§ 1828a. Prudential safeguards

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(a)Comptroller of the Currency

(1)In general The Comptroller of the Currency may, by regulation or order, impose restrictions or requirements on relationships or transactions between a national bank and a subsidiary of the national bank that the Comptroller finds are—

(A)consistent with the purposes of this Act, title LXII of the Revised Statutes of the United States, and other Federal law applicable to national banks; and

(B)appropriate to avoid any significant risk to the safety and soundness of insured depository institutions or the Deposit Insurance Fund or other adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices.

(2)Review The Comptroller of the Currency shall regularly—

(A)review all restrictions or requirements established pursuant to paragraph

(1)to determine whether there is a continuing need for any such restriction or requirement to carry out the purposes of the Act, including the avoidance of any adverse effect referred to in paragraph (1)(B); and

(B)modify or eliminate any such restriction or requirement the Comptroller finds is no longer required for such purposes.

(b)Board of Governors of the Federal Reserve System

(1)In general The Board of Governors of the Federal Reserve System may, by regulation or order, impose restrictions or requirements on relationships or transactions—

(A)between a depository institution subsidiary of a bank holding company and any affiliate of such depository institution (other than a subsidiary of such institution); or

(B)between a State member bank and a subsidiary of such bank;

if the Board makes a finding described in paragraph

(2)with respect to such restriction or requirement.

(2)Finding The Board of Governors of the Federal Reserve System may exercise authority under paragraph

(1)if the Board finds that the exercise of such authority is—

(A)consistent with the purposes of this Act, the Bank Holding Company Act of 1956 [12 U.S.C. 1841 et seq.], the Federal Reserve Act [12 U.S.C. 221 et seq.], and other Federal law applicable to depository institution subsidiaries of bank holding companies or State member banks, as the case may be; and

(B)appropriate to prevent an evasion of any provision of law referred to in subparagraph

(A)or to avoid any significant risk to the safety and soundness of depository institutions or the Deposit Insurance Fund or other adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices.

(3)Review The Board of Governors of the Federal Reserve System shall regularly—

(A)review all restrictions or requirements established pursuant to paragraph

(1)or

(4)to determine whether there is a continuing need for any such restriction or requirement to carry out the purposes of the Act, including the avoidance of any adverse effect referred to in paragraph (2)(B) or (4)(B); and

(B)modify or eliminate any such restriction or requirement the Board finds is no longer required for such purposes.

(4)Foreign banks The Board may, by regulation or order, impose restrictions or requirements on relationships or transactions between a branch, agency, or commercial lending company of a foreign bank in the United States and any affiliate in the United States of such foreign bank that the Board finds are—

(A)consistent with the purposes of this Act, the Bank Holding Company Act of 1956, the Federal Reserve Act, and other Federal law applicable to foreign banks and their affiliates in the United States; and

(B)appropriate to prevent an evasion of any provision of law referred to in subparagraph

(c)Federal Deposit Insurance Corporation

(1)In general The Federal Deposit Insurance Corporation may, by regulation or order, impose restrictions or requirements on relationships or transactions between a State nonmember bank (as defined in section 3 of the Federal Deposit Insurance Act [12 U.S.C. 1813]) and a subsidiary of the State nonmember bank that the Corporation finds are—

(A)consistent with the purposes of this Act, the Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.], or other Federal law applicable to State nonmember banks; and

(B)appropriate to avoid any significant risk to the safety and soundness of depository institutions or the Deposit Insurance Fund or other adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices.

(2)Review The Federal Deposit Insurance Corporation shall regularly—

(A)review all restrictions or requirements established pursuant to paragraph

(B)modify or eliminate any such restriction or requirement the Corporation finds is no longer required for such purposes.

(Pub. L. 106–102, title I, § 114, Nov. 12, 1999, 113 Stat. 1369; Pub. L. 109–173, § 9(i), Feb. 15, 2006, 119 Stat. 3618.)

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