(a) After the end of the 1-year
period beginning on the date of the enactment of the Federal Deposit
Insurance Corporation Improvement Act of 1991, an insured State bank
may not engage as principal in any type of activity that is not permissible
for a national bank unless—
(1) (A) the Corporation
has determined that the activity would pose no significant risk to
the Deposit Insurance Fund; and
(B) the State bank is, and continues
to be, in compliance with applicable capital standards prescribed
by the appropriate Federal banking agency.
(2) (A)
The Corporation shall make a determination under paragraph (1)(A)
not later than 60 days after receipt of a completed application that
may be required under this subsection.
(B) The Corporation may extend the 60-day
period referred to in subparagraph (A) for not more than 30 additional
days, and shall notify the applicant of any such extension.
(b) Insurance
underwriting.
(1) Notwithstanding subsection (a), an
insured State bank may not engage in insurance underwriting except
to the extent that activity is permissible for national banks.
(2) Notwithstanding any
other provision of law, an insured State bank or any of its subsidiaries
that provided insurance on or before September 30, 1991, which was
reinsured in whole or in part by the Federal Crop Insurance Corporation
may continue to provide such insurance.
1-399.1
(c) Equity investments by insured state
banks.
(1) An insured State bank
may not, directly or indirectly, acquire or retain any equity investment
of a type that is not permissible for a national bank.
(2) Paragraph (1) shall not
prohibit an insured State bank from acquiring or retaining an equity
investment in a subsidiary of which the insured State bank is a majority
owner.
1-399.11
(3) (A) Notwithstanding any other
provision of this subsection, an insured State bank may invest as
a limited partner in a partnership, the sole purpose of which is direct
or indirect investment in the acquisition, rehabilitation, or new
construction of a qualified housing project.
(B) The aggregate of the investments
of any insured State bank pursuant to this paragraph shall not exceed
2 percent of the total assets of the bank.
(C) As used in this paragraph—
(i) The term
“qualified housing project” means residential real estate that is
intended to primarily benefit lower income people throughout the period
of the investment.
(ii)
The term “lower income” means income that is less than or equal to
the median income based on statistics from State or Federal sources.
1-399.12
(4) (A) The Corporation
shall require any insured State bank to divest any equity investment
the retention of which is not permissible under this subsection as
quickly as can be prudently done, and in any event before the end
of the 5-year period beginning on the date of the enactment of the
Federal Deposit Insurance Corporation Improvement Act of 1991.
(B) With respect to
any equity investment held by any insured State bank on the date of
enactment of the Federal Deposit Insurance Corporation Improvement
Act of 1991 which was lawfully acquired before such date, the bank
shall be deemed not to be in violation of the prohibition in this
subsection on retaining such investment so long as the bank complies
with the applicable requirements established by the Corporation for
divesting such investments.
1-399.13
(d) Subsidiaries of insured state banks.
(1) After the end of the 1-year
period beginning on the date of the enactment of the Federal Deposit
Insurance Corporation Improvement Act of 1991, a subsidiary of an
insured State bank may not engage as principal in any type of activity
that is not permissible for a subsidiary of a national bank unless—
(A) the Corporation has determined that
the activity poses no significant risk to the Deposit Insurance Fund;
and
(B) the bank
is, and continues to be, in compliance with applicable capital standards
prescribed by the appropriate Federal banking agency.
(2) (A) Notwithstanding paragraph
(1), no subsidiary of an insured State bank may engage in insurance
underwriting except to the extent such activities are permissible
for national banks.
(B) Notwithstanding subparagraph (A), a well-capitalized insured
State bank or any of its subsidiaries that was lawfully providing
insurance as principal in a State on November 21, 1991, may continue
to provide, as principal, insurance of the same type to residents
of the State (including companies or partnerships incorporated in,
organized under the laws of, licensed to do business in, or having
an office in the State, but only on behalf of their employees resident
in or property located in the State), individuals employed in the
State, and any other person to whom the bank or subsidiary has provided
insurance as principal, without interruption, since such person resided
in or was employed in such State.
(C) Subparagraph (A) does not apply
to a subsidiary of an insured State bank if—
(i) the insured
State bank was required, before June 1, 1991, to provide title insurance
as a condition of the bank’s initial chartering under State law; and
(ii) control of the insured
State bank has not changed since that date.
(3) (A) The Corporation shall make
a determination under paragraph (1)(A) not later than 60 days after
receipt of a completed application that may be required under this
subsection.
(B) The
Corporation may extend the 60-day period referred to in subparagraph
(A) for not more than 30 additional days, and shall notify the applicant
of any such extension.
1-399.14
(e) Savings bank life insurance.
(1) No provision of this Act
shall be construed as prohibiting or impairing the sale or underwriting
of savings bank life insurance, or the ownership of stock in a savings
bank life insurance company, by any insured bank which—
(A) is
located in the Commonwealth of Massachusetts or the State of New York
or Connecticut; and
(B) meets applicable consumer disclosure requirements with respect
to such insurance.
(2) (A) Before the
end of the 1-year period beginning on the date of the enactment of
the Federal Deposit Insurance Corporation Improvement Act of 1991,
the Corporation shall make a finding whether savings bank life insurance
activities of insured banks pose or may pose any significant risk
to the Deposit Insurance Fund.
(B) (i) The Corporation shall,
pursuant to any finding made under subparagraph (A), take appropriate
actions to address any risk that exists or may subsequently develop
with respect to insured banks described in paragraph (1)(A).
(ii) Actions the Corporation
may take under this subparagraph include requiring the modification,
suspension, or termination of insurance activities conducted by any
insured bank if the Corporation finds that the activities pose a significant
risk to any insured bank described in paragraph (1)(A) or to the Deposit
Insurance Fund.
1-399.15
(f) Common and preferred stock investment.
(1) An insured State bank
shall not acquire or retain, directly or indirectly, any equity investment
of a type or in an amount that is not permissible for a national bank
or is not otherwise permitted under this section.
(2) Notwithstanding paragraph (1), an insured
State bank may, to the extent permitted by the Corporation, acquire
and retain ownership of securities described in paragraph (1) to the
extent the aggregate amount of such investment does not exceed an
amount equal to 100 percent of the bank’s capital if such bank—
(A) is located in a State that permitted, as of September 30, 1991,
investment in common or preferred stock listed on a national securities
exchange or shares of an investment company registered under the Investment
Company Act of 1940; and
(B) made or maintained an investment
in such securities during the period beginning on September 30, 1990,
and ending on November 26, 1991.
1-399.16
(3) Notwithstanding paragraph (1), an insured
State bank may—
(A) acquire not more than 10 percent
of a corporation that only—
(i) provides directors’, trustees’, and officers’
liability insurance coverage or bankers’ blanket bond group insurance
coverage for insured depository institutions; or
(ii) reinsures such policies; and
(B) acquire or retain
shares of a depository institution if—
(i) the institution engages
only in activities permissible for national banks;
(ii) the institution is subject to examination
and regulation by a State bank supervisor;
(iii) 20 or more depository institutions own
shares of the institution and none of those institutions owns more
than 15 percent of the institution’s shares; and
(iv) the institution’s shares (other than
directors’ qualifying shares or shares held under or initially acquired
through a plan established for the benefit of the institution’s officers
and employees) are owned only by the institution.
1-399.17
(4) (A) During each year in the
3-year period beginning on the date of the enactment of the Federal
Deposit Insurance Corporation Improvement Act of 1991, each insured
State bank shall reduce by not less than 1/3 of its shares (as of
such date of enactment) the bank’s ownership of securities in excess
of the amount equal to 100 percent of the capital of such bank.
(B) By the end of
the 3-year period referred to in subparagraph (A), each insured State
bank and each subsidiary of a State bank shall be in compliance with
the maximum amount limitations on investments referred to in paragraph
(1).
(5)
Any exception applicable under paragraph (2) with respect to any insured
State bank shall cease to apply with respect to such bank upon any
change in control of such bank or any conversion of the charter of
such bank.
1-399.18
(6) An insured State bank
may only engage in any investment pursuant to paragraph (2) if—
(A) the bank has filed a 1-time notice of the bank’s intention to
acquire and retain investments described in paragraph (1); and
(B) the Corporation
has determined, within 60 days of receiving such notice, that acquiring
or retaining such investments does not pose a significant risk to
the Deposit Insurance Fund.
(7) (A) The Corporation
may require divestiture by an insured State bank of any investment
permitted under this subsection if the Corporation determines that
such investment will have an adverse effect on the safety and soundness
of the bank.
(B)
The Corporation shall not require divestiture by any bank pursuant
to subparagraph (A) without reason to believe that such investment
will have an adverse effect on the safety and soundness of the bank.
1-399.19
(g) Determinations. The Corporation shall make determinations under
this section by regulation or order.
(h) Activity defined. For purposes of this
section, the term “activity” includes acquiring or retaining any investment.
(i) Other authority not
affected. This section shall not be construed as limiting the
authority of any appropriate Federal banking agency or any State supervisory
authority to impose more stringent restrictions.
1-399.2
(j) Activities of branches of out-of-State banks.
(1) The laws of a host State, including
laws regarding community reinvestment, consumer protection, fair lending,
and establishment of intrastate branches, shall apply to any branch
in the host State of an out-of-State State bank to the same extent
as such State laws apply to a branch in the host State of an out-of-State
national bank. To the extent host State law is inapplicable to a branch
of an out-of-State State bank in such host State pursuant to the preceding
sentence, home State law shall apply to such branch.
(2) An insured State bank that establishes
a branch in a host State may conduct any activity at such branch that
is permissible under the laws of the home State of such bank, to the
extent such activity is permissible either for a bank chartered by
the host State (subject to the restrictions in this section) or for
a branch in the host State of an out-of-State national bank.
(3) No provision of this subsection
shall be construed as affecting the applicability of—
(A) any State
law of any home State under subsection (b), (c), or (d) of section
44; or
(B) Federal
law to State banks and State bank branches in the home State or the
host State.
(4) The terms “host State”, “home State”, and “out-of-State bank”
have the same meanings as in section 44(f).
[12 USC 1831a. As added
by act of Dec. 19, 1991 (105 Stat. 2349) and amended by acts of Oct.
28, 1992 (106 Stat. 4086); Sept. 29, 1994 (108 Stat. 2351); Sept.
30, 1996 (110 Stat. 3009-414); July 3, 1997 (111 Stat. 238); and Feb.
15, 2006 (119 Stat. 3615).]
