FDIC Law, Regulations, Related Acts
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1000 - Federal Deposit Insurance Act
SEC. 26. ASSURING CONSISTENT OVERSIGHT OF SUBSIDIARIES OF HOLDING
COMPANIES.
(a) Definitions.--For purposes of this section:
(1) BOARD.--The term "Board" means the Board of
Governors of the Federal Reserve System.
(2) FUNCTIONALLY REGULATED SUBSIDIARY.--The term
"functionally regulated subsidiary" has the same meaning as in
section 5(c)(5) of the Bank Holding Company Act.
(3) LEAD INSURED DEPOSITORY INSTITUTION.--The term
"lead insured depository institution" has the same meaning as in
section 2(o)(8) of the Bank Holding Company Act.
(b) Examination Requirements.--Subject to subtitle B of
the Consumer Financial Protection Act of 2010, the Board shall examine
the activities of a nondepository institution subsidiary (other than a
functionally regulated subsidiary or a subsidiary of a depository
institution) of a depository institution holding company that are
permissible for the insured depository institution subsidiaries of the
depository institution holding company in the same manner, subject to
the same standards, and with the same frequency as would be required if
such activities were conducted in the lead insured depository
institution of the depository institution holding
company.
(c) State Coordination.--
(1) CONSULTATION AND COORDINATION.--If a nondepository
institution subsidiary is supervised by a State bank supervisor or
other State regulatory authority, the Board, in conducting the
examinations required in subsection (b), shall consult and coordinate
with such State regulator.
(2) ALTERNATING EXAMINATIONS PERMITTED.--The
examinations required under subsection (b) may be conducted in joint or
alternating manner with a State regulator, if the Board determines that
an examination of a nondepository institution subsidiary conducted by
the State carries out the purposes of this section.
(d) Appropriate Federal Banking Agency Backup Examination
Authority.--
(1) IN GENERAL.--In the event that the Board does not
conduct examinations required under subsection (b) in the same manner,
subject to the same standards, and with the same frequency as would be
required if such activities were conducted by the lead insured
depository institution subsidiary of the depository institution holding
company, the appropriate Federal banking agency for the lead insured
depository institution may recommend in writing (which shall include a
written explanation of the concerns giving rise to the recommendation)
that the Board perform the examination required under subsection (b).
(2) EXAMINATION BY AN APPROPRIATE BANKING AGENCY.--If
the Board does not, before the end of the 60-day period beginning on
the date on which the Board receives a recommendation under paragraph
(1), begin an examination as required under subsection (b) or provide a
written explanation or plan to the appropriate Federal banking agency
making such recommendation responding to the concerns raised by the
appropriate Federal banking agency for the lead insured depository
institution, the appropriate Federal banking agency for the lead
insured depository institution may, subject to the Consumer Financial
Protection Act of 2010, examine the activities that are permissible for
a depository institution subsidiary conducted by such nondepository
institution subsidiary (other than a functionally regulated subsidiary
or a subsidiary of a depository institution) of the depository
institution holding company as if the nondepository institution
subsidiary were an insured depository institution for which the
appropriate Federal banking agency of the lead insured depository
institution was the appropriate Federal banking agency, to determine
whether the activities-
(A) pose a material threat to the safety and soundness of any
insured depository institution subsidiary of the depository institution
holding company;
(B) are conducted in accordance with applicable Federal law; and
(C) are subject to appropriate systems for monitoring and
controlling the financial, operating, and other material risks of the
activities that may pose a material threat to the safety and soundness
of the insured depository institution subsidiaries of the holding
company.
(3) AGENCY COORDINATION WITH THE BOARD.--An appropriate
Federal banking agency that conducts an examination pursuant to
paragraph (2) shall coordinate examination of the activities of
nondepository institution subsidiaries described in subsection (b) with
the Board in a manner that--
(A) avoids duplication;
(B) shares information relevant to the supervision of the
depository institution holding company;
(C) achieves the objectives of subsection (b); and
(D) ensures that the depository institution holding company and
the subsidiaries of the depository institution holding company are not
subject to conflicting supervisory demands by such agency and the
Board.
(4) FEE PERMITTED FOR EXAMINATION COSTS.--An appropriate
Federal banking agency that conducts an examination or enforcement
action pursuant to this section may collect an assessment, fee, or such
other charge from the subsidiary as the appropriate Federal banking
agency determines necessary or appropriate to carry out the
responsibilities of the appropriate Federal banking agency in
connection with such examination.
(e) Referrals for Enforcement by Appropriate Federal Banking
Agency.--
(1) RECOMMENDATION OF ENFORCEMENT ACTION.--The
appropriate Federal banking agency for the lead insured depository
institution, based upon its examination of a nondepository institution
subsidiary conducted pursuant to subsection (d), or other relevant
information, may submit to the Board, in writing, a recommendation that
the Board take enforcement action against such nondepository
institution subsidiary, together with an explanation of the concerns
giving rise to the recommendation, if the appropriate Federal banking
agency determines (by a vote of its members, if applicable) that the
activities of the nondepository institution subsidiary pose a material
threat to the safety and soundness of any insured depository
institution subsidiary of the depository institution holding company.
(2) BACK-UP AUTHORITY OF THE APPROPRIATE FEDERAL BANKING
AGENCY.--If, within the 60-day period beginning on the date on
which the Board receives a recommendation under paragraph (1), the
Board does not take enforcement action against the nondepository
institution subsidiary or provide a plan for supervisory or enforcement
action that is acceptable to the appropriate Federal banking agency
that made the recommendation pursuant to paragraph (1), such agency may
take the recommended enforcement action against the nondepository
institution subsidiary, in the same manner as if the nondepository
institution subsidiary were an insured depository institution for which
the agency was the appropriate Federal banking
agency.
(f) Coordination Among Appropriate Federal Banking
Agencies.--Each Federal banking agency, prior to or when exercising
authority under subsection (d) or (e) shall--
(1) provide reasonable notice to, and consult with, the
appropriate Federal banking agency or State bank supervisor (or other
State regulatory agency) of the nondepository institution subsidiary of
a depository institution holding company that is described in
subsection (d) before commencing any examination of the subsidiary;
(2) to the fullest extent possible--
(A) rely on the examinations, inspections, and reports of the
appropriate Federal banking agency or the State bank supervisor (or
other State regulatory agency) of the subsidiary;
(B) avoid duplication of examination activities, reporting
requirements, and requests for information; and
(C) ensure that the depository institution holding company and
the subsidiaries of the depository institution holding company are not
subject to conflicting supervisory demands by the appropriate Federal
banking agencies.
(g) Rule of Construction.--No provision of this section
shall be construed as limiting any authority of the Board, the
Corporation, or the Comptroller of the Currency under any other
provision of law.
[Codified to 12 U.S.C. 1831(c)]
[Source: Section 2[26] of the Act of September 21, 1950 (Pub.
L. No. 797), as added by section 1205 of title XII of the Act of
November 10, 1978 (Pub. L. No. 95--630; 92 Stat. 3711), effective March
10, 1979; as amended by section 113(p) of title I of the Act of October
15, 1982 (Pub. L. No. 97--320; 96 Stat. 1474), effective October 15,
1982; section 3 of the Act of January 12, 1983 (Pub. L. No. 97--457; 96
Stat. 2507), effective January 12, 1983; repealed by section 602(f)(1)
of title VI of the Act of September 23, 1994 (Pub. L. No. 103--325; 108
Stat. 2292), effective September 23, 1994; section 26 added by section
605(a) of title VI of the Act of July 21, 2010 (Pub. L. No. 111--203;
124 Stat. 1604), effective July 21, 2010]
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