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4000 - Advisory Opinions

Change in Bank Control Act Notice Requirement


April 2, 1984

Katharine H. Haygood, Senior Attorney

I am writing in response to your letter of March 13, 1984 to Robert Shumway, to our telephone conversations of March 27 and 28, 1984, and to your letter to me of March 28, 1984. You have asked whether a Change in Bank Control Act Notice is required in the situation described by you. Briefly and in pertinent part, * * * is establishing a bank holding company * * * which will own 100 percent, less qualifying shares, of each of two domestic banks (specifically, two limited purpose trust companies). The two banks are presently owned 100 percent, less the qualifying shares, by * * *, and the new bank holding company will in turn be wholly-owned by * * *. Although the acquisition of a second existing bank holding company and the formation of the new holding company (* * * will also, in addition, itself become a bank holding company so that three bank holding companies are actually involved) will be approved by the Federal Reserve Board pursuant to § 3 of the Bank Holding Company Act (BHCA), the acquisition of the two domestic banks by the new bank holding company will be accomplished pursuant to § 4(c)(8) of the BHCA. Since the Change in Bank Control Act exempts transactions accomplished pursuant to § 3, not § 4, of the BHCA, the transaction is not clearly exempted under the Change in Bank Control Act.

The FDIC's Legal Division is of the opinion that since the only change of control is an exchange of direct ownership for indirect by * * * with a new entity wholly-owned by * * * becoming the direct owner, no Change in Bank Control Act Notice need be filed by * * * or the new intermediate bank holding company.

I trust that your questions have been answered.

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