(a) Limits on establishment of financial subsidiaries and expansion of
existing financial subsidiaries. If a state member bank, or any
insured depository institution affiliate of the bank, has received
less than a satisfactory rating in meeting community credit needs
in its most recent examination under the Community Reinvestment Act
of 1977 (12 U.S.C. 2901 et seq.)—
(1) the state member bank may not, directly
or indirectly, acquire control of any financial subsidiary; and
(2) any financial subsidiary
controlled by the state member bank may not commence any additional
activity or acquire control, including all or substantially all of
the assets, of any company.
(b) Exception for certain activities. The prohibition
in paragraph (a)(2) of this section does not apply to any activity,
or to the acquisition of control of any company that is engaged only
in activities, that the state member bank is permitted to conduct
directly and that are conducted on the same terms and conditions that
govern the conduct of the activity by the state member bank.
(c) Duration of prohibitions. The prohibitions described in paragraph (a) of this section shall
continue in effect until such time as the state member bank and each
insured depository institution affiliate of the state member bank
has achieved at least a satisfactory rating in meeting community credit
needs in its most recent examination under the Community Reinvestment
Act.
