(a) In general. An insured State bank may control or hold an interest
in a subsidiary that engages in activities as principal that would
only be permissible for a national bank to conduct through a financial
subsidiary if—
(1) the State bank and each insured depository
institution affiliate of the State bank are well capitalized (after
the capital deduction required by paragraph (2));
(2) the State bank complies with the capital
deduction and financial statement disclosure requirements in section
5136A(c) of the Revised Statutes of the United States;
(3) the State bank complies
with the financial and operational safeguards required by section
5136A(d) of the Revised Statutes of the United States; and
(4) the State bank complies
with the amendments to sections 23A and 23B of the Federal Reserve
Act made by section 121(b) of the Gramm-Leach-Bliley Act.
1-401.74
(b) Preservation of existing
subsidiaries. Notwithstanding subsection (a), an insured State bank may
retain control of a subsidiary, or retain an interest in a subsidiary,
that the State bank lawfully controlled or acquired before the date
of the enactment of the Gramm-Leach-Bliley Act, and conduct through
such subsidiary any activities lawfully conducted in such subsidiary
as of such date.
(c) Definitions. For purposes of this section, the following definitions
shall apply:
(1) The term “subsidiary” means any company that is a subsidiary (as defined in section 3(w)(4))
of 1 or more insured banks.
(2) The term “financial subsidiary” has the meaning given the term in section 5136A(g) of the Revised
Statutes of the United States.
1-401.75
(d) Preservation of authority.
(1) No provision of this section shall
be construed as superseding the authority of the Federal Deposit Insurance
Corporation to review subsidiary activities under section 24.
(2) No provision of this section
shall be construed as affecting the applicability of the 20th undesignated
paragraph of section 9 of the Federal Reserve Act.
[12 USC 1831w. As added
by act of Nov. 12, 1999 (113 Stat. 1380).]
