{"identifier":"/us/usc/t12/s1831w","title":12,"num":"\u00a7\u202f1831w.","heading":"Safety and soundness firewalls applicable to financial subsidiaries of banks","text":"\u00a7\u202f1831w.\nSafety and soundness firewalls applicable to financial subsidiaries of banks\n(a)\nIn general\nAn 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\u2014\n(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));\n(2) the State bank complies with the capital deduction and financial statement disclosure requirements in\nsection 24a(c) of this title\n(3) the State bank complies with the financial and operational safeguards required by\nsection 24a(d) of this title\n(4) the State bank complies with the amendments to sections 23A and 23B of the Federal Reserve Act [\n12 U.S.C. 371c\n(b)\nPreservation of existing subsidiaries\nNotwithstanding 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\nNovember 12, 1999\n(c)\nDefinitions\nFor purposes of this section, the following definitions shall apply:\n(1)\nSubsidiary\nThe term \u201csubsidiary\u201d means any company that is a subsidiary (as defined in\nsection 1813(w)(4) of this title\n(2)\nFinancial subsidiary\nThe term \u201cfinancial subsidiary\u201d has the meaning given the term in\nsection 24a(g) of this title\n(d)\nPreservation of authority\n(1)\nThis chapter\nNo provision of this section shall be construed as superseding the authority of the Federal Deposit Insurance Corporation to review subsidiary activities under\nsection 1831a of this title\n(2)\nFederal Reserve Act\nNo provision of this section shall be construed as affecting the applicability of the 20th undesignated paragraph of section 9 of the Federal Reserve Act [\n12 U.S.C. 335","url":"https://projectusc.org/usc/t12/s1831w.html","content":[{"t":"sec","id":"/us/usc/t12/s1831w","children":[{"t":"num","text":"\u00a7\u202f1831w."},{"t":"heading","text":"Safety and soundness firewalls applicable to financial subsidiaries of banks"},{"t":"subsec","id":"/us/usc/t12/s1831w/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"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\u2014"},{"t":"para","id":"/us/usc/t12/s1831w/a/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" the State bank and each insured depository institution affiliate of the State bank are well capitalized (after the capital deduction required by paragraph (2));","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t12/s1831w/a/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" the State bank complies with the capital deduction and financial statement disclosure requirements in ","children":[{"t":"ref","text":"section 24a(c) of this title","href":"/us/usc/t12/s24a/c","tail":";"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t12/s1831w/a/3","children":[{"t":"num","text":"(3)"},{"t":"content","text":" the State bank complies with the financial and operational safeguards required by ","children":[{"t":"ref","text":"section 24a(d) of this title","href":"/us/usc/t12/s24a/d","tail":"; and"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t12/s1831w/a/4","children":[{"t":"num","text":"(4)"},{"t":"content","text":" the State bank complies with the amendments to sections 23A and 23B of the Federal Reserve Act [","children":[{"t":"ref","text":"12 U.S.C. 371c","href":"/us/usc/t12/s371c","tail":" and 371c\u20131] made by section 121(b) of the Gramm-Leach-Bliley Act."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t12/s1831w/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Preservation of existing subsidiaries"},{"t":"content","children":[{"t":"p","text":"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 ","children":[{"t":"text","text":"November 12, 1999","tail":", and conduct through such subsidiary any activities lawfully conducted in such subsidiary as of such date."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t12/s1831w/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Definitions"},{"t":"chapeau","text":"For purposes of this section, the following definitions shall apply:"},{"t":"para","id":"/us/usc/t12/s1831w/c/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Subsidiary"},{"t":"content","children":[{"t":"p","text":"The term \u201csubsidiary\u201d means any company that is a subsidiary (as defined in ","children":[{"t":"ref","text":"section 1813(w)(4) of this title","href":"/us/usc/t12/s1813/w/4","tail":") of 1 or more insured banks."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t12/s1831w/c/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Financial subsidiary"},{"t":"content","children":[{"t":"p","text":"The term \u201cfinancial subsidiary\u201d has the meaning given the term in ","children":[{"t":"ref","text":"section 24a(g) of this title","href":"/us/usc/t12/s24a/g","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t12/s1831w/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Preservation of authority"},{"t":"para","id":"/us/usc/t12/s1831w/d/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"This chapter"},{"t":"content","children":[{"t":"p","text":"No provision of this section shall be construed as superseding the authority of the Federal Deposit Insurance Corporation to review subsidiary activities under ","children":[{"t":"ref","text":"section 1831a of this title","href":"/us/usc/t12/s1831a","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t12/s1831w/d/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Federal Reserve Act"},{"t":"content","children":[{"t":"p","text":"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 [","children":[{"t":"ref","text":"12 U.S.C. 335","href":"/us/usc/t12/s335","tail":"]."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}