Page images
PDF
EPUB

80 STAT. 237.

70 Stat. 133.

48 Stat. 183;
Post, pp. 241,
243.
12 USC 3710.
Post, pp. 238-
240.
12 USC 1843.

Sec. 6. Section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841), as amended by this Act, is further amended by adding at the end thereof the following new subsections: “(g) For the purposes of this Act

""(1) shares owned or controlled by any subsidiary of a bank holding company shall be deemed to be indirectly owned or controlled by such bank holding company;

“(2) shares held or controlled directly or indirectly by trustees for the benefit of (A) a company, (B) the shareholders or members of a company, or (C) the employees (whether exclusively or not) of a company, shall be deemed to be controlled by such company; and

“(3) shares transferred after January 1, 1966, by any bank holding company (or by any company which, but for such transfer, would be a bank holding company) directly or indirectly to any transferee that is indebted to the transferor, or has one or more officers, directors, trustees, or beneficiaries in common with or subject to control by the transferor, shall be deemed to be indirectly owned or controlled by the transferor unless the Board, after opportunity for hearing, determines that the transferor is not in

fact capable of controlling the transferee. “(h) 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: Provided, however, That the prohibitions of section.4 of this Act shall not apply to shares of any company organized under the laws of a foreign country that does not do any business within the United States, if such shares are held or acquired by a bank holding company that is principally engaged in the banking business outside the United States.

Sec. 7. (a) The first sentence of subsection (a) of section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 1812(a)) is amended to read as follows: 'It shall be unlawful, except with the prior approval of the Board, (1) for any action to be taken that causes any company to become a bank holding company; (2) for any action to be taken that causes a bank to become a subsidiary of a bank holding company; (3) for any bank holding company to acquire direct or indirect ownership or control of any voting shares of any bank if, after such acquisition, such company will directly or indirectly own or control more than 5 per centum of the voting shares of such bank; (4) for any bank holding company or subsidiary thereof, other than a bank, to acquire all or substantially all of the assets of a bank; or (5)

bank holding company to merge or consolidate with any other bank holding company."

(b) The second sentence of subsection (a) of section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(a)) is amended by striking the words “except where such shares are held for the benefit of the shareholders of such bank” at the end of clause (i) and inserting in lieu thereof the words “except where such shares are held under a trust that constitutes a company as defined in section 2(h) and except as provided in paragraphs (2) and (3) of section 2(g)”.

(c) Subsection (c) of section 3 of the Bank Holding Company Act of 1956 is amended to read as follows: "(c) The Board shall not approve

“(1) any acquisition or merger or consolidation under this section which would result in a monopoly, or which would be in furtherance of any combination or conspiracy to monoplize or

Acquisition of bank shares or assets.

for any

Ante', p.236.
Supra.

80 STAT. 238

to attempt to monopolize the business of banking in any part of the United States, or

“(2) any other proposed acquisition or merger or consolidation under this section whose effect in any section of the country may be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint or trade, unless it finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the conven

ience and needs of the community to be served. In every case, the Board shall take into consideration the financial and managerial resources and future prospects of the company or companies and the banks concerned, and the convenience and needs of the community to be served.”

(d) Subsection (d) of section 3 of the Bank Holding Company 70 Stat. 135. Act of 1956 (12 U.S.C. 1842(d)) is amended by striking the words in which such bank holding company maintains its principal office and place of business or in which it conducts its principal operations” and inserting in lieu thereof the words "in which the operations of such bank holding company's banking subsidiaries were principally conducted on the effective date of this amendment or the date on which such company became a bank holding company, whichever is later,"; Such subsection is further amended by adding at the end thereof the following new sentence: "For the purposes of this section, the State in which the operations of a bank holding company's subsidiaries are principally conducted is that State in which total deposits of all such banking subsidiaries are largest.”.

Sec. 8. (a) Subsection (a) of section 4 of the Bank Holding, Com- Interests in pany Act of 1956 (12 U.S.C. 1843(a)) is amended to read as follows: nonbanking

“(a) Except as otherwise provided in this Act, no bank holding organizations. company shall

(1) after the date of enactment of this Act acquire direct or indirect ownership or control of any voting shares of any company which is not a bank, or

“(2) after two years from the date as of which it becomes a bank holding company, or, in the case of any company that has been continuously affiliated since May 15, 1955, with a company which was registered under the Investment Company Act of 1910, prior to May 15, 1955, in such a manner as to constitute an affiliated company

within the meaning of that Act, after Decem- 15 USC 80a-51. ber 31, 1978, retain direct or indirect ownership or control of any voting shares of any company which is not a bank or a bank holding company or engage in any business other than that of banking or of managing or controlling banks or of furnishing services to or performing services for any bank of which it owns

or controls 25 per centum or more of the voting shares. The Board is authorized, upon application by a bank holding company, to extend the period referred to in paragraph (2) above from time to time as to such bank holding company for not more than one year at a time, if, in its judgment, such an extension would not be detrimental to the public interest, but no such extensions shall in the aggregate exceed three years."

(b) Subsection (c) of section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843 (c)) is amended to read as follows:

"(c) The prohibitions in this section shall not apply to any bank holding company which is a labor, agricultural, or horticuitural organization and which is exempt from taxation under section 501 of the

54 Stat. 789.

[merged small][merged small][ocr errors]

Internal Revenue Code of 1954, and such prohibitions shall not, with respect to any other bank holding company, apply to

“(1) shares of any company engaged or to be engaged solely in one or more of the following activities: (A) holding or operating properties used wholly or substantially by any banking subsidiary of such bank holding company in the operations of such banking subsidiary or acquired for such future use; or (B) conducting a safe deposit business; or (C) furnishing services to or performing services for such bank holding company or its banking subsidiaries; or (D) liquidating assets acquired from such bank holding company or its banking subsidiaries or acquired from any other source prior to May 9, 1956, or the date on which such company became a bank holding company, whichever is later;

“(2) shares acquired by a bank in satisfaction of a debt previously contracted in good faith, but such bank shall dispose of such shares within a period of two years from the date on which they were acquired, except that the Board is authorized upon application by such bank holding company to extend such period of two years from time to time as to such holding company for not more than one year at a time if, in its judgment, such an extension would not be detrimental to the public interest, but no such extensions shall extend beyond a date five years after the date on which such shares were acquired;

“(3) shares acquired by such bank holding company from any of its subsidiaries which subsidiary has been requested to dispose of such shares by any Federal or State authority having statutory power to examine sucli subsidiary, but such bank holding company shall dispose of such shares within a period of two years from the date on which they were acquired;

“(4) shares held or acquired by a bank in good faith in a fiduciary capacity, except where such shares are held under a trust that constitutes a company as defined in section 2(b) and except as provided in paragraphs (2) and (3) of section 2(g);

(5) shares which are of the kinds and amounts eligible for investment by national banking associations under the provisions of section 5136 of the Revised Statutes;

“(6) shares of any company which do not include more than ð per centum of the outstanding voting shares of such company;

"(7) shares of an investment company which is not a bank holding company and which is not engaged in any business other than investing in securities, which securities do not include more than 5 per centum of the outstanding voting shares of any company;

*(8) shares of any company all the activities of which are or are to be of a financial, fiduciary, or insurance nature and which the Board after due notice and hearing, and on the basis of the record made at such hearing, by order has determined to be so closely related to the business of banking or of managing or controlling banks as to be a proper incident thereto and as to make it unnecessary for the prohibitions of this section to apply in order to carry out the purposes of this Act;

"(9) shares of any company which is or is to be organized under the laws of a foreign country and which is or is to be engaged principally in the banking business outside the United States; or

"(10) shares lawfully acquired and owned prior to May 9, 1956, by à bank which is a bank holding company, or by any of its wholly owned subsidiaries.”

Ante, p. 236.
Ante, p. 237.

12 USC 24.

66

21-137 0-68-24

BO STAT. 240 (c) Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843) is amended by adding at the end thereof the following 70 Stat. 135. new subsection:

“(d) With respect to shares which were not subject to the prohibitions of this section as originally enacted by reason of any exemption with respect thereto but which were made subject to such prohibítions by the subsequent repeal of such exemption, no bank holding company shall retain direct or indirett ownership or control of such shares after five years from the date of the repeal of such exemption, except as provided in paragraph (2) of subsection (a). Any bank holding Ante, p. 238. company subject to such five-year limitation on the retention of nonbanking assets shall endeavor to divest itself of such sharez promptly and such bank holding company shall report its progress in such divestiture to the Board two years after repeal of the exemption applicable to it and annually thereafter.”

Sec. 9. Section 6 of the Bank Holding Company Act of 1956 (12 Repeal.
U.S.C. 1845) is hereby repealed.

Sec. 10. The first sentence of section 9 of the Bank Holding Com: Petition, peripany Act of 1956 (12 U.S.C. 1848) is amended by striking out “sixty” od for filing. and inserting "thirty".

Sec. 11. Section il of the Bank Holding Company Act of 1956 (12 Antitrust L'.S.C. 1841 (note)) is amended by inserting “(a)” after “Sec. 11.”; proceedings. by inserting a comma and “except as specifically provided in this section” before the period at the end thereof; and by adding at the end thereof the following new subsections:

"(b) The Board shall immediately notify the Attorney General of any approval by it pursuant to this Act of a proposed acquisition, merger, or consolidation transaction, and such transaction may not be consummated before the thirtieth calendar day after the date of approval by the Board. Any action brought under the antitrust laws arising out of an acquisition, merger, or consolidation transaction shall be commenced within such thirty-day period. The commencement of such an action shall stay the effectiveness of the Board's approval unless the court shall otherwise specifically order. In any such action, the court shall review de novo the issues presented. In any judicial proceeding attacking any acquisition, merger, or consolidation transaction approved pursuant to this Act on the ground that such transaction alone and of itself constituted a violation of any antitrust laws other than section 2 of the Act of July 2, 1890 (section 2 of the Sherman Antitrust Act, 15 U.S.C.2), the standards applied by the court shall be 26 Stat. 209. identical with those that the Board is directed to apply under section 3 70 Stat. 134; of this Act. Upon the consummation of an acquisition, merger, or Ante, pp. 237, consolidation transaction in compliance with this Act and after the 238. termination of any antitrust litigation commenced within the period 12 USC 1842. prescribed in this section, or upon the termination of such period if no such litigation is commenced therein, the transaction may not thereafter be attacked in any judicial proceeding on the ground that it alone and of itself constituted a violation of any antitrust laws other than section 2 of the Act of July 2, 1890 (section 2 of the Sherman Antitrust Act, 15 U.S.C. 2), but nothing in this Act shall exempt any bank holding company involved in such a transaction from complying with the antitrust laws after the consummation of such transaction.

"(c) In any action brought under the antitrust laws arising out of any acquisition, merger, or consolidation transaction approved by the Board pursuant to this Act, the Board and any State banking supervisory agency having jurisdiction within the State involved, may appear as a party of its own motion and as of right, and be represented by its counsel.

"(d) Åny acquisition, merger, or consolidation of the kind described in section 3(a) of this Act which was consummated at any time prior or subsequent to May 9, 1956, and as to which no litigation was initiated

26 Stat. 209.

70 Stat. 134.

12 USC 1842.

Loans to affili

80 STAT. 241.

by the Attorney General prior to the date of enactment of this amendment, shall be conclusively presumed not to have been in violation of any antitrust laws other than section 2 of the Act of July 2, 1890 (section 2 of the Sherman Antitrust Act, 15 U.S.C. 2).

“(e) Any court having pending before it on or after the date of enactment of this amendment any litigation initiated under the antitrust laws by the Attorney General with respect to any acquisition, merger, or consolidation of the kind described in section 3(a) of this

Act shall apply the substantive rule of law set forth in section 3 of Ante, pp. 237,238. this Act.

“(f) For the purposes of this section, the term “antitrust laws' means "Antitrust laws." the Act of July 2, 1890 (the Sherman'Antitrust Act, 15 U.S.C. 1-7), 26 Stat. 209. the Act of October 15, 1914 (the Clayton Act, 15 U.S.C. 12-27), and 38 Stat. 730.

any other Acts in pari materia.”

Sec. 12. (a) Section 23A of the Federal Reserve Act, as amended ates.

(12 U.S.C. 371c), is amended by adding at the end thereof the fol48 Stat. 183; lowing new paragraphs: Post, p. 243.

“For the purposes of this section, (1) the term 'extension of credit "Extension of

and 'extensions of credit shall be deemed to include (A) any purchase credit."

of securities, other assets or obligations under repurchase agreement, and (B) thé discount of promissory notes, bills of exchange, conditional sales contracts, or similar paper, whether with or without recourse, except that the acquisition of such paper by a member bank from another bank, without recourse, shall not be deemed to be a discount by such member bank for such other bank; and (2) noninterest-bearing deposits to the credit of a bank shall not be deemed to be a loan or advance or extension of credit to the bank of deposit, nor shall the giving of immediate credit to a bank upon uncollected items received in the ordinary course of business be deemed to be a

loan or advance or extension of credit to the depositing bank. "Affiliate." “For the purposes of this section, the term 'affiliate' shall include,

with respect to any member bank, any bank holding company of which such member bank is a subsidiary within the meaning of the Bank Holding Company Act of 1956, as amended, and any other subsidiary

of such company. Exemptions.

“The provisions of this section shall not apply to (1) stock, bonds,

debentures, or other obligations of any company of the kinds described Ante, p. 239. in section 4(c)(1) of the Bank Holding Company. Act of 1956, as

amended; (2) stock, bonds, debentures, or other obligations accepted as security for debts previously contracted, provided that such collateral shall not be held for a period of over two years; (3) shares

which are of the kinds and amounts eligible for investment by national 12 USC 24. banks under the provisions of section 5136 of the Revised Statutes;

(4) any extension of credit by a member bank to a bank holding company of which such bank is a subsidiary or to another subsidiary of such bank holding company, if made within one year after the effective date of this amendment to section 23A and pursuant to a contract lawfully entered into prior to January 1, 1966; or (5) any transaction by a member bank with another bank the deposits of which are insured by the Federal Deposit Insurance Corporation, if more than 50 per centum of the voting stock of such other bank is owned by the member bank or held by trustees for the benefit of the shareholders of the

member bank." Foreign branches (b) Section 25 of the Federal Reserve Act, as amended (12 U.S.C. of national banks. 601), is amended by striking out “either or both of“ immediately 39 Stat. 755.

preceding "the following powers" in the introductory paragraph and by inserting after the paragraph designated "Second. the following new paragraph:

“Third. To acquire and hold, directly or indirectly, stock or other evidences of ownership in one or more banks organized under the law

« PreviousContinue »