Section 2. The act is amended by adding a section to read:
Section 115.1. Mutual Holding Companies
(a) In general--Notwithstanding any other provision of this act, a savings bank organized under this act in mutual form may reorganize so as to become a holding company by:
(i) chartering a subsidiary stock savings bank, the
stock of which is wholly owned by the mutual savings bank at
the time of the reorganization; and
(ii) transferring the substantial part of its assets and
liabilities, including all of its liabilities which are
insured by any deposit insurance corporation, to the
subsidiary stock savings bank.
(b) Trustees' approval of plan required--A reorganization is not authorized under this section unless a plan providing for such reorganization has been approved by the affirmative vote of two-thirds of the board of trustees of the mutual savings bank.
(c) Notice to, and approval by, the department--
(i) At least sixty days prior to taking any action
described in subsection (a), a mutual savings bank seeking to
establish a mutual holding company shall provide written
notice to the department. The notice shall contain such
relevant information as the department shall require by
regulation or by specific request in connection with any
particular notice.
(ii) Upon receipt of an application for approval of a
plan of reorganization authorized by this section, the
department shall conduct such investigation as it may deem
necessary to determine whether:
(A) the plan satisfies the requirements of this act;
and
(B) the plan adequately protects the interests of
depositors, borrowers and creditors.
(iii) Within sixty days after receipt of the
application, the department shall approve or disapprove the
application on the basis of its investigation and shall
immediately give to the savings bank written notice of its
decision, and in the event of disapproval, a statement in
detail of such grounds therefor as are permitted by paragraph
(iv).
(iv) The department may disapprove any proposed holding
company formation only if:
(A) the plan providing for such reorganization fails
to comply, or as implemented would fail to comply, with
such regulations as the department may promulgate from
time to time;
(B) such disapproval is necessary to prevent unsafe
or unsound practices;
(C) the financial or management resources of the
resulting mutual holding company or the resulting savings
bank warrant disapproval; or
(D) the savings bank fails to furnish the
information required under paragraph (i).
(v) At the time of the transaction described in
subsection (a), a savings bank may, with the approval of the
department, retain capital assets at the holding company
level to the extent that such capital assets are not needed
by the subsidiary stock savings bank in order for the
subsidiary to satisfy applicable regulatory requirements.
(d) Permitted activities--A mutual holding company may engage only in the following activities:
(i) investing in the stock of one or more financial
institution subsidiaries;
(ii) acquiring one or more additional financial
institution subsidiaries through the merger of such financial
institution subsidiaries into a subsidiary of the holding
company;
(iii) subject to subsection (e), merging with or
acquiring another holding company, one of whose subsidiaries
is a financial institution subsidiary;
(iv) investing in a corporation the capital stock of
which is available for purchase by a savings bank under
Federal law or under this act;
(v) engaging in such activities as are permitted, by
statute or regulation, to a holding company of a federally
chartered insured mutual institution under Federal law; and
(vi) engaging in such other activities as may be
permitted by the department.
(e) Limitations on certain activities of acquired holding companies--
(i) If a mutual holding company acquires or merges with
another holding company pursuant to subsection (d)(iii), the
holding company acquired or the holding company resulting
from such merger or acquisition may invest in only those
assets and engage in only those activities which are
authorized under subsection (d).
(ii) Not later than two years following a merger or
acquisition described in subsection (d)(iii), the acquired
holding company or the holding company resulting from such
merger or acquisition shall:
(A) dispose of any asset which is an asset in which
a mutual holding company may not invest under subsection
(d); and
(B) cease any activity which is an activity in which
a mutual holding company may not engage under subsection
(d).
(f) Regulation--The department shall have the authority to issue rules, regulations and orders as may be necessary to properly administer this section. Until the department has adopted regulations pursuant to this section, the department shall not approve any application by a savings bank for approval of a plan of reorganization into a mutual holding company. The regulations adopted under this section shall be no less restrictive than those promulgated by the Office of Thrift Supervision for federally chartered savings banks.
(g) Definitions--The following words and phrases when used in this section shall have, unless the context clearly indicates otherwise, the following meanings:
(i) "Mutual holding company"--a corporation organized as
a holding company under this section.
(ii) "Financial institution subsidiary"--a savings
association, a Federal savings and loan association or
savings bank which is located in Pennsylvania, a bank, a bank
and trust company, a trust company, a savings bank, a
regional thrift institution or, after March 4, 1990, a
foreign thrift institution.