§1467b Intermediate Holding Companies

Summary

The Board can require certain grandfathered unitary savings and loan holding companies to set up an intermediate holding company (IHC) to hold or run their financial activities. If required, the IHC must be created under Board rules no later than 90 days after the transfer date, unless the Board allows more time. The Board must order an IHC when it decides one is needed to properly supervise financial activities or to keep its supervision from reaching non-financial parts of the company. Financial activities — the kinds of banking and related work listed elsewhere in the law. Grandfathered unitary savings and loan holding company — the specific kind of company identified in another part of the law. Internal financial activities — internal treasury, investment, and employee benefit functions. Internal financial activities generally do not have to move into an IHC. A grandfathered company can keep certain internal activities if it did them in the year before July 21, 2010 and at least 2/3 of the assets or 2/3 of the revenues from that activity come from the grandfathered company; the Board can review those activities for risk. The parent must act as a source of strength for its IHC. The Board may examine, require sworn reports, and use enforcement powers to make sure companies follow these rules. The Board must write rules explaining when an IHC is required and may limit unsafe transactions between an IHC and its parent or affiliates, but such rules cannot block genuine sales or leases by unaffiliated buyers.