(a) In general. A state member bank may control, or hold an interest
in, a financial subsidiary only if—
(1) the state member bank and each depository
institution affiliate of the state member bank are well capitalized
and well managed;
(2)
the aggregate consolidated total assets of all financial subsidiaries
of the state member bank do not exceed the lesser of—
(i) 45
percent of the consolidated total assets of the parent bank; or
(ii) $50 billion, which
dollar amount shall be adjusted according to an indexing mechanism
jointly established by the Board and the secretary of the Treasury;
(3) the state
member bank, if it is one of the largest 100 insured banks (based
on consolidated total assets as of the end of the previous calendar
year), meets the debt rating or alternative requirement of paragraph
(b) of this section, if applicable; and
(4) the Board or the appropriate Reserve
Bank has approved the bank to acquire the interest in or control the
financial subsidiary under section 208.76.
3-381.1
(b) Debt-rating or alternative requirement
for 100 largest insured banks.
(1) General. A state member bank meets the debt-rating or alternative requirement
of this paragraph (b) if—
(i) the bank has at least one issue
of eligible debt outstanding that is currently rated in one of the
three highest investment-grade rating categories by a nationally recognized
statistical rating organization; or
(ii) if the bank is one of the second
50 largest insured banks (based on consolidated total assets as of
the end of the previous calendar year), the bank has a current long-term
issuer credit rating from at least one nationally recognized statistical
rating organization that is within the three highest investment-grade
rating categories used by the organization.
(2) Financial subsidiaries engaged in financial activities only as an
agent. This paragraph (b) does not apply to a state member bank
if the financial subsidiaries of the bank engage in financial activities
described in section 208.72(a)(1) and (2) only in an agency capacity
and not directly or indirectly as principal.
