12 U.S.C. § 1852 — Concentration limits on large financial firms
submitted 70 years ago by Pub. L. 111-203 to r/title-12-BANKS-AND-BANKING · 615 words · no verdicts yet
A financial company generally may not acquire another company if the resulting company’s consolidated liabilities would exceed 10 percent of all financial companies’ consolidated liabilities. The Board may exempt certain failing-bank, assisted, or de minimis acquisitions with prior written consent, and must issue implementing rules after a Council study.
(a) Definitions. “Council” means the Financial Stability Oversight Council. “Financial company” means: (A) an insured depository institution*; (B) a bank* holding company; (C) a savings and loan holding company; (D) a company controlling an insured depository institution*; (E) a nonbank financial company supervised by the Board under title I of the Dodd-Frank Act; or (F) a foreign bank or company treated as a bank holding company under this chapter. “Liabilities” means the following. For a United States financial company, it is total risk-weighted assets* under bank-holding-company risk-capital rules, adjusted for exposures deducted from regulatory capital, minus total regulatory capital under those rules. For a foreign-based financial company, it is the comparable risk-weighted assets of its United States operations, adjusted for deducted exposures, minus the regulatory capital of those operations. For an insurance company* or other Board-supervised nonbank financial company, it is the assets the Board specifies by rule for consistent and equitable treatment.
(b) Concentration limit. Subject to the Council’s recommendations under subsection (e), a financial company may not merge or consolidate with another company, acquire all or nearly all of another company’s assets, or otherwise acquire control of another company if, after the transaction, the acquiring company’s total consolidated liabilities would be more than 10 percent of the combined consolidated liabilities of all financial companies at the end of the previous calendar year.
(c) Exceptions. With the Board’s prior written consent, the limit in subsection (b) does not apply to an acquisition of: (1) a bank that is in default* or at risk of default; (2) an acquisition for which the FDIC provides assistance under 12 U.S.C. § 1823(c); or (3) an acquisition that would increase the financial company’s liabilities only by a de minimis amount.
(d) Rules and guidance. The Board must issue regulations implementing this section consistently with the Council’s subsection (e) recommendations, including necessary definitions. The Board may issue interpretations or guidance for a particular financial company or financial companies generally.
(e) Council study and rulemaking. (1) Within 6 months after July 21, 2010, the Council must study how this limit would affect financial stability, moral hazard in the financial system, the efficiency and competitiveness of United States financial companies and markets, and the cost and availability of credit* and other financial services for United States households and businesses. The Council must recommend any changes it believes would better carry out this section. (2) Within 9 months after finishing that study, and despite subsections (b) and (d), the Board must issue final implementing regulations reflecting any Council recommendation under paragraph (1)(B).
In this section—
the term “Council” means the Financial Stability Oversight Council;
the term “financial company” means—
an insured depository institution*;
a bank* holding company;
a savings and loan holding company;
a company that controls an insured depository institution*;
a nonbank financial company supervised by the Board under title I of the Dodd-Frank Wall Street Reform and Consumer* Protection Act [12 U.S.C. 5311 et seq.]; and
a foreign bank or company that is treated as a bank holding company for purposes of this chapter; and
the term “liabilities” means—
with respect to a United States financial company—
the total risk-weighted assets* of the financial company, as determined under the risk-based capital rules applicable to bank holding companies, as adjusted to reflect exposures that are deducted from regulatory capital; less
the total regulatory capital of the financial company under the risk-based capital rules applicable to bank holding companies;
with respect to a foreign-based financial company—
the total risk-weighted assets of the United States operations of the financial company, as determined under the applicable risk-based capital rules, as adjusted to reflect exposures that are deducted from regulatory capital; less
the total regulatory capital of the United States operations of the financial company, as determined under the applicable risk-based capital rules; and
with respect to an insurance company* or other nonbank financial company supervised by the Board, such assets of the company as the Board shall specify by rule, in order to provide for consistent and equitable treatment of such companies.
Subject to the recommendations by the Council under subsection (e), a financial company may not merge or consolidate with, acquire all or substantially all of the assets of, or otherwise acquire control of, another company, if the total consolidated liabilities of the acquiring financial company upon consummation of the transaction would exceed 10 percent of the aggregate consolidated liabilities of all financial companies at the end of the calendar year preceding the transaction.
With the prior written consent of the Board, the concentration limit under subsection (b) shall not apply to an acquisition—
of a bank in default* or in danger of default*;
with respect to which assistance is provided by the Federal Deposit Insurance Corporation under section 1823(c) of this title; or
that would result only in a de minimis increase in the liabilities of the financial company.
The Board shall issue regulations implementing this section in accordance with the recommendations of the Council under subsection (e), including the definition of terms, as necessary. The Board may issue interpretations or guidance regarding the application of this section to an individual financial company or to financial companies in general.
Not later than 6 months after July 21, 2010, the Council shall—
complete a study of the extent to which the concentration limit under this section would affect financial stability, moral hazard in the financial system, the efficiency and competitiveness of United States financial firms and financial markets, and the cost and availability of credit* and other financial services to households and businesses in the United States; and
make recommendations regarding any modifications to the concentration limit that the Council determines would more effectively implement this section.
Not later than 9 months after the date of completion of the study under paragraph (1), and notwithstanding subsections (b) and (d), the Board shall issue final regulations implementing this section, which shall reflect any recommendations by the Council under paragraph (1)(B).
Source credit: (May 9, 1956, ch. 240, § 14, as added Pub. L. 111–203, title VI, § 622, July 21, 2010, 124 Stat. 1632.)
- 1956Enacted · Pub. L. 111-203 · 124 Stat. 1632
A history note hasn’t been published yet. The record shows enactment by Pub. L. 111-203 on 1956-05-09.
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