PRIA, Government Policy, Made Personal

Summary

Gives federal banking agencies the power to examine and regulate a bank service company the same way they examine the company’s principal investor. The agency that oversees the principal investor can let another federal agency that supervises a different owner do the examination. The company must follow the rules in section 1818 as if it were an insured bank, and for that rule the overseeing agency is the one for the principal investor. The Board and those agencies can make rules and orders needed to run and enforce this law and stop people from getting around it. If a bank, or its subsidiary or affiliate, hires anyone to do allowed services for it, on or off site, the bank’s regular examining agency can regulate and inspect those services as if the bank did them itself on its own premises. The bank must tell each such agency about the service arrangement within 30 days after the contract is made or the service starts, whichever comes first.

Title 12, §1867

Banks and Banking, Source: USLM XML via OLRC

(a)Principal investor (b) Applicability of section 1818 of this title

A bank service company shall be subject to examination and regulation by the appropriate Federal banking agency of its principal investor to the same extent as its principal investor. The appropriate Federal banking agency of the principal shareholder or principal member of such a bank service company may authorize any other Federal banking agency that supervises any other shareholder or member of the bank service company to make such an examination.

(c)Services performed by contract or otherwise

Notwithstanding subsection (a) of this section, whenever a depository institution that is regularly examined by an appropriate Federal banking agency, or any subsidiary or affiliate of such a depository institution that is subject to examination by that agency, causes to be performed for itself, by contract or otherwise, any services authorized under this chapter, whether on or off its premises—

(1)such performance shall be subject to regulation and examination by such agency to the same extent as if such services were being performed by the depository institution itself on its own premises, and

(2)the depository institution shall notify each such agency of the existence of the service relationship within thirty days after the making of such service contract or the performance of the service, whichever occurs first.

(d)Issuance of regulations and orders

The Board and the appropriate Federal banking agencies are authorized to issue such regulations and orders as may be necessary to enable them to administer and to carry out the purposes of this chapter and to prevent evasions thereof.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2010—Subsec. (c)(2). Pub. L. 111–203 inserted “each” after “notify”. 2006—Subsec. (b). Pub. L. 109–351, § 602(b)(5)(A), substituted “insured depository institution” for “insured bank”. Subsec. (c). Pub. L. 109–351, § 602(b)(5)(B), substituted “a depository institution” for “a bank” in two places in introductory provisions and “the depository institution” for “the bank” in pars. (1) and (2). 1996—Pub. L. 104–208, § 2613(h)(3), substituted “companies” for “corporations” in section catchline. Subsec. (a). Pub. L. 104–208, § 2613(h)(1), (2), substituted “company” for “corporation” wherever appearing and inserted “or principal member” after “principal shareholder” and “or member” after “other shareholder”. Subsec. (b). Pub. L. 104–208, § 2613(h)(1), substituted “company” for “corporation” wherever appearing. 1983—Subsec. (b). Pub. L. 97–457 substituted reference to section 1818 of this title for reference to the Financial Institutions Supervisory Act of 1966 (12 U.S.C. 1818(b) et seq.).

Statutory Notes and Related Subsidiaries

Effective Date

of 2010 AmendmentAmendment by Pub. L. 111–203 effective on the transfer date, see section 351 of Pub. L. 111–203, set out as a note under section 906 of Title 2, The Congress.

§1867 Regulation and Examination of Bank Service Companies