(a) Filing requirement. A bank holding company may elect to become
a financial holding company by filing a written declaration with the
appropriate Reserve Bank. A declaration by a bank holding company
is considered to be filed on the date that all information required
by paragraph (b) of this section is received by the appropriate Reserve
Bank.
(b) Contents of
declaration. To be deemed complete, a declaration must—
(1) state that the bank holding company
elects to be a financial holding company;
(2) provide the name and head-office address
of the bank holding company and of each depository institution controlled
by the bank holding company;
(3) certify that each depository institution
controlled by the bank holding company is well capitalized as of the
date the bank holding company submits its declaration;
(4) provide the capital ratios
as of the close of the previous quarter for all relevant capital measures,
as defined in section 38 of the Federal Deposit Insurance Act (12
USC 1831o), for each depository institution controlled by the company
on the date the company submits its declaration; and
(5) certify that each depository institution
controlled by the company is well managed as of the date the company
submits its declaration.
4-056.11
(c) Effectiveness of election. An election
by a bank holding company to become a financial holding company shall
not be effective if, during the period provided in paragraph (e) of
this section, the Board finds that, as of the date the declaration
was filed with the appropriate Reserve Bank—
(1) any insured depository institution
controlled by the bank holding company (except an institution excluded
under paragraph (d) of this section) has not achieved at least a rating
of “satisfactory record of meeting community credit needs” under the
Community Reinvestment Act at the institution’s most recent examination;
or
(2) any depository
institution controlled by the bank holding company is not both well
capitalized and well managed.
(d) Consideration of the CRA performance of a recently
acquired insured depository institution. Except as provided in
paragraph (f) of this section, an insured depository institution will
be excluded for purposes of the review of the Community Reinvestment
Act rating provisions of paragraph (c)(1) of this section if—
(1) the bank holding company acquired the
insured depository institution during the 12-month period preceding
the filing of an election under paragraph (a) of this section;
(2) the bank holding
company has submitted an affirmative plan to the appropriate federal
banking agency for the institution to take actions necessary for the
institution to achieve at least a rating of “satisfactory record of
meeting community credit needs” under the Community Reinvestment Act
at the next examination of the institution; and
(3) the appropriate federal banking agency
for the institution has accepted the plan described in paragraph (d)(2)
of this section.
4-056.12
(e) Effective date of election.
(1) In general. An election filed by a bank holding company under paragraph (a)
of this section is effective on the thirty-first calendar day after
the date that a complete declaration was filed with the appropriate
Reserve Bank, unless the Board notifies the bank holding company prior
to that time that the election is ineffective.
(2) Earlier notification
that an election is effective. The Board or the appropriate Reserve
Bank may notify a bank holding company that its election to become
a financial holding company is effective prior to the thirty-first
day after the date that a complete declaration was filed with the
appropriate Reserve Bank. Such a notification must be in writing.
4-056.13
(f) Requests to become a
financial holding company submitted as part of an application to become
a bank holding company.
(1) In general. A company that is not a bank holding company and has applied for
the Board’s approval to become a bank holding company under section
3(a)(1) of the BHC Act (12 USC 1842(a)(1)) may as part of that application
submit a request to become a financial holding company.
(2) Contents of request. A request to become a financial holding
company submitted as part of an application to become a bank holding
company must—
(i) state that the company seeks to
become a financial holding company on consummation of its proposal
to become a bank holding company; and
(ii) certify that each depository institution that would
be controlled by the company on consummation of its proposal to become
a bank holding company will be both well capitalized and well managed
as of the date the company consummates the proposal.
(3) Request becomes a declaration and an effective
election on date of consummation of bank holding company proposal. A complete request submitted by a company under this paragraph (f)
becomes a complete declaration by a bank holding company for purposes
of section 4(l) of the BHC Act and becomes an effective election
for purposes of section 225.81(b) on the date that the company lawfully
consummates its proposal under section 3 of the BHC Act, unless the
Board notifies the company at any time prior to consummation of the
proposal and that—
(i) any depository institution that
would be controlled by the company on consummation of the proposal
will not be both well capitalized and well managed on the date of
consummation; or
(ii) any insured depository institution that would be controlled
by the company on consummation of the proposal has not achieved at
least a rating of “satisfactory record of meeting community credit
needs” under the Community Reinvestment Act at the institution’s most
recent examination.
(4) Limited exclusion
for recently acquired institutions not available. Unless the
Board determines otherwise, an insured depository institution that
is controlled or would be controlled by the company as part of its
proposal to become a bank holding company may not be excluded for
purposes of evaluating the Community Reinvestment Act criterion described
in this paragraph or in paragraph (d) of this section.
4-056.14
(g) Board’s authority to
exercise supervisory authority over a financial holding company. An effective election to become a financial holding company does
not in any way limit the Board’s statutory authority under the BHC
Act, the Federal Deposit Insurance Act, or any other relevant federal
statute to take appropriate action, including imposing supervisory
limitations, restrictions, or prohibitions on the activities and acquisitions
of a bank holding company that has elected to become a financial holding
company, or enforcing compliance with applicable law.
