§1831w Safety and Soundness Firewalls Applicable to Financial Subsidiaries of Banks

Summary

An insured state bank may own or control a subsidiary that does the same kinds of financial activities a national bank can do through a financial subsidiary, but only if the state bank and its insured bank affiliates are well capitalized after the required capital deduction, and the state bank follows the capital deduction and financial-report rules in section 24a(c), the financial and operational safeguards in section 24a(d), and the limits in sections 23A and 23B as changed by section 121(b) of the Gramm-Leach-Bliley Act. A state bank may keep a subsidiary it lawfully controlled or bought before November 12, 1999, and keep doing the activities that were legal in that subsidiary on that date. Definitions: subsidiary — a company owned by one or more insured banks. Financial subsidiary — the special type described in section 24a(g). This does not override the FDIC’s review authority under section 1831a or affect the noted Federal Reserve Act paragraph.