Library of Congress Summary
The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.
Bank Holding Company Deregulation Act of 1982 - Amends the Banking Act of 1933 to allow a member bank to be affiliated with a bank securities affiliate.
Permits any eligible association to acquire the stock of a bank securities affiliate.
Defines an 'eligible association' as a bank with assets of less than $100,000,000 which is not controlled by a bank holding company.
Requires any eligible association establishing or acquiring a bank securities affiliate to transfer to it all of the following activities within one year after the affiliate has commenced business in the United States:
(1) dealing in and underwriting obligations of the United States, general obligations of any State or local government or subdivision; and
(2) buying and selling securities and stock as agent.
Permits any officer, director, or employee of any member bank to serve at the same time as an officer, director or employee of any of its bank securities affiliates.
Amends the Securities Exchange Act of 1934 to make the Securities and Exchange Commission the appropriate regulatory agency to enforce a bank securities affiliate's compliance with regulations concerning transactions in municipal securities.
Amends the Bank Holding Company Act of 1956 to define "bank securities affiliate" to mean any corporation that:
(1) is engaged in the United States in one or more of the activities authorized under such Act; and
(2) is a broker or dealer within the meaning of the Securities Exchange Act of 1934 or an investment advisor within the meaning of the Investment Advisers Act of 1940.
Permits a bank holding company to engage in activities that the Federal Reserve Board has determined are of a financial nature.
Requires any bank holding company seeking to engage in one or more activities of a financial nature to provide the Board written notice within 60 days.
Sets forth the information to be contained in such notice.
Requires the Board, within 180 days of enactment of this Act, to promulgate regulations to permit bank holding companies to engage in such financial activities.
Declares that such financial activities shall include:
(1) making or acquiring extensions of credit;
(2) operating an industrial bank, Morris Plan bank or industrial loan company as authorized under State law;
(3) servicing loans or extensions of credit;
(4) acting as an investment or financial advisor;
(5) leasing personal or real property;
(6)selling money orders, travelers checks, and U.S. savings bonds; and
(7) such additional activities of a financial nature as will maximize competition between bank holding companies and other firms engaging in such activities.
Permits bank holding companies to engage in certain securities activities.
Permits a bank holding company to establish a bank securities affiliate or to acquire an existing securities firm.
Permits any bank securities affiliate to conduct any securities or securities-related activity that a bank is not prohibited from conducting.
Permits such bank securities affiliate to:
(1) deal in and underwrite all State and municipal general obligations and revenue bonds (except industrial development bonds);
(2) organize, sponsor, operate, and control, an investment company;
(3) render investment advice; or
(4) underwrite, distribute, and sell securities of any investment company.
Permits such bank securities affiliate to deal in and distribute commercial paper and other obligations of its affiliated bank holding company and subsidiaries, and certificates of deposit and bankers; acceptances of any bank, including bank subsidiaries of its affiliated bank holding company.
Permits a bank holding company to engage in the following:
(1) insurance underwriting and brokerage; and
(2) real estate investment, development or brokerage.
Limits Federal Reserve Board authority to:
(1) require nonbanking subsidiaries of a bank holding company to submit reports regarding compliance with the provisions of the Bank Holding Company Act; and
(2) conduct examinations of such subsidiaries.
Amends the Federal Reserve Act to allow a member bank and its subsidiaries to engage in a covered transaction or a financial assistance transaction with an affiliate only on substantially the same terms prevailing for comparable transactions with other nonaffiliated companies.
Imposes limitations on the amount of financial assistance transactions between a member bank and an affiliate or all its affiliates.
Prohibits a member bank and its subsidiaries from purchasing a low-quality asset from any affiliate unless previously committed to purchase such asset before it was acquired by the affiliate.
Prohibits a member bank and its affiliates from purchasing as fiduciary any securities or other assets from an affiliate unless lawfully authorized by the instrument creating the fiduciary relationship, by court or by local law.
Prohibits a member bank and its affiliates from publishing any advertisement suggesting that the member bank is responsible for its affiliates' obligations.
Prohibits a member bank and its subsidiaries from purchasing or otherwise acquiring, during the existence of any underwriting or selling syndicate, any obligation a principal underwriter of which is an affiliate or subsidiary of the member bank.
Sets forth exemptions to such prohibitions.
Requires each financial assistance transaction to be secured at the time of the transaction by collateral (or, in the case of a repurchase agreement, by securities or other assets) equal to between 100 to 130 percent of the amount of the transaction.
Amends the Federal Deposit Insurance Act to limit the cease and desist authority of the Federal Reserve Board over nonbanking subsidiaries of a bank holding company to activities affecting the safety and soundness of any bank directly or indirectly owned or controlled by such bank holding company, or any activities otherwise violating any banking law, rule, regulation, or order.
Amends the Investment Company Act of 1940 to prohibit an investment company affiliated with a bank securities affilate from:
(1) placing or maintaining its securities or similar investments in the custody of a bank affiliated with such bank securities affiliate;
(2) designating any such bank as trustee or custodian; or
(3) depositing designated proceeds with any such bank.
Prohibits any subsidiary of a bank holding company from engaging in certain tying arrangements in which banks are currently forbidden to engage.