<enum>I</enum><header>Facilitating affiliation among securities firms, insurance companies, and depository institutions</header> <subtitle id="HBEEB0F3529AA491195CF258BB300AC66"><enum>A</enum><header>Affiliations</header> <section id="HF84FCAD32C244BF8BAA6258B177C8747"><enum>101.</enum><header>Glass-Steagall Act reformed</header> <subsection id="H66DB5ABF3F0D4FA888DE3160CA80C5BF"><enum>(a)</enum><header>Section 20 Repealed</header><text>Section 20 of the Banking Act of 1933 (12 U.S.C. 377) (commonly referred to as the `Glass-Steagall Act') is repealed.</text></subsection> <subsection id="H6720BD937BA24BBB958757F785A95C5D"><enum>(b)</enum><header>Section 32 Repealed</header><text>Section 32 of the Banking Act of 1933 (12 U.S.C. 78) is repealed.</text></subsection></section> <section id="HC6B50D5974B5486FA93B4169F417023F"><enum>102.</enum><header>Activity restrictions applicable to bank holding companies which are not financial holding companies</header> <subsection id="HCE1A6ACD0F1C4A47A5BF015CE4B8C2C5"><enum>(a)</enum><header>In general</header><text>Section 4(c)(8) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(c)(8)) is amended to read as follows:</text> <quoted-block id="H8FA68DE7A56A49AC925FCE60BF04CA9" style="USC"> <paragraph id="H90177FD6C5E04F5B9E7F72D3303C361D"><enum>(8)</enum><text>shares of any company the activities of which had been determined by the Board by regulation under this paragraph as of the day before the date of the enactment of the Financial Services Act of 1999, to be so closely related to banking as to be a proper incident thereto (subject to such terms and conditions contained in such regulation, unless modified by the Board);</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H7166194280BC45FDB418F3311376F3E3"><enum>(b)</enum><header>Conforming changes to other statutes</header> <paragraph id="H02FAEA9C16B44141A4101CBC9527CB4C"><enum>(1)</enum><header>Amendment to the bank holding company act amendments of 1970</header><text>Section 105 of the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1850) is amended by striking <quote>, to engage directly or indirectly in a nonbanking activity pursuant to section 4 of such Act,</quote>.</text></paragraph> <paragraph id="H7C357E76C2D54D9D813D1368278F80B7"><enum>(2)</enum><header>Amendment to the bank service company act</header><text>Section 4(f) of the Bank Service Company Act (12 U.S.C. 1864(f)) is amended by striking the period and adding at the end the following: <quote>as of the day before the date of enactment of the Financial Services Act of 1999.</quote>.</text></paragraph></subsection></section> <section id="H6160CEF601D94840A0D08F21F001436E"><enum>103.</enum><header>Financial holding companies</header> <subsection id="H7A85E20F066D4AA48EE4D24333BCA8E0"><enum>(a)</enum><text>The Bank Holding Company Act of 1956 is amended by inserting after section 5 (12 U.S.C. 1844) the following new section:</text> <quoted-block style="USC" id="H73553B08C6A245C2BC4981F56F2DAE9D"> <section id="H404E0A3DF77E4FDE806895692EEC0515"><enum>6.</enum><header>Financial holding companies</header> <subsection id="HDD2D51D362D3416800CE8EED5A803C"><enum>(a)</enum><header>Financial holding company defined</header><text>For purposes of this section, the term <term>financial holding company</term> means a bank holding company which meets the requirements of subsection (b).</text></subsection> <subsection id="H09F7CB918DC74B32AA2C733E32DEB681"><enum>(b)</enum><header>Eligibility requirements for financial holding companies</header> <paragraph id="HF0F7C0C28DF8448D96EA83B7A8D46D3"><enum>(1)</enum><header>In general</header><text>No bank holding company may engage in any activity or directly or indirectly acquire or retain shares of any company under this section unless the bank holding company meets the following requirements:</text> <subparagraph id="H5B687ACC4AD949C288DAB02EF2317814"><enum>(A)</enum><text>All of the subsidiary depository institutions of the bank holding company are well capitalized.</text></subparagraph> <subparagraph id="HE7BDA237D73C44CB00155D1BDD273122"><enum>(B)</enum><text>All of the subsidiary depository institutions of the bank holding company are well managed.</text></subparagraph> <subparagraph id="HC7C1B638E38D44B78313C4D7E61E11FD"><enum>(C)</enum><text>The company has filed with the Board a declaration that the company elects to be a financial holding company and certifying that the company meets the requirements of subparagraphs (A) and (B) and paragraph (2).</text></subparagraph></paragraph> <paragraph id="H5D2A0CA6B89B4DECA1D6DF8B5767C64D"><enum>(2)</enum><header>Community needs requirement</header><text>No bank holding company may become a financial holding company unless all of the subsidiary depository institutions of the bank holding company have achieved a rating of `satisfactory record of meeting community credit needs', or better, at the most recent examination of each such institution under the Community Reinvestment Act of 1977.</text></paragraph> <paragraph id="H555C2B3F94404140BD879CA50371F866"><enum>(3)</enum><header>Foreign banks and companies</header><text>For purposes of paragraph (1), the Board shall establish and apply comparable capital and other operating standards to a foreign bank that operates a branch or agency or owns or controls a bank or commercial lending company in the United States, and any company that owns or controls such foreign bank, giving due regard to the principle of national treatment and equality of competitive opportunity.</text></paragraph></subsection> <subsection id="H39951958EF8740019000008CD0BAC2F1"><enum>(c)</enum><header>Engaging in activities that are financial in nature</header> <paragraph id="H123C650B401C444AB01E8FC1D3CB653E"><enum>(1)</enum><header>Financial activities</header> <subparagraph id="H21141EE39B8A447EBC51C46D56D15CE"><enum>(A)</enum><header>In general</header><text>Notwithstanding section 4(a), a financial holding company and a wholesale financial holding company may engage in any activity, and acquire and retain the shares of any company engaged in any activity, that the Board has determined (by regulation or order) to be financial in nature or incidental to such financial activities.</text></subparagraph> <subparagraph id="H3088C02A0B12442587C30493473F783C"><enum>(B)</enum><header>Coordination between the board and the department of the Treasury</header> <clause id="HE55673E8887349B8A71D771DEBEB713B"><enum>(i)</enum><header>Proposals raised before the board</header> <subclause id="H8613F7C9940F438600CC45CA8FCC437C"><enum>(I)</enum><header>Consultation</header><text>The Board shall notify the Secretary of the Treasury of, and consult with the Secretary of the Treasury concerning, any request, proposal, or application under this subsection for a determination of whether an activity is financial in nature or incidental to such a financial activity.</text></subclause> <subclause id="H704CB37D60CC4E198588A19DBF075401"><enum>(II)</enum><header>Treasury View</header><text>The Board shall not determine that any activity is financial in nature or incidental to a financial activity under this subsection if the Secretary of the Treasury notifies the Board in writing, not later than 30 days after the date of receipt of the notice described in subclause (I) (or such longer period as the Board determines to be appropriate in light of the circumstances) that the Secretary of the Treasury believes that the activity is not financial in nature or incidental to a financial activity.</text></subclause></clause> <clause id="H0F8ADE593C334F9CA916516E2782005D"><enum>(ii)</enum><header>Proposals raised by the treasury</header> <subclause id="HEAE56DC028BD44918C53D07DC433B7BA"><enum>(I)</enum><header>Treasury recommendation</header><text>The Secretary of the Treasury may, at any time, recommend in writing that the Board find an activity to be financial in nature or incidental to a financial activity.</text></subclause> <subclause id="H87022208AC2E47CA8370628D3EA548AE"><enum>(II)</enum><header>Time period for board action</header><text>Not later than 30 days after the date of receipt of a written recommendation from the Secretary of the Treasury under subclause (I) (or such longer period as the Secretary of the Treasury and the Board determine to be appropriate in light of the circumstances), the Board shall determine whether to initiate a public rulemaking proposing that the subject recommended activity be found to be financial in nature or incidental to a financial activity under this subsection, and shall notify the Secretary of the Treasury in writing of the determination of the Board and, in the event that the Board determines not to seek public comment on the proposal, the reasons for that determination.</text></subclause></clause></subparagraph></paragraph> <paragraph id="HEE3A37D91D774C03ADDCB6DDEFA97F32"><enum>(2)</enum><header>Factors to be considered</header><text>In determining whether an activity is financial in nature or incidental to financial activities, the Board shall take into account—</text> <subparagraph id="H6793E49C99964184992DB3FB864914D0"><enum>(A)</enum><text>the purposes of this Act and the Financial Services Act of 1999;</text></subparagraph> <subparagraph id="HF881197F1D3B45C5BE00876533BBDCBC"><enum>(B)</enum><text>changes or reasonably expected changes in the marketplace in which bank holding companies compete;</text></subparagraph> <subparagraph id="HED0E8632B1FD4A3B8602DFD09FB7F245"><enum>(C)</enum><text>changes or reasonably expected changes in the technology for delivering financial services; and</text></subparagraph> <subparagraph id="HA7F51BC0CF3E48EFB700A2B3B1A8BE56"><enum>(D)</enum><text>whether such activity is necessary or appropriate to allow a bank holding company and the affiliates of a bank holding company to—</text> <clause id="HAB6B65A27B4A48EBB43E00DDA531A741"><enum>(i)</enum><text>compete effectively with any company seeking to provide financial services in the United States;</text></clause> <clause id="H68F4966B68604AD2A50999237E813F66"><enum>(ii)</enum><text>use any available or emerging technological means, including any application necessary to protect the security or efficacy of systems for the transmission of data or financial transactions, in providing financial services; and</text></clause> <clause id="H26AC6EFADD06480DAC2E9FC880B3546B"><enum>(iii)</enum><text>offer customers any available or emerging technological means for using financial services.</text></clause></subparagraph></paragraph> <paragraph id="H7EC47170340543F290E35DF480E328D6"><enum>(3)</enum><header>Activities that are financial in nature</header><text>The following activities shall be considered to be financial in nature:</text> <subparagraph id="HFA8C0CA3277E415DB8FA6682C2533370"><enum>(A)</enum><text>Lending, exchanging, transferring, investing for others, or safeguarding money or securities.</text></subparagraph> <subparagraph id="H8D08430F4F65422D8F198F06B53120B1"><enum>(B)</enum><text>Insuring, guaranteeing, or indemnifying against loss, harm, damage, illness, disability, or death, or providing and issuing annuities, and acting as principal, agent, or broker for purposes of the foregoing.</text></subparagraph> <subparagraph id="H01D0504DB13C4EA3A8CE3C4E32EDF8A6"><enum>(C)</enum><text>Providing financial, investment, or economic advisory services, including advising an investment company (as defined in section 3 of the Investment Company Act of 1940).</text></subparagraph> <subparagraph id="H1D9EAE7E90CE4F47BDEB29685D727F4E"><enum>(D)</enum><text>Issuing or selling instruments representing interests in pools of assets permissible for a bank to hold directly.</text></subparagraph> <subparagraph id="H8B86ABE35ECD45C68B272EA700F320D3"><enum>(E)</enum><text>Underwriting, dealing in, or making a market in securities.</text></subparagraph> <subparagraph id="HCCADD1332BBA4C4D8886C391C19025E"><enum>(F)</enum><text>Engaging in any activity that the Board has determined, by order or regulation that is in effect on the date of enactment of the Financial Services Act of 1999, to be so closely related to banking or managing or controlling banks as to be a proper incident thereto (subject to the same terms and conditions contained in such order or regulation, unless modified by the Board).</text></subparagraph> <subparagraph id="H3D0F3C2FFD734CD696BDBF8348D07009"><enum>(G)</enum><text>Engaging, in the United States, in any activity that—</text> <clause id="H4CD3CE26A3F040C8B2BD7BF28E3E50F8"><enum>(i)</enum><text>a bank holding company may engage in outside the United States; and</text></clause> <clause id="H65576AAE43FD423080F703F17687EFD"><enum>(ii)</enum><text>the Board has determined, under regulations issued pursuant to section 4(c)(13) of this Act (as in effect on the day before the date of enactment of the Financial Services Act of 1999) to be usual in connection with the transaction of banking or other financial operations abroad.</text></clause></subparagraph> <subparagraph id="H7A141E42F1ED4DA2A4B04C3F7DBC73B5"><enum>(H)</enum><text>Directly or indirectly acquiring or controlling, whether as principal, on behalf of 1 or more entities (including entities, other than a depository institution or subsidiary of a depository institution, that the bank holding company controls) or otherwise, shares, assets, or ownership interests (including without limitation debt or equity securities, partnership interests, trust certificates or other instruments representing ownership) of a company or other entity, whether or not constituting control of such company or entity, engaged in any activity not authorized pursuant to this section if—</text> <clause id="H18D337B77C9941C3AD83AB7CD204FB4C"><enum>(i)</enum><text>the shares, assets, or ownership interests are not acquired or held by a depository institution or subsidiary of a depository institution;</text></clause> <clause id="H39102AD65A804DF5BF00A73ECAEB07E1"><enum>(ii)</enum><text>such shares, assets, or ownership interests are acquired and held by a securities affiliate or an affiliate thereof as part of a bona fide underwriting or merchant banking activity, including investment activities engaged in for the purpose of appreciation and ultimate resale or disposition of the investment;</text></clause> <clause id="H989F55DF1FF3402B8E8C82803FB5F151"><enum>(iii)</enum><text>such shares, assets, or ownership interests are held only for such a period of time as will permit the sale or disposition thereof on a reasonable basis consistent with the nature of the activities described in clause (ii); and</text></clause> <clause id="HDE9AF4760D034E5C97B990D667471338"><enum>(iv)</enum><text>during the period such shares, assets, or ownership interests are held, the bank holding company does not actively participate in the day to day management or operation of such company or entity, except insofar as necessary to achieve the objectives of clause (ii).</text></clause></subparagraph> <subparagraph id="H0B5C9F0E59F149B9BE9D392E7F487EF8"><enum>(I)</enum><text>Directly or indirectly acquiring or controlling, whether as principal, on behalf of 1 or more entities (including entities, other than a depository institution or subsidiary of a depository institution, that the bank holding company controls) or otherwise, shares, assets, or ownership interests (including without limitation debt or equity securities, partnership interests, trust certificates or other instruments representing ownership) of a company or other entity, whether or not constituting control of such company or entity, engaged in any activity not authorized pursuant to this section if—</text> <clause id="H714063FA28AF479BA057640076F795D2"><enum>(i)</enum><text>the shares, assets, or ownership interests are not acquired or held by a depository institution or a subsidiary of a depository institution;</text></clause> <clause id="H84C43136E23841BD81178B12FDC319FD"><enum>(ii)</enum><text>such shares, assets, or ownership interests are acquired and held by an insurance company that is predominantly engaged in underwriting life, accident and health, or property and casualty insurance (other than credit-related insurance) or providing and issuing annuities;</text></clause> <clause id="H839EB5F42C844E70A3DC309369C6B8EA"><enum>(iii)</enum><text>such shares, assets, or ownership interests represent an investment made in the ordinary course of business of such insurance company in accordance with relevant State law Îgoverning such investments; and</text></clause> <clause id="HAB8E2917301244E881293E42CD454600"><enum>(iv)</enum><text>during the period such shares, assets, or ownership interests are held, the bank holding company does not directly or indirectly participate in the day-to-day management or operation of the company or entity except insofar as necessary to achieve the objectives of clauses (ii) and (iii).</text></clause></subparagraph></paragraph> <paragraph id="H3BF3B1BEF77D4B37B9773706468F1C1E"><enum>(4)</enum><header>Actions required</header><text>The Board shall, by regulation or order, define, consistent with the purposes of this Act, the following activities as, and the extent to which such activities are, financial in nature or incidental to activities which are financial in nature:</text> <subparagraph id="H3725DF574B114AFBB169C002FE036593"><enum>(A)</enum><text>ending, exchanging, transferring, investing for others, or safeguarding financial assets other than money or securities.</text></subparagraph> <subparagraph id="H8C9C2170E8934AE1A9B48389BE06FB87"><enum>(B)</enum><text>Providing any device or other instrumentality for transferring money or other financial assets.</text></subparagraph> <subparagraph id="HE024E6570CD2495A8EABB4E6E29BC85"><enum>(C)</enum><text>Arranging, effecting, or facilitating financial transactions for the account of third parties.</text></subparagraph></paragraph> <paragraph id="H348A4010A813406F81F93577DDCEB361"><enum>(5)</enum><header>Post-consummation notification</header> <subparagraph id="H2FD10E5DD4E34DDEA6B52B709DD14E0"><enum>(A)</enum><header>In general</header><text>A financial holding company and a wholesale financial holding company that acquires any company, or commences any activity, pursuant to this subsection shall provide written notice to the Board describing the activity commenced or conducted by the company acquired no later than 30 calendar days after commencing the activity or consummating the acquisition.</text></subparagraph> <subparagraph id="HC0A76D90145E414F967FA01C3D586949"><enum>(B)</enum><header>Approval not required for certain financial activities</header><text>Except as provided in section 4(j) with regard to the acquisition of a savings association or in paragraph (6) of this subsection, a financial holding company and a wholesale financial holding company may commence any activity, or acquire any company, pursuant to paragraph (3) or any regulation prescribed or order issued under paragraph (4), without prior approval of the Board.</text></subparagraph></paragraph> <paragraph id="H64C533D7C7284123AA3D0007003DEA5D"><enum>(6)</enum><header>Notice required for large combinations</header> <subparagraph id="H72E5766C0CC4477E934262BFF8C5692"><enum>(A)</enum><header>In general</header><text>No financial holding company or wholesale financial holding company shall directly or indirectly acquire, and no company that becomes a financial holding company or a wholesale financial holding company shall directly or indirectly acquire control of, any company in the United States, including through merger, consolidation, or other type of business combination, that—</text> <clause id="H5FB41D4E8C314C878F528EAAF33BA9D"><enum>(i)</enum><text>is engaged in activities permitted under this subsection or subsection (g); and</text></clause> <clause id="HA04BE3007BD74C7EB0C7A58C5F8C04CA"><enum>(ii)</enum><text>has consolidated total assets in excess of $40,000,000,000, unless such holding company has provided notice to the Board, not later than 60 days prior to such proposed acquisition or prior to becoming a financial holding company or wholesale financial holding company, and during that time period, or such longer time period not exceeding an additional 60 days, as established by the Board, the Board has not issued a notice disapproving the proposed acquisition or retention.</text></clause></subparagraph> <subparagraph id="HA533FF273C4547F7B946364312D4D7DC"><enum>(B)</enum><header>Factors for consideration</header><text>In reviewing any prior notice filed under this paragraph, the Board shall take into consideration—</text> <clause id="H4B27F5B4B62E49FC8703CAC5A3BFF76C"><enum>(i)</enum><text>whether the company is in compliance with all applicable criteria set forth in subsection (b) and the provisions of subsection (d);</text></clause> <clause id="HFC9BBD1B3EC648E58DB2DF003303197F"><enum>(ii)</enum><text>whether the proposed combination represents an undue aggregation of resources;</text></clause> <clause id="H28FB9464869D4E179B474E935EA0BBC3"><enum>(iii)</enum><text>whether the proposed combination poses a risk to the deposit insurance system;</text></clause> <clause id="H8381AF95DB5844368D09D2F20300EE3B"><enum>(iv)</enum><text>whether the proposed combination poses a risk to State insurance guaranty funds;</text></clause> <clause id="H6B10FCF99ECE4E7790CB7CA6E9E9B082"><enum>(v)</enum><text>whether the proposed combination can reasonably be expected to be in the best interests of depositors or policyholders of the respective entities; and</text></clause> <clause id="H6533ACB080064BEB8B68C6D4B99888B"><enum>(vi)</enum><text>whether the proposed transaction can reasonably be expected to produce benefits to the public.</text></clause></subparagraph> <subparagraph id="H4C74763728EA45FA8C15393E237CFCD2"><enum>(C)</enum><header>Required information</header><text>The Board may disapprove any prior notice filed under this paragraph if the company submitting such notice neglects, fails, or refuses to furnish to the Board all relevant information required by the Board.</text></subparagraph> <subparagraph id="HB28D3FABA553495392BB8615EEA5C7DE"><enum>(D)</enum><header>Solicitation of views of other supervisory agencies</header> <clause id="H82592C2081524F03A5E8BF153E00F382"><enum>(i)</enum><header>In general</header><text>Upon receiving a prior notice under this paragraph, in order to provide for the submission of their views and recommendations, the Board shall give notice of the proposal to—</text> <subclause id="HC77E9C370E19450B8731BF656093ED9B"><enum>(I)</enum><text>the appropriate Federal banking agency of any bank involved;</text></subclause> <subclause id="HBBA03A48FF364980AE95CDABFFD4E00"><enum>(II)</enum><text>the appropriate functional regulator of any functionally regulated nondepository institution (as defined in section 5(c)(1)(C)) involved; and</text></subclause> <subclause id="H995DD4FF149D4F0D9BD1DFB4C039A6AB"><enum>(III)</enum><text>the Secretary of the Treasury, the Department of Justice, and the Federal Trade Commission.</text></subclause></clause> <clause id="H68CBEE86F6004050920404B0939E7443"><enum>(ii)</enum><header>Timing</header><text>The views and recommendations of any agency provided notice under this paragraph shall be submitted to the Board not later than 30 calendar days after the date on which notice to the agency was given, unless the Board determines that another shorter time period is appropriate.</text></clause></subparagraph></paragraph></subsection> <subsection id="HFC9A10F7517B4D64BC91D6BBB8799AD"><enum>(d)</enum><header>Provisions applicable to financial holding companies that fail to meet requirements</header> <paragraph id="H27E15D0DC7B54BA9A4CB966E00C8D3B"><enum>(1)</enum><header>In general</header><text>If the Board finds that a financial holding company is not in compliance with the requirements of subparagraph (A) or (B) of subsection (b)(1), the Board shall give notice of such finding to the company.</text></paragraph> <paragraph id="HE3BFD701858B41519FE88705A8C2E500"><enum>(2)</enum><header>Agreement to correct conditions required</header><text>Not later than 45 days after receipt by a financial holding company of a notice given under paragraph (1) (or such additional period as the Board may permit), the company shall execute an agreement acceptable to the Board to comply with the requirements applicable to a financial holding company.</text></paragraph> <paragraph id="H74D03900A15146E0BB009D41EC4D5175"><enum>(3)</enum><header>Board may impose limitations</header><text>Until the conditions described in a notice to a financial holding company under paragraph (1) are corrected, the Board may impose such limitations on the conduct or activities of the company or any affiliate of the company as the Board determines to be appropriate under the circumstances.</text></paragraph> <paragraph id="H67401BAD22F54D3783D6572828533764"><enum>(4)</enum><header>Failure to correct</header><text>If, after receiving a notice under paragraph (1), a financial holding company does not—</text> <subparagraph id="H360154310C764FFE8DFCAACD48E0A"><enum>(A)</enum><text>execute and implement an agreement in accordance with paragraph (2);</text></subparagraph> <subparagraph id="HC4C482F09DFA4096AA6FA1FDE8C4D1F7"><enum>(B)</enum><text>comply with any limitations imposed under paragraph (3);</text></subparagraph> <subparagraph id="H3B4C0F41AD304852808D700826A22F8D"><enum>(C)</enum><text>in the case of a notice of failure to comply with subsection (b)(1)(A), restore each depository institution subsidiary to well capitalized status before the end of the 180-day period beginning on the date such notice is received by the company (or such other period permitted by the Board); or</text></subparagraph> <subparagraph id="H6C5B6830EC12478100677B98E600DA96"><enum>(D)</enum><text>in the case of a notice of failure to comply with subparagraph (B) of subsection (b)(1), restore compliance with any such subparagraph on or before the date on which the next examination of the depository institution subsidiary is completed or by the end of such other period as the Board determines to be appropriate, the Board may require such company, under such terms and conditions as may be imposed by the Board and subject to such extension of time as may be granted in the Board's discretion, to divest control of any depository institution subsidiary or, at the election of the financial holding company, instead to cease to engage in any activity conducted by such company or its subsidiaries pursuant to this section.</text></subparagraph></paragraph> <paragraph id="H66673FC81D9B4D11898BCC41CAC727D"><enum>(5)</enum><header>Consultation</header><text> In taking any action under this subsection, the Board shall consult with all relevant Federal and State regulatory agencies.</text></paragraph></subsection> <subsection id="HB5796834369F48C8A66CF4619140DA64"><enum>(e)</enum><header>Safeguards for bank subsidiaries</header><text>A financial holding company shall assure that—</text> <paragraph id="HDD091D545DB3441688FE43847E16509"><enum>(1)</enum><text>the procedures of the holding company for identifying and managing financial and operational risks within the company, and the subsidiaries of such company, adequately protect the subsidiaries of such company which are insured depository institutions from such risks;</text></paragraph> <paragraph id="H74F7DDB073034B8C83B76D00C6F4F9C"><enum>(2)</enum><text>the holding company has reasonable policies and procedures to preserve the separate corporate identity and limited liability of such company and the subsidiaries of such company, for the protection of the company's subsidiary insured depository institutions; and</text></paragraph> <paragraph id="H17520DED110D47750000D6C272C273AC"><enum>(3)</enum><text>the holding company complies with this section.</text></paragraph></subsection> <subsection id="H8488D71FCF0F44D3B831B5A1EFDB9B59"><enum>(f)</enum><header>Authority to retain limited nonfinancial activities and affiliations</header> <paragraph id="H42CF945CE6494945B76B9F65037F8318"><enum>(1)</enum><header>In general</header><text>Notwithstanding section 4(a), a company that is not a bank holding company or a foreign bank (as defined in section 1(b)(7) of the International Banking Act of 1978) and becomes a financial holding company after the date of the enactment of the Financial Services Act of 1999 may continue to engage in any activity and retain direct or indirect ownership or control of shares of a company engaged in any activity if—</text> <subparagraph id="H82FCD23245994D61873023C700E17E68"><enum>(A)</enum><text>the holding company lawfully was engaged in the activity or held the shares of such company on September 30, 1997;</text></subparagraph> <subparagraph id="H23F63DB2E4854653BF00256CF873C0AB"><enum>(B)</enum><text>the holding company is predominantly engaged in financial activities as defined in paragraph (2); and</text></subparagraph> <subparagraph id="HC7F44CF154F644E9AEBAB1BFC5C597E"><enum>(C)</enum><text>the company engaged in such activity continues to engage only in the same activities that such company conducted on September 30, 1997, and other activities permissible under this Act.</text></subparagraph></paragraph> <paragraph id="H0FF80484DAD045B796B1A04EF5F34DF"><enum>(2)</enum><header>Predominantly financial</header><text>For purposes of this subsection, a company is predominantly engaged in financial activities if the annual gross revenues derived by the holding company and all subsidiaries of the holding company (excluding revenues derived from subsidiary depository institutions), on a consolidated basis, from engaging in activities that are financial in nature or are incidental to activities that are financial in nature under subsection (c) represent at least 85 percent of the consolidated annual gross revenues of the company.</text></paragraph> <paragraph id="HBCCCD60E7A224807B74D00C4F6C95348"><enum>(3)</enum><header>No expansion of grandfathered commercial activities through merger or consolidation</header><text>A financial holding company that engages in activities or holds shares pursuant to this subsection, or a subsidiary of such financial holding company, may not acquire, in any merger, consolidation, or other type of business combination, assets of any other company which is engaged in any activity which the Board has not determined to be financial in nature or incidental to activities that are financial in nature under subsection (c).</text></paragraph> <paragraph id="H20DBD86C558048A49FD4D5A54666F0BB"><enum>(4)</enum><header>Continuing revenue limitation on grandfathered commercial activities</header><text>Notwithstanding any other provision of this subsection, a financial holding company may continue to engage in activities or hold shares in companies pursuant to this subsection only to the extent that the aggregate annual gross revenues derived from all such activities and all such companies does not exceed 15 percent of the consolidated annual gross revenues of the financial holding company (excluding revenues derived from subsidiary depository institutions).</text></paragraph> <paragraph id="H4F21E99C19A643B9B12FF620DD9E98E7"><enum>(5)</enum><header>Cross marketing restrictions applicable to commercial activities</header><text>A depository institution controlled by a financial holding company shall not—</text> <subparagraph id="HF166D45567F94BA7BA9D8E4CBB759545"><enum>(A)</enum><text>offer or market, directly or through any arrangement, any product or service of a company whose activities are conducted or whose shares are owned or controlled by the financial holding company pursuant to this subsection or subparagraph (H) or (I) of subsection (c)(3); or</text></subparagraph> <subparagraph id="HBC76A5AE15B34E79A7E304B3B07EF5F7"><enum>(B)</enum><text>permit any of its products or services to be offered or marketed, directly or through any arrangement, by or through any company described in subparagraph (A).</text></subparagraph></paragraph> <paragraph id="HADF9CBC45E6944D1B921B5672DFBE003"><enum>(6)</enum><header>Transactions with nonfinancial affiliates</header><text>An insured depository institution controlled by a financial holding company or wholesale financial holding company may not engage in a covered transaction (as defined by section 23A(b)(7) of the Federal Reserve Act) with any affiliate controlled by the company pursuant to section 10(c), this subsection, or subparagraph (H) or (I) of subsection (c)(3).</text></paragraph> <paragraph id="H0819842CFA9C438DA934630008B994AE"><enum>(7)</enum><header>Sunset of grandfather</header><text>A financial holding company engaged in any activity, or retaining direct or indirect ownership or control of shares of a company, pursuant to this subsection, shall terminate such activity and divest ownership or control of the shares of such company before the end of the 10-year period beginning on the date of the enactment of the Financial Services Act of 1999. The Board may, upon application by a financial holding company, extend such 10-year period by a period not to exceed an additional 5 years if such extension would not be detrimental to the public interest.</text></paragraph></subsection> <subsection id="HE58C9307FC254DC7BFA577C41501F752"><enum>(g)</enum><header>Developing activities</header><text>A financial holding company and a wholesale financial holding company may engage directly or indirectly, or acquire shares of any company engaged, in any activity that the Board has not determined to be financial in nature or incidental to financial activities under subsection (c) if—</text> <paragraph id="H8B9BE2D403B94767B6EC6C8B70770006"><enum>(1)</enum><text>the holding company reasonably concludes that the activity is financial in nature or incidental to financial activities;</text></paragraph> <paragraph id="H1E0E5F915A1141E4ADFDC6ED6BB471FD"><enum>(2)</enum><text>the gross revenues from all activities conducted under this subsection represent less than 5 percent of the consolidated gross revenues of the holding company;</text></paragraph> <paragraph id="H247ACB00978647378F74707EC77153D7"><enum>(3)</enum><text>the aggregate total assets of all companies the shares of which are held under this subsection do not exceed 5 percent of the holding company's consolidated total assets;</text></paragraph> <paragraph id="H53E6FDCCDCD8401492E4143FC1ECD062"><enum>(4)</enum><text>the total capital invested in activities conducted under this subsection represents less than 5 percent of the consolidated total capital of the holding company;</text></paragraph> <paragraph id="H1F9EBF9848454F99A7F6FBF8010003C8"><enum>(5)</enum><text>the Board has not determined that the activity is not financial in nature or incidental to financial activities under subsection (c);</text></paragraph> <paragraph id="H6B2B1642B66A47839682EA9FD38D10A2"><enum>(6)</enum><text>the holding company is not required to provide prior written notice of the transaction to the Board under subsection (c)(6); and</text></paragraph> <paragraph id="H4AE8A529B031443D8EAE21483FB8CCB2"><enum>(7)</enum><text>the holding company provides written notification to the Board describing the activity commenced or conducted by the company acquired no later than 10 business days after commencing the activity or consummating the acquisition.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="HE6183E13A3DA407AA57E5853716F08A8"><enum>104.</enum><header>Operation of State law</header> <subsection id="H1A7B47BD70534E8EB6B86C86B35BD713"><enum>(a)</enum><header>Affiliations</header> <paragraph id="H7B1F848968D642B1A76C001CA5752D42"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), no State may, by statute, regulation, order, interpretation, or other action, prevent or restrict an insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof, from being affiliated directly or indirectly or associated with any person or entity, as authorized or permitted by this Act or any other provision of Federal law.</text></paragraph> <paragraph id="HC0CFA4CF83C6467698DBCF4F3D11BB00"><enum>(2)</enum><header>Insurance</header><text>With respect to affiliations between insured depository institutions or wholesale financial institutions, or any subsidiary or affiliate thereof, and persons or entities engaged in the business of insurance, paragraph (1) does not prohibit any State from—</text> <subparagraph id="H478943E09735413BA0974CA78B1F0085"><enum>(A)</enum><text>requiring any person or entity that proposes to acquire control of an entity that is engaged in the business of insurance and domiciled in that State (hereafter in this subparagraph referred to as the `insurer') to furnish to the insurance regulatory authority of that State, not later than 60 days before the effective date of the proposed acquisition—</text> <clause id="H06AECACB33B04AA1A07F00EFAEC13261"><enum>(i)</enum><text>the name and address of each person by whom, or on whose behalf, the affiliation referred to in this subparagraph is to be effected (hereafter in this subparagraph referred to as the <quote>acquiring party</quote>);</text></clause> <clause id="H346DC2AF74B6443DB5A382DF4B88184"><enum>(ii)</enum><text>if the acquiring party is an individual, his or her principal occupation and all offices and positions held during the 5 years preceding the date of notification, and any conviction of crimes other than minor traffic violations during the 10 years preceding the date of notification;</text></clause> <clause id="H0E06108B3C0540ED9F4C08D109AFF3E4"><enum>(iii)</enum><text>if the acquiring party is not an individual—</text> <subclause id="H11090490AB8E4EE58565437184CA51E6"><enum>(I)</enum><text>a report of the nature of its business operations during the 5 years preceding the date of notification, or for such shorter period as such person and any predecessors thereof shall have been in existence;</text></subclause> <subclause id="HFF0E863CC1EA4E34B2B054D60354D2E"><enum>(II)</enum><text>an informative description of the business intended to be done by the acquiring party and any subsidiary thereof; and</text></subclause> <subclause id="H79AD6F9051F74D4C8669AB64475FBB90"><enum>(III)</enum><text>a list of all individuals who are, or who have been selected to become, directors or executive officers of the acquiring party or who perform, or will perform, functions appropriate to such positions, including, for each such individual, the information required by clause (ii);</text></subclause></clause> <clause id="H370317768F1849758F2F6F644098DED"><enum>(iv)</enum><text>the source, nature, and amount of the consideration used, or to be used, in effecting the merger or other acquisition of control, a description of any transaction wherein funds were, or are to be, obtained for any such purpose, and the identity of persons furnishing such consideration, except that, if a source of such consideration is a loan made in the lender's ordinary course of business, the identity of the lender shall remain confidential if the person filing such statement so requests;</text></clause> <clause id="H644D6B777FB245E2BBA44D6118829D67"><enum>(v)</enum><text>fully audited financial information as to the earnings and financial condition of each acquiring party for the 5 fiscal years preceding the date of notification of each such acquiring party, or for such lesser period as such acquiring party and any predecessors thereof shall have been in existence, and similar unaudited information as of a date not earlier than 90 days before the date of notification, except that, in the case of an acquiring party that is an insurer actively engaged in the business of insurance, the financial statements of such insurer need not be audited, but such audit may be required if the need therefor is determined by the insurance regulatory authority of the State;</text></clause> <clause id="HE0F8315D30134DDAA196FDE616503FAD"><enum>(vi)</enum><text>any plans or proposals that each acquiring party may have to liquidate such insurer, to sell its assets, or to merge or consolidate it with any person or to make any other material change in its business or corporate structure or management;</text></clause> <clause id="H47B1F0716E6347CB9B6FD3D3C9A3E68D"><enum>(vii)</enum><text>the number of shares of any security of the insurer that each acquiring party proposes to acquire, the terms of any offer, request, invitation, agreement, or acquisition, and a statement as to the method by which the fairness of the proposal was arrived at;</text></clause> <clause id="H5B845369B32B45E7A7BF106426782996"><enum>(viii)</enum><text>the amount of each class of any security of the insurer that is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;</text></clause> <clause id="H7C39235918414F56BFCC2895D5637B85"><enum>(ix)</enum><text>a full description of any contracts, arrangements, or understandings with respect to any security of the insurer in which any acquiring party is involved, including transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies, and identification of the persons with whom such contracts, arrangements, or understandings have been entered into;</text></clause> <clause id="HAB9D27EA46B342EE8419C9AEB97B6B58"><enum>(x)</enum><text>a description of the purchase of any security of the insurer during the 12-month period preceding the date of notification by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid, or agreed to be paid, therefor;</text></clause> <clause id="H8EB46A9AC7854B378E55959B7B2ECB97"><enum>(xi)</enum><text>a description of any recommendations to purchase any security of the insurer made during the 12-month period preceding the date of notification by any acquiring party or by any person based upon interviews or at the suggestion of such acquiring party;</text></clause> <clause id="HC534375227E74094A1AF31801DC940C1"><enum>(xii)</enum><text>copies of all tender offers for, requests or invitations for tenders of, exchange offers for and agreements to acquire or exchange any securities of the insurer and, if distributed, of additional soliciting material relating thereto; and</text></clause> <clause id="H4C1FD75795FD40D5BB903EEEAB5B3FD8"><enum>(xiii)</enum><text>the terms of any agreement, contract, or understanding made with any broker-dealer as to solicitation of securities of the insurer for tender and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard thereto;</text></clause></subparagraph> <subparagraph id="H1388A0E16814434BB66E03E972F0B8FA"><enum>(B)</enum><text>requiring an entity that is acquiring control of an entity that is engaged in the business of insurance and domiciled in that State to maintain or restore the capital requirements of that insurance entity to the level required under the capital regulations of general applicability in that State to avoid the requirement of preparing and filing with the insurance regulatory authority of that State a plan to increase the capital of the entity, except that any determination by the State insurance regulatory authority with respect to such requirement shall be made not later than 60 days after the date of notification under subparagraph (A);</text></subparagraph> <subparagraph id="HCF0AAFDE38B449F69073AC8D266EDAD2"><enum>(C)</enum><text>taking actions with respect to the receivership or conservatorship of any insurance company; or</text></subparagraph> <subparagraph id="H655684D595EC4D8EB68EE3247B296418"><enum>(D)</enum><text>restricting a change in the ownership of stock in an insurance company, or a company formed for the purpose of controlling such insurance company, for a period of not more than 3 years beginning on the date of the conversion of such company from mutual to stock form.</text></subparagraph></paragraph> <paragraph id="H1521B0D021C2458CA8C36C856931E242"><enum>(3)</enum><header>Preservation of state antitrust and general corporate laws</header> <subparagraph id="HD41CF83C7FF5483AB4C2A2B4FA5BDC35"><enum>(A)</enum><header>In general</header><text>Nothing in paragraph (1) shall be construed as affecting State laws, regulations, orders, interpretations, or other actions of general applicability relating to the governance of corporations, partnerships, limited liability companies or other business associations incorporated or formed under the laws of that State or domiciled in that State, or the applicability of the antitrust laws of any State or any State law that is similar to the antitrust laws.</text></subparagraph> <subparagraph id="H5CB595CA860042F798274094A9EF7C5"><enum>(B)</enum><header>Definition</header><text>The term <term>antitrust laws</term> has the same meaning as in subsection (a) of the first section of the Clayton Act, and includes section 5 of the Federal Trade Commission Act to the extent that such section 5 relates to unfair methods of competition.</text></subparagraph></paragraph></subsection> <subsection id="H17E37BCA4BF8402900DE633FD10052B1"><enum>(b)</enum><header>Activities</header> <paragraph id="HD662C058C7F944ABA5A45FB4749570A4"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (3), and except with respect to insurance sales, solicitation, and cross marketing activities, which shall be governed by paragraph (2), no State may, by statute, regulation, order, interpretation, or other action, prevent or restrict an insured depository institution, wholesale financial institution, or subsidiary or affiliate thereof from engaging directly or indirectly, either by itself or in conjunction with a subsidiary, affiliate, or any other entity or person, in any activity authorized or permitted under this Act.</text></paragraph> <paragraph id="HBD8CA92446734B1AB7F200C45018F38D"><enum>(2)</enum><header>Insurance sales</header> <subparagraph id="H58BDB9B72D8649A4BCFE8F05C4D53670"><enum>(A)</enum><header>In general</header><text>In accordance with the legal standards for preemption set forth in the decision of the Supreme Court of the United States in Barnett Bank of Marion County N.A. v. Nelson, 116 S. Ct. 1103 (1996), no State may, by statute, regulation, order, interpretation, or other action, prevent or significantly interfere with the ability of an insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof, to engage, directly or indirectly, either by itself or in conjunction with a subsidiary, affiliate, or any other party, in any insurance sales, solicitation, or cross-marketing activity.</text></subparagraph> <subparagraph id="HA23874F1C8674C47838BD9386EE7EB00"><enum>(B)</enum><header>Certain state laws preserved</header><text>Notwithstanding subparagraph (A), a State may impose any of the following restrictions, or restrictions which are substantially the same as but no more burdensome or restrictive than those in each of the following clauses:</text> <clause id="H326C390DD8F44BA0AFF9B7C38F35B61B"><enum>(i)</enum><text>Restrictions prohibiting the rejection of an insurance policy solely because the policy has been issued or underwritten by any person who is not associated with such insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, when such insurance is required in connection with a loan or extension of credit.</text></clause> <clause id="HE9C4FF98BC6F47E98338DEBE80BD99B"><enum>(ii)</enum><text>Restrictions prohibiting a requirement for any debtor, insurer, or insurance agent or broker to pay a separate charge in connection with the handling of insurance that is required in connection with a loan or other extension of credit or the provision of another traditional banking product, unless such charge would be required when the insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, is the licensed insurance agent or broker providing the insurance.</text></clause> <clause id="H5A9C944EC88E4701A2E235CB1B65865"><enum>(iii)</enum><text>Restrictions prohibiting the use of any advertisement or other insurance promotional material by an insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, that would cause a reasonable person to believe mistakenly that—</text> <subclause id="HE8ADE655B06F4F43B2C7BA19C2DC2FD3"><enum>(I)</enum><text>a State or the Federal Government is responsible for the insurance sales activities of, or stands behind the credit of, the institution, affiliate, or subsidiary; or</text></subclause> <subclause id="H48A56A2381D74407BE0000098B05277B"><enum>(II)</enum><text>a State, or the Federal Government guarantees any returns on insurance products, or is a source of payment on any insurance obligation of or sold by the institution, affiliate, or subsidiary;</text></subclause></clause> <clause id="H4BC8817AF5594F6AA34C1BBD25A741E1"><enum>(iv)</enum><text>Restrictions prohibiting the payment or receipt of any commission or brokerage fee or other valuable consideration for services as an insurance agent or broker to or by any person, unless such person holds a valid State license regarding the applicable class of insurance at the time at which the services are performed, except that, in this clause, the term `services as an insurance agent or broker' does not include a referral by an unlicensed person of a customer or potential customer to a licensed insurance agent or broker that does not include a discussion of specific insurance policy terms and conditions.</text></clause> <clause id="H1602F92541FB44D0A76599C6E9BC18EC"><enum>(v)</enum><text>Restrictions prohibiting any compensation paid to or received by any individual who is not licensed to sell insurance, for the referral of a customer that seeks to purchase, or seeks an opinion or advice on, any insurance product to a person that sells or provides opinions or advice on such product, based on the purchase of insurance by the customer.</text></clause> <clause id="H3F73C22BDEB84A8B85628846D6CCB25E"><enum>(vi)</enum><text>Restrictions prohibiting the release of the insurance information of a customer (defined as information concerning the premiums, terms, and conditions of insurance coverage, including expiration dates and rates, and insurance claims of a customer contained in the records of the insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof) to any person or entity other than an officer, director, employee, agent, subsidiary, or affiliate of an insured depository institution or a wholesale financial institution, for the purpose of soliciting or selling insurance, without the express consent of the customer, other than a provision that prohibits—</text> <subclause id="HFFD3321C0CA04821B7F4026F89C87551"><enum>(I)</enum><text>a transfer of insurance information to an unaffiliated insurance company, agent, or broker in connection with transferring insurance in force on existing insureds of the insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, or in connection with a merger with or acquisition of an unaffiliated insurance company, agent, or broker; or</text></subclause> <subclause id="H45F212331CEF476981B2940369BEA8"><enum>(II)</enum><text>the release of information as otherwise authorized by State or Federal law.</text></subclause></clause> <clause id="HD3A771D3F82D4D79B75621C7FBE9B693"><enum>(vii)</enum><text>Restrictions prohibiting the use of health information obtained from the insurance records of a customer for any purpose, other than for its activities as a licensed agent or broker, without the express consent of the customer.</text></clause> <clause id="HB71E2AD4FCF14E03ABBA5DA34FAA15AD"><enum>(viii)</enum><text>Restrictions prohibiting the extension of credit or any product or service that is equivalent to an extension of credit, lease or sale of property of any kind, or furnishing of any services or fixing or varying the consideration for any of the foregoing, on the condition or requirement that the customer obtain insurance from the insured depository institution, wholesale financial institution, a subsidiary or affiliate thereof, or a particular insurer, agent, or broker, other than a prohibition that would prevent any insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof—</text> <subclause id="H3A0AE62753724BDB835C514E999B3821"><enum>(I)</enum><text>from engaging in any activity that would not violate section 106 of the Bank Holding Company Act Amendments of 1970, as interpreted by the Board of Governors of the Federal Reserve System; or</text></subclause> <subclause id="HE8AD986E1C86483AAF17654E018E76C"><enum>(II)</enum><text>from informing a customer or prospective customer that insurance is required in order to obtain a loan or credit, that loan or credit approval is contingent upon the procurement by the customer of acceptable insurance, or that insurance is available from the insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof.</text></subclause></clause> <clause id="H4CA5624C90B44E989D1F319BCA343493"><enum>(ix)</enum><text>Restrictions requiring, when an application by a consumer for a loan or other extension of credit from an insured depository institution or wholesale financial institution is pending, and insurance is offered or sold to the consumer or is required in connection with the loan or extension of credit by the insured depository institution or wholesale financial institution, that a written disclosure be provided to the consumer or prospective customer indicating that his or her choice of an insurance provider will not affect the credit decision or credit terms in any way, except that the insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, may impose reasonable requirements concerning the creditworthiness of the insurance provider and scope of coverage chosen.</text></clause> <clause id="HE266DBAE6C0F4B05A6531986FDA4B25"><enum>(x)</enum><text>Restrictions requiring clear and conspicuous disclosure, in writing, where practicable, to the customer prior to the sale of any insurance policy that such policy—</text> <subclause id="H440CDC2E29B54CA28C65B088726EFDA6"><enum>(I)</enum><text>is not a deposit;</text></subclause> <subclause id="H3AAEF94C6BF34C4083E1A223A9076F63"><enum>(II)</enum><text>is not insured by the Federal Deposit Insurance Corporation;</text></subclause> <subclause id="H72039B98F06F472293A0D6D5F317B806"><enum>(III)</enum><text>is not guaranteed by the insured depository institution or wholesale financial institution or, if appropriate, its subsidiaries or affiliates or any person soliciting the purchase of or selling insurance on the premises thereof; and</text></subclause> <subclause id="HB965F818A75F4584AEFB004967B2FA81"><enum>(IV)</enum><text>where appropriate, involves investment risk, including potential loss of principal.</text></subclause></clause> <clause id="H3C003CA917664C2E9659A986FDC2DEDA"><enum>(xi)</enum><text>Restrictions requiring that, when a customer obtains insurance (other than credit insurance or flood insurance) and credit from an insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, or any person soliciting the purchase of or selling insurance on the premises thereof, the credit and insurance transactions be completed through separate documents.</text></clause> <clause id="H3ADE2301899540D2A9004FAF2222CAC2"><enum>(xii)</enum><text>Restrictions prohibiting, when a customer obtains insurance (other than credit insurance or flood insurance) and credit from an insured depository institution or wholesale financial institution or its subsidiaries or affiliates, or any person soliciting the purchase of or selling insurance on the premises thereof, inclusion of the expense of insurance premiums in the primary credit transaction without the express written consent of the customer.</text></clause> <clause id="H4EF8E63848F346ADB7361EC5E4CAFF97"><enum>(xiii)</enum><text>Restrictions requiring maintenance of separate and distinct books and records relating to insurance transactions, including all files relating to and reflecting consumer complaints, and requiring that such insurance books and records be made available to the appropriate State insurance regulator for inspection upon reasonable notice.</text></clause></subparagraph> <subparagraph id="H2761478B17944F888784C2E4A8689EED"><enum>(C)</enum><header>Limitations</header> <clause id="H584140BECC3F424C9C864B16E0B51423"><enum>(i)</enum><header>OCC Deference</header><text>Section 306(e) does not apply with respect to any State statute, regulation, order, interpretation, or other action regarding insurance sales, solicitation, or cross marketing activities described in subparagraph (A) that was issued, adopted, or enacted before September 3, 1998, and that is not described in subparagraph (B).</text></clause> <clause id="H0596331345C84889A4C5D8F92D192361"><enum>(ii)</enum><header>Nondiscrimination</header><text>Subsection (c) does not apply with respect to any State statute, regulation, order, interpretation, or other action regarding insurance sales, solicitation, or cross marketing activities described in subparagraph (A) that was issued, adopted, or enacted before September 3, 1998, and that is not described in subparagraph (B).</text></clause> <clause id="H5606529F84FF4AD1AA00003200DBF7EE"><enum>(iii)</enum><header>Construction</header><text>Nothing in this paragraph shall be construed to limit the applicability of the decision of the Supreme Court in Barnett Bank of Marion County N.A. v. Nelson, 116 S. Ct. 1103 (1996) with respect to a State statute, regulation, order, interpretation, or other action that is not described in subparagraph (B).</text></clause> <clause id="H8675297A3BEC49058B2E17CEA8E8B6F5"><enum>(iv)</enum><header>Limitation on inferences</header><text>Nothing in this paragraph shall be construed to create any inference with respect to any State statute, regulation, order, interpretation, or other action that is not referred to or described in this paragraph.</text></clause></subparagraph></paragraph> <paragraph id="H9B6E4EF250C549888E345F179F5BBE1E"><enum>(3)</enum><header>Insurance activities other than sales</header><text>State statutes, regulations, interpretations, orders, and other actions shall not be preempted under subsection (b)(1) to the extent that they—</text> <subparagraph id="HC1E81F3173F24607BDA62E5B19ED00FC"><enum>(A)</enum><text>relate to, or are issued, adopted, or enacted for the purpose of regulating the business of insurance in accordance with the Act of March 9, 1945 (commonly known as the <quote>McCarran-Ferguson Act</quote>);</text></subparagraph> <subparagraph id="H2A900D43D3824D25BAF0D32E006F00EE"><enum>(B)</enum><text>apply only to persons or entities that are not insured depository institutions or wholesale financial institutions, but that are directly engaged in the business of insurance (except that they may apply to depository institutions engaged in providing savings bank life insurance as principal to the extent of regulating such insurance);</text></subparagraph> <subparagraph id="HEF8166FFA14C4D6E9F07982973ACD8B0"><enum>(C)</enum><text>do not relate to or directly or indirectly regulate insurance sales, solicitations, or cross-marketing activities; and</text></subparagraph> <subparagraph id="HFE5D543415E5491CAA78ADC8113F81EC"><enum>(D)</enum><text>are not prohibited under subsection (c).</text></subparagraph></paragraph> <paragraph id="HC3FFA4E0DF76430B8B644D4F07256970"><enum>(4)</enum><header>Financial activities other than insurance</header><text>No State statute, regulation, interpretation, order, or other action shall be preempted under subsection (b)(1) to the extent that—</text> <subparagraph id="H76A90ECA2BEF49BE8DEDF41D1FED5B1E"><enum>(A)</enum><text>it does not relate to, and is not issued and adopted, or enacted for the purpose of regulating, directly or indirectly, insurance sales, solicitations, or cross marketing activities covered under paragraph (2);</text></subparagraph> <subparagraph id="HCD97D1038D304E9291F0B9CFEA5191D2"><enum>(B)</enum><text>it does not relate to, and is not issued and adopted, or enacted for the purpose of regulating, directly or indirectly, the business of insurance activities other than sales, solicitations, or cross marketing activities, covered under paragraph (3);</text></subparagraph> <subparagraph id="HEEC2FB438A004EA89F4D6B0589001CA2"><enum>(C)</enum><text>it does not relate to securities investigations or enforcement actions referred to in subsection (d); and</text></subparagraph> <subparagraph id="H43C7BC320FDC4658B5A6006FF3462B1F"><enum>(D)</enum><text>it—</text> <clause id="H139297768F05498BB6B49D26A2AAD238"><enum>(i)</enum><text>does not distinguish by its terms between insured depository institutions, wholesale financial institutions, and subsidiaries and affiliates thereof engaged in the activity at issue and other persons or entities engaged in the same activity in a manner that is in any way adverse with respect to the conduct of the activity by any such insured depository institution, wholesale financial institution, or subsidiary or affiliate thereof engaged in the activity at issue;</text></clause> <clause id="H0139752B2DB14D6882731440031893D5"><enum>(ii)</enum><text>as interpreted or applied, does not have, and will not have, an impact on depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof engaged in the activity at issue, or any person or entity affiliated therewith, that is substantially more adverse than its impact on other persons or entities engaged in the same activity that are not insured depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof, or persons or entities affiliated therewith;</text></clause> <clause id="HA93AB36B730D4C59BA10FD12286BBF3C"><enum>(iii)</enum><text>does not effectively prevent a depository institution, wholesale financial institution, or subsidiary or affiliate thereof from engaging in activities authorized or permitted by this Act or any other provision of Federal law; and</text></clause> <clause id="H06CEF89BBAF54815A6C78F04A46B7FA7"><enum>(iv)</enum><text>does not conflict with the intent of this Act generally to permit affiliations that are authorized or permitted by Federal law.</text></clause></subparagraph></paragraph></subsection> <subsection id="HD6FB0A7429F54C6B925FA205B0D676D1"><enum>(c)</enum><header>Nondiscrimination</header><text>Except as provided in any restrictions described in subsection (b)(2)(B), no State may, by statute, regulation, order, interpretation, or other action, regulate the insurance activities authorized or permitted under this Act or any other provision of Federal law of an insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, to the extent that such statute, regulation, order, interpretation, or other action—</text> <paragraph id="HFA7ADA62A0664BD8B21340A1A88D9115"><enum>(1)</enum><text>distinguishes by its terms between insured depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, and other persons or entities engaged in such activities, in a manner that is in any way adverse to any such insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof;</text></paragraph> <paragraph id="HBC608A5B5A984133948444106342D505"><enum>(2)</enum><text>as interpreted or applied, has or will have an impact on depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, that is substantially more adverse than its impact on other persons or entities providing the same products or services or engaged in the same activities that are not insured depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof, or persons or entities affiliated therewith;</text></paragraph> <paragraph id="H1A42E2E4FBCC4732A219D373D1E2C600"><enum>(3)</enum><text>effectively prevents a depository institution or wholesale financial institution, or subsidiary or affiliate thereof, from engaging in insurance activities authorized or permitted by this Act or any other provision of Federal law; or</text></paragraph> <paragraph id="H3600A50EDD404B2690595FD4379BB35B"><enum>(4)</enum><text>conflicts with the intent of this Act generally to permit affiliations that are authorized or permitted by Federal law between insured depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, and persons and entities engaged in the business of insurance.</text></paragraph></subsection> <subsection id="H5A9F3386A44A44B8A45586FEEFC28956"><enum>(d)</enum><header>Limitation</header><text>Subsections (a) and (b) shall not be construed to affect the jurisdiction of the securities commission (or any agency or office performing like functions) of any State, under the laws of such State, to investigate and bring enforcement actions, consistent with section 18(c) of the Securities Act of 1933, with respect to fraud or deceit or unlawful conduct by any person, in connection with securities or securities transactions.</text></subsection> <subsection id="H1A4591CFEF3A426092475E3500D1B5AD"><enum>(e)</enum><header>Definition</header><text>For purposes of this section, the term <term>State</term> means any State of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands. </text></subsection></section> <section id="H677C6CDDD7954F0CAB42DE97B79B1D03"><enum>105.</enum><header>Mutual bank holding companies authorized</header> <subsection id="H6E2D1A24A9D745BF9674C2F9A605004D"><enum>(a)</enum><text>Section 3(g)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(g)(2)) is amended to read as follows:</text> <quoted-block id="H7B8E9B3E6F934360B8A7006E0046C4E4" style="USC"> <paragraph id="H60D0CD0961C54E8FA3B0BC66AD3392B0"><enum>(2)</enum><header>Regulations</header><text>A bank holding company organized as a mutual holding company shall be regulated on terms, and shall be subject to limitations, comparable to those applicable to any other bank holding company.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="HAB035376ABE4470993B2C4576F66BB44"><enum>106.</enum><header>Prohibition on deposit production offices</header> <subsection id="H66802892F1E7482191C800E736092365"><enum>(a)</enum><header>In general</header><text>Section 109(d) of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (12 U.S.C. 1835a(d)) is amended—</text> <paragraph id="H54A3EB57642B4129B14B1E7ED6C55FB9"><enum>(1)</enum><text>by inserting <quote>, the Financial Services Act of 1999,</quote> after <quote>pursuant to this title</quote>; and</text></paragraph> <paragraph id="H3B7734B0887E44DB9D652BA5C477912D"><enum>(2)</enum><text>by inserting <quote>or such Act</quote> after <quote>made by this title</quote>.</text></paragraph></subsection> <subsection id="HDE820138634F4A8CB1916DDACDB84B6B"><enum>(b)</enum><header>Technical and conforming amendment</header><text>Section 109(e)(4) of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (12 U.S.C. 1835a(e)(4)) is amended by inserting `and any branch of a bank controlled by an out-of-State bank holding company (as defined in section 2(o)(7) of the Bank Holding Company Act of 1956)' before the period. </text></subsection></section> <section id="H8B5591F0B04F4014B9CA4ED56F1528A1"><enum>107.</enum><header>Clarification of branch closure requirements</header> <subsection id="HFA7526F8F86E4DFBBE26032471F20072"><enum></enum><text>Section 42(d)(4)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1831r-1(d)(4)(A)) is amended by inserting `and any bank controlled by an out-of-State bank holding company (as defined in section 2(o)(7) of the Bank Holding Company Act of 1956)' before the period. </text></subsection></section> <section id="H05B97CDE1BF342E3B7018D2222786422"><enum>108.</enum><header>Amendments relating to limited purpose banks</header> <subsection id="H73F419A8922945D59DA062F059F3DACD"><enum>(a)</enum><header>In general</header><text>Section 4(f) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(f)) is amended—</text> <paragraph id="H4F3BE0FB144F41F3BE3EEC1C745FA547"><enum>(1)</enum><text>in paragraph (2)(a)(ii)—</text> <subparagraph id="H79AAD86FFE4B42E78BC70090CCE8156D"><enum>(A)</enum><text>by striking <quote>and</quote> at the end of subclause (IX);</text></subparagraph> <subparagraph id="HDBAA92E713D642AC90899DA07B53E138"><enum>(B)</enum><text>by inserting <quote>and</quote> after the semicolon at the end of subclause (X); and</text></subparagraph> <subparagraph id="H975F57C7C0D649B0B78473C1EBD198CF"><enum>(C)</enum><text>by inserting after subclause (X) the following new subclause:</text> <quoted-block id="HD9D3EBD43A2848418F6600E06B98E41C" style="USC"> <subclause id="H7D6BB987B1054FA0B98DDF00E7A526B2"><enum>(XI)</enum><text>assets that are derived from, or are incidental to, activities in which institutions described in section 2(c)(2)(F) are permitted to engage,</text></subclause><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="HDA1BEDE58F104D4C8616B44439691EC"><enum>(2)</enum><text>in paragraph (2), by striking subparagraph (B) and inserting the following new subparagraphs:</text> <quoted-block id="H5DC57E21F90342B8BF34858D3CABD22F" style="USC"> <subparagraph id="H790CECE6A27D4DBCB3AE1E92777CD5A7"><enum>(B)</enum><text>any bank subsidiary of such company engages in any activity in which the bank was not lawfully engaged as of March 5, 1987, unless the bank is well managed and well capitalized;</text></subparagraph> <subparagraph id="HF41DF33ECA1849F9AB8614648B661D66"><enum>(C)</enum><text>any bank subsidiary of such company both—</text> <clause id="H9FD0E35DE7054EB1AD02FB1ECB158900"><enum>(i)</enum><text>accepts demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties; and</text></clause> <clause id="H331E490C80FC4D35AE044C9DD841DAE0"><enum>(ii)</enum><text>engages in the business of making commercial loans (and, for purposes of this clause, loans made in the ordinary course of a credit card operation shall not be treated as commercial loans); or</text></clause></subparagraph> <subparagraph id="H37D47F4830A14A1486FB2C8FBCC3A9C"><enum>(D)</enum><text>after the date of the enactment of the Competitive Equality Amendments of 1987, any bank subsidiary of such company permits any overdraft (including any intraday overdraft), or incurs any such overdraft in such bank's account at a Federal reserve bank, on behalf of an affiliate, other than an overdraft described in paragraph (3).</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="H619A908DE79E457886077FB181CA4449"><enum>(3)</enum><text>by striking paragraphs (3) and (4) and inserting the following new paragraphs:</text> <quoted-block id="HA512606447874ED798346BF1AE1351E5" style="USC"> <paragraph id="H45FB0CAB1D50489DBB545E27CCC95248"><enum>(3)</enum><header>Permissible overdrafts described</header><text>For purposes of paragraph (2)(D), an overdraft is described in this paragraph if—</text> <subparagraph id="HB8543E0151334AB0B4BF2FBACB1372CC"><enum>(A)</enum><text>such overdraft results from an inadvertent computer or accounting error that is beyond the control of both the bank and the affiliate; or</text></subparagraph> <subparagraph id="H562F7458E7844DA58D27B600087ECA99"><enum>(B)</enum><text>such overdraft—</text> <clause id="HFC9E59E366D54C299CAA3EC1C187CC93"><enum>(i)</enum><text>is permitted or incurred on behalf of an affiliate which is monitored by, reports to, and is recognized as a primary dealer by the Federal Reserve Bank of New York; and</text></clause> <clause id="H04FB1C3E5E5A4CAAAADC86F3CD8C2CFD"><enum>(ii)</enum><text>is fully secured, as required by the Board, by bonds, notes, or other obligations which are direct obligations of the United States or on which the principal and interest are fully guaranteed by the United States or by securities and obligations eligible for settlement on the Federal Reserve book entry system.</text></clause></subparagraph></paragraph> <paragraph id="HD9C5FF603DCF4B4AB345B21D33B796D"><enum>(4)</enum><header>Divestiture in case of loss of exemption</header><text>If any company described in paragraph (1) fails to qualify for the exemption provided under such paragraph by operation of paragraph (2), such exemption shall cease to apply to such company and such company shall divest control of each bank it controls before the end of the 180-day period beginning on the date that the company receives notice from the Board that the company has failed to continue to qualify for such exemption, unless before the end of such 180-day period, the company has—</text> <subparagraph id="H6B3D218A9D2B4CA2B2B0041CC26BAA7"><enum>(A)</enum><text>corrected the condition or ceased the activity that caused the company to fail to continue to qualify for the exemption; and</text></subparagraph> <subparagraph id="H696A6EE12E774A6CB19C66953F0548EF"><enum>(B)</enum><text>implemented procedures that are reasonably adapted to avoid the reoccurrence of such condition or activity.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H862FBBECA361493EA3906C9583FAB00"><enum>(b)</enum><header>Industrial loan companies affiliate overdrafts</header><text>Section 2(c)(2)(H) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(H)) is amended by inserting before the period at the end <quote>, or that is otherwise permissible for a bank controlled by a company described in section 4(f)(1)</quote>.</text></subsection></section> <section id="HBFB477480C894A068844DC9DA75EDBB9"><enum>109.</enum><header>Reports on ongoing FTC study of consumer privacy issues</header> <subsection id="H066EB57234394393AEB8E29ED21B751F"><enum></enum><text>With respect to the ongoing multistage study being conducted by the Federal Trade Commission on consumer privacy issues, the Commission shall submit to the Congress an interim report on the findings and conclusions of the Commission, together with such recommendations for legislative and administrative action as the Commission determines to be appropriate, at the conclusion of each stage of such study and a final report at the conclusion of the study. </text></subsection></section> <section id="H77943B34DAF249739F40162FF951CE3B"><enum>110.</enum><header>GAO study of economic impact on community banks and other small financial institutions</header> <subsection id="H74553A0B652944968545EB2823E6F01C"><enum>(a)</enum><header>Study required</header><text>The Comptroller General of the United States shall conduct a study of the projected economic impact that the enactment of this Act will have on financial institutions which have total assets of $100,000,000 or less.</text></subsection> <subsection id="HCCD117672ED44CB8809E90DDF0920834"><enum>(b)</enum><header>Report to the Congress</header><text>The Comptroller General of the United States shall submit a report to the Congress before the end of the 6-month period beginning on the date of the date of the enactment of this Act containing the findings and conclusions of the Comptroller General with regard to the study required under subsection (a) and such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.</text></subsection></section></subtitle> <subtitle id="T408CC2F7A6554C94B4A843EF65123184"><enum>B</enum><header>Streamlining Supervision of Financial Holding Companies</header> <section id="H09E8FEB41D8D496BB84B181769878ECA"><enum>111.</enum><header>Streamlining financial holding company supervision</header> <subsection id="H19D0098492CD4A1699C63604BC84F5AB"><enum>(a)</enum><text>Section 5(c) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)) is amended to read as follows:</text> <quoted-block id="HFFC7ADB3165A4031AB6EC9C4A3AABD83" style="USC"> <subsection id="HB31E58F0EF3B48F9B2F41B05006B20F0"><enum>(c)</enum><header>Reports and examinations</header> <paragraph id="H8B3669C6258C4290AD061314C4EA836B"><enum>(1)</enum><header>Reports</header> <subparagraph id="HDFC4A04F82AC4646BF9E9774F0071112"><enum>(A)</enum><header>In general</header><text>The Board from time to time may require any bank holding company and any subsidiary of such company to submit reports under oath to keep the Board informed as to—</text> <clause id="HB4BF035E5AA546F1BCB7516C2D6FFE57"><enum>(i)</enum><text>its financial condition, systems for monitoring and controlling financial and operating risks, and transactions with depository institution subsidiaries of the holding company; and</text></clause> <clause id="H6939AEAAEDA246A9B3BDC8FC1E5B7DD"><enum>(ii)</enum><text>compliance by the company or subsidiary with applicable provisions of this Act.</text></clause></subparagraph> <subparagraph id="HCE637E1D66014DDDB3B4002936027FA"><enum>(B)</enum><header>Use of existing reports</header> <clause id="H72045B3C480F4000004D693DD115E53C"><enum>(i)</enum><header>In general</header><text>The Board shall, to the fullest extent possible, accept reports in fulfillment of the Board's reporting requirements under this paragraph that a bank holding company or any subsidiary of such company has provided or been required to provide to other Federal and State supervisors or to appropriate self-regulatory organizations.</text></clause> <clause id="H8E06BDD7EA93498B9036B1692825BD99"><enum>(ii)</enum><header>Availability</header><text>A bank holding company or a subsidiary of such company shall provide to the Board, at the request of the Board, a report referred to in clause (i).</text></clause> <clause id="HF19CE703A04545C2AF52E1D07FE87366"><enum>(iii)</enum><header>Required use of publicly reported information</header><text>The Board shall, to the fullest extent possible, accept in fulfillment of any reporting or recordkeeping requirements under this Act information that is otherwise required to be reported publicly and externally audited financial statements.</text></clause> <clause id="HE5CE75F5247E459299CC92D6EAAB942D"><enum>(iv)</enum><header>Reports filed with other agencies</header><text>In the event the Board requires a report from a functionally regulated nondepository institution subsidiary of a bank holding company of a kind that is not required by another Federal or State regulator or appropriate self-regulatory organization, the Board shall request that the appropriate regulator or self-regulatory organization obtain such report. If the report is not made available to the Board, and the report is necessary to assess a material risk to the bank holding company or any of its subsidiary depository institutions or compliance with this Act, the Board may require such subsidiary to provide such a report to the Board.</text></clause></subparagraph> <subparagraph id="H5956F510928E4897BE90E5747FEBC84"><enum>(C)</enum><header>Definition</header><text>For purposes of this subsection, the term <term>functionally regulated nondepository institution</term> means—</text> <clause id="HE57F7663018447E4AA43563E1CEE3719"><enum>(i)</enum><text>a broker or dealer registered under the Securities Exchange Act of 1934;</text></clause> <clause id="HC83CE5E874454D5BADD600C26F83DCE9"><enum>(ii)</enum><text>an investment adviser registered under the Investment Advisers Act of 1940, or with any State, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;</text></clause> <clause id="HE9E6F2716E404ADD00A82CE2ED93007E"><enum>(iii)</enum><text>an insurance company subject to supervision by a State insurance commission, agency, or similar authority; and</text></clause> <clause id="H66929DB36E5048FC8C8B51229CC31DB9"><enum>(iv)</enum><text>an entity subject to regulation by the Commodity Futures Trading Commission, with respect to the commodities activities of such entity and activities incidental to such commodities activities.</text></clause></subparagraph></paragraph> <paragraph id="H4B870A89E8A74CD997B832E155EC32D7"><enum>(2)</enum><header>Examinations</header> <subparagraph id="HCB05A37EBCDB423A004BA843CDAEB047"><enum>(A)</enum><header>Examination authority</header> <clause id="HE9CBF7C75A3C4A12B4BE409678EEBA45"><enum>(i)</enum><header>In general</header><text>The Board may make examinations of each bank holding company and each subsidiary of a bank holding company.</text></clause> <clause id="HEF8FE7BB2C49480BBC2C507E70AEF4C8"><enum>(ii)</enum><header>Functionally regulated nondepository institution subsidiaries</header><text>Notwithstanding clause (i), the Board may make examinations of a functionally regulated nondepository institution subsidiary of a bank holding company only if—</text> <subclause id="HFC7B5C6EF3E24ED681E2E7E453E7B9E"><enum>(I)</enum><text>the Board has reasonable cause to believe that such subsidiary is engaged in activities that pose a material risk to an affiliated depository institution, or</text></subclause> <subclause id="HC7B65C1624F143BBBCB234579DDB5289"><enum>(II)</enum><text>based on reports and other available information, the Board has reasonable cause to believe that a subsidiary is not in compliance with this Act or with provisions relating to transactions with an affiliated depository institution and the Board cannot make such determination through examination of the affiliated depository institution or bank holding company.</text></subclause></clause></subparagraph> <subparagraph id="H62B41DDBFA2E421D9846F2C008866FE0"><enum>(B)</enum><header>Limitations on examination authority for bank holding companies and subsidiaries</header><text>Subject to subparagraph (A)(ii), the Board may make examinations under subparagraph (A)(i) of each bank holding company and each subsidiary of such holding company in order to—</text> <clause id="H90A9B06162F343B8AF5FFF2CF4479CC"><enum>(i)</enum><text>inform the Board of the nature of the operations and financial condition of the holding company and such subsidiaries;</text></clause> <clause id="H0DF6A75992BF408DB021147D297BB5F4"><enum>(ii)</enum><text>inform the Board of—</text> <subclause id="H8A8EA7530555450C8D7FD703B0C9ACBB"><enum>(I)</enum><text>the financial and operational risks within the holding company system that may pose a threat to the safety and soundness of any subsidiary depository institution of such holding company; and</text></subclause> <subclause id="H3CB849EF1A6F46839CCB9FC9688D0506"><enum>(II)</enum><text>the systems for monitoring and controlling such risks; and</text></subclause></clause> <clause id="HC21DBBD86896464B80CD2400687DADC3"><enum>(iii)</enum><text>monitor compliance with the provisions of this Act and those governing transactions and relationships between any subsidiary depository institution and its affiliates.</text></clause></subparagraph> <subparagraph id="HBA674D36739B4225B6FC2B2004F386FA"><enum>(C)</enum><header>Restricted focus of examinations</header><text>The Board shall, to the fullest extent possible, limit the focus and scope of any examination of a bank holding company to—</text> <clause id="HBAE5E71A25734C1CA75BD85C337B9B81"><enum>(i)</enum><text>the bank holding company; and</text></clause> <clause id="H4DF10C4996094523B8C240EE61E1CB3"><enum>(ii)</enum><text>any subsidiary of the holding company that, because of—</text> <subclause id="H287574FB53F6496083830395D60091D1"><enum>(I)</enum><text>the size, condition, or activities of the subsidiary;</text></subclause> <subclause id="HC9EB0B32E78E46D58C55728F4493E48D"><enum>(II)</enum><text>the nature or size of transactions between such subsidiary and any depository institution which is also a subsidiary of such holding company; or</text></subclause> <subclause id="H75F864021EEC4D66947FD976C25030F5"><enum>(III)</enum><text>the centralization of functions within the holding company system, could have a materially adverse effect on the safety and soundness of any depository institution affiliate of the holding company.</text></subclause></clause></subparagraph> <subparagraph id="H9E39BBCA19B5421BB735A5FEBB13C62C"><enum>(D)</enum><header>Deference to bank examinations</header><text>The Board shall, to the fullest extent possible, use, for the purposes of this paragraph, the reports of examinations of depository institutions made by the appropriate Federal and State depository institution supervisory authority.</text></subparagraph> <subparagraph id="HFFECA33BFC0B4E2B9686EDA0EB48A457"><enum>(E)</enum><header>Deference to other examinations</header><text>The Board shall, to the fullest extent possible, address the circumstances which might otherwise permit or require an examination by the Board by forgoing an examination and instead reviewing the reports of examination made of—</text> <clause id="H0633BE440835475481AE34DB70E742C9"><enum>(i)</enum><text>any registered broker or dealer by or on behalf of the Securities and Exchange Commission;</text></clause> <clause id="H8F5E14659B95482CB2D2DE3EAD8144FF"><enum>(ii)</enum><text>any registered investment adviser properly registered by or on behalf of either the Securities and Exchange Commission or any State;</text></clause> <clause id="HC70524CD9E6343468226F5006836A320"><enum>(iii)</enum><text>any licensed insurance company by or on behalf of any state regulatory authority responsible for the supervision of insurance companies; and</text></clause> <clause id="H438E38AEC7C9433EABF05BA0415B4C30"><enum>(iv)</enum><text>any other subsidiary that the Board finds to be comprehensively supervised by a Federal or State authority.</text></clause></subparagraph></paragraph> <paragraph id="H0A1F01CBF48B4B569D1597E812B3D182"><enum>(3)</enum><header>Capital</header> <subparagraph id="H6247FB31EA4742588E1629A39D9ED513"><enum>(A)</enum><header>In general</header><text>The Board shall not, by regulation, guideline, order or otherwise, prescribe or impose any capital or capital adequacy rules, guidelines, standards, or requirements on any subsidiary of a financial holding company that is not a depository institution and—</text> <clause id="H78E0357FC9A94C5AB0C1BE34FF39E103"><enum>(i)</enum><text>is in compliance with applicable capital requirements of another Federal regulatory authority (including the Securities and Exchange Commission) or State insurance authority; or</text></clause> <clause id="HF6299B9DD643435C93B9B4ED7DBDC4BE"><enum>(ii)</enum><text>is properly registered as an investment adviser under the Investment Advisers Act of 1940, or with any State.</text></clause></subparagraph> <subparagraph id="H3D918248798044188FD678D2D3F9D92D"><enum>(B)</enum><header>Rule of construction</header><text>Subparagraph (A) shall not be construed as preventing the Board from imposing capital or capital adequacy rules, guidelines, standards, or requirements with respect to activities of a registered investment adviser other than investment advisory activities or activities incidental to investment advisory activities.</text></subparagraph> <subparagraph id="H0902C554811D4E55003B47AFD3553FC"><enum>(C)</enum><header>Limitations on indirect action</header><text>In developing, establishing, or assessing holding company capital or capital adequacy rules, guidelines, standards, or requirements for purposes of this paragraph, the Board shall not take into account the activities, operations, or investments of an affiliated investment company registered under the Investment Company Act of 1940, if the investment company is not—</text> <clause id="H51CB10E81B594E0EAFE0013D922CBA9C"><enum>(i)</enum><text>a bank holding company; or</text></clause> <clause id="H6D8CCA86B1FE4B49BFDA4447AFCC6B3"><enum>(ii)</enum><text>controlled by a bank holding company by reason of ownership by the bank holding company (including through all of its affiliates) of 25 percent or more of the shares of the investment company, where the shares owned by the bank holding company have a market value equal to more than $1,000,000.</text></clause></subparagraph></paragraph> <paragraph id="HD43A3CB980624E439BC4D9BB4C004BA3"><enum>(4)</enum><header>Transfer of board authority to appropriate federal banking agency</header> <subparagraph id="H6B9BF654F1FF4693B6656624D565C133"><enum>(A)</enum><header>In general</header><text>In the case of any bank holding company which is not significantly engaged in nonbanking activities, the Board, in consultation with the appropriate Federal banking agency, may designate the appropriate Federal banking agency of the lead insured depository institution subsidiary of such holding company as the appropriate Federal banking agency for the bank holding company.</text></subparagraph> <subparagraph id="HA8C664C468E14449AC57837C00F2ABF"><enum>(B)</enum><header>Authority transferred</header><text>An agency designated by the Board under subparagraph (A) shall have the same authority as the Board under this Act to—</text> <clause id="H696E2B5F9A0E4F1CA9B6AC24A2B65304"><enum>(i)</enum><text>examine and require reports from the bank holding company and any affiliate of such company (other than a depository institution) under section 5;</text></clause> <clause id="H5DC152E43BBB4430876331C4B5E1AC80"><enum>(ii)</enum><text>approve or disapprove applications or transactions under section 3;</text></clause> <clause id="H6595E64D1EFF425C825E47C4F2CEDEC"><enum>(iii)</enum><text>take actions and impose penalties under subsections (e) and (f) of section 5 and section 8; and</text></clause> <clause id="H8D5B60D8F07D49C2B6A1AFBC2CD0049"><enum>(iv)</enum><text>take actions regarding the holding company, any affiliate of the holding company (other than a depository institution), or any institution-affiliated party of such company or affiliate under the Federal Deposit Insurance Act and any other statute which the Board may designate.</text></clause></subparagraph> <subparagraph id="H9656E954236049C8B17492B6E5F7405E"><enum>(C)</enum><header>Agency orders</header><text>ection 9 of this Act and section 105 of the Bank Holding Company Act Amendments of 1970 shall apply to orders issued by an agency designated under subparagraph (A) in the same manner such sections apply to orders issued by the Board.</text></subparagraph></paragraph> <paragraph id="H2203CFFE53334050A36CD3FF4FEE8D05"><enum>(5)</enum><header>Functional regulation of securities and insurance activities</header><text>The Board shall defer to—</text> <subparagraph id="H73434341FB5F47DAA8BD88BC00FF1B6C"><enum>(A)</enum><text>the Securities and Exchange Commission with regard to all interpretations of, and the enforcement of, applicable Federal securities laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of registered brokers, dealers, investment advisers, and investment companies;</text></subparagraph> <subparagraph id="H4391426541AF4C4CA4B5E100916BF145"><enum>(B)</enum><text>the relevant State securities authorities with regard to all interpretations of, and the enforcement of, applicable State securities laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of registered brokers, dealers, and investment advisers; and</text></subparagraph> <subparagraph id="H5DA91278727D438BAB2576DE353E0582"><enum>(C)</enum><text>the relevant State insurance authorities with regard to all interpretations of, and the enforcement of, applicable State insurance laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of insurance companies and insurance agents.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="HB7A80D8B2FF449CE9043312F36EA1200"><enum>112.</enum><header>Elimination of application requirement for financial holding companies</header> <subsection id="H2B59F5B5B4B248ABB3EABD06C2414CC6"><enum>(a)</enum><header>Prevention of duplicative filings</header><text>Section 5(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(a)) is amended by adding the following new sentence at the end: <quote>A declaration filed in accordance with section 6(b)(1)(C) shall satisfy the requirements of this subsection with regard to the registration of a bank holding company but not any requirement to file an application to acquire a bank pursuant to section 3.</quote>.</text></subsection> <subsection id="HF8DAC0B7160F4110B9CB7C25121200F3"><enum>(b)</enum><header>Divestiture procedures</header><text>Section 5(e)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(e)(1)) is amended—</text> <paragraph id="H9388A75920DC45FBB118BA9B1742486D"><enum>(1)</enum><text>by striking <quote>Financial Institutions Supervisory Act of 1966, order</quote> and inserting “Financial Institutions Supervisory Act of 1966, at the election of the bank holding company</text> <quoted-block id="H88F6233B46CA466C8E00EB4F1C413412" style="USC"> <subparagraph id="H6336286D6A224032B0F5A37BEE5B28E9"><enum>(A)</enum><text>order</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="H1B3B7DC99C6E47EEA02250618038362B"><enum>(2)</enum><text>by striking <quote>shareholders of the bank holding company. Such distribution</quote> and inserting “shareholders of the bank holding company; or</text> <quoted-block id="H2595507039AD4491A6C666F47871EF31" style="USC"> <subparagraph id="H5C711092982849AF8D2C00763192DECD"><enum>(B)</enum><text>order the bank holding company, after due notice and opportunity for hearing, and after consultation with the primary supervisor for the bank, which shall be the Comptroller of the Currency in the case of a national bank, and the Federal Deposit Insurance Corporation and the appropriate State supervisor in the case of an insured nonmember bank, to terminate (within 120 days or such longer period as the Board may direct) the ownership or control of any such bank by such company.<linebreak/><linebreak/>The distribution referred to in subparagraph (A)</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section> <section id="H589902FBB85B4F47BB00E1D0C6394FE4"><enum>113.</enum><header>Authority of State insurance regulator and Securities and Exchange Commission</header> <subsection id="H6267F6D43A6E4A61A752AC554718AEB4"><enum>(a)</enum><text>Section 5 of the Bank Holding Company Act of 1956 (12 U.S.C. 1844) is amended by adding at the end the following new subsection:</text> <quoted-block id="HCAE813277DAA42E0BCA2CB6D96A943EC" style="USC"> <subsection id="H20379CB3EF1A487D895D6403DC60A653"><enum>(g)</enum><header>Authority of State insurance regulator and the Securities and Exchange Commission</header> <paragraph id="H28807CB8ABCA4B5882AD6F7D437855E"><enum>(1)</enum><header>In general</header><text>Notwithstanding any other provision of law, any regulation, order, or other action of the Board which requires a bank holding company to provide funds or other assets to a subsidiary insured depository institution shall not be effective nor enforceable if—</text> <subparagraph id="H9B0527094AD846E5A9AACF883F75FB40"><enum>(A)</enum><text>such funds or assets are to be provided by—</text> <clause id="HBBD3E347709940BD001FB5514BC7AE83"><enum>(i)</enum><text>a bank holding company that is an insurance company or is a broker or dealer registered under the Securities Exchange Act of 1934; or</text></clause> <clause id="H5ECB76F6E30E453EBE5F65BCC419ACF5"><enum>(ii)</enum><text>an affiliate of the depository institution which is an insurance company or a broker or dealer registered under such Act; and </text></clause></subparagraph> <subparagraph id="H53C7CD7C5C3E4787A71E843FD9F4EAE5"><enum>(B)</enum><text>the State insurance authority for the insurance company or the Securities and Exchange Commission for the registered broker or dealer, as the case may be, determines in writing sent to the holding company and the Board that the holding company shall not provide such funds or assets because such action would have a material adverse effect on the financial condition of the insurance company or the broker or dealer, as the case may be.</text></subparagraph></paragraph> <paragraph id="H6FAC87293FA541C0AD777FA6A9815BC7"><enum>(2)</enum><header>Notice to State insurance authority or sec required</header><text>If the Board requires a bank holding company, or an affiliate of a bank holding company, which is an insurance company or a broker or dealer described in paragraph (1)(A) to provide funds or assets to an insured depository institution subsidiary of the holding company pursuant to any regulation, order, or other action of the Board referred to in paragraph (1), the Board shall promptly notify the State insurance authority for the insurance company or the Securities and Exchange Commission, as the case may be, of such requirement.</text></paragraph> <paragraph id="H4F03EFB4A9BC4226BEC2000080C92B09"><enum>(3)</enum><header>Divestiture in lieu of other action</header><text>If the Board receives a notice described in paragraph (1)(B) from a State insurance authority or the Securities and Exchange Commission with regard to a bank holding company or affiliate referred to in that paragraph, the Board may order the bank holding company to divest the insured depository institution not later than 180 days after receiving the notice, or such longer period as the Board determines consistent with the safe and sound operation of the insured depository institution.</text></paragraph> <paragraph id="HE916C4D7358F4786984D8B13B3B6953F"><enum>(4)</enum><header>Conditions before divestiture</header><text>During the period beginning on the date an order to divest is issued by the Board under paragraph (3) to a bank holding company and ending on the date the divestiture is completed, the Board may impose any conditions or restrictions on the holding company's ownership or operation of the insured depository institution, including restricting or prohibiting transactions between the insured depository institution and any affiliate of the institution, as are appropriate under the circumstances.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H0A6FAE8DC718401E822C00B159E42BD1"><enum>114.</enum><header>Prudential safeguards</header> <subsection id="HA94F02CB78EA45E4813914F28100F876"><enum></enum><text>Section 5 of the Bank Holding Company Act of 1956 (12 U.S.C. 1844) is amended by inserting after subsection (g) (as added by section 113 of this subtitle) the following new subsection:</text> <quoted-block id="H2ED7DBBAA83645A085BC91067FABEF00" style="USC"> <subsection id="HD809099D130F4481AC10BA7EBCB2E48B"><enum>(g)</enum><header>Prudential safeguards</header> <paragraph id="H8B29C1FE783148A397773DAF6CBE812C"><enum>(1)</enum><header>In general</header><text>The Board may, by regulation or order, impose restrictions or requirements on relationships or transactions between a depository institution subsidiary of a bank holding company and any affiliate of such depository institution (other than a subsidiary of such institution) which the Board finds is consistent with the public interest, the purposes of this Act, the Financial Services Act of 1999, the Federal Reserve Act, and other Federal law applicable to depository institution subsidiaries of bank holding companies and the standards in paragraph (2).</text></paragraph> <paragraph id="HFA61F7D117A84EA7B66E2484A420E8C1"><enum>(2)</enum><header>Standards</header><text>The Board may exercise authority under paragraph (1) if the Board finds that such action would—</text> <subparagraph id="H738E9523C3CD4C84B400004E68182075"><enum>(A)</enum><text>avoid any significant risk to the safety and soundness of depository institutions or any Federal deposit insurance fund;</text></subparagraph> <subparagraph id="H877E64BC35EC4AA69F9BE244F068FDD"><enum>(B)</enum><text>enhance the financial stability of bank holding companies;</text></subparagraph> <subparagraph id="H0A8A217BFCCB428A8E23C468B5C6A94F"><enum>(C)</enum><text>avoid conflicts of interest or other abuses;</text></subparagraph> <subparagraph id="H393278EAC88444C4009BEA3261074EC7"><enum>(D)</enum><text>enhance the privacy of customers of depository institutions; or</text></subparagraph> <subparagraph id="H8AEE18F35EA84A9EAEA31FF96041865E"><enum>(E)</enum><text>promote the application of national treatment and equality of competitive opportunity between nonbank affiliates owned or controlled by domestic bank holding companies and nonbank affiliates owned or controlled by foreign banks operating in the United States.</text></subparagraph></paragraph> <paragraph id="H6D0E8B2903084A4C8670BE457C333EC6"><enum>(3)</enum><header>Review</header><text>The Board shall regularly—</text> <subparagraph id="H5274ADE782834EEEB9E4221DD878C1C5"><enum>(A)</enum><text>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 any purpose described in paragraph (2); and</text></subparagraph> <subparagraph id="H69ACCA6CBD594D6198D939B240AB62F1"><enum>(B)</enum><text>modify or eliminate any restriction or requirement the Board finds is no longer required for such purposes.</text></subparagraph></paragraph> <paragraph id="HD82345B7379946EAACEFB769599BA91C"><enum>(4)</enum><header>Foreign banks</header><text>The Board may, by regulation or order, impose restrictions or requirements on relationships or transactions between a foreign bank and any affiliate in the United States of such foreign bank that the Board finds are consistent with the public interest, the purposes of this Act, the Financial Services Act of 1999, the Federal Reserve Act, and other Federal law applicable to foreign banks and their affiliates in the United States, and the standards in paragraphs (2) and (3).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="HAD36368318E74A25AC32E54292B559CC"><enum>115.</enum><header>Examination of investment companies</header> <subsection id="H955A8ED22380451682CB7BA94CD93D37"><enum>(a)</enum><header>Exclusive commission authority</header> <paragraph id="H0D539321928146E4A9D28CFF5C1DED99"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (3), the Commission shall be the sole Federal agency with authority to inspect and examine any registered investment company that is not a bank holding company or a savings and loan holding company.</text></paragraph> <paragraph id="HD5C2308C2E8940C897A1006B542922EE"><enum>(2)</enum><header>Prohibition on banking agencies</header><text>Except as provided in paragraph (3), a Federal banking agency may not inspect or examine any registered investment company that is not a bank holding company or a savings and loan holding company.</text></paragraph> <paragraph id="H1DFD2653CFDF4F0794E49C24B7EC9358"><enum>(3)</enum><header>Certain examinations authorized</header><text>Nothing in this subsection prevents the Federal Deposit Insurance Corporation, if the Corporation finds it necessary to determine the condition of an insured depository institution for insurance purposes, from examining an affiliate of any insured depository institution, pursuant to its authority under section 10(b)(4) of the Federal Deposit Insurance Act, as may be necessary to disclose fully the relationship between the depository institution and the affiliate, and the effect of such relationship on the depository institution.</text></paragraph></subsection> <subsection id="H77C4DDC87DA7495A95A951DEC1CB65F"><enum>(b)</enum><header>Examination results and other information</header><text>The Commission shall provide to any Federal banking agency, upon request, the results of any examination, reports, records, or other information with respect to any registered investment company to the extent necessary for the agency to carry out its statutory responsibilities.</text></subsection> <subsection id="H6426D38FF57B46FB982C4FD733FEA88E"><enum>(c)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <paragraph id="HB8FE6F8593E648E0B06698BBE8497C7D"><enum>(1)</enum><header>Bank holding company</header><text>The term <term>bank holding company</term> has the same meaning as in section 2 of the Bank Holding Company Act of 1956.</text></paragraph> <paragraph id="H6DB71970EE41476EA12829E51DEF07F9"><enum>(2)</enum><header>Commission</header><text>The term <term>Commission</term> means the Securities and Exchange Commission.</text></paragraph> <paragraph id="HB4F3A2B850DD47618B6D72BBE29D855"><enum>(3)</enum><header>Federal banking agency</header><text>The term <term>Federal banking agency</term> has the same meaning as in section 3(z) of the Federal Deposit Insurance Act.</text></paragraph> <paragraph id="HE02871A37E4B47FE00707268245E7619"><enum>(4)</enum><header>Registered investment company</header><text>The term <term>registered investment company</term> means an investment company which is registered with the Commission under the Investment Company Act of 1940.</text></paragraph> <paragraph id="HC5806F3A489D4AD7BF29C433C13461D3"><enum>(5)</enum><header>Savings and loan holding company</header><text>The term <term>savings and loan holding company</term> has the same meaning as in section 10(a)(1)(D) of the Home Owners' Loan Act.</text></paragraph></subsection></section> <section id="H9C35F32A94EE4294B6DA653116D4F4B0"><enum>116.</enum><header>Limitation on rulemaking, prudential, supervisory, and enforcement authority of the Board</header> <subsection id="HE3C456D655AD4B97A098312C716C4ECC"><enum></enum><text>The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended by inserting after section 10 the following new section:</text> <quoted-block style="USC" id="H23DD34CE59EA46C2BB55A93326EE234"> <section id="HD285D371FB30438F8DC317B8FB8174AC"><enum>10A.</enum><header>Limitation on rulemaking, prudential, supervisory, and enforcement authority of the Board</header> <subsection id="H5E54F2741AC7493BAE2C71A210694EB9"><enum>(a)</enum><header>Limitation on direct action</header> <paragraph id="H904206C7B3C04863BF424EFB28373284"><enum>(1)</enum><header>In general</header><text>The Board may not prescribe regulations, issue or seek entry of orders, impose restraints, restrictions, guidelines, requirements, safeguards, or standards, or otherwise take any action under or pursuant to any provision of this Act or section 8 of the Federal Deposit Insurance Act against or with respect to a regulated subsidiary of a bank holding company unless the action is necessary to prevent or redress an unsafe or unsound practice or breach of fiduciary duty by such subsidiary that poses a material risk to—</text> <subparagraph id="H4F94BADDD7C04ADB009C753CD2C59656"><enum>(A)</enum><text>the financial safety, soundness, or stability of an affiliated depository institution; or</text></subparagraph> <subparagraph id="HF57D27DBB74D4751000789B51CDB8CE7"><enum>(B)</enum><text>the domestic or international payment system.</text></subparagraph></paragraph> <paragraph id="HCAF6A60974CE42329055A1EFDDA8E56"><enum>(2)</enum><header>Criteria for board action</header><text>The Board shall not take action otherwise permitted under paragraph (1) unless the Board finds that it is not reasonably possible to effectively protect against the material risk at issue through action directed at or against the affiliated depository institution or against depository institutions generally.</text></paragraph></subsection> <subsection id="HAA4F2C96127B494D9946EDEE00D6F922"><enum>(b)</enum><header>Limitation on indirect action</header><text>The Board may not prescribe regulations, issue or seek entry of orders, impose restraints, restrictions, guidelines, requirements, safeguards, or standards, or otherwise take any action under or pursuant to any provision of this Act or section 8 of the Federal Deposit Insurance Act against or with respect to a financial holding company or a wholesale financial holding company where the purpose or effect of doing so would be to take action indirectly against or with respect to a regulated subsidiary that may not be taken directly against or with respect to such subsidiary in accordance with subsection (a).</text></subsection> <subsection id="H7A6C201804A74BAC8FEB5DCD62B99149"><enum>(c)</enum><header>Actions specifically authorized</header><text>Notwithstanding subsection (a), the Board may take action under this Act or section 8 of the Federal Deposit Insurance Act to enforce compliance by a regulated subsidiary with Federal law that the Board has specific jurisdiction to enforce against such subsidiary.</text></subsection> <subsection id="HAE931ACFDDC34FFCAD45C6B5876DF5F3"><enum>(d)</enum><header>Regulated subsidiary defined</header><text>For purposes of this section, the term `regulated subsidiary' means any company that is not a bank holding company and is—</text> <paragraph id="HA2E91DA4E49E4FE5BDDEADD8CB6CD89B"><enum>(1)</enum><text>a broker or dealer registered under the Securities Exchange Act of 1934;</text></paragraph> <paragraph id="H7CD5753D9AA440308BD1005600BDD35E"><enum>(2)</enum><text>a registered investment adviser, properly registered by or on behalf of either the Securities and Exchange Commission or any State, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;</text></paragraph> <paragraph id="H494392008F9947A0BF2D52389DD67109"><enum>(3)</enum><text>an investment company registered under the Investment Company Act of 1940;</text></paragraph> <paragraph id="H06B65F10A1ED4F2F00AA11F3ABB6D41"><enum>(4)</enum><text>an insurance company or an insurance agency subject to supervision by a State insurance commission, agency, or similar authority; or</text></paragraph> <paragraph id="HE77EF0890BA446E7B64FA9AA1701721F"><enum>(5)</enum><text>an entity subject to regulation by the Commodity Futures Trading Commission, with respect to the commodities activities of such entity and activities incidental to such commodities activities.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H04910892B680474CB9F50898B49694A6"><enum>117.</enum><header>Interagency consultation</header> <subsection id="HB57CC4EB8CCE42F5B0E52D53562653F3"><enum>(a)</enum><header>Purpose</header><text>It is the intention of Congress that the Board of Governors of the Federal Reserve System, as the umbrella supervisor for financial holding companies, and the State insurance regulators, as the functional regulators of companies engaged in insurance activities, coordinate efforts to supervise companies that control both a depository institution and a company engaged in insurance activities regulated under State law. In particular, Congress believes that the Board and the State insurance regulators should share, on a confidential basis, information relevant to the supervision of companies that control both a depository institution and a company engaged in insurance activities, including information regarding the financial health of the consolidated organization and information regarding transactions and relationships between insurance companies and affiliated depository institutions. The appropriate Federal banking agencies for depository institutions should also share, on a confidential basis, information with the relevant State insurance regulators regarding transactions and relationships between depository institutions and affiliated companies engaged in insurance activities. The purpose of this section is to encourage this coordination and confidential sharing of information, and to thereby improve both the efficiency and the quality of the supervision of financial holding companies and their affiliated depository institutions and companies engaged in insurance activities.</text></subsection> <subsection id="H71868270256C4DCBBB4F9D57BAFC0952"><enum>(b)</enum><header>Examination results and other information</header> <paragraph id="H43E9B109F69A4AADA368AF04173CEB58"><enum>(1)</enum><header>Information of the Board</header><text>Upon the request of the appropriate insurance regulator of any State, the Board may provide any information of the Board regarding the financial condition, risk management policies, and operations of any financial holding company that controls a company that is engaged in insurance activities and is regulated by such State insurance regulator, and regarding any transaction or relationship between such an insurance company and any affiliated depository institution. The Board may provide any other information to the appropriate State insurance regulator that the Board believes is necessary or appropriate to permit the State insurance regulator to administer and enforce applicable State insurance laws.</text></paragraph> <paragraph id="H41B57878EEB94FB7933FE3773208CEE8"><enum>(2)</enum><header>Banking agency information</header><text>Upon the request of the appropriate insurance regulator of any State, the appropriate Federal banking agency may provide any information of the agency regarding any transaction or relationship between a depository institution supervised by such Federal banking agency and any affiliated company that is engaged in insurance activities regulated by such State insurance regulator. The appropriate Federal banking agency may provide any other information to the appropriate State insurance regulator that the agency believes is necessary or appropriate to permit the State insurance regulator to administer and enforce applicable State insurance laws.</text></paragraph> <paragraph id="H0F37F23135F74621A4F33C990040D814"><enum>(3)</enum><header>State insurance regulator information</header><text>Upon the request of the Board or the appropriate Federal banking agency, a State insurance regulator may provide any examination or other reports, records, or other information to which such insurance regulator may have access with respect to a company which—</text> <subparagraph id="H6ED9FFD6CB4C40A687EA61306F003767"><enum>(A)</enum><text>is engaged in insurance activities and regulated by such insurance regulator; and</text></subparagraph> <subparagraph id="H445465F460C74D4B8ED6FCE7EC318BE2"><enum>(B)</enum><text>is an affiliate of an insured depository institution, wholesale financial institution, or financial holding company.</text></subparagraph></paragraph></subsection> <subsection id="HA59A1B1F6E7B478DB59275A2B02C8E86"><enum>(c)</enum><header>Consultation</header><text>Before making any determination relating to the initial affiliation of, or the continuing affiliation of, an insured depository institution, wholesale financial institution, or financial holding company with a company engaged in insurance activities, the appropriate Federal banking agency shall consult with the appropriate State insurance regulator of such company and take the views of such insurance regulator into account in making such determination.</text></subsection> <subsection id="H37534179E3A6407B9DF0BCF6F7C4545"><enum>(d)</enum><header>Effect on other authority</header><text>Nothing in this section shall limit in any respect the authority of the appropriate Federal banking agency with respect to an insured depository institution, wholesale financial institution, or bank holding company or any affiliate thereof under any provision of law.</text></subsection> <subsection id="H351EDA27A42F43D59783211FCFC7FB9F"><enum>(e)</enum><header>Confidentiality and privilege</header> <paragraph id="HA8CEDFC018924118B8DA35CDB9AC6E6F"><enum>(1)</enum><header>Confidentiality</header><text>The appropriate Federal banking agency shall not provide any information or material that is entitled to confidential treatment under applicable Federal banking agency regulations, or other applicable law, to a State insurance regulator unless such regulator agrees to maintain the information or material in confidence and to take all reasonable steps to oppose any effort to secure disclosure of the information or material by the regulator. The appropriate Federal banking agency shall treat as confidential any information or material obtained from a State insurance regulator that is entitled to confidential treatment under applicable State regulations, or other applicable law, and take all reasonable steps to oppose any effort to secure disclosure of the information or material by the Federal banking agency.</text></paragraph> <paragraph id="H348197DC5E254022A71B328C90FDDC63"><enum>(2)</enum><header>Privilege</header><text>The provision pursuant to this section of information or material by a Federal banking agency or State insurance regulator shall not constitute a waiver of, or otherwise affect, any privilege to which the information or material is otherwise subject.</text></paragraph></subsection> <subsection id="HD4EE98BC68C349AEA44828005D34C3F1"><enum>(f)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <paragraph id="H1FCE44CCF0384A1A880064F246F2656"><enum>(1)</enum><header>Appropriate federal banking agency; insured depository institution</header><text>The terms <term>appropriate Federal banking agency</term> and <term>insured depository institution</term> have the same meanings as in section 3 of the Federal Deposit Insurance Act.</text></paragraph> <paragraph id="H50E07962EC3C4E898B2792112BEF50F0"><enum>(2)</enum><header>Board; financial holding company; and wholesale financial institution</header><text>The terms <term>Board</term>, <term>financial holding company</term>, and <term>wholesale financial institution</term> have the same meanings as in section 2 of the Bank Holding Company Act of 1956.</text></paragraph></subsection></section> <section id="HF2C0CB6E4B1B4A1EAD1F41544ED3E849"><enum>118.</enum><header>Equivalent regulation and supervision</header> <subsection id="H833D04A2D86E4E77BAD935C8EC9845F3"><enum>(a)</enum><header>In general</header><text>Notwithstanding any other provision of law, the provisions of—</text> <paragraph id="HEDAC7E886D3442938828208776B736A"><enum>(1)</enum><text>section 5(c) of the Bank Holding Company Act of 1956 (as amended by this Act) that limit the authority of the Board of Governors of the Federal Reserve System to require reports from, to make examinations of, or to impose capital requirements on bank holding companies and their nonbank subsidiaries; and</text></paragraph> <paragraph id="H034D9188ECE24ED3A1541B38DB88FFA2"><enum>(2)</enum><text>section 10A of the Bank Holding Company Act of 1956 (as added by

Short title; purposes; table of contents

(a)

Short title

This Act may be cited as the “&short-title1;”. (b)

Purposes

The purposes of this Act are as follows: (1)To enhance competition in the financial services industry, in order to foster innovation and efficiency. (2)To ensure the continued safety and soundness of depository institutions. (3)To provide necessary and appropriate protections for investors and ensure fair and honest markets in the delivery of financial services. (4)To avoid duplicative, potentially conflicting, and overly burdensome regulatory requirements through the creation of a regulatory framework for financial holding companies that respects the divergent requirements of each of the component businesses of the holding company, and that is based upon principles of strong functional regulation and enhanced regulatory coordination. (5)To reduce and, to the maximum extent practicable, to eliminate the legal barriers preventing affiliation among depository institutions, securities firms, insurance companies, and other financial service providers and to provide a prudential framework for achieving that result. (6)To enhance the availability of financial services to citizens of all economic circumstances and in all geographic areas. (7)To enhance the competitiveness of United States financial service providers internationally. (8)To ensure compliance by depository institutions with the provisions of the Community Reinvestment Act of 1977 and enhance the ability of depository institutions to meet the capital and credit needs of all citizens and communities, including underserved communities and populations. (c)

Table of Contents

The table of contents for this Act is as follows:

Sec. 1. Short title; purposes; table of contents

Title I—Facilitating affiliation among securities firms, insurance companies, and depository institutions

Subtitle A—Affiliations

Sec. 101. Glass-Steagall Act reformed

Sec. 102. Activity restrictions applicable to bank holding companies which are not financial holding companies

Sec. 103. Financial holding companies

Sec. 104. Operation of State law

Sec. 105. Mutual bank holding companies authorized

Sec. 106. Prohibition on deposit production offices

Sec. 107. Clarification of branch closure requirements

Sec. 108. Amendments relating to limited purpose banks

Sec. 109. Reports on ongoing FTC study of consumer privacy issues

Sec. 110. GAO study of economic impact on community banks and other small financial institutions

Subtitle B—Streamlining Supervision of Financial Holding Companies

Sec. 111. Streamlining financial holding company supervision

Sec. 112. Elimination of application requirement for financial holding companies

Sec. 113. Authority of State insurance regulator and Securities and Exchange Commission

Sec. 114. Prudential safeguards

Sec. 115. Examination of investment companies

Sec. 116. Limitation on rulemaking, prudential, supervisory, and enforcement authority of the Board

Sec. 117. Interagency consultation

Sec. 118. Equivalent regulation and supervision

Sec. 119. Prohibition on FDIC assistance to affiliates and subsidiaries

Subtitle C—Subsidiaries of National Banks

Sec. 121. Permissible activities for subsidiaries of national banks

Sec. 122. Misrepresentations regarding depository institution liability for obligations of affiliates

Sec. 123. Repeal of stock loan limit in federal reserve act

Subtitle D—Wholesale financial holding companies; wholesale financial institutions

Chapter 1—Wholesale financial holding companies

Sec. 131. Wholesale financial holding companies established

Sec. 132. Authorization to release reports

Sec. 133. Conforming amendments

Chapter 2—Wholesale financial institutions

Sec. 136. Wholesale financial institutions

<enum>I</enum><header>Facilitating affiliation among securities firms, insurance companies, and depository institutions</header> <subtitle id="HBEEB0F3529AA491195CF258BB300AC66"><enum>A</enum><header>Affiliations</header> <section id="HF84FCAD32C244BF8BAA6258B177C8747"><enum>101.</enum><header>Glass-Steagall Act reformed</header> <subsection id="H66DB5ABF3F0D4FA888DE3160CA80C5BF"><enum>(a)</enum><header>Section 20 Repealed</header><text>Section 20 of the Banking Act of 1933 (12 U.S.C. 377) (commonly referred to as the `Glass-Steagall Act') is repealed.</text></subsection> <subsection id="H6720BD937BA24BBB958757F785A95C5D"><enum>(b)</enum><header>Section 32 Repealed</header><text>Section 32 of the Banking Act of 1933 (12 U.S.C. 78) is repealed.</text></subsection></section> <section id="HC6B50D5974B5486FA93B4169F417023F"><enum>102.</enum><header>Activity restrictions applicable to bank holding companies which are not financial holding companies</header> <subsection id="HCE1A6ACD0F1C4A47A5BF015CE4B8C2C5"><enum>(a)</enum><header>In general</header><text>Section 4(c)(8) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(c)(8)) is amended to read as follows:</text> <quoted-block id="H8FA68DE7A56A49AC925FCE60BF04CA9" style="USC"> <paragraph id="H90177FD6C5E04F5B9E7F72D3303C361D"><enum>(8)</enum><text>shares of any company the activities of which had been determined by the Board by regulation under this paragraph as of the day before the date of the enactment of the Financial Services Act of 1999, to be so closely related to banking as to be a proper incident thereto (subject to such terms and conditions contained in such regulation, unless modified by the Board);</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H7166194280BC45FDB418F3311376F3E3"><enum>(b)</enum><header>Conforming changes to other statutes</header> <paragraph id="H02FAEA9C16B44141A4101CBC9527CB4C"><enum>(1)</enum><header>Amendment to the bank holding company act amendments of 1970</header><text>Section 105 of the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1850) is amended by striking <quote>, to engage directly or indirectly in a nonbanking activity pursuant to section 4 of such Act,</quote>.</text></paragraph> <paragraph id="H7C357E76C2D54D9D813D1368278F80B7"><enum>(2)</enum><header>Amendment to the bank service company act</header><text>Section 4(f) of the Bank Service Company Act (12 U.S.C. 1864(f)) is amended by striking the period and adding at the end the following: <quote>as of the day before the date of enactment of the Financial Services Act of 1999.</quote>.</text></paragraph></subsection></section> <section id="H6160CEF601D94840A0D08F21F001436E"><enum>103.</enum><header>Financial holding companies</header> <subsection id="H7A85E20F066D4AA48EE4D24333BCA8E0"><enum>(a)</enum><text>The Bank Holding Company Act of 1956 is amended by inserting after section 5 (12 U.S.C. 1844) the following new section:</text> <quoted-block style="USC" id="H73553B08C6A245C2BC4981F56F2DAE9D"> <section id="H404E0A3DF77E4FDE806895692EEC0515"><enum>6.</enum><header>Financial holding companies</header> <subsection id="HDD2D51D362D3416800CE8EED5A803C"><enum>(a)</enum><header>Financial holding company defined</header><text>For purposes of this section, the term <term>financial holding company</term> means a bank holding company which meets the requirements of subsection (b).</text></subsection> <subsection id="H09F7CB918DC74B32AA2C733E32DEB681"><enum>(b)</enum><header>Eligibility requirements for financial holding companies</header> <paragraph id="HF0F7C0C28DF8448D96EA83B7A8D46D3"><enum>(1)</enum><header>In general</header><text>No bank holding company may engage in any activity or directly or indirectly acquire or retain shares of any company under this section unless the bank holding company meets the following requirements:</text> <subparagraph id="H5B687ACC4AD949C288DAB02EF2317814"><enum>(A)</enum><text>All of the subsidiary depository institutions of the bank holding company are well capitalized.</text></subparagraph> <subparagraph id="HE7BDA237D73C44CB00155D1BDD273122"><enum>(B)</enum><text>All of the subsidiary depository institutions of the bank holding company are well managed.</text></subparagraph> <subparagraph id="HC7C1B638E38D44B78313C4D7E61E11FD"><enum>(C)</enum><text>The company has filed with the Board a declaration that the company elects to be a financial holding company and certifying that the company meets the requirements of subparagraphs (A) and (B) and paragraph (2).</text></subparagraph></paragraph> <paragraph id="H5D2A0CA6B89B4DECA1D6DF8B5767C64D"><enum>(2)</enum><header>Community needs requirement</header><text>No bank holding company may become a financial holding company unless all of the subsidiary depository institutions of the bank holding company have achieved a rating of `satisfactory record of meeting community credit needs', or better, at the most recent examination of each such institution under the Community Reinvestment Act of 1977.</text></paragraph> <paragraph id="H555C2B3F94404140BD879CA50371F866"><enum>(3)</enum><header>Foreign banks and companies</header><text>For purposes of paragraph (1), the Board shall establish and apply comparable capital and other operating standards to a foreign bank that operates a branch or agency or owns or controls a bank or commercial lending company in the United States, and any company that owns or controls such foreign bank, giving due regard to the principle of national treatment and equality of competitive opportunity.</text></paragraph></subsection> <subsection id="H39951958EF8740019000008CD0BAC2F1"><enum>(c)</enum><header>Engaging in activities that are financial in nature</header> <paragraph id="H123C650B401C444AB01E8FC1D3CB653E"><enum>(1)</enum><header>Financial activities</header> <subparagraph id="H21141EE39B8A447EBC51C46D56D15CE"><enum>(A)</enum><header>In general</header><text>Notwithstanding section 4(a), a financial holding company and a wholesale financial holding company may engage in any activity, and acquire and retain the shares of any company engaged in any activity, that the Board has determined (by regulation or order) to be financial in nature or incidental to such financial activities.</text></subparagraph> <subparagraph id="H3088C02A0B12442587C30493473F783C"><enum>(B)</enum><header>Coordination between the board and the department of the Treasury</header> <clause id="HE55673E8887349B8A71D771DEBEB713B"><enum>(i)</enum><header>Proposals raised before the board</header> <subclause id="H8613F7C9940F438600CC45CA8FCC437C"><enum>(I)</enum><header>Consultation</header><text>The Board shall notify the Secretary of the Treasury of, and consult with the Secretary of the Treasury concerning, any request, proposal, or application under this subsection for a determination of whether an activity is financial in nature or incidental to such a financial activity.</text></subclause> <subclause id="H704CB37D60CC4E198588A19DBF075401"><enum>(II)</enum><header>Treasury View</header><text>The Board shall not determine that any activity is financial in nature or incidental to a financial activity under this subsection if the Secretary of the Treasury notifies the Board in writing, not later than 30 days after the date of receipt of the notice described in subclause (I) (or such longer period as the Board determines to be appropriate in light of the circumstances) that the Secretary of the Treasury believes that the activity is not financial in nature or incidental to a financial activity.</text></subclause></clause> <clause id="H0F8ADE593C334F9CA916516E2782005D"><enum>(ii)</enum><header>Proposals raised by the treasury</header> <subclause id="HEAE56DC028BD44918C53D07DC433B7BA"><enum>(I)</enum><header>Treasury recommendation</header><text>The Secretary of the Treasury may, at any time, recommend in writing that the Board find an activity to be financial in nature or incidental to a financial activity.</text></subclause> <subclause id="H87022208AC2E47CA8370628D3EA548AE"><enum>(II)</enum><header>Time period for board action</header><text>Not later than 30 days after the date of receipt of a written recommendation from the Secretary of the Treasury under subclause (I) (or such longer period as the Secretary of the Treasury and the Board determine to be appropriate in light of the circumstances), the Board shall determine whether to initiate a public rulemaking proposing that the subject recommended activity be found to be financial in nature or incidental to a financial activity under this subsection, and shall notify the Secretary of the Treasury in writing of the determination of the Board and, in the event that the Board determines not to seek public comment on the proposal, the reasons for that determination.</text></subclause></clause></subparagraph></paragraph> <paragraph id="HEE3A37D91D774C03ADDCB6DDEFA97F32"><enum>(2)</enum><header>Factors to be considered</header><text>In determining whether an activity is financial in nature or incidental to financial activities, the Board shall take into account—</text> <subparagraph id="H6793E49C99964184992DB3FB864914D0"><enum>(A)</enum><text>the purposes of this Act and the Financial Services Act of 1999;</text></subparagraph> <subparagraph id="HF881197F1D3B45C5BE00876533BBDCBC"><enum>(B)</enum><text>changes or reasonably expected changes in the marketplace in which bank holding companies compete;</text></subparagraph> <subparagraph id="HED0E8632B1FD4A3B8602DFD09FB7F245"><enum>(C)</enum><text>changes or reasonably expected changes in the technology for delivering financial services; and</text></subparagraph> <subparagraph id="HA7F51BC0CF3E48EFB700A2B3B1A8BE56"><enum>(D)</enum><text>whether such activity is necessary or appropriate to allow a bank holding company and the affiliates of a bank holding company to—</text> <clause id="HAB6B65A27B4A48EBB43E00DDA531A741"><enum>(i)</enum><text>compete effectively with any company seeking to provide financial services in the United States;</text></clause> <clause id="H68F4966B68604AD2A50999237E813F66"><enum>(ii)</enum><text>use any available or emerging technological means, including any application necessary to protect the security or efficacy of systems for the transmission of data or financial transactions, in providing financial services; and</text></clause> <clause id="H26AC6EFADD06480DAC2E9FC880B3546B"><enum>(iii)</enum><text>offer customers any available or emerging technological means for using financial services.</text></clause></subparagraph></paragraph> <paragraph id="H7EC47170340543F290E35DF480E328D6"><enum>(3)</enum><header>Activities that are financial in nature</header><text>The following activities shall be considered to be financial in nature:</text> <subparagraph id="HFA8C0CA3277E415DB8FA6682C2533370"><enum>(A)</enum><text>Lending, exchanging, transferring, investing for others, or safeguarding money or securities.</text></subparagraph> <subparagraph id="H8D08430F4F65422D8F198F06B53120B1"><enum>(B)</enum><text>Insuring, guaranteeing, or indemnifying against loss, harm, damage, illness, disability, or death, or providing and issuing annuities, and acting as principal, agent, or broker for purposes of the foregoing.</text></subparagraph> <subparagraph id="H01D0504DB13C4EA3A8CE3C4E32EDF8A6"><enum>(C)</enum><text>Providing financial, investment, or economic advisory services, including advising an investment company (as defined in section 3 of the Investment Company Act of 1940).</text></subparagraph> <subparagraph id="H1D9EAE7E90CE4F47BDEB29685D727F4E"><enum>(D)</enum><text>Issuing or selling instruments representing interests in pools of assets permissible for a bank to hold directly.</text></subparagraph> <subparagraph id="H8B86ABE35ECD45C68B272EA700F320D3"><enum>(E)</enum><text>Underwriting, dealing in, or making a market in securities.</text></subparagraph> <subparagraph id="HCCADD1332BBA4C4D8886C391C19025E"><enum>(F)</enum><text>Engaging in any activity that the Board has determined, by order or regulation that is in effect on the date of enactment of the Financial Services Act of 1999, to be so closely related to banking or managing or controlling banks as to be a proper incident thereto (subject to the same terms and conditions contained in such order or regulation, unless modified by the Board).</text></subparagraph> <subparagraph id="H3D0F3C2FFD734CD696BDBF8348D07009"><enum>(G)</enum><text>Engaging, in the United States, in any activity that—</text> <clause id="H4CD3CE26A3F040C8B2BD7BF28E3E50F8"><enum>(i)</enum><text>a bank holding company may engage in outside the United States; and</text></clause> <clause id="H65576AAE43FD423080F703F17687EFD"><enum>(ii)</enum><text>the Board has determined, under regulations issued pursuant to section 4(c)(13) of this Act (as in effect on the day before the date of enactment of the Financial Services Act of 1999) to be usual in connection with the transaction of banking or other financial operations abroad.</text></clause></subparagraph> <subparagraph id="H7A141E42F1ED4DA2A4B04C3F7DBC73B5"><enum>(H)</enum><text>Directly or indirectly acquiring or controlling, whether as principal, on behalf of 1 or more entities (including entities, other than a depository institution or subsidiary of a depository institution, that the bank holding company controls) or otherwise, shares, assets, or ownership interests (including without limitation debt or equity securities, partnership interests, trust certificates or other instruments representing ownership) of a company or other entity, whether or not constituting control of such company or entity, engaged in any activity not authorized pursuant to this section if—</text> <clause id="H18D337B77C9941C3AD83AB7CD204FB4C"><enum>(i)</enum><text>the shares, assets, or ownership interests are not acquired or held by a depository institution or subsidiary of a depository institution;</text></clause> <clause id="H39102AD65A804DF5BF00A73ECAEB07E1"><enum>(ii)</enum><text>such shares, assets, or ownership interests are acquired and held by a securities affiliate or an affiliate thereof as part of a bona fide underwriting or merchant banking activity, including investment activities engaged in for the purpose of appreciation and ultimate resale or disposition of the investment;</text></clause> <clause id="H989F55DF1FF3402B8E8C82803FB5F151"><enum>(iii)</enum><text>such shares, assets, or ownership interests are held only for such a period of time as will permit the sale or disposition thereof on a reasonable basis consistent with the nature of the activities described in clause (ii); and</text></clause> <clause id="HDE9AF4760D034E5C97B990D667471338"><enum>(iv)</enum><text>during the period such shares, assets, or ownership interests are held, the bank holding company does not actively participate in the day to day management or operation of such company or entity, except insofar as necessary to achieve the objectives of clause (ii).</text></clause></subparagraph> <subparagraph id="H0B5C9F0E59F149B9BE9D392E7F487EF8"><enum>(I)</enum><text>Directly or indirectly acquiring or controlling, whether as principal, on behalf of 1 or more entities (including entities, other than a depository institution or subsidiary of a depository institution, that the bank holding company controls) or otherwise, shares, assets, or ownership interests (including without limitation debt or equity securities, partnership interests, trust certificates or other instruments representing ownership) of a company or other entity, whether or not constituting control of such company or entity, engaged in any activity not authorized pursuant to this section if—</text> <clause id="H714063FA28AF479BA057640076F795D2"><enum>(i)</enum><text>the shares, assets, or ownership interests are not acquired or held by a depository institution or a subsidiary of a depository institution;</text></clause> <clause id="H84C43136E23841BD81178B12FDC319FD"><enum>(ii)</enum><text>such shares, assets, or ownership interests are acquired and held by an insurance company that is predominantly engaged in underwriting life, accident and health, or property and casualty insurance (other than credit-related insurance) or providing and issuing annuities;</text></clause> <clause id="H839EB5F42C844E70A3DC309369C6B8EA"><enum>(iii)</enum><text>such shares, assets, or ownership interests represent an investment made in the ordinary course of business of such insurance company in accordance with relevant State law Îgoverning such investments; and</text></clause> <clause id="HAB8E2917301244E881293E42CD454600"><enum>(iv)</enum><text>during the period such shares, assets, or ownership interests are held, the bank holding company does not directly or indirectly participate in the day-to-day management or operation of the company or entity except insofar as necessary to achieve the objectives of clauses (ii) and (iii).</text></clause></subparagraph></paragraph> <paragraph id="H3BF3B1BEF77D4B37B9773706468F1C1E"><enum>(4)</enum><header>Actions required</header><text>The Board shall, by regulation or order, define, consistent with the purposes of this Act, the following activities as, and the extent to which such activities are, financial in nature or incidental to activities which are financial in nature:</text> <subparagraph id="H3725DF574B114AFBB169C002FE036593"><enum>(A)</enum><text>ending, exchanging, transferring, investing for others, or safeguarding financial assets other than money or securities.</text></subparagraph> <subparagraph id="H8C9C2170E8934AE1A9B48389BE06FB87"><enum>(B)</enum><text>Providing any device or other instrumentality for transferring money or other financial assets.</text></subparagraph> <subparagraph id="HE024E6570CD2495A8EABB4E6E29BC85"><enum>(C)</enum><text>Arranging, effecting, or facilitating financial transactions for the account of third parties.</text></subparagraph></paragraph> <paragraph id="H348A4010A813406F81F93577DDCEB361"><enum>(5)</enum><header>Post-consummation notification</header> <subparagraph id="H2FD10E5DD4E34DDEA6B52B709DD14E0"><enum>(A)</enum><header>In general</header><text>A financial holding company and a wholesale financial holding company that acquires any company, or commences any activity, pursuant to this subsection shall provide written notice to the Board describing the activity commenced or conducted by the company acquired no later than 30 calendar days after commencing the activity or consummating the acquisition.</text></subparagraph> <subparagraph id="HC0A76D90145E414F967FA01C3D586949"><enum>(B)</enum><header>Approval not required for certain financial activities</header><text>Except as provided in section 4(j) with regard to the acquisition of a savings association or in paragraph (6) of this subsection, a financial holding company and a wholesale financial holding company may commence any activity, or acquire any company, pursuant to paragraph (3) or any regulation prescribed or order issued under paragraph (4), without prior approval of the Board.</text></subparagraph></paragraph> <paragraph id="H64C533D7C7284123AA3D0007003DEA5D"><enum>(6)</enum><header>Notice required for large combinations</header> <subparagraph id="H72E5766C0CC4477E934262BFF8C5692"><enum>(A)</enum><header>In general</header><text>No financial holding company or wholesale financial holding company shall directly or indirectly acquire, and no company that becomes a financial holding company or a wholesale financial holding company shall directly or indirectly acquire control of, any company in the United States, including through merger, consolidation, or other type of business combination, that—</text> <clause id="H5FB41D4E8C314C878F528EAAF33BA9D"><enum>(i)</enum><text>is engaged in activities permitted under this subsection or subsection (g); and</text></clause> <clause id="HA04BE3007BD74C7EB0C7A58C5F8C04CA"><enum>(ii)</enum><text>has consolidated total assets in excess of $40,000,000,000, unless such holding company has provided notice to the Board, not later than 60 days prior to such proposed acquisition or prior to becoming a financial holding company or wholesale financial holding company, and during that time period, or such longer time period not exceeding an additional 60 days, as established by the Board, the Board has not issued a notice disapproving the proposed acquisition or retention.</text></clause></subparagraph> <subparagraph id="HA533FF273C4547F7B946364312D4D7DC"><enum>(B)</enum><header>Factors for consideration</header><text>In reviewing any prior notice filed under this paragraph, the Board shall take into consideration—</text> <clause id="H4B27F5B4B62E49FC8703CAC5A3BFF76C"><enum>(i)</enum><text>whether the company is in compliance with all applicable criteria set forth in subsection (b) and the provisions of subsection (d);</text></clause> <clause id="HFC9BBD1B3EC648E58DB2DF003303197F"><enum>(ii)</enum><text>whether the proposed combination represents an undue aggregation of resources;</text></clause> <clause id="H28FB9464869D4E179B474E935EA0BBC3"><enum>(iii)</enum><text>whether the proposed combination poses a risk to the deposit insurance system;</text></clause> <clause id="H8381AF95DB5844368D09D2F20300EE3B"><enum>(iv)</enum><text>whether the proposed combination poses a risk to State insurance guaranty funds;</text></clause> <clause id="H6B10FCF99ECE4E7790CB7CA6E9E9B082"><enum>(v)</enum><text>whether the proposed combination can reasonably be expected to be in the best interests of depositors or policyholders of the respective entities; and</text></clause> <clause id="H6533ACB080064BEB8B68C6D4B99888B"><enum>(vi)</enum><text>whether the proposed transaction can reasonably be expected to produce benefits to the public.</text></clause></subparagraph> <subparagraph id="H4C74763728EA45FA8C15393E237CFCD2"><enum>(C)</enum><header>Required information</header><text>The Board may disapprove any prior notice filed under this paragraph if the company submitting such notice neglects, fails, or refuses to furnish to the Board all relevant information required by the Board.</text></subparagraph> <subparagraph id="HB28D3FABA553495392BB8615EEA5C7DE"><enum>(D)</enum><header>Solicitation of views of other supervisory agencies</header> <clause id="H82592C2081524F03A5E8BF153E00F382"><enum>(i)</enum><header>In general</header><text>Upon receiving a prior notice under this paragraph, in order to provide for the submission of their views and recommendations, the Board shall give notice of the proposal to—</text> <subclause id="HC77E9C370E19450B8731BF656093ED9B"><enum>(I)</enum><text>the appropriate Federal banking agency of any bank involved;</text></subclause> <subclause id="HBBA03A48FF364980AE95CDABFFD4E00"><enum>(II)</enum><text>the appropriate functional regulator of any functionally regulated nondepository institution (as defined in section 5(c)(1)(C)) involved; and</text></subclause> <subclause id="H995DD4FF149D4F0D9BD1DFB4C039A6AB"><enum>(III)</enum><text>the Secretary of the Treasury, the Department of Justice, and the Federal Trade Commission.</text></subclause></clause> <clause id="H68CBEE86F6004050920404B0939E7443"><enum>(ii)</enum><header>Timing</header><text>The views and recommendations of any agency provided notice under this paragraph shall be submitted to the Board not later than 30 calendar days after the date on which notice to the agency was given, unless the Board determines that another shorter time period is appropriate.</text></clause></subparagraph></paragraph></subsection> <subsection id="HFC9A10F7517B4D64BC91D6BBB8799AD"><enum>(d)</enum><header>Provisions applicable to financial holding companies that fail to meet requirements</header> <paragraph id="H27E15D0DC7B54BA9A4CB966E00C8D3B"><enum>(1)</enum><header>In general</header><text>If the Board finds that a financial holding company is not in compliance with the requirements of subparagraph (A) or (B) of subsection (b)(1), the Board shall give notice of such finding to the company.</text></paragraph> <paragraph id="HE3BFD701858B41519FE88705A8C2E500"><enum>(2)</enum><header>Agreement to correct conditions required</header><text>Not later than 45 days after receipt by a financial holding company of a notice given under paragraph (1) (or such additional period as the Board may permit), the company shall execute an agreement acceptable to the Board to comply with the requirements applicable to a financial holding company.</text></paragraph> <paragraph id="H74D03900A15146E0BB009D41EC4D5175"><enum>(3)</enum><header>Board may impose limitations</header><text>Until the conditions described in a notice to a financial holding company under paragraph (1) are corrected, the Board may impose such limitations on the conduct or activities of the company or any affiliate of the company as the Board determines to be appropriate under the circumstances.</text></paragraph> <paragraph id="H67401BAD22F54D3783D6572828533764"><enum>(4)</enum><header>Failure to correct</header><text>If, after receiving a notice under paragraph (1), a financial holding company does not—</text> <subparagraph id="H360154310C764FFE8DFCAACD48E0A"><enum>(A)</enum><text>execute and implement an agreement in accordance with paragraph (2);</text></subparagraph> <subparagraph id="HC4C482F09DFA4096AA6FA1FDE8C4D1F7"><enum>(B)</enum><text>comply with any limitations imposed under paragraph (3);</text></subparagraph> <subparagraph id="H3B4C0F41AD304852808D700826A22F8D"><enum>(C)</enum><text>in the case of a notice of failure to comply with subsection (b)(1)(A), restore each depository institution subsidiary to well capitalized status before the end of the 180-day period beginning on the date such notice is received by the company (or such other period permitted by the Board); or</text></subparagraph> <subparagraph id="H6C5B6830EC12478100677B98E600DA96"><enum>(D)</enum><text>in the case of a notice of failure to comply with subparagraph (B) of subsection (b)(1), restore compliance with any such subparagraph on or before the date on which the next examination of the depository institution subsidiary is completed or by the end of such other period as the Board determines to be appropriate, the Board may require such company, under such terms and conditions as may be imposed by the Board and subject to such extension of time as may be granted in the Board's discretion, to divest control of any depository institution subsidiary or, at the election of the financial holding company, instead to cease to engage in any activity conducted by such company or its subsidiaries pursuant to this section.</text></subparagraph></paragraph> <paragraph id="H66673FC81D9B4D11898BCC41CAC727D"><enum>(5)</enum><header>Consultation</header><text> In taking any action under this subsection, the Board shall consult with all relevant Federal and State regulatory agencies.</text></paragraph></subsection> <subsection id="HB5796834369F48C8A66CF4619140DA64"><enum>(e)</enum><header>Safeguards for bank subsidiaries</header><text>A financial holding company shall assure that—</text> <paragraph id="HDD091D545DB3441688FE43847E16509"><enum>(1)</enum><text>the procedures of the holding company for identifying and managing financial and operational risks within the company, and the subsidiaries of such company, adequately protect the subsidiaries of such company which are insured depository institutions from such risks;</text></paragraph> <paragraph id="H74F7DDB073034B8C83B76D00C6F4F9C"><enum>(2)</enum><text>the holding company has reasonable policies and procedures to preserve the separate corporate identity and limited liability of such company and the subsidiaries of such company, for the protection of the company's subsidiary insured depository institutions; and</text></paragraph> <paragraph id="H17520DED110D47750000D6C272C273AC"><enum>(3)</enum><text>the holding company complies with this section.</text></paragraph></subsection> <subsection id="H8488D71FCF0F44D3B831B5A1EFDB9B59"><enum>(f)</enum><header>Authority to retain limited nonfinancial activities and affiliations</header> <paragraph id="H42CF945CE6494945B76B9F65037F8318"><enum>(1)</enum><header>In general</header><text>Notwithstanding section 4(a), a company that is not a bank holding company or a foreign bank (as defined in section 1(b)(7) of the International Banking Act of 1978) and becomes a financial holding company after the date of the enactment of the Financial Services Act of 1999 may continue to engage in any activity and retain direct or indirect ownership or control of shares of a company engaged in any activity if—</text> <subparagraph id="H82FCD23245994D61873023C700E17E68"><enum>(A)</enum><text>the holding company lawfully was engaged in the activity or held the shares of such company on September 30, 1997;</text></subparagraph> <subparagraph id="H23F63DB2E4854653BF00256CF873C0AB"><enum>(B)</enum><text>the holding company is predominantly engaged in financial activities as defined in paragraph (2); and</text></subparagraph> <subparagraph id="HC7F44CF154F644E9AEBAB1BFC5C597E"><enum>(C)</enum><text>the company engaged in such activity continues to engage only in the same activities that such company conducted on September 30, 1997, and other activities permissible under this Act.</text></subparagraph></paragraph> <paragraph id="H0FF80484DAD045B796B1A04EF5F34DF"><enum>(2)</enum><header>Predominantly financial</header><text>For purposes of this subsection, a company is predominantly engaged in financial activities if the annual gross revenues derived by the holding company and all subsidiaries of the holding company (excluding revenues derived from subsidiary depository institutions), on a consolidated basis, from engaging in activities that are financial in nature or are incidental to activities that are financial in nature under subsection (c) represent at least 85 percent of the consolidated annual gross revenues of the company.</text></paragraph> <paragraph id="HBCCCD60E7A224807B74D00C4F6C95348"><enum>(3)</enum><header>No expansion of grandfathered commercial activities through merger or consolidation</header><text>A financial holding company that engages in activities or holds shares pursuant to this subsection, or a subsidiary of such financial holding company, may not acquire, in any merger, consolidation, or other type of business combination, assets of any other company which is engaged in any activity which the Board has not determined to be financial in nature or incidental to activities that are financial in nature under subsection (c).</text></paragraph> <paragraph id="H20DBD86C558048A49FD4D5A54666F0BB"><enum>(4)</enum><header>Continuing revenue limitation on grandfathered commercial activities</header><text>Notwithstanding any other provision of this subsection, a financial holding company may continue to engage in activities or hold shares in companies pursuant to this subsection only to the extent that the aggregate annual gross revenues derived from all such activities and all such companies does not exceed 15 percent of the consolidated annual gross revenues of the financial holding company (excluding revenues derived from subsidiary depository institutions).</text></paragraph> <paragraph id="H4F21E99C19A643B9B12FF620DD9E98E7"><enum>(5)</enum><header>Cross marketing restrictions applicable to commercial activities</header><text>A depository institution controlled by a financial holding company shall not—</text> <subparagraph id="HF166D45567F94BA7BA9D8E4CBB759545"><enum>(A)</enum><text>offer or market, directly or through any arrangement, any product or service of a company whose activities are conducted or whose shares are owned or controlled by the financial holding company pursuant to this subsection or subparagraph (H) or (I) of subsection (c)(3); or</text></subparagraph> <subparagraph id="HBC76A5AE15B34E79A7E304B3B07EF5F7"><enum>(B)</enum><text>permit any of its products or services to be offered or marketed, directly or through any arrangement, by or through any company described in subparagraph (A).</text></subparagraph></paragraph> <paragraph id="HADF9CBC45E6944D1B921B5672DFBE003"><enum>(6)</enum><header>Transactions with nonfinancial affiliates</header><text>An insured depository institution controlled by a financial holding company or wholesale financial holding company may not engage in a covered transaction (as defined by section 23A(b)(7) of the Federal Reserve Act) with any affiliate controlled by the company pursuant to section 10(c), this subsection, or subparagraph (H) or (I) of subsection (c)(3).</text></paragraph> <paragraph id="H0819842CFA9C438DA934630008B994AE"><enum>(7)</enum><header>Sunset of grandfather</header><text>A financial holding company engaged in any activity, or retaining direct or indirect ownership or control of shares of a company, pursuant to this subsection, shall terminate such activity and divest ownership or control of the shares of such company before the end of the 10-year period beginning on the date of the enactment of the Financial Services Act of 1999. The Board may, upon application by a financial holding company, extend such 10-year period by a period not to exceed an additional 5 years if such extension would not be detrimental to the public interest.</text></paragraph></subsection> <subsection id="HE58C9307FC254DC7BFA577C41501F752"><enum>(g)</enum><header>Developing activities</header><text>A financial holding company and a wholesale financial holding company may engage directly or indirectly, or acquire shares of any company engaged, in any activity that the Board has not determined to be financial in nature or incidental to financial activities under subsection (c) if—</text> <paragraph id="H8B9BE2D403B94767B6EC6C8B70770006"><enum>(1)</enum><text>the holding company reasonably concludes that the activity is financial in nature or incidental to financial activities;</text></paragraph> <paragraph id="H1E0E5F915A1141E4ADFDC6ED6BB471FD"><enum>(2)</enum><text>the gross revenues from all activities conducted under this subsection represent less than 5 percent of the consolidated gross revenues of the holding company;</text></paragraph> <paragraph id="H247ACB00978647378F74707EC77153D7"><enum>(3)</enum><text>the aggregate total assets of all companies the shares of which are held under this subsection do not exceed 5 percent of the holding company's consolidated total assets;</text></paragraph> <paragraph id="H53E6FDCCDCD8401492E4143FC1ECD062"><enum>(4)</enum><text>the total capital invested in activities conducted under this subsection represents less than 5 percent of the consolidated total capital of the holding company;</text></paragraph> <paragraph id="H1F9EBF9848454F99A7F6FBF8010003C8"><enum>(5)</enum><text>the Board has not determined that the activity is not financial in nature or incidental to financial activities under subsection (c);</text></paragraph> <paragraph id="H6B2B1642B66A47839682EA9FD38D10A2"><enum>(6)</enum><text>the holding company is not required to provide prior written notice of the transaction to the Board under subsection (c)(6); and</text></paragraph> <paragraph id="H4AE8A529B031443D8EAE21483FB8CCB2"><enum>(7)</enum><text>the holding company provides written notification to the Board describing the activity commenced or conducted by the company acquired no later than 10 business days after commencing the activity or consummating the acquisition.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="HE6183E13A3DA407AA57E5853716F08A8"><enum>104.</enum><header>Operation of State law</header> <subsection id="H1A7B47BD70534E8EB6B86C86B35BD713"><enum>(a)</enum><header>Affiliations</header> <paragraph id="H7B1F848968D642B1A76C001CA5752D42"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), no State may, by statute, regulation, order, interpretation, or other action, prevent or restrict an insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof, from being affiliated directly or indirectly or associated with any person or entity, as authorized or permitted by this Act or any other provision of Federal law.</text></paragraph> <paragraph id="HC0CFA4CF83C6467698DBCF4F3D11BB00"><enum>(2)</enum><header>Insurance</header><text>With respect to affiliations between insured depository institutions or wholesale financial institutions, or any subsidiary or affiliate thereof, and persons or entities engaged in the business of insurance, paragraph (1) does not prohibit any State from—</text> <subparagraph id="H478943E09735413BA0974CA78B1F0085"><enum>(A)</enum><text>requiring any person or entity that proposes to acquire control of an entity that is engaged in the business of insurance and domiciled in that State (hereafter in this subparagraph referred to as the `insurer') to furnish to the insurance regulatory authority of that State, not later than 60 days before the effective date of the proposed acquisition—</text> <clause id="H06AECACB33B04AA1A07F00EFAEC13261"><enum>(i)</enum><text>the name and address of each person by whom, or on whose behalf, the affiliation referred to in this subparagraph is to be effected (hereafter in this subparagraph referred to as the <quote>acquiring party</quote>);</text></clause> <clause id="H346DC2AF74B6443DB5A382DF4B88184"><enum>(ii)</enum><text>if the acquiring party is an individual, his or her principal occupation and all offices and positions held during the 5 years preceding the date of notification, and any conviction of crimes other than minor traffic violations during the 10 years preceding the date of notification;</text></clause> <clause id="H0E06108B3C0540ED9F4C08D109AFF3E4"><enum>(iii)</enum><text>if the acquiring party is not an individual—</text> <subclause id="H11090490AB8E4EE58565437184CA51E6"><enum>(I)</enum><text>a report of the nature of its business operations during the 5 years preceding the date of notification, or for such shorter period as such person and any predecessors thereof shall have been in existence;</text></subclause> <subclause id="HFF0E863CC1EA4E34B2B054D60354D2E"><enum>(II)</enum><text>an informative description of the business intended to be done by the acquiring party and any subsidiary thereof; and</text></subclause> <subclause id="H79AD6F9051F74D4C8669AB64475FBB90"><enum>(III)</enum><text>a list of all individuals who are, or who have been selected to become, directors or executive officers of the acquiring party or who perform, or will perform, functions appropriate to such positions, including, for each such individual, the information required by clause (ii);</text></subclause></clause> <clause id="H370317768F1849758F2F6F644098DED"><enum>(iv)</enum><text>the source, nature, and amount of the consideration used, or to be used, in effecting the merger or other acquisition of control, a description of any transaction wherein funds were, or are to be, obtained for any such purpose, and the identity of persons furnishing such consideration, except that, if a source of such consideration is a loan made in the lender's ordinary course of business, the identity of the lender shall remain confidential if the person filing such statement so requests;</text></clause> <clause id="H644D6B777FB245E2BBA44D6118829D67"><enum>(v)</enum><text>fully audited financial information as to the earnings and financial condition of each acquiring party for the 5 fiscal years preceding the date of notification of each such acquiring party, or for such lesser period as such acquiring party and any predecessors thereof shall have been in existence, and similar unaudited information as of a date not earlier than 90 days before the date of notification, except that, in the case of an acquiring party that is an insurer actively engaged in the business of insurance, the financial statements of such insurer need not be audited, but such audit may be required if the need therefor is determined by the insurance regulatory authority of the State;</text></clause> <clause id="HE0F8315D30134DDAA196FDE616503FAD"><enum>(vi)</enum><text>any plans or proposals that each acquiring party may have to liquidate such insurer, to sell its assets, or to merge or consolidate it with any person or to make any other material change in its business or corporate structure or management;</text></clause> <clause id="H47B1F0716E6347CB9B6FD3D3C9A3E68D"><enum>(vii)</enum><text>the number of shares of any security of the insurer that each acquiring party proposes to acquire, the terms of any offer, request, invitation, agreement, or acquisition, and a statement as to the method by which the fairness of the proposal was arrived at;</text></clause> <clause id="H5B845369B32B45E7A7BF106426782996"><enum>(viii)</enum><text>the amount of each class of any security of the insurer that is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;</text></clause> <clause id="H7C39235918414F56BFCC2895D5637B85"><enum>(ix)</enum><text>a full description of any contracts, arrangements, or understandings with respect to any security of the insurer in which any acquiring party is involved, including transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies, and identification of the persons with whom such contracts, arrangements, or understandings have been entered into;</text></clause> <clause id="HAB9D27EA46B342EE8419C9AEB97B6B58"><enum>(x)</enum><text>a description of the purchase of any security of the insurer during the 12-month period preceding the date of notification by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid, or agreed to be paid, therefor;</text></clause> <clause id="H8EB46A9AC7854B378E55959B7B2ECB97"><enum>(xi)</enum><text>a description of any recommendations to purchase any security of the insurer made during the 12-month period preceding the date of notification by any acquiring party or by any person based upon interviews or at the suggestion of such acquiring party;</text></clause> <clause id="HC534375227E74094A1AF31801DC940C1"><enum>(xii)</enum><text>copies of all tender offers for, requests or invitations for tenders of, exchange offers for and agreements to acquire or exchange any securities of the insurer and, if distributed, of additional soliciting material relating thereto; and</text></clause> <clause id="H4C1FD75795FD40D5BB903EEEAB5B3FD8"><enum>(xiii)</enum><text>the terms of any agreement, contract, or understanding made with any broker-dealer as to solicitation of securities of the insurer for tender and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard thereto;</text></clause></subparagraph> <subparagraph id="H1388A0E16814434BB66E03E972F0B8FA"><enum>(B)</enum><text>requiring an entity that is acquiring control of an entity that is engaged in the business of insurance and domiciled in that State to maintain or restore the capital requirements of that insurance entity to the level required under the capital regulations of general applicability in that State to avoid the requirement of preparing and filing with the insurance regulatory authority of that State a plan to increase the capital of the entity, except that any determination by the State insurance regulatory authority with respect to such requirement shall be made not later than 60 days after the date of notification under subparagraph (A);</text></subparagraph> <subparagraph id="HCF0AAFDE38B449F69073AC8D266EDAD2"><enum>(C)</enum><text>taking actions with respect to the receivership or conservatorship of any insurance company; or</text></subparagraph> <subparagraph id="H655684D595EC4D8EB68EE3247B296418"><enum>(D)</enum><text>restricting a change in the ownership of stock in an insurance company, or a company formed for the purpose of controlling such insurance company, for a period of not more than 3 years beginning on the date of the conversion of such company from mutual to stock form.</text></subparagraph></paragraph> <paragraph id="H1521B0D021C2458CA8C36C856931E242"><enum>(3)</enum><header>Preservation of state antitrust and general corporate laws</header> <subparagraph id="HD41CF83C7FF5483AB4C2A2B4FA5BDC35"><enum>(A)</enum><header>In general</header><text>Nothing in paragraph (1) shall be construed as affecting State laws, regulations, orders, interpretations, or other actions of general applicability relating to the governance of corporations, partnerships, limited liability companies or other business associations incorporated or formed under the laws of that State or domiciled in that State, or the applicability of the antitrust laws of any State or any State law that is similar to the antitrust laws.</text></subparagraph> <subparagraph id="H5CB595CA860042F798274094A9EF7C5"><enum>(B)</enum><header>Definition</header><text>The term <term>antitrust laws</term> has the same meaning as in subsection (a) of the first section of the Clayton Act, and includes section 5 of the Federal Trade Commission Act to the extent that such section 5 relates to unfair methods of competition.</text></subparagraph></paragraph></subsection> <subsection id="H17E37BCA4BF8402900DE633FD10052B1"><enum>(b)</enum><header>Activities</header> <paragraph id="HD662C058C7F944ABA5A45FB4749570A4"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (3), and except with respect to insurance sales, solicitation, and cross marketing activities, which shall be governed by paragraph (2), no State may, by statute, regulation, order, interpretation, or other action, prevent or restrict an insured depository institution, wholesale financial institution, or subsidiary or affiliate thereof from engaging directly or indirectly, either by itself or in conjunction with a subsidiary, affiliate, or any other entity or person, in any activity authorized or permitted under this Act.</text></paragraph> <paragraph id="HBD8CA92446734B1AB7F200C45018F38D"><enum>(2)</enum><header>Insurance sales</header> <subparagraph id="H58BDB9B72D8649A4BCFE8F05C4D53670"><enum>(A)</enum><header>In general</header><text>In accordance with the legal standards for preemption set forth in the decision of the Supreme Court of the United States in Barnett Bank of Marion County N.A. v. Nelson, 116 S. Ct. 1103 (1996), no State may, by statute, regulation, order, interpretation, or other action, prevent or significantly interfere with the ability of an insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof, to engage, directly or indirectly, either by itself or in conjunction with a subsidiary, affiliate, or any other party, in any insurance sales, solicitation, or cross-marketing activity.</text></subparagraph> <subparagraph id="HA23874F1C8674C47838BD9386EE7EB00"><enum>(B)</enum><header>Certain state laws preserved</header><text>Notwithstanding subparagraph (A), a State may impose any of the following restrictions, or restrictions which are substantially the same as but no more burdensome or restrictive than those in each of the following clauses:</text> <clause id="H326C390DD8F44BA0AFF9B7C38F35B61B"><enum>(i)</enum><text>Restrictions prohibiting the rejection of an insurance policy solely because the policy has been issued or underwritten by any person who is not associated with such insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, when such insurance is required in connection with a loan or extension of credit.</text></clause> <clause id="HE9C4FF98BC6F47E98338DEBE80BD99B"><enum>(ii)</enum><text>Restrictions prohibiting a requirement for any debtor, insurer, or insurance agent or broker to pay a separate charge in connection with the handling of insurance that is required in connection with a loan or other extension of credit or the provision of another traditional banking product, unless such charge would be required when the insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, is the licensed insurance agent or broker providing the insurance.</text></clause> <clause id="H5A9C944EC88E4701A2E235CB1B65865"><enum>(iii)</enum><text>Restrictions prohibiting the use of any advertisement or other insurance promotional material by an insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, that would cause a reasonable person to believe mistakenly that—</text> <subclause id="HE8ADE655B06F4F43B2C7BA19C2DC2FD3"><enum>(I)</enum><text>a State or the Federal Government is responsible for the insurance sales activities of, or stands behind the credit of, the institution, affiliate, or subsidiary; or</text></subclause> <subclause id="H48A56A2381D74407BE0000098B05277B"><enum>(II)</enum><text>a State, or the Federal Government guarantees any returns on insurance products, or is a source of payment on any insurance obligation of or sold by the institution, affiliate, or subsidiary;</text></subclause></clause> <clause id="H4BC8817AF5594F6AA34C1BBD25A741E1"><enum>(iv)</enum><text>Restrictions prohibiting the payment or receipt of any commission or brokerage fee or other valuable consideration for services as an insurance agent or broker to or by any person, unless such person holds a valid State license regarding the applicable class of insurance at the time at which the services are performed, except that, in this clause, the term `services as an insurance agent or broker' does not include a referral by an unlicensed person of a customer or potential customer to a licensed insurance agent or broker that does not include a discussion of specific insurance policy terms and conditions.</text></clause> <clause id="H1602F92541FB44D0A76599C6E9BC18EC"><enum>(v)</enum><text>Restrictions prohibiting any compensation paid to or received by any individual who is not licensed to sell insurance, for the referral of a customer that seeks to purchase, or seeks an opinion or advice on, any insurance product to a person that sells or provides opinions or advice on such product, based on the purchase of insurance by the customer.</text></clause> <clause id="H3F73C22BDEB84A8B85628846D6CCB25E"><enum>(vi)</enum><text>Restrictions prohibiting the release of the insurance information of a customer (defined as information concerning the premiums, terms, and conditions of insurance coverage, including expiration dates and rates, and insurance claims of a customer contained in the records of the insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof) to any person or entity other than an officer, director, employee, agent, subsidiary, or affiliate of an insured depository institution or a wholesale financial institution, for the purpose of soliciting or selling insurance, without the express consent of the customer, other than a provision that prohibits—</text> <subclause id="HFFD3321C0CA04821B7F4026F89C87551"><enum>(I)</enum><text>a transfer of insurance information to an unaffiliated insurance company, agent, or broker in connection with transferring insurance in force on existing insureds of the insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, or in connection with a merger with or acquisition of an unaffiliated insurance company, agent, or broker; or</text></subclause> <subclause id="H45F212331CEF476981B2940369BEA8"><enum>(II)</enum><text>the release of information as otherwise authorized by State or Federal law.</text></subclause></clause> <clause id="HD3A771D3F82D4D79B75621C7FBE9B693"><enum>(vii)</enum><text>Restrictions prohibiting the use of health information obtained from the insurance records of a customer for any purpose, other than for its activities as a licensed agent or broker, without the express consent of the customer.</text></clause> <clause id="HB71E2AD4FCF14E03ABBA5DA34FAA15AD"><enum>(viii)</enum><text>Restrictions prohibiting the extension of credit or any product or service that is equivalent to an extension of credit, lease or sale of property of any kind, or furnishing of any services or fixing or varying the consideration for any of the foregoing, on the condition or requirement that the customer obtain insurance from the insured depository institution, wholesale financial institution, a subsidiary or affiliate thereof, or a particular insurer, agent, or broker, other than a prohibition that would prevent any insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof—</text> <subclause id="H3A0AE62753724BDB835C514E999B3821"><enum>(I)</enum><text>from engaging in any activity that would not violate section 106 of the Bank Holding Company Act Amendments of 1970, as interpreted by the Board of Governors of the Federal Reserve System; or</text></subclause> <subclause id="HE8AD986E1C86483AAF17654E018E76C"><enum>(II)</enum><text>from informing a customer or prospective customer that insurance is required in order to obtain a loan or credit, that loan or credit approval is contingent upon the procurement by the customer of acceptable insurance, or that insurance is available from the insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof.</text></subclause></clause> <clause id="H4CA5624C90B44E989D1F319BCA343493"><enum>(ix)</enum><text>Restrictions requiring, when an application by a consumer for a loan or other extension of credit from an insured depository institution or wholesale financial institution is pending, and insurance is offered or sold to the consumer or is required in connection with the loan or extension of credit by the insured depository institution or wholesale financial institution, that a written disclosure be provided to the consumer or prospective customer indicating that his or her choice of an insurance provider will not affect the credit decision or credit terms in any way, except that the insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, may impose reasonable requirements concerning the creditworthiness of the insurance provider and scope of coverage chosen.</text></clause> <clause id="HE266DBAE6C0F4B05A6531986FDA4B25"><enum>(x)</enum><text>Restrictions requiring clear and conspicuous disclosure, in writing, where practicable, to the customer prior to the sale of any insurance policy that such policy—</text> <subclause id="H440CDC2E29B54CA28C65B088726EFDA6"><enum>(I)</enum><text>is not a deposit;</text></subclause> <subclause id="H3AAEF94C6BF34C4083E1A223A9076F63"><enum>(II)</enum><text>is not insured by the Federal Deposit Insurance Corporation;</text></subclause> <subclause id="H72039B98F06F472293A0D6D5F317B806"><enum>(III)</enum><text>is not guaranteed by the insured depository institution or wholesale financial institution or, if appropriate, its subsidiaries or affiliates or any person soliciting the purchase of or selling insurance on the premises thereof; and</text></subclause> <subclause id="HB965F818A75F4584AEFB004967B2FA81"><enum>(IV)</enum><text>where appropriate, involves investment risk, including potential loss of principal.</text></subclause></clause> <clause id="H3C003CA917664C2E9659A986FDC2DEDA"><enum>(xi)</enum><text>Restrictions requiring that, when a customer obtains insurance (other than credit insurance or flood insurance) and credit from an insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, or any person soliciting the purchase of or selling insurance on the premises thereof, the credit and insurance transactions be completed through separate documents.</text></clause> <clause id="H3ADE2301899540D2A9004FAF2222CAC2"><enum>(xii)</enum><text>Restrictions prohibiting, when a customer obtains insurance (other than credit insurance or flood insurance) and credit from an insured depository institution or wholesale financial institution or its subsidiaries or affiliates, or any person soliciting the purchase of or selling insurance on the premises thereof, inclusion of the expense of insurance premiums in the primary credit transaction without the express written consent of the customer.</text></clause> <clause id="H4EF8E63848F346ADB7361EC5E4CAFF97"><enum>(xiii)</enum><text>Restrictions requiring maintenance of separate and distinct books and records relating to insurance transactions, including all files relating to and reflecting consumer complaints, and requiring that such insurance books and records be made available to the appropriate State insurance regulator for inspection upon reasonable notice.</text></clause></subparagraph> <subparagraph id="H2761478B17944F888784C2E4A8689EED"><enum>(C)</enum><header>Limitations</header> <clause id="H584140BECC3F424C9C864B16E0B51423"><enum>(i)</enum><header>OCC Deference</header><text>Section 306(e) does not apply with respect to any State statute, regulation, order, interpretation, or other action regarding insurance sales, solicitation, or cross marketing activities described in subparagraph (A) that was issued, adopted, or enacted before September 3, 1998, and that is not described in subparagraph (B).</text></clause> <clause id="H0596331345C84889A4C5D8F92D192361"><enum>(ii)</enum><header>Nondiscrimination</header><text>Subsection (c) does not apply with respect to any State statute, regulation, order, interpretation, or other action regarding insurance sales, solicitation, or cross marketing activities described in subparagraph (A) that was issued, adopted, or enacted before September 3, 1998, and that is not described in subparagraph (B).</text></clause> <clause id="H5606529F84FF4AD1AA00003200DBF7EE"><enum>(iii)</enum><header>Construction</header><text>Nothing in this paragraph shall be construed to limit the applicability of the decision of the Supreme Court in Barnett Bank of Marion County N.A. v. Nelson, 116 S. Ct. 1103 (1996) with respect to a State statute, regulation, order, interpretation, or other action that is not described in subparagraph (B).</text></clause> <clause id="H8675297A3BEC49058B2E17CEA8E8B6F5"><enum>(iv)</enum><header>Limitation on inferences</header><text>Nothing in this paragraph shall be construed to create any inference with respect to any State statute, regulation, order, interpretation, or other action that is not referred to or described in this paragraph.</text></clause></subparagraph></paragraph> <paragraph id="H9B6E4EF250C549888E345F179F5BBE1E"><enum>(3)</enum><header>Insurance activities other than sales</header><text>State statutes, regulations, interpretations, orders, and other actions shall not be preempted under subsection (b)(1) to the extent that they—</text> <subparagraph id="HC1E81F3173F24607BDA62E5B19ED00FC"><enum>(A)</enum><text>relate to, or are issued, adopted, or enacted for the purpose of regulating the business of insurance in accordance with the Act of March 9, 1945 (commonly known as the <quote>McCarran-Ferguson Act</quote>);</text></subparagraph> <subparagraph id="H2A900D43D3824D25BAF0D32E006F00EE"><enum>(B)</enum><text>apply only to persons or entities that are not insured depository institutions or wholesale financial institutions, but that are directly engaged in the business of insurance (except that they may apply to depository institutions engaged in providing savings bank life insurance as principal to the extent of regulating such insurance);</text></subparagraph> <subparagraph id="HEF8166FFA14C4D6E9F07982973ACD8B0"><enum>(C)</enum><text>do not relate to or directly or indirectly regulate insurance sales, solicitations, or cross-marketing activities; and</text></subparagraph> <subparagraph id="HFE5D543415E5491CAA78ADC8113F81EC"><enum>(D)</enum><text>are not prohibited under subsection (c).</text></subparagraph></paragraph> <paragraph id="HC3FFA4E0DF76430B8B644D4F07256970"><enum>(4)</enum><header>Financial activities other than insurance</header><text>No State statute, regulation, interpretation, order, or other action shall be preempted under subsection (b)(1) to the extent that—</text> <subparagraph id="H76A90ECA2BEF49BE8DEDF41D1FED5B1E"><enum>(A)</enum><text>it does not relate to, and is not issued and adopted, or enacted for the purpose of regulating, directly or indirectly, insurance sales, solicitations, or cross marketing activities covered under paragraph (2);</text></subparagraph> <subparagraph id="HCD97D1038D304E9291F0B9CFEA5191D2"><enum>(B)</enum><text>it does not relate to, and is not issued and adopted, or enacted for the purpose of regulating, directly or indirectly, the business of insurance activities other than sales, solicitations, or cross marketing activities, covered under paragraph (3);</text></subparagraph> <subparagraph id="HEEC2FB438A004EA89F4D6B0589001CA2"><enum>(C)</enum><text>it does not relate to securities investigations or enforcement actions referred to in subsection (d); and</text></subparagraph> <subparagraph id="H43C7BC320FDC4658B5A6006FF3462B1F"><enum>(D)</enum><text>it—</text> <clause id="H139297768F05498BB6B49D26A2AAD238"><enum>(i)</enum><text>does not distinguish by its terms between insured depository institutions, wholesale financial institutions, and subsidiaries and affiliates thereof engaged in the activity at issue and other persons or entities engaged in the same activity in a manner that is in any way adverse with respect to the conduct of the activity by any such insured depository institution, wholesale financial institution, or subsidiary or affiliate thereof engaged in the activity at issue;</text></clause> <clause id="H0139752B2DB14D6882731440031893D5"><enum>(ii)</enum><text>as interpreted or applied, does not have, and will not have, an impact on depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof engaged in the activity at issue, or any person or entity affiliated therewith, that is substantially more adverse than its impact on other persons or entities engaged in the same activity that are not insured depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof, or persons or entities affiliated therewith;</text></clause> <clause id="HA93AB36B730D4C59BA10FD12286BBF3C"><enum>(iii)</enum><text>does not effectively prevent a depository institution, wholesale financial institution, or subsidiary or affiliate thereof from engaging in activities authorized or permitted by this Act or any other provision of Federal law; and</text></clause> <clause id="H06CEF89BBAF54815A6C78F04A46B7FA7"><enum>(iv)</enum><text>does not conflict with the intent of this Act generally to permit affiliations that are authorized or permitted by Federal law.</text></clause></subparagraph></paragraph></subsection> <subsection id="HD6FB0A7429F54C6B925FA205B0D676D1"><enum>(c)</enum><header>Nondiscrimination</header><text>Except as provided in any restrictions described in subsection (b)(2)(B), no State may, by statute, regulation, order, interpretation, or other action, regulate the insurance activities authorized or permitted under this Act or any other provision of Federal law of an insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, to the extent that such statute, regulation, order, interpretation, or other action—</text> <paragraph id="HFA7ADA62A0664BD8B21340A1A88D9115"><enum>(1)</enum><text>distinguishes by its terms between insured depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, and other persons or entities engaged in such activities, in a manner that is in any way adverse to any such insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof;</text></paragraph> <paragraph id="HBC608A5B5A984133948444106342D505"><enum>(2)</enum><text>as interpreted or applied, has or will have an impact on depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, that is substantially more adverse than its impact on other persons or entities providing the same products or services or engaged in the same activities that are not insured depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof, or persons or entities affiliated therewith;</text></paragraph> <paragraph id="H1A42E2E4FBCC4732A219D373D1E2C600"><enum>(3)</enum><text>effectively prevents a depository institution or wholesale financial institution, or subsidiary or affiliate thereof, from engaging in insurance activities authorized or permitted by this Act or any other provision of Federal law; or</text></paragraph> <paragraph id="H3600A50EDD404B2690595FD4379BB35B"><enum>(4)</enum><text>conflicts with the intent of this Act generally to permit affiliations that are authorized or permitted by Federal law between insured depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, and persons and entities engaged in the business of insurance.</text></paragraph></subsection> <subsection id="H5A9F3386A44A44B8A45586FEEFC28956"><enum>(d)</enum><header>Limitation</header><text>Subsections (a) and (b) shall not be construed to affect the jurisdiction of the securities commission (or any agency or office performing like functions) of any State, under the laws of such State, to investigate and bring enforcement actions, consistent with section 18(c) of the Securities Act of 1933, with respect to fraud or deceit or unlawful conduct by any person, in connection with securities or securities transactions.</text></subsection> <subsection id="H1A4591CFEF3A426092475E3500D1B5AD"><enum>(e)</enum><header>Definition</header><text>For purposes of this section, the term <term>State</term> means any State of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands. </text></subsection></section> <section id="H677C6CDDD7954F0CAB42DE97B79B1D03"><enum>105.</enum><header>Mutual bank holding companies authorized</header> <subsection id="H6E2D1A24A9D745BF9674C2F9A605004D"><enum>(a)</enum><text>Section 3(g)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(g)(2)) is amended to read as follows:</text> <quoted-block id="H7B8E9B3E6F934360B8A7006E0046C4E4" style="USC"> <paragraph id="H60D0CD0961C54E8FA3B0BC66AD3392B0"><enum>(2)</enum><header>Regulations</header><text>A bank holding company organized as a mutual holding company shall be regulated on terms, and shall be subject to limitations, comparable to those applicable to any other bank holding company.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="HAB035376ABE4470993B2C4576F66BB44"><enum>106.</enum><header>Prohibition on deposit production offices</header> <subsection id="H66802892F1E7482191C800E736092365"><enum>(a)</enum><header>In general</header><text>Section 109(d) of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (12 U.S.C. 1835a(d)) is amended—</text> <paragraph id="H54A3EB57642B4129B14B1E7ED6C55FB9"><enum>(1)</enum><text>by inserting <quote>, the Financial Services Act of 1999,</quote> after <quote>pursuant to this title</quote>; and</text></paragraph> <paragraph id="H3B7734B0887E44DB9D652BA5C477912D"><enum>(2)</enum><text>by inserting <quote>or such Act</quote> after <quote>made by this title</quote>.</text></paragraph></subsection> <subsection id="HDE820138634F4A8CB1916DDACDB84B6B"><enum>(b)</enum><header>Technical and conforming amendment</header><text>Section 109(e)(4) of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (12 U.S.C. 1835a(e)(4)) is amended by inserting `and any branch of a bank controlled by an out-of-State bank holding company (as defined in section 2(o)(7) of the Bank Holding Company Act of 1956)' before the period. </text></subsection></section> <section id="H8B5591F0B04F4014B9CA4ED56F1528A1"><enum>107.</enum><header>Clarification of branch closure requirements</header> <subsection id="HFA7526F8F86E4DFBBE26032471F20072"><enum></enum><text>Section 42(d)(4)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1831r-1(d)(4)(A)) is amended by inserting `and any bank controlled by an out-of-State bank holding company (as defined in section 2(o)(7) of the Bank Holding Company Act of 1956)' before the period. </text></subsection></section> <section id="H05B97CDE1BF342E3B7018D2222786422"><enum>108.</enum><header>Amendments relating to limited purpose banks</header> <subsection id="H73F419A8922945D59DA062F059F3DACD"><enum>(a)</enum><header>In general</header><text>Section 4(f) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(f)) is amended—</text> <paragraph id="H4F3BE0FB144F41F3BE3EEC1C745FA547"><enum>(1)</enum><text>in paragraph (2)(a)(ii)—</text> <subparagraph id="H79AAD86FFE4B42E78BC70090CCE8156D"><enum>(A)</enum><text>by striking <quote>and</quote> at the end of subclause (IX);</text></subparagraph> <subparagraph id="HDBAA92E713D642AC90899DA07B53E138"><enum>(B)</enum><text>by inserting <quote>and</quote> after the semicolon at the end of subclause (X); and</text></subparagraph> <subparagraph id="H975F57C7C0D649B0B78473C1EBD198CF"><enum>(C)</enum><text>by inserting after subclause (X) the following new subclause:</text> <quoted-block id="HD9D3EBD43A2848418F6600E06B98E41C" style="USC"> <subclause id="H7D6BB987B1054FA0B98DDF00E7A526B2"><enum>(XI)</enum><text>assets that are derived from, or are incidental to, activities in which institutions described in section 2(c)(2)(F) are permitted to engage,</text></subclause><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="HDA1BEDE58F104D4C8616B44439691EC"><enum>(2)</enum><text>in paragraph (2), by striking subparagraph (B) and inserting the following new subparagraphs:</text> <quoted-block id="H5DC57E21F90342B8BF34858D3CABD22F" style="USC"> <subparagraph id="H790CECE6A27D4DBCB3AE1E92777CD5A7"><enum>(B)</enum><text>any bank subsidiary of such company engages in any activity in which the bank was not lawfully engaged as of March 5, 1987, unless the bank is well managed and well capitalized;</text></subparagraph> <subparagraph id="HF41DF33ECA1849F9AB8614648B661D66"><enum>(C)</enum><text>any bank subsidiary of such company both—</text> <clause id="H9FD0E35DE7054EB1AD02FB1ECB158900"><enum>(i)</enum><text>accepts demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties; and</text></clause> <clause id="H331E490C80FC4D35AE044C9DD841DAE0"><enum>(ii)</enum><text>engages in the business of making commercial loans (and, for purposes of this clause, loans made in the ordinary course of a credit card operation shall not be treated as commercial loans); or</text></clause></subparagraph> <subparagraph id="H37D47F4830A14A1486FB2C8FBCC3A9C"><enum>(D)</enum><text>after the date of the enactment of the Competitive Equality Amendments of 1987, any bank subsidiary of such company permits any overdraft (including any intraday overdraft), or incurs any such overdraft in such bank's account at a Federal reserve bank, on behalf of an affiliate, other than an overdraft described in paragraph (3).</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="H619A908DE79E457886077FB181CA4449"><enum>(3)</enum><text>by striking paragraphs (3) and (4) and inserting the following new paragraphs:</text> <quoted-block id="HA512606447874ED798346BF1AE1351E5" style="USC"> <paragraph id="H45FB0CAB1D50489DBB545E27CCC95248"><enum>(3)</enum><header>Permissible overdrafts described</header><text>For purposes of paragraph (2)(D), an overdraft is described in this paragraph if—</text> <subparagraph id="HB8543E0151334AB0B4BF2FBACB1372CC"><enum>(A)</enum><text>such overdraft results from an inadvertent computer or accounting error that is beyond the control of both the bank and the affiliate; or</text></subparagraph> <subparagraph id="H562F7458E7844DA58D27B600087ECA99"><enum>(B)</enum><text>such overdraft—</text> <clause id="HFC9E59E366D54C299CAA3EC1C187CC93"><enum>(i)</enum><text>is permitted or incurred on behalf of an affiliate which is monitored by, reports to, and is recognized as a primary dealer by the Federal Reserve Bank of New York; and</text></clause> <clause id="H04FB1C3E5E5A4CAAAADC86F3CD8C2CFD"><enum>(ii)</enum><text>is fully secured, as required by the Board, by bonds, notes, or other obligations which are direct obligations of the United States or on which the principal and interest are fully guaranteed by the United States or by securities and obligations eligible for settlement on the Federal Reserve book entry system.</text></clause></subparagraph></paragraph> <paragraph id="HD9C5FF603DCF4B4AB345B21D33B796D"><enum>(4)</enum><header>Divestiture in case of loss of exemption</header><text>If any company described in paragraph (1) fails to qualify for the exemption provided under such paragraph by operation of paragraph (2), such exemption shall cease to apply to such company and such company shall divest control of each bank it controls before the end of the 180-day period beginning on the date that the company receives notice from the Board that the company has failed to continue to qualify for such exemption, unless before the end of such 180-day period, the company has—</text> <subparagraph id="H6B3D218A9D2B4CA2B2B0041CC26BAA7"><enum>(A)</enum><text>corrected the condition or ceased the activity that caused the company to fail to continue to qualify for the exemption; and</text></subparagraph> <subparagraph id="H696A6EE12E774A6CB19C66953F0548EF"><enum>(B)</enum><text>implemented procedures that are reasonably adapted to avoid the reoccurrence of such condition or activity.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H862FBBECA361493EA3906C9583FAB00"><enum>(b)</enum><header>Industrial loan companies affiliate overdrafts</header><text>Section 2(c)(2)(H) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(H)) is amended by inserting before the period at the end <quote>, or that is otherwise permissible for a bank controlled by a company described in section 4(f)(1)</quote>.</text></subsection></section> <section id="HBFB477480C894A068844DC9DA75EDBB9"><enum>109.</enum><header>Reports on ongoing FTC study of consumer privacy issues</header> <subsection id="H066EB57234394393AEB8E29ED21B751F"><enum></enum><text>With respect to the ongoing multistage study being conducted by the Federal Trade Commission on consumer privacy issues, the Commission shall submit to the Congress an interim report on the findings and conclusions of the Commission, together with such recommendations for legislative and administrative action as the Commission determines to be appropriate, at the conclusion of each stage of such study and a final report at the conclusion of the study. </text></subsection></section> <section id="H77943B34DAF249739F40162FF951CE3B"><enum>110.</enum><header>GAO study of economic impact on community banks and other small financial institutions</header> <subsection id="H74553A0B652944968545EB2823E6F01C"><enum>(a)</enum><header>Study required</header><text>The Comptroller General of the United States shall conduct a study of the projected economic impact that the enactment of this Act will have on financial institutions which have total assets of $100,000,000 or less.</text></subsection> <subsection id="HCCD117672ED44CB8809E90DDF0920834"><enum>(b)</enum><header>Report to the Congress</header><text>The Comptroller General of the United States shall submit a report to the Congress before the end of the 6-month period beginning on the date of the date of the enactment of this Act containing the findings and conclusions of the Comptroller General with regard to the study required under subsection (a) and such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.</text></subsection></section></subtitle> <subtitle id="T408CC2F7A6554C94B4A843EF65123184"><enum>B</enum><header>Streamlining Supervision of Financial Holding Companies</header> <section id="H09E8FEB41D8D496BB84B181769878ECA"><enum>111.</enum><header>Streamlining financial holding company supervision</header> <subsection id="H19D0098492CD4A1699C63604BC84F5AB"><enum>(a)</enum><text>Section 5(c) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)) is amended to read as follows:</text> <quoted-block id="HFFC7ADB3165A4031AB6EC9C4A3AABD83" style="USC"> <subsection id="HB31E58F0EF3B48F9B2F41B05006B20F0"><enum>(c)</enum><header>Reports and examinations</header> <paragraph id="H8B3669C6258C4290AD061314C4EA836B"><enum>(1)</enum><header>Reports</header> <subparagraph id="HDFC4A04F82AC4646BF9E9774F0071112"><enum>(A)</enum><header>In general</header><text>The Board from time to time may require any bank holding company and any subsidiary of such company to submit reports under oath to keep the Board informed as to—</text> <clause id="HB4BF035E5AA546F1BCB7516C2D6FFE57"><enum>(i)</enum><text>its financial condition, systems for monitoring and controlling financial and operating risks, and transactions with depository institution subsidiaries of the holding company; and</text></clause> <clause id="H6939AEAAEDA246A9B3BDC8FC1E5B7DD"><enum>(ii)</enum><text>compliance by the company or subsidiary with applicable provisions of this Act.</text></clause></subparagraph> <subparagraph id="HCE637E1D66014DDDB3B4002936027FA"><enum>(B)</enum><header>Use of existing reports</header> <clause id="H72045B3C480F4000004D693DD115E53C"><enum>(i)</enum><header>In general</header><text>The Board shall, to the fullest extent possible, accept reports in fulfillment of the Board's reporting requirements under this paragraph that a bank holding company or any subsidiary of such company has provided or been required to provide to other Federal and State supervisors or to appropriate self-regulatory organizations.</text></clause> <clause id="H8E06BDD7EA93498B9036B1692825BD99"><enum>(ii)</enum><header>Availability</header><text>A bank holding company or a subsidiary of such company shall provide to the Board, at the request of the Board, a report referred to in clause (i).</text></clause> <clause id="HF19CE703A04545C2AF52E1D07FE87366"><enum>(iii)</enum><header>Required use of publicly reported information</header><text>The Board shall, to the fullest extent possible, accept in fulfillment of any reporting or recordkeeping requirements under this Act information that is otherwise required to be reported publicly and externally audited financial statements.</text></clause> <clause id="HE5CE75F5247E459299CC92D6EAAB942D"><enum>(iv)</enum><header>Reports filed with other agencies</header><text>In the event the Board requires a report from a functionally regulated nondepository institution subsidiary of a bank holding company of a kind that is not required by another Federal or State regulator or appropriate self-regulatory organization, the Board shall request that the appropriate regulator or self-regulatory organization obtain such report. If the report is not made available to the Board, and the report is necessary to assess a material risk to the bank holding company or any of its subsidiary depository institutions or compliance with this Act, the Board may require such subsidiary to provide such a report to the Board.</text></clause></subparagraph> <subparagraph id="H5956F510928E4897BE90E5747FEBC84"><enum>(C)</enum><header>Definition</header><text>For purposes of this subsection, the term <term>functionally regulated nondepository institution</term> means—</text> <clause id="HE57F7663018447E4AA43563E1CEE3719"><enum>(i)</enum><text>a broker or dealer registered under the Securities Exchange Act of 1934;</text></clause> <clause id="HC83CE5E874454D5BADD600C26F83DCE9"><enum>(ii)</enum><text>an investment adviser registered under the Investment Advisers Act of 1940, or with any State, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;</text></clause> <clause id="HE9E6F2716E404ADD00A82CE2ED93007E"><enum>(iii)</enum><text>an insurance company subject to supervision by a State insurance commission, agency, or similar authority; and</text></clause> <clause id="H66929DB36E5048FC8C8B51229CC31DB9"><enum>(iv)</enum><text>an entity subject to regulation by the Commodity Futures Trading Commission, with respect to the commodities activities of such entity and activities incidental to such commodities activities.</text></clause></subparagraph></paragraph> <paragraph id="H4B870A89E8A74CD997B832E155EC32D7"><enum>(2)</enum><header>Examinations</header> <subparagraph id="HCB05A37EBCDB423A004BA843CDAEB047"><enum>(A)</enum><header>Examination authority</header> <clause id="HE9CBF7C75A3C4A12B4BE409678EEBA45"><enum>(i)</enum><header>In general</header><text>The Board may make examinations of each bank holding company and each subsidiary of a bank holding company.</text></clause> <clause id="HEF8FE7BB2C49480BBC2C507E70AEF4C8"><enum>(ii)</enum><header>Functionally regulated nondepository institution subsidiaries</header><text>Notwithstanding clause (i), the Board may make examinations of a functionally regulated nondepository institution subsidiary of a bank holding company only if—</text> <subclause id="HFC7B5C6EF3E24ED681E2E7E453E7B9E"><enum>(I)</enum><text>the Board has reasonable cause to believe that such subsidiary is engaged in activities that pose a material risk to an affiliated depository institution, or</text></subclause> <subclause id="HC7B65C1624F143BBBCB234579DDB5289"><enum>(II)</enum><text>based on reports and other available information, the Board has reasonable cause to believe that a subsidiary is not in compliance with this Act or with provisions relating to transactions with an affiliated depository institution and the Board cannot make such determination through examination of the affiliated depository institution or bank holding company.</text></subclause></clause></subparagraph> <subparagraph id="H62B41DDBFA2E421D9846F2C008866FE0"><enum>(B)</enum><header>Limitations on examination authority for bank holding companies and subsidiaries</header><text>Subject to subparagraph (A)(ii), the Board may make examinations under subparagraph (A)(i) of each bank holding company and each subsidiary of such holding company in order to—</text> <clause id="H90A9B06162F343B8AF5FFF2CF4479CC"><enum>(i)</enum><text>inform the Board of the nature of the operations and financial condition of the holding company and such subsidiaries;</text></clause> <clause id="H0DF6A75992BF408DB021147D297BB5F4"><enum>(ii)</enum><text>inform the Board of—</text> <subclause id="H8A8EA7530555450C8D7FD703B0C9ACBB"><enum>(I)</enum><text>the financial and operational risks within the holding company system that may pose a threat to the safety and soundness of any subsidiary depository institution of such holding company; and</text></subclause> <subclause id="H3CB849EF1A6F46839CCB9FC9688D0506"><enum>(II)</enum><text>the systems for monitoring and controlling such risks; and</text></subclause></clause> <clause id="HC21DBBD86896464B80CD2400687DADC3"><enum>(iii)</enum><text>monitor compliance with the provisions of this Act and those governing transactions and relationships between any subsidiary depository institution and its affiliates.</text></clause></subparagraph> <subparagraph id="HBA674D36739B4225B6FC2B2004F386FA"><enum>(C)</enum><header>Restricted focus of examinations</header><text>The Board shall, to the fullest extent possible, limit the focus and scope of any examination of a bank holding company to—</text> <clause id="HBAE5E71A25734C1CA75BD85C337B9B81"><enum>(i)</enum><text>the bank holding company; and</text></clause> <clause id="H4DF10C4996094523B8C240EE61E1CB3"><enum>(ii)</enum><text>any subsidiary of the holding company that, because of—</text> <subclause id="H287574FB53F6496083830395D60091D1"><enum>(I)</enum><text>the size, condition, or activities of the subsidiary;</text></subclause> <subclause id="HC9EB0B32E78E46D58C55728F4493E48D"><enum>(II)</enum><text>the nature or size of transactions between such subsidiary and any depository institution which is also a subsidiary of such holding company; or</text></subclause> <subclause id="H75F864021EEC4D66947FD976C25030F5"><enum>(III)</enum><text>the centralization of functions within the holding company system, could have a materially adverse effect on the safety and soundness of any depository institution affiliate of the holding company.</text></subclause></clause></subparagraph> <subparagraph id="H9E39BBCA19B5421BB735A5FEBB13C62C"><enum>(D)</enum><header>Deference to bank examinations</header><text>The Board shall, to the fullest extent possible, use, for the purposes of this paragraph, the reports of examinations of depository institutions made by the appropriate Federal and State depository institution supervisory authority.</text></subparagraph> <subparagraph id="HFFECA33BFC0B4E2B9686EDA0EB48A457"><enum>(E)</enum><header>Deference to other examinations</header><text>The Board shall, to the fullest extent possible, address the circumstances which might otherwise permit or require an examination by the Board by forgoing an examination and instead reviewing the reports of examination made of—</text> <clause id="H0633BE440835475481AE34DB70E742C9"><enum>(i)</enum><text>any registered broker or dealer by or on behalf of the Securities and Exchange Commission;</text></clause> <clause id="H8F5E14659B95482CB2D2DE3EAD8144FF"><enum>(ii)</enum><text>any registered investment adviser properly registered by or on behalf of either the Securities and Exchange Commission or any State;</text></clause> <clause id="HC70524CD9E6343468226F5006836A320"><enum>(iii)</enum><text>any licensed insurance company by or on behalf of any state regulatory authority responsible for the supervision of insurance companies; and</text></clause> <clause id="H438E38AEC7C9433EABF05BA0415B4C30"><enum>(iv)</enum><text>any other subsidiary that the Board finds to be comprehensively supervised by a Federal or State authority.</text></clause></subparagraph></paragraph> <paragraph id="H0A1F01CBF48B4B569D1597E812B3D182"><enum>(3)</enum><header>Capital</header> <subparagraph id="H6247FB31EA4742588E1629A39D9ED513"><enum>(A)</enum><header>In general</header><text>The Board shall not, by regulation, guideline, order or otherwise, prescribe or impose any capital or capital adequacy rules, guidelines, standards, or requirements on any subsidiary of a financial holding company that is not a depository institution and—</text> <clause id="H78E0357FC9A94C5AB0C1BE34FF39E103"><enum>(i)</enum><text>is in compliance with applicable capital requirements of another Federal regulatory authority (including the Securities and Exchange Commission) or State insurance authority; or</text></clause> <clause id="HF6299B9DD643435C93B9B4ED7DBDC4BE"><enum>(ii)</enum><text>is properly registered as an investment adviser under the Investment Advisers Act of 1940, or with any State.</text></clause></subparagraph> <subparagraph id="H3D918248798044188FD678D2D3F9D92D"><enum>(B)</enum><header>Rule of construction</header><text>Subparagraph (A) shall not be construed as preventing the Board from imposing capital or capital adequacy rules, guidelines, standards, or requirements with respect to activities of a registered investment adviser other than investment advisory activities or activities incidental to investment advisory activities.</text></subparagraph> <subparagraph id="H0902C554811D4E55003B47AFD3553FC"><enum>(C)</enum><header>Limitations on indirect action</header><text>In developing, establishing, or assessing holding company capital or capital adequacy rules, guidelines, standards, or requirements for purposes of this paragraph, the Board shall not take into account the activities, operations, or investments of an affiliated investment company registered under the Investment Company Act of 1940, if the investment company is not—</text> <clause id="H51CB10E81B594E0EAFE0013D922CBA9C"><enum>(i)</enum><text>a bank holding company; or</text></clause> <clause id="H6D8CCA86B1FE4B49BFDA4447AFCC6B3"><enum>(ii)</enum><text>controlled by a bank holding company by reason of ownership by the bank holding company (including through all of its affiliates) of 25 percent or more of the shares of the investment company, where the shares owned by the bank holding company have a market value equal to more than $1,000,000.</text></clause></subparagraph></paragraph> <paragraph id="HD43A3CB980624E439BC4D9BB4C004BA3"><enum>(4)</enum><header>Transfer of board authority to appropriate federal banking agency</header> <subparagraph id="H6B9BF654F1FF4693B6656624D565C133"><enum>(A)</enum><header>In general</header><text>In the case of any bank holding company which is not significantly engaged in nonbanking activities, the Board, in consultation with the appropriate Federal banking agency, may designate the appropriate Federal banking agency of the lead insured depository institution subsidiary of such holding company as the appropriate Federal banking agency for the bank holding company.</text></subparagraph> <subparagraph id="HA8C664C468E14449AC57837C00F2ABF"><enum>(B)</enum><header>Authority transferred</header><text>An agency designated by the Board under subparagraph (A) shall have the same authority as the Board under this Act to—</text> <clause id="H696E2B5F9A0E4F1CA9B6AC24A2B65304"><enum>(i)</enum><text>examine and require reports from the bank holding company and any affiliate of such company (other than a depository institution) under section 5;</text></clause> <clause id="H5DC152E43BBB4430876331C4B5E1AC80"><enum>(ii)</enum><text>approve or disapprove applications or transactions under section 3;</text></clause> <clause id="H6595E64D1EFF425C825E47C4F2CEDEC"><enum>(iii)</enum><text>take actions and impose penalties under subsections (e) and (f) of section 5 and section 8; and</text></clause> <clause id="H8D5B60D8F07D49C2B6A1AFBC2CD0049"><enum>(iv)</enum><text>take actions regarding the holding company, any affiliate of the holding company (other than a depository institution), or any institution-affiliated party of such company or affiliate under the Federal Deposit Insurance Act and any other statute which the Board may designate.</text></clause></subparagraph> <subparagraph id="H9656E954236049C8B17492B6E5F7405E"><enum>(C)</enum><header>Agency orders</header><text>ection 9 of this Act and section 105 of the Bank Holding Company Act Amendments of 1970 shall apply to orders issued by an agency designated under subparagraph (A) in the same manner such sections apply to orders issued by the Board.</text></subparagraph></paragraph> <paragraph id="H2203CFFE53334050A36CD3FF4FEE8D05"><enum>(5)</enum><header>Functional regulation of securities and insurance activities</header><text>The Board shall defer to—</text> <subparagraph id="H73434341FB5F47DAA8BD88BC00FF1B6C"><enum>(A)</enum><text>the Securities and Exchange Commission with regard to all interpretations of, and the enforcement of, applicable Federal securities laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of registered brokers, dealers, investment advisers, and investment companies;</text></subparagraph> <subparagraph id="H4391426541AF4C4CA4B5E100916BF145"><enum>(B)</enum><text>the relevant State securities authorities with regard to all interpretations of, and the enforcement of, applicable State securities laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of registered brokers, dealers, and investment advisers; and</text></subparagraph> <subparagraph id="H5DA91278727D438BAB2576DE353E0582"><enum>(C)</enum><text>the relevant State insurance authorities with regard to all interpretations of, and the enforcement of, applicable State insurance laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of insurance companies and insurance agents.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="HB7A80D8B2FF449CE9043312F36EA1200"><enum>112.</enum><header>Elimination of application requirement for financial holding companies</header> <subsection id="H2B59F5B5B4B248ABB3EABD06C2414CC6"><enum>(a)</enum><header>Prevention of duplicative filings</header><text>Section 5(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(a)) is amended by adding the following new sentence at the end: <quote>A declaration filed in accordance with section 6(b)(1)(C) shall satisfy the requirements of this subsection with regard to the registration of a bank holding company but not any requirement to file an application to acquire a bank pursuant to section 3.</quote>.</text></subsection> <subsection id="HF8DAC0B7160F4110B9CB7C25121200F3"><enum>(b)</enum><header>Divestiture procedures</header><text>Section 5(e)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(e)(1)) is amended—</text> <paragraph id="H9388A75920DC45FBB118BA9B1742486D"><enum>(1)</enum><text>by striking <quote>Financial Institutions Supervisory Act of 1966, order</quote> and inserting “Financial Institutions Supervisory Act of 1966, at the election of the bank holding company</text> <quoted-block id="H88F6233B46CA466C8E00EB4F1C413412" style="USC"> <subparagraph id="H6336286D6A224032B0F5A37BEE5B28E9"><enum>(A)</enum><text>order</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="H1B3B7DC99C6E47EEA02250618038362B"><enum>(2)</enum><text>by striking <quote>shareholders of the bank holding company. Such distribution</quote> and inserting “shareholders of the bank holding company; or</text> <quoted-block id="H2595507039AD4491A6C666F47871EF31" style="USC"> <subparagraph id="H5C711092982849AF8D2C00763192DECD"><enum>(B)</enum><text>order the bank holding company, after due notice and opportunity for hearing, and after consultation with the primary supervisor for the bank, which shall be the Comptroller of the Currency in the case of a national bank, and the Federal Deposit Insurance Corporation and the appropriate State supervisor in the case of an insured nonmember bank, to terminate (within 120 days or such longer period as the Board may direct) the ownership or control of any such bank by such company.<linebreak/><linebreak/>The distribution referred to in subparagraph (A)</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section> <section id="H589902FBB85B4F47BB00E1D0C6394FE4"><enum>113.</enum><header>Authority of State insurance regulator and Securities and Exchange Commission</header> <subsection id="H6267F6D43A6E4A61A752AC554718AEB4"><enum>(a)</enum><text>Section 5 of the Bank Holding Company Act of 1956 (12 U.S.C. 1844) is amended by adding at the end the following new subsection:</text> <quoted-block id="HCAE813277DAA42E0BCA2CB6D96A943EC" style="USC"> <subsection id="H20379CB3EF1A487D895D6403DC60A653"><enum>(g)</enum><header>Authority of State insurance regulator and the Securities and Exchange Commission</header> <paragraph id="H28807CB8ABCA4B5882AD6F7D437855E"><enum>(1)</enum><header>In general</header><text>Notwithstanding any other provision of law, any regulation, order, or other action of the Board which requires a bank holding company to provide funds or other assets to a subsidiary insured depository institution shall not be effective nor enforceable if—</text> <subparagraph id="H9B0527094AD846E5A9AACF883F75FB40"><enum>(A)</enum><text>such funds or assets are to be provided by—</text> <clause id="HBBD3E347709940BD001FB5514BC7AE83"><enum>(i)</enum><text>a bank holding company that is an insurance company or is a broker or dealer registered under the Securities Exchange Act of 1934; or</text></clause> <clause id="H5ECB76F6E30E453EBE5F65BCC419ACF5"><enum>(ii)</enum><text>an affiliate of the depository institution which is an insurance company or a broker or dealer registered under such Act; and </text></clause></subparagraph> <subparagraph id="H53C7CD7C5C3E4787A71E843FD9F4EAE5"><enum>(B)</enum><text>the State insurance authority for the insurance company or the Securities and Exchange Commission for the registered broker or dealer, as the case may be, determines in writing sent to the holding company and the Board that the holding company shall not provide such funds or assets because such action would have a material adverse effect on the financial condition of the insurance company or the broker or dealer, as the case may be.</text></subparagraph></paragraph> <paragraph id="H6FAC87293FA541C0AD777FA6A9815BC7"><enum>(2)</enum><header>Notice to State insurance authority or sec required</header><text>If the Board requires a bank holding company, or an affiliate of a bank holding company, which is an insurance company or a broker or dealer described in paragraph (1)(A) to provide funds or assets to an insured depository institution subsidiary of the holding company pursuant to any regulation, order, or other action of the Board referred to in paragraph (1), the Board shall promptly notify the State insurance authority for the insurance company or the Securities and Exchange Commission, as the case may be, of such requirement.</text></paragraph> <paragraph id="H4F03EFB4A9BC4226BEC2000080C92B09"><enum>(3)</enum><header>Divestiture in lieu of other action</header><text>If the Board receives a notice described in paragraph (1)(B) from a State insurance authority or the Securities and Exchange Commission with regard to a bank holding company or affiliate referred to in that paragraph, the Board may order the bank holding company to divest the insured depository institution not later than 180 days after receiving the notice, or such longer period as the Board determines consistent with the safe and sound operation of the insured depository institution.</text></paragraph> <paragraph id="HE916C4D7358F4786984D8B13B3B6953F"><enum>(4)</enum><header>Conditions before divestiture</header><text>During the period beginning on the date an order to divest is issued by the Board under paragraph (3) to a bank holding company and ending on the date the divestiture is completed, the Board may impose any conditions or restrictions on the holding company's ownership or operation of the insured depository institution, including restricting or prohibiting transactions between the insured depository institution and any affiliate of the institution, as are appropriate under the circumstances.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H0A6FAE8DC718401E822C00B159E42BD1"><enum>114.</enum><header>Prudential safeguards</header> <subsection id="HA94F02CB78EA45E4813914F28100F876"><enum></enum><text>Section 5 of the Bank Holding Company Act of 1956 (12 U.S.C. 1844) is amended by inserting after subsection (g) (as added by section 113 of this subtitle) the following new subsection:</text> <quoted-block id="H2ED7DBBAA83645A085BC91067FABEF00" style="USC"> <subsection id="HD809099D130F4481AC10BA7EBCB2E48B"><enum>(g)</enum><header>Prudential safeguards</header> <paragraph id="H8B29C1FE783148A397773DAF6CBE812C"><enum>(1)</enum><header>In general</header><text>The Board may, by regulation or order, impose restrictions or requirements on relationships or transactions between a depository institution subsidiary of a bank holding company and any affiliate of such depository institution (other than a subsidiary of such institution) which the Board finds is consistent with the public interest, the purposes of this Act, the Financial Services Act of 1999, the Federal Reserve Act, and other Federal law applicable to depository institution subsidiaries of bank holding companies and the standards in paragraph (2).</text></paragraph> <paragraph id="HFA61F7D117A84EA7B66E2484A420E8C1"><enum>(2)</enum><header>Standards</header><text>The Board may exercise authority under paragraph (1) if the Board finds that such action would—</text> <subparagraph id="H738E9523C3CD4C84B400004E68182075"><enum>(A)</enum><text>avoid any significant risk to the safety and soundness of depository institutions or any Federal deposit insurance fund;</text></subparagraph> <subparagraph id="H877E64BC35EC4AA69F9BE244F068FDD"><enum>(B)</enum><text>enhance the financial stability of bank holding companies;</text></subparagraph> <subparagraph id="H0A8A217BFCCB428A8E23C468B5C6A94F"><enum>(C)</enum><text>avoid conflicts of interest or other abuses;</text></subparagraph> <subparagraph id="H393278EAC88444C4009BEA3261074EC7"><enum>(D)</enum><text>enhance the privacy of customers of depository institutions; or</text></subparagraph> <subparagraph id="H8AEE18F35EA84A9EAEA31FF96041865E"><enum>(E)</enum><text>promote the application of national treatment and equality of competitive opportunity between nonbank affiliates owned or controlled by domestic bank holding companies and nonbank affiliates owned or controlled by foreign banks operating in the United States.</text></subparagraph></paragraph> <paragraph id="H6D0E8B2903084A4C8670BE457C333EC6"><enum>(3)</enum><header>Review</header><text>The Board shall regularly—</text> <subparagraph id="H5274ADE782834EEEB9E4221DD878C1C5"><enum>(A)</enum><text>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 any purpose described in paragraph (2); and</text></subparagraph> <subparagraph id="H69ACCA6CBD594D6198D939B240AB62F1"><enum>(B)</enum><text>modify or eliminate any restriction or requirement the Board finds is no longer required for such purposes.</text></subparagraph></paragraph> <paragraph id="HD82345B7379946EAACEFB769599BA91C"><enum>(4)</enum><header>Foreign banks</header><text>The Board may, by regulation or order, impose restrictions or requirements on relationships or transactions between a foreign bank and any affiliate in the United States of such foreign bank that the Board finds are consistent with the public interest, the purposes of this Act, the Financial Services Act of 1999, the Federal Reserve Act, and other Federal law applicable to foreign banks and their affiliates in the United States, and the standards in paragraphs (2) and (3).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="HAD36368318E74A25AC32E54292B559CC"><enum>115.</enum><header>Examination of investment companies</header> <subsection id="H955A8ED22380451682CB7BA94CD93D37"><enum>(a)</enum><header>Exclusive commission authority</header> <paragraph id="H0D539321928146E4A9D28CFF5C1DED99"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (3), the Commission shall be the sole Federal agency with authority to inspect and examine any registered investment company that is not a bank holding company or a savings and loan holding company.</text></paragraph> <paragraph id="HD5C2308C2E8940C897A1006B542922EE"><enum>(2)</enum><header>Prohibition on banking agencies</header><text>Except as provided in paragraph (3), a Federal banking agency may not inspect or examine any registered investment company that is not a bank holding company or a savings and loan holding company.</text></paragraph> <paragraph id="H1DFD2653CFDF4F0794E49C24B7EC9358"><enum>(3)</enum><header>Certain examinations authorized</header><text>Nothing in this subsection prevents the Federal Deposit Insurance Corporation, if the Corporation finds it necessary to determine the condition of an insured depository institution for insurance purposes, from examining an affiliate of any insured depository institution, pursuant to its authority under section 10(b)(4) of the Federal Deposit Insurance Act, as may be necessary to disclose fully the relationship between the depository institution and the affiliate, and the effect of such relationship on the depository institution.</text></paragraph></subsection> <subsection id="H77C4DDC87DA7495A95A951DEC1CB65F"><enum>(b)</enum><header>Examination results and other information</header><text>The Commission shall provide to any Federal banking agency, upon request, the results of any examination, reports, records, or other information with respect to any registered investment company to the extent necessary for the agency to carry out its statutory responsibilities.</text></subsection> <subsection id="H6426D38FF57B46FB982C4FD733FEA88E"><enum>(c)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <paragraph id="HB8FE6F8593E648E0B06698BBE8497C7D"><enum>(1)</enum><header>Bank holding company</header><text>The term <term>bank holding company</term> has the same meaning as in section 2 of the Bank Holding Company Act of 1956.</text></paragraph> <paragraph id="H6DB71970EE41476EA12829E51DEF07F9"><enum>(2)</enum><header>Commission</header><text>The term <term>Commission</term> means the Securities and Exchange Commission.</text></paragraph> <paragraph id="HB4F3A2B850DD47618B6D72BBE29D855"><enum>(3)</enum><header>Federal banking agency</header><text>The term <term>Federal banking agency</term> has the same meaning as in section 3(z) of the Federal Deposit Insurance Act.</text></paragraph> <paragraph id="HE02871A37E4B47FE00707268245E7619"><enum>(4)</enum><header>Registered investment company</header><text>The term <term>registered investment company</term> means an investment company which is registered with the Commission under the Investment Company Act of 1940.</text></paragraph> <paragraph id="HC5806F3A489D4AD7BF29C433C13461D3"><enum>(5)</enum><header>Savings and loan holding company</header><text>The term <term>savings and loan holding company</term> has the same meaning as in section 10(a)(1)(D) of the Home Owners' Loan Act.</text></paragraph></subsection></section> <section id="H9C35F32A94EE4294B6DA653116D4F4B0"><enum>116.</enum><header>Limitation on rulemaking, prudential, supervisory, and enforcement authority of the Board</header> <subsection id="HE3C456D655AD4B97A098312C716C4ECC"><enum></enum><text>The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended by inserting after section 10 the following new section:</text> <quoted-block style="USC" id="H23DD34CE59EA46C2BB55A93326EE234"> <section id="HD285D371FB30438F8DC317B8FB8174AC"><enum>10A.</enum><header>Limitation on rulemaking, prudential, supervisory, and enforcement authority of the Board</header> <subsection id="H5E54F2741AC7493BAE2C71A210694EB9"><enum>(a)</enum><header>Limitation on direct action</header> <paragraph id="H904206C7B3C04863BF424EFB28373284"><enum>(1)</enum><header>In general</header><text>The Board may not prescribe regulations, issue or seek entry of orders, impose restraints, restrictions, guidelines, requirements, safeguards, or standards, or otherwise take any action under or pursuant to any provision of this Act or section 8 of the Federal Deposit Insurance Act against or with respect to a regulated subsidiary of a bank holding company unless the action is necessary to prevent or redress an unsafe or unsound practice or breach of fiduciary duty by such subsidiary that poses a material risk to—</text> <subparagraph id="H4F94BADDD7C04ADB009C753CD2C59656"><enum>(A)</enum><text>the financial safety, soundness, or stability of an affiliated depository institution; or</text></subparagraph> <subparagraph id="HF57D27DBB74D4751000789B51CDB8CE7"><enum>(B)</enum><text>the domestic or international payment system.</text></subparagraph></paragraph> <paragraph id="HCAF6A60974CE42329055A1EFDDA8E56"><enum>(2)</enum><header>Criteria for board action</header><text>The Board shall not take action otherwise permitted under paragraph (1) unless the Board finds that it is not reasonably possible to effectively protect against the material risk at issue through action directed at or against the affiliated depository institution or against depository institutions generally.</text></paragraph></subsection> <subsection id="HAA4F2C96127B494D9946EDEE00D6F922"><enum>(b)</enum><header>Limitation on indirect action</header><text>The Board may not prescribe regulations, issue or seek entry of orders, impose restraints, restrictions, guidelines, requirements, safeguards, or standards, or otherwise take any action under or pursuant to any provision of this Act or section 8 of the Federal Deposit Insurance Act against or with respect to a financial holding company or a wholesale financial holding company where the purpose or effect of doing so would be to take action indirectly against or with respect to a regulated subsidiary that may not be taken directly against or with respect to such subsidiary in accordance with subsection (a).</text></subsection> <subsection id="H7A6C201804A74BAC8FEB5DCD62B99149"><enum>(c)</enum><header>Actions specifically authorized</header><text>Notwithstanding subsection (a), the Board may take action under this Act or section 8 of the Federal Deposit Insurance Act to enforce compliance by a regulated subsidiary with Federal law that the Board has specific jurisdiction to enforce against such subsidiary.</text></subsection> <subsection id="HAE931ACFDDC34FFCAD45C6B5876DF5F3"><enum>(d)</enum><header>Regulated subsidiary defined</header><text>For purposes of this section, the term `regulated subsidiary' means any company that is not a bank holding company and is—</text> <paragraph id="HA2E91DA4E49E4FE5BDDEADD8CB6CD89B"><enum>(1)</enum><text>a broker or dealer registered under the Securities Exchange Act of 1934;</text></paragraph> <paragraph id="H7CD5753D9AA440308BD1005600BDD35E"><enum>(2)</enum><text>a registered investment adviser, properly registered by or on behalf of either the Securities and Exchange Commission or any State, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;</text></paragraph> <paragraph id="H494392008F9947A0BF2D52389DD67109"><enum>(3)</enum><text>an investment company registered under the Investment Company Act of 1940;</text></paragraph> <paragraph id="H06B65F10A1ED4F2F00AA11F3ABB6D41"><enum>(4)</enum><text>an insurance company or an insurance agency subject to supervision by a State insurance commission, agency, or similar authority; or</text></paragraph> <paragraph id="HE77EF0890BA446E7B64FA9AA1701721F"><enum>(5)</enum><text>an entity subject to regulation by the Commodity Futures Trading Commission, with respect to the commodities activities of such entity and activities incidental to such commodities activities.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H04910892B680474CB9F50898B49694A6"><enum>117.</enum><header>Interagency consultation</header> <subsection id="HB57CC4EB8CCE42F5B0E52D53562653F3"><enum>(a)</enum><header>Purpose</header><text>It is the intention of Congress that the Board of Governors of the Federal Reserve System, as the umbrella supervisor for financial holding companies, and the State insurance regulators, as the functional regulators of companies engaged in insurance activities, coordinate efforts to supervise companies that control both a depository institution and a company engaged in insurance activities regulated under State law. In particular, Congress believes that the Board and the State insurance regulators should share, on a confidential basis, information relevant to the supervision of companies that control both a depository institution and a company engaged in insurance activities, including information regarding the financial health of the consolidated organization and information regarding transactions and relationships between insurance companies and affiliated depository institutions. The appropriate Federal banking agencies for depository institutions should also share, on a confidential basis, information with the relevant State insurance regulators regarding transactions and relationships between depository institutions and affiliated companies engaged in insurance activities. The purpose of this section is to encourage this coordination and confidential sharing of information, and to thereby improve both the efficiency and the quality of the supervision of financial holding companies and their affiliated depository institutions and companies engaged in insurance activities.</text></subsection> <subsection id="H71868270256C4DCBBB4F9D57BAFC0952"><enum>(b)</enum><header>Examination results and other information</header> <paragraph id="H43E9B109F69A4AADA368AF04173CEB58"><enum>(1)</enum><header>Information of the Board</header><text>Upon the request of the appropriate insurance regulator of any State, the Board may provide any information of the Board regarding the financial condition, risk management policies, and operations of any financial holding company that controls a company that is engaged in insurance activities and is regulated by such State insurance regulator, and regarding any transaction or relationship between such an insurance company and any affiliated depository institution. The Board may provide any other information to the appropriate State insurance regulator that the Board believes is necessary or appropriate to permit the State insurance regulator to administer and enforce applicable State insurance laws.</text></paragraph> <paragraph id="H41B57878EEB94FB7933FE3773208CEE8"><enum>(2)</enum><header>Banking agency information</header><text>Upon the request of the appropriate insurance regulator of any State, the appropriate Federal banking agency may provide any information of the agency regarding any transaction or relationship between a depository institution supervised by such Federal banking agency and any affiliated company that is engaged in insurance activities regulated by such State insurance regulator. The appropriate Federal banking agency may provide any other information to the appropriate State insurance regulator that the agency believes is necessary or appropriate to permit the State insurance regulator to administer and enforce applicable State insurance laws.</text></paragraph> <paragraph id="H0F37F23135F74621A4F33C990040D814"><enum>(3)</enum><header>State insurance regulator information</header><text>Upon the request of the Board or the appropriate Federal banking agency, a State insurance regulator may provide any examination or other reports, records, or other information to which such insurance regulator may have access with respect to a company which—</text> <subparagraph id="H6ED9FFD6CB4C40A687EA61306F003767"><enum>(A)</enum><text>is engaged in insurance activities and regulated by such insurance regulator; and</text></subparagraph> <subparagraph id="H445465F460C74D4B8ED6FCE7EC318BE2"><enum>(B)</enum><text>is an affiliate of an insured depository institution, wholesale financial institution, or financial holding company.</text></subparagraph></paragraph></subsection> <subsection id="HA59A1B1F6E7B478DB59275A2B02C8E86"><enum>(c)</enum><header>Consultation</header><text>Before making any determination relating to the initial affiliation of, or the continuing affiliation of, an insured depository institution, wholesale financial institution, or financial holding company with a company engaged in insurance activities, the appropriate Federal banking agency shall consult with the appropriate State insurance regulator of such company and take the views of such insurance regulator into account in making such determination.</text></subsection> <subsection id="H37534179E3A6407B9DF0BCF6F7C4545"><enum>(d)</enum><header>Effect on other authority</header><text>Nothing in this section shall limit in any respect the authority of the appropriate Federal banking agency with respect to an insured depository institution, wholesale financial institution, or bank holding company or any affiliate thereof under any provision of law.</text></subsection> <subsection id="H351EDA27A42F43D59783211FCFC7FB9F"><enum>(e)</enum><header>Confidentiality and privilege</header> <paragraph id="HA8CEDFC018924118B8DA35CDB9AC6E6F"><enum>(1)</enum><header>Confidentiality</header><text>The appropriate Federal banking agency shall not provide any information or material that is entitled to confidential treatment under applicable Federal banking agency regulations, or other applicable law, to a State insurance regulator unless such regulator agrees to maintain the information or material in confidence and to take all reasonable steps to oppose any effort to secure disclosure of the information or material by the regulator. The appropriate Federal banking agency shall treat as confidential any information or material obtained from a State insurance regulator that is entitled to confidential treatment under applicable State regulations, or other applicable law, and take all reasonable steps to oppose any effort to secure disclosure of the information or material by the Federal banking agency.</text></paragraph> <paragraph id="H348197DC5E254022A71B328C90FDDC63"><enum>(2)</enum><header>Privilege</header><text>The provision pursuant to this section of information or material by a Federal banking agency or State insurance regulator shall not constitute a waiver of, or otherwise affect, any privilege to which the information or material is otherwise subject.</text></paragraph></subsection> <subsection id="HD4EE98BC68C349AEA44828005D34C3F1"><enum>(f)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <paragraph id="H1FCE44CCF0384A1A880064F246F2656"><enum>(1)</enum><header>Appropriate federal banking agency; insured depository institution</header><text>The terms <term>appropriate Federal banking agency</term> and <term>insured depository institution</term> have the same meanings as in section 3 of the Federal Deposit Insurance Act.</text></paragraph> <paragraph id="H50E07962EC3C4E898B2792112BEF50F0"><enum>(2)</enum><header>Board; financial holding company; and wholesale financial institution</header><text>The terms <term>Board</term>, <term>financial holding company</term>, and <term>wholesale financial institution</term> have the same meanings as in section 2 of the Bank Holding Company Act of 1956.</text></paragraph></subsection></section> <section id="HF2C0CB6E4B1B4A1EAD1F41544ED3E849"><enum>118.</enum><header>Equivalent regulation and supervision</header> <subsection id="H833D04A2D86E4E77BAD935C8EC9845F3"><enum>(a)</enum><header>In general</header><text>Notwithstanding any other provision of law, the provisions of—</text> <paragraph id="HEDAC7E886D3442938828208776B736A"><enum>(1)</enum><text>section 5(c) of the Bank Holding Company Act of 1956 (as amended by this Act) that limit the authority of the Board of Governors of the Federal Reserve System to require reports from, to make examinations of, or to impose capital requirements on bank holding companies and their nonbank subsidiaries; and</text></paragraph> <paragraph id="H034D9188ECE24ED3A1541B38DB88FFA2"><enum>(2)</enum><text>section 10A of the Bank Holding Company Act of 1956 (as added by