The bank holding company act of 1956 duke law scholarship. The bhc act excludes from these restrictions certain companies because the financial institutions. The bank holding company act of 1956 t he bank holding company act of 1956,1 designed principally to regulate the expansion of bank holding companies and to insure the separation of banking and nonbanking enterprises, is perhaps the most important banking legislation of. Bnccorp or the company is a bank holding company registered under the bank holding company act of 1956 headquartered in bismarck, north dakota. On the last day of the old year, president nixon signed into law the bill amending the bank holding company act of 1956 to extend its coverage to onebank holding. T he bank holding company act of 1956,1 designed principally to regulate. All bank holding companies in the us are required to register with the board of governors of the federal reserve system regulation. The volcker rule generally prohibits, subject to exceptions, a banking entity from engaging in proprietary trading and from acquiring or retaining an ownership interest in or. The bank holding company act is amended by adding the. Bank holding company act of 1956, as amended bhc act. The bank holding company act of 1956 a established uniform.
The staff of the sec division of trading and markets, investment management, and corporate finance provided updated guidance on june 12, 2015 in response to frequently asked questions faqs regarding the secs final rule implementing section of the bank holding company act of 1956, commonly referred to as the volcker rule. This act, among other things, generally prohibited a bank holding company from engaging in most nonbanking activities or acquiring voting securities of certain companies that are not. The bank holding company act of 1956 is a united states act of congress that regulates the actions of bank holding companies. December 31, 1956 holding companies registered pursuant to the bank holding company aot of 1956 note. In the early 1950s, transamerica owned 46 banks, a large share of bank of america, an insurance company, real estate and oil development firms, and a fishpacking company. The transamerica corporation was symbolic of this trend. An act to amend the bank holding company act of 1956, and. We provide banking, insurance, trust and investments, mortgage.
It is the parent company of bnc national bank the bank. Section of the bank holding company act financial. Government and agency securities and money market instruments. Financial holding companies section 4k of the bhc act. The grammleachbliley act the glb act became effective on march 11, 2000. Be it enacted by parliament in the sixth year of the republic of india as follows 1. Yet, bank holding companies were not directly regulated until the enactment of the bank holding company act the bhca in 1956. Glossarybank holding company act of 1956, as amended bhc actrelated contentthe federal statute regulating the acquisition, ownership and control of banks by companies 12 u. The original law, specified that the federal reserve board of governors must approve the establishment of a bank holding company and that bank holding companies headquartered in one state are banned from acquiring a bank in another state. Wall street reform and consumer protection act and codified in section of the bank holding company act of 1956, as amended bhc act. The primary legislation defining the allowable scope of bhc activities is the bank holding company act of 1956 bhca, 12 u. With this legislation, congress gave the federal reserve much more oversight of the banking industry.
In the united states, a bank holding company, as provided by the bank holding company act of 1956 12 u. The bank holding company act of 1956 duke law research. The bank holding company act in the 1940s and 1950s, diversified bank holding companies grew in number and size. To further this goal, the glb act amended section 4 of the bhc act to allow a. An act to consolidate and amend the law relating to companies and certain other associations. Section 2 defines the bhc acts operative terms, including. I shall also say a few words about our present, far from satisfactory eco nomic situation. Act doddfrank act prohibit bhcs from engaging in proprietary trading and limit their investments in hedge funds, private equity, and related vehicles.
Section 3d of the bhc act allows the board to approve an application by a bank holding company to acquire control of a bank located in a state other than the home state of the bank holding company if certain conditions are met. Regulated foreign bank branches and agencies in the us. Banking, finance and accounting business government bank holding companies case studies laws, regulations and rules banking industry management banking law interpretation and construction. Section 4 governs the acquisition and ownership of nonbanking organizations by bank holding companies, as well as the regulation of financial holding.
Part of the banking and finance law commons recommended citation carl felsenfeld, the bank holding company act. An act to amend the bank holding company act of 1956, and for other purposes united states. The company operates community banking and wealth management businesses in north dakota, arizona and minnesota from 15 locations. Companies act, 1956 bare acts law library advocatekhoj. Section 4c8 of the bank holding company act of 1956 12 u. Notwithstanding subsection a, a financial holding company may engage in any activity, and may acquire and retain the shares of any company engaged in any activity, that the. Bank holding company act fdic law, regulations, related acts. A bank holding company is a company that controls any bank. The bank holding company act of 1956 bhc act establishes the legal framework under which bank holding companies that is, companies which own or control banks operate and restricts the type of activities that these companies may conduct. Leveled the playing field so international banks had to play. The bank holding company act requires that such companies register with the board of governors of the federal reserve system which is given extensive regulatory authority over these corporations. Bank holding company act of 1956, also known as an act to define bank holding companies, control their future expansion, and require divestment of their nonbanking interestspublic law 84511, 84th congress, h.
The assumption by a bank holding company of direct or indirect ownership or control of the voting shares of another bank holding company or a bank if, after the effective date thereof, the bank holding company making the acquisition will directly or indirectly own or control more than 5 percent of any class of voting shares of the other bank. Bank holding company supervision manual federal reserve. The authority section 4k4h of the bank holding company act bhc act grants to fhcs to make merchant banking investments mbis is an alternative to any other authority that the fhc may have to make investments in non. Bank holding company act of 1956 federal reserve history. Company covered in 1970 means a company which becomes a bank holding company as a result of the enactment of the bank holding company act amendments of 1970 and which would have been a bank holding company on june 30, 1968, if those amendments had been enacted on that date. For complete classification of this act to the code, see short title note set out below and tables. Glossarybank holding company act of 1956, as amended bhc act related contentthe federal statute regulating the acquisition, ownership and control of banks by companies 12 u. Has it lived its life carl felsenfeld follow this and additional works at.
The 1970 amendments to the bank holding company act. The income tax department never asks for your pin numbers, passwords or similar access information for credit cards, banks or other financial accounts through email the income tax department appeals to taxpayers not to respond to such emails and not to share information relating to their credit card, bank and other financial accounts. Bhc act, regulation y 12 cfr part 225, and all other applicable statutes and regulations to become a bank holding company andor to acquire the assets or the ownership of, control of, or the power to vote shares of a bank or bank holding company and all of the banks and nonbanking companies owned by the. The bank holding company act of 1956, 7 duke law journal 124 1957 available at. The law was implemented, in part, to regulate and control banks that had formed bank holding companies to own both banking and nonbank. The bank holding company act of 1956 bhc act establishes the legal framework under which bank holding companiesthat is, companies which own or control banksoperate and restricts the type of activities that these companies may conduct. G engaging, in the united states, in any activity that i a bank holding company may engage in outside of the united states. The bank holding company act of 1956 was implemented in response to banks forming bank holding companies in order to own both banking and nonbanking businesses. Bank holding company law and legal definition uslegal, inc. Fdic law, regulations, related acts bank holding company act. Act of 1956 to extend its coverage to onebank holding. To amend the bank holding company act of 1956 to require agencies to make considerations relating to the promotion of efficiency, competition, and capital formation before issuing or modifying certain regulations. Company covered in 1970 means a company which becomes a bank holding company as a result of the enactment of the bank holding company act amendments of 1970 and which would have been a bank holding company on june 30, 1968, if those amendments. Because of their corporate status, they are subject to more regulations than.