DEFINITIONS

SEC. 2.  (a)(1)  Except as provided in paragraph (5) of this subsection, "bank holding company" means any company which has control over any bank or over any company that is or becomes a bank holding company by virtue of this Act.

(2)  Any company has control over a bank or over any company if--

(A)  the company directly or indirectly or acting through one or more other persons owns, controls, or has power to vote 25 per centum or more of any class of voting securities of the bank or company;

(B)  the company controls in any manner the election of a majority of the directors or trustees of the bank or company; or

(C)  the Board determines, after notice and opportunity for hearing, that the company directly or indirectly exercises a controlling influence over the management or policies of the bank or company.

(3)  For the purposes of any proceeding under paragraph (2)(C) of this subsection, there is a presumption that any company which directly or indirectly owns, controls, or has power to vote less than 5 per centum of any class of voting securities of a given bank or company does not have control over that bank or company.

(4)  In any administrative or judicial proceeding under this Act, other than a proceeding under paragraph (2)(C) of this subsection, a company may not be held to have had control over any given bank or company at any given time unless that company, at the time in question, directly or indirectly owned, controlled, or had power to vote 5 per centum or more of any class of voting securities of the bank or company, or had already been found to have control in a proceeding under paragraph (2)(C).

(5)  Notwithstanding any other provision of this subsection--

(A)  No bank and no company owning or controlling voting shares of a bank is a bank holding company by virtue of its ownership or control of shares in a fiduciary capacity, except as provided in paragraphs (2) and (3) of subsection (g) of this section. For the purpose of the preceding sentence, bank shares shall not be deemed to have been acquired in a fiduciary capacity if the acquiring bank or company has sole discretionary authority to exercise voting rights with respect thereto; except that this limitation is applicable in the case of a bank or company acquiring such shares prior to the date of enactment of the Bank Holding Company Act Amendments of 1970 only if the bank or company has the right consistent with its obligations under the instrument, agreement, or other arrangement establishing the fiduciary relationship to divest itself of such voting rights and fails to exercise that right to divest within a reasonable period not to exceed one year after the date of enactment of the Bank Holding Company Act Amendments of 1970.

(B)  No company is a bank holding company by virtue of its ownership or control of shares acquired by it in connection with its underwriting of securities if such shares are held only for such period of time as will permit the sale thereof on a reasonable basis.

(c)   BANK DEFINED.--For purposes of this Act--

(1)   IN GENERAL.--Except as provided in paragraph (2), the term "bank" means any of the following:

(A)  An insured bank as defined in section 3(h) of the Federal Deposit Insurance Act.

(B)  An institution organized under the laws of the United States, any State of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands which both--

(i)  accepts demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties or others; and

(ii)  is engaged in the business of making commercial loans.

(2)   EXCEPTIONS.--The term "bank" does not include any of the following:

(A)  A foreign bank which would be a bank within the meaning of paragraph (1) solely because such bank has an insured or uninsured branch in the United States.

(B)  An insured institution (as defined in subsection (j)).

(C)  An organization that does not do business in the United States except as an incident to its activities outside the United States.

(D)  An institution that functions solely in a trust or fiduciary capacity, if--

(i)  all or substantially all of the deposits of such institution are in trust funds and are received in a bona fide fiduciary capacity;

(ii)  no deposits of such institution which are insured by the Federal Deposit Insurance Corporation are offered or marketed by or through an affiliate of such institution;

(iii)  such institution does not accept demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties or others or make commercial loans; and

(iv)  such institution does not--

(I)  obtain payment or payment related services from any Federal Reserve bank, including any service referred to in section 11A of the Federal Reserve Act; or

(II)  exercise discount or borrowing privileges pursuant to section 19(b)(7) of the Federal Reserve Act.

(E)  A credit union (as described in section 19(b)(1)(A)(iv) of the Federal Reserve Act).

(F)  An institution, including an institution that accepts collateral for extensions of credit by holding deposits under $100,000, and by other means which--

(i)  engages only in credit card operations;

(ii)  does not accept demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties or others;

(iii)  does not accept any savings or time deposit of less than $100,000;

(iv)  maintains only one office that accepts deposits; and

(v)  does not engage in the business of making commercial loans.

(G)  An organization operating under section 25 or section 25(a) of the Federal Reserve Act.

(H)  An industrial loan company, industrial bank, or other similar institution which is--

(i)  an institution organized under the laws of a State which, on March 5, 1987, had in effect or had under consideration in such State's legislature a statute which required or would require such institution to obtain insurance under the Federal Deposit Insurance Act--

(I)  which does not accept demand deposits that the depositor may withdraw by check or similar means for payment to third parties;

(d)  "Subsidiary", with respect to a specified bank holding company, means (1) any company 25 per centum or more of whose voting shares (excluding shares owned by the United States or by any company wholly owned by the United States) is directly or indirectly owned or controlled by such bank holding company, or is held by it with power to vote; (2) any company the election of a majority of whose directors is controlled in any manner by such bank holding company; or (3) any company with respect to the management or policies of which such bank holding company has the power, directly or indirectly, to exercise a controlling influence, as determined by the Board, after notice and opportunity for hearing.

[Codified to 12 U.S.C. 1841(d)]

(e)  The term "successor" shall include any company which acquires directly or indirectly from a bank holding company shares of any bank, when and if the relationship between such company and the bank holding company is such that the transaction effects no substantial change in the control of the bank or beneficial ownership of such shares of such bank. The Board may, by regulation, further define the term "successor" to the extent necessary to prevent evasion of the purposes of this Act.

[Codified to 12 U.S.C. 1841(e)]

(f)  "Board" means the Board of Governors of the Federal Reserve System.

[Codified to 12 U.S.C. 1841(f)]

(g)  For the purposes of this Act--

(h)(1)  Except as provided by paragraph (2), the application of this Act and of section 23A of the Federal Reserve Act (12 U.S.C. 371), as amended, shall not be affected by the fact that a transaction takes place wholly or partly outside the United States or that a company is organized or operates outside the United States.

(2)  Except as provided in paragraph (3), the prohibitions of section 4 of this Act shall not apply to shares of any company organized under the laws of a foreign country (or to shares held by such company in any company engaged in the same general line of business as the investor company or in a business related to the business of the investor company) that is principally engaged in business outside the United States if such shares are held or acquired by a bank holding company organized under the laws of a foreign country that is principally engaged in the banking business outside the United States. For the purpose of this subsection, the term "section 2(h)(2) company" means any company whose shares are held pursuant to this paragraph.

(3)  Nothing in paragraph (2) authorizes a section 2(h)(2) company to engage in (or acquire or hold more than 5 percent of the outstanding shares of any class of voting securities of a company engaged in) any banking, securities, insurance, or other financial activities, as defined by the Board, in the United States. This paragraph does not prohibit a section 2(h)(2) company from holding shares that were lawfully acquired before the date of enactment of the Competitive Equality Banking Act of 1987.

(4)  No domestic office or subsidiary of a bank holding company or subsidiary thereof holding shares of a section 2(h)(2) company may extend credit to a domestic office or subsidiary of such section 2(h)(2) company on terms more favorable than those afforded similar borrowers in the United States.

(5)  No domestic banking office or bank subsidiary of a bank holding company that controls a section 2(h)(2) company may offer or market products or services of such section 2(h)(2) company, or permit its products or services to be offered or marketed by or through such section 2(h)(2) company, unless such products or services were being so offered or marketed as of March 5, 1987, and then only in the same manner in which they were being offered or marketed as of that date.

[Codified to 12 U.S.C. 1841(h)]

(i)  THRIFT INSTITUTION.--For purposes of this Act, the term "thrift institution" means--

(1)  any domestic building and loan or savings and loan association;

(2)  any cooperative bank without capital stock organized and operated for mutual purposes and without profit;

(3)  any Federal savings bank; and

(4)  any State-chartered savings bank the holding company of which is registered pursuant to section 408 of the National Housing Act.

[Codified to 12 U.S.C. 1841(i)]

(j)  DEFINITION OF SAVINGS ASSOCIATIONS AND RELATED TERM.--The term "savings association" or "insured institution" means--

(1)  any Federal savings association or Federal savings bank;

(2)  any building and loan association, savings and loan association, homestead association, or cooperative bank if such association or cooperative bank is a member of the Deposit Insurance Fund; and

(3)  any savings bank or cooperative bank which is deemed by the Director of the Office of Thrift Supervision to be a savings association under section 10(1) of the Home Owners' Loan Act.

[Codified to 12 U.S.C. 1841(j)]

(k)   AFFILIATE.--For purposes of this Act the term "affiliate" means any company that controls, is controlled by, or is under common control with another company.

[Codified to 12 U.S.C. 1841(k)]

(l)   SAVINGS BANK HOLDING COMPANY.--For purposes of this Act, the term "savings bank holding company" means any company which controls one or more qualified savings banks if the aggregate total assets of such savings banks constitute, upon formation of the holding company and at all times thereafter, at least 70 percent of the total assets of such company.

[Codified to 12 U.S.C. 1841(l)]

(m)  [Repealed]

[Codified to 12 U.S.C. 1841(m)]

(n)  INCORPORATED DEFINITIONS.--For purposes of this Act, the terms "depository institution", "insured depository institution", "appropriate Federal banking agency", "default", "in danger of default", and "State bank supervisor" have the same meanings as in section 3 of the Federal Deposit Insurance Act.

[Codified to 12 U.S.C. 1841(n)]

(o)  OTHER DEFINITIONS.--For purposes of this Act, the following definitions shall apply:

(1)  CAPITAL TERMS.--

(A)  INSURED DEPOSITORY INSTITUTIONS.--With respect to insured depository institutions, the terms "well capitalized", "adequately capitalized", and "undercapitalized" have the same meanings as in section 38 of the Federal Deposit Insurance Act.

(B)  BANK HOLDING COMPANY.--

(i)  ADEQUATELY CAPITALIZED.--With respect to a bank holding company, the term "adequately capitalized" means a level of capitalization which meets or exceeds all applicable Federal regulatory capital standards.

(ii)  WELL CAPITALIZED.--A bank holding company is "well capitalized" if it meets the required capital levels for well capitalized bank holding companies established by the Board.

(C)  OTHER CAPITAL TERMS.--The terms "Tier 1" and "risk-weighted assets" have the meanings given those terms in the capital guidelines or regulations established by the Board for bank holding companies.

(2)  ANTITRUST LAWS.--Except as provided in section 11, the term "antitrust laws"--

(A)  has the same meaning as in subsection (a) of the first section of the Clayton Act; and

(B)  includes section 5 of the Federal Trade Commission Act to the extent that such section 5 relates to unfair methods of competition.

(3)  BRANCH.--The term "branch" means a domestic branch (as defined in section 3 of the Federal Deposit Insurance Act).

(4)  HOME STATE.--The term "home State" means--

(A)  with respect to a national bank, the State in which the main office of the bank is located;

(B)  with respect to a State bank, the State by which the bank is chartered; and

(C)  with respect to a bank holding company, the State in which the total deposits of all banking subsidiaries of such company are the largest on the later of--

(i)  July 1, 1966; or

(ii)  the date on which the company becomes a bank holding company under this Act.

(5)  HOST STATE.--The term "host State" means--

(A)  with respect to a bank, a State, other than the home State of the bank, in which the bank maintains, or seeks to establish and maintain, a branch; and

(B)  with respect to a bank holding company, a State, other than the home State of the company, in which the company controls, or seeks to control, a bank subsidiary.

(6)  OUT-OF-STATE BANK.--The term "out-of-State bank" means, with respect to any State, a bank whose home State is another State.

(7)  OUT-OF-STATE BANK HOLDING COMPANY.--The term "out-of-State bank holding company" means, with respect to any State, a bank holding company whose home State is another State.

(8)  LEAD INSURED DEPOSITORY INSTITUTIONS.--

(A)  IN GENERAL.--The term "lead insured depository institution" means the largest insured depository institution controlled by the subject bank holding company at any time, based on a comparison of the average total risk-weighted assets controlled by each insured depository institution during the previous 12-month period.

(B)  BRANCH OR AGENCY.--For purposes of this paragraph and section 4(j)(4), the term "insured depository institution" includes any branch or agency operated in the United States by a foreign bank.

(9)  WELL MANAGED.--The term "well managed" means--

(p)  FINANCIAL HOLDING COMPANY.--For purposes of this Act, the term "financial holding company" means a bank holding company that meets the requirements of section 4(l)(1).

[Codified to 12 U.S.C. 1841(p)]

(q)  INSURANCE COMPANY.--For purposes of sections 4 and 5, the term "insurance company" includes any person engaged in the business of insurance to the extent of such activities.

[Codified to 12 U.S.C. 1841(q)]

[Source: Section 2(q) of title I of the Act of May 9, 1956 (Pub. L. No. 511), as added by section 103(c)(1) of title I of the Act of November 12, 1999 (Pub. L. No. 106--102; 113 Stat. 1351), effective March 12, 2000]