—BANKS AND BANKING § 1468 with the provisions of this subsection that are applicable to any company described in paragraph (1)(A) that controls an inter- mediate holding company under section 8 of the Federal Deposit Insurance Act [12 U.S.C. 1818], and a company described in paragraph (1)(A) shall be subject to such section (solely for purposes of this subparagraph) in the same manner and to the same extent as if the company described in paragraph (1)(A) were a savings and loan holding company. (B) Application of other Act Any violation of this subsection by a grandfathered unitary savings and loan hold- ing company that controls an intermediate holding company may also be treated as a violation of the Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.] for purposes of subparagraph (A). (C) No effect on other authority No provision of this paragraph shall be construed as limiting any authority of the Board or any other Federal agency under any other provision of law. (c) Regulations The Board— (1) shall promulgate regulations to establish the criteria for determining whether to re- quire a grandfathered unitary savings and loan holding company to establish an intermediate holding company under subsection (b); and (2) may promulgate regulations to establish any restrictions or limitations on transactions between an intermediate holding company or a parent of such company and its affiliates, as necessary to prevent unsafe and unsound prac- tices in connection with transactions between the intermediate holding company, or any subsidiary thereof, and its parent company or affiliates that are not subsidiaries of the inter- mediate holding company, except that such regulations shall not restrict or limit any transaction in connection with the bona fide acquisition or lease by an unaffiliated person of assets, goods, or services. (d) Rules of construction (1) Activities Nothing in this section shall be construed to require a grandfathered unitary savings and loan holding company to conform its activi- ties to permissible activities. (2) Permissible corporate reorganization The formation of an intermediate holding company as required in subsection (b) shall be presumed to be a permissible corporate reorga- nization as described in section 1467a(c)(9)(D) of this title. (June 13, 1933, ch. 64, § 10A, as added Pub. L. 111–203, title VI, § 626, July 21, 2010, 124 Stat. 1638.) Editorial Notes REFERENCES IN TEXT The transfer date, referred to in subsec. (b)(1)(A), probably means the transfer date defined in section 5301 of this title. The Federal Deposit Insurance Act, referred to in subsec. (b)(5)(B), is act Sept. 21, 1950, ch. 967, § 2, 64 Stat. 873, which is classified generally to chapter 16 (§ 1811 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under sec- tion 1811 of this title and Tables. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as a note under section 5301 of this title. § 1468. Transactions with affiliates; extensions of credit to executive officers, directors, and principal shareholders (a) Affiliate transactions (1) In general Sections 23A and 23B of the Federal Reserve Act [12 U.S.C. 371c and 371c–1] shall apply to every savings association in the same manner and to the same extent as if the savings asso- ciation were a member bank (as defined in such Act [12 U.S.C. 221 et seq.]), except that— (A) no loan or other extension of credit may be made to any affiliate unless that af- filiate is engaged only in activities described in section 1467a(c)(2)(F)(i) of this title; and (B) no savings association may enter into any transaction described in section 23A(b)(7)(B) of the Federal Reserve Act with any affiliate other than with respect to shares of a subsidiary. (2) Sister bank exemption made available to savings associations (A) Savings associations controlled by bank holding companies Every savings association more than 80 percent of the voting stock of which is owned by a company described in section 1467a(c)(8) of this title shall be treated as a bank for purposes of section 23A(d)(1) and section 23B of the Federal Reserve Act, if every savings association and bank con- trolled by such company complies with all applicable capital requirements on a fully phased-in basis and without reliance on goodwill. (B) Savings associations generally Effective on and after January 1, 1995, every savings association shall be treated as a bank for purposes of section 23A(d)(1) and section 23B of the Federal Reserve Act. (3) Affiliates described Any company that would be an affiliate (as defined in sections 23A and 23B of the Federal Reserve Act) of any savings association if such savings association were a member bank (as such term is defined in such Act) shall be deemed to be an affiliate of such savings asso- ciation for purposes of paragraph (1). (4) Additional restrictions authorized The appropriate Federal banking agency may impose such additional restrictions on any transaction between any savings associa- tion and any affiliate of such savings associa- tion as the appropriate Federal banking agen-