The Home Owners’ Loan Act (HOLA) authorizes OTS to examine and supervise the companies that own, directly or indirectly, savings associations. OTS refers to these companies as savings and loan holding companies. OTS has supervisory and enforcement authority over the entire corporate structure. The scope of this authority includes the savings association, its holding company and other affiliates, and subsidiaries of the savings association. In accordance with its responsibilities, OTS has issued regulations and developed examination procedures for savings and loan holding companies. These supervisory tools allow OTS to obtain a complete picture of the interrelationships and risks throughout the savings and loan holding company enterprise, regardless of its size or complexity.
Holding company examinations, significant among these tools, are risk-focused, meaning that the primary objective is to examine the entire holding company structure in the areas that pose the greatest risk. Examination conclusions are based on the overall risk profile of the consolidated entity (both current and prospective), the financial health and stability of the enterprise, and the degree of interdependence between the savings association and its affiliates. To facilitate a risk-focused approach to supervision and examination, all savings and loan holding companies are assigned to one of two categories: Noncomplex or relatively low risk enterprises; or Complex or higher risk enterprises. As the category descriptions suggest, holding companies assigned to the Complex category will require more intense examination and supervisory efforts in most cases. Within the Complex category are a number of enterprises further designated as "conglomerates," or enterprises made up of different companies or legal entities that operate in diversified fields. Examination and supervision of conglomerates is further tailored to address the unique characteristics of this type of enterprise.
Savings and loan holding companies are engaged in significant business activities. These lines of business include insurance, asset management, securities brokerage, financial services, retailing and manufacturing. Some holding company structures contain a mix of financial and commercial operations, while others provide only financial products and services. Some OTS-regulated holding company entities provide products and services throughout the United States and in countries around the world. Given its considerable involvement in supervising U.S.-based savings and loan holding companies with worldwide operations, OTS has been a leader in working with European Union (EU) representatives to implement the EU’s Financial Conglomerates Directive, which took effect on January 1, 2005. OTS has engaged in extensive dialogue with a variety of foreign regulators, facilitated examination participation, coordinated numerous meetings and had countless other communications on specific cases to deal with issues that arise in internationally active complex holding companies.
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