§1828a — Title 12 Banks and Banking | U.S. Code

Summary

Bank regulators can set rules limiting deals and relationships between banks and their subsidiaries or affiliates to keep banks safe and protect the deposit insurance fund. The Comptroller of the Currency can do this for national banks and their subsidiaries. The Federal Reserve can do this for bank holding company subsidiaries, State member banks, and U.S. branches or agencies of foreign banks. The Federal Deposit Insurance Corporation can do this for state nonmember banks and their subsidiaries. Any rules must fit with other federal bank laws and be aimed at stopping big risks to safety and soundness, avoiding harm to the deposit insurance fund, and preventing problems like too much concentration, unfair competition, conflicts of interest, or unsafe banking practices. Each regulator must regularly review the rules it makes. If a rule is no longer needed for those goals, the regulator must change it or get rid of it.

Title 12, §1828a

Banks and Banking — Source: USLM XML via OLRC

(a)(1)The Comptroller of the Currency may, by regulation or order, impose restrictions or requirements on relationships or transactions between a national bank and a subsidiary of the national bank that the Comptroller finds are—

(A)consistent with the purposes of this Act, title LXII of the Revised Statutes of the United States, and other Federal law applicable to national banks; and

(B)appropriate to avoid any significant risk to the safety and soundness of insured depository institutions or the Deposit Insurance Fund or other adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices.

(2)The Comptroller of the Currency shall regularly—

(A)review all restrictions or requirements established pursuant to paragraph (1) to determine whether there is a continuing need for any such restriction or requirement to carry out the purposes of the Act, including the avoidance of any adverse effect referred to in paragraph (1)(B); and

(B)modify or eliminate any such restriction or requirement the Comptroller finds is no longer required for such purposes.

(b)(1)The Board of Governors of the Federal Reserve System may, by regulation or order, impose restrictions or requirements on relationships or transactions—

(A)between a depository institution subsidiary of a bank holding company and any affiliate of such depository institution (other than a subsidiary of such institution); or

(B)between a State member bank and a subsidiary of such bank;

(2)The Board of Governors of the Federal Reserve System may exercise authority under paragraph (1) if the Board finds that the exercise of such authority is—

(A)consistent with the purposes of this Act, the Bank Holding Company Act of 1956 [12 U.S.C. 1841 et seq.], the Federal Reserve Act [12 U.S.C. 221 et seq.], and other Federal law applicable to depository institution subsidiaries of bank holding companies or State member banks, as the case may be; and

(B)appropriate to prevent an evasion of any provision of law referred to in subparagraph (A) or to avoid any significant risk to the safety and soundness of depository institutions or the Deposit Insurance Fund or other adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices.

(3)The Board of Governors of the Federal Reserve System shall regularly—

(A)review all restrictions or requirements established pursuant to paragraph (1) or (4) to determine whether there is a continuing need for any such restriction or requirement to carry out the purposes of the Act, including the avoidance of any adverse effect referred to in paragraph (2)(B) or (4)(B); and

(B)modify or eliminate any such restriction or requirement the Board finds is no longer required for such purposes.

(4)The Board may, by regulation or order, impose restrictions or requirements on relationships or transactions between a branch, agency, or commercial lending company of a foreign bank in the United States and any affiliate in the United States of such foreign bank that the Board finds are—

(A)consistent with the purposes of this Act, the Bank Holding Company Act of 1956, the Federal Reserve Act, and other Federal law applicable to foreign banks and their affiliates in the United States; and

(c)(1)The Federal Deposit Insurance Corporation may, by regulation or order, impose restrictions or requirements on relationships or transactions between a State nonmember bank (as defined in section 3 of the Federal Deposit Insurance Act [12 U.S.C. 1813]) and a subsidiary of the State nonmember bank that the Corporation finds are—

(A)consistent with the purposes of this Act, the Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.], or other Federal law applicable to State nonmember banks; and

(B)appropriate to avoid any significant risk to the safety and soundness of depository institutions or the Deposit Insurance Fund or other adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices.

(2)The Federal Deposit Insurance Corporation shall regularly—

(B)modify or eliminate any such restriction or requirement the Corporation finds is no longer required for such purposes.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This Act and the Act, referred to in text, probably are references to Pub. L. 106–102, Nov. 12, 1999, 113 Stat. 1338, known as the Gramm-Leach-Bliley Act. For complete classification of this Act to the Code, see

Short Title

of 1999 Amendment note set out under section 1811 of this title and Tables. Title LXII of the Revised Statutes, referred to in subsec. (a)(1)(A), consists of R.S. §§ 5133 to 5244, which are classified to section 16, 21, 22 to 24a, 25a, 25b, 26, 27, 29, 35 to 37, 39, 43, 52, 53, 55 to 57, 59 to 62, 66, 71, 72 to 76, 81, 83 to 86, 90, 91, 93, 93a, 94, 141 to 144, 161, 164, 181, 182, 192 to 194, 196, 215c, 481 to 485, 501, 541, 548, and 582 of this title. See, also, section 8, 333, 334, 475, 656, 709, 1004, and 1005 of Title 18, Crimes and Criminal Procedure. For complete classification of R.S. §§ 5133 to 5244 to the Code, see Tables. The Bank Holding Company Act of 1956, referred to in subsec. (b)(2)(A), (4)(A), is act May 9, 1956, ch. 240, 70 Stat. 133, which is classified principally to chapter 17 (§ 1841 et seq.) of this title. For complete classification of this Act to the Code, see

Short Title

note set out under section 1841 of this title and Tables. The Federal Reserve Act, referred to in subsec. (b)(2)(A), (4)(A), is act Dec. 23, 1913, ch. 6, 38 Stat. 251, which is classified principally to chapter 3 (§ 221 et seq.) of this title. For complete classification of this Act to the Code, see

References in Text

note set out under section 226 of this title and Tables. The Federal Deposit Insurance Act, referred to in subsec. (c)(1)(A), is act Sept. 21, 1950, ch. 967, § 2, 64 Stat. 873, which is classified generally to this chapter. For complete classification of this Act to the Code, see

Short Title

note set out under section 1811 of this title and Tables. Codification Section was enacted as part of the Gramm-Leach-Bliley Act, and not as part of the Federal Deposit Insurance Act which comprises this chapter.

Amendments

2006—Subsecs. (a)(1)(B), (b)(2)(B), (4)(B), (c)(1)(B). Pub. L. 109–173 substituted “the Deposit Insurance Fund” for “any Federal deposit insurance fund”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2006 AmendmentAmendment by Pub. L. 109–173 effective Mar. 31, 2006, see section 9(j) of Pub. L. 109–173, set out as a note under section 24 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.

§1828a Prudential safeguards

Summary

Title 12, §1828a

Notes & Related Subsidiaries

Editorial Notes

References in Text

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References in Text

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Amendments

Statutory Notes and Related Subsidiaries

Effective Date

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