The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F o r m F. R. 511
TO*
w
FROM
REMARKS:
'. Dreibelbis brought this in and said
that air. licKee as^e-
L
ive it to you.
IvlcK.ee would like you to take it home and
read it. Mr. Dreibelbis says he is still
working on the matter to see if some
changes can be made.
CHAIRMAN'S OFFICE
©
CONFIDENTIAL
O c t o b e r 7, 1 9 4 3 .
DRAFT FOR DISCUSSION
A BILL
To control and regulate bank holding companies; to control and regulate relationships between insured banks and their affiliates;
and for other purposes.
3e it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That section 23A of
the Federal Reserve Act, as amended, is amended to read as follows:
"SECTION 23A.
"Sec. 23A.
3ANK HOLDING COMPANIES
(a) Declaration of Policy. - The business of banking
is an instrument of, and inseparably connected with, commerce with
foreign nations and among the several States, the District of Columbia,
and the Territories and possessions of the United States.
Adequate
and sound banking facilities ere necessary and proper for the efficient
exercise of powers conferred upon the Federal Government, particularly
the powers to collect taxes, borrow money, and pay debts; to provide
for tile common defense and gener&l welfare of the United States; end
to establish and regulate a national currency.
Bank holding companies
and their subsidiary oompanies are affected with a national public interest in that, among other things (l) their business is often conducted
and transactions incident thereto are often effected by means of the
mails and instrumentalities of interstate commerce; (2) their control
over subsidiary banks often influences or controls the management or
policies of such banks end materially affects interstate commerce and
I;
-2the exercise of powers conferred upon the Federal Governmentj (3) their
practices in respect to the use of the corporate device to link, under
common management, the business of banks with unrelated businesses which
must depend upon the banks for financial support materially affect the
general welfare and the exercise of powers conferred upon the Federal
O
X
L
Governmentj (4) their practices in respect to the use of the corporate
device to avoid the restrictions of banking statutes and established
banking principles materially affect the general welfare and the exercise
of powers conferred upon the Federal Governmentj (5) the activities of
the bank holding companies, extending over many States, are net susceptible
of effective control by any State and make difficult, if not impossible,
effective State regulation of bank holding companies or their subsidiary
banks within a State.
"For these reasons, it is necessary and appropriate in the national
public interest, and it is heroby declared to be the policy of this section, in accordance with which policy all the provisions of this section
shall be interpreted, to separate the business of bank holding companies
from unrelated businesses; to prevent avoidance of existing banking laws
by means of the corporate device; and to provide adequate control and
regulation of bank holding companies to the end that their influence and
control shall be directed toward the pursuit of sound policies and the
maintenance of sound financial conditions by their subsidiary banks.
"(b) Definitions. - When used in this section -"(l) 'Bank holding company' means any company of which two or
more banks are subsidiaries.
The Board, upon application by a specified
-3company, may by order declare that such company is not u bank holding
company if it finds that the applicant is not primarily engaged in the
business of managing or controlling banks und if it finds that it does
not exercise such a controlling influence over the management and policies
of banks in which it owns or controls stock as to make it necessary or
appropriate in the public interest that the applicant be subject to the
obligations, duties, and liabilities imposed in this section upon bank
holding companies.
"(2) 'Bank' means any national bank, or any State bank, banking
association, savings bank, or trust company.
The terms 'member bank 1 ,
'national bank', 'Board', 'district' and 'reserve bank' have the same
meanings as are assi~-ned to them, respectively, in section 1 of this
Act.
The terms 'insured bank', 'State member bank', and 'District bank'
have the same meanings as are assigned to them, respectively, in section
12B of this Act, as amended*
"(3) 'Company' means cny corporation, business trust, association
or other similar organization {including a bank), not wholly owned by
the United States*
"(4) 'Subsidiary' means, with respect to a specified company
—
"(A) Any company 20 per cent or more of the outstanding
voting shares of which (excluding shares owned by the
United States or by any company wholly owned by the United
States) arc directly or indirectly ownedj controlled, or
held with power to voto by the specified company (or by a
company that is a subsidiary of a specified company by
virtue of this clause or clause (B); or
"(3) Any company any of the outstanding voting shares
o f' vrh i c h a re d ir e c 11 y o r i nd i r c- c 11 y ovme d, c ontro 11 ed» o r
hold with power to vote and thy management or policies
of which the Board determines, after notice and opportunity for hearingj are subject to a controlling influence by the specified company or by a person or group
of persons exercising a controlling influence over the
specified company.
"(5) 'Voting share' means i~ny share of stock, capital note or debenture, or evidence of proprietary interest, the ownership of which
carries with it the right to vote such stock at elections of directors.
"(6) 'Affiliate' moans, with respect to a specified bank, any
company —
"(A) which is a subsidiary of the specified bank;
"(3) 50 per cent or more of whose voting shares are
owned by persons who own 50 per cent or more of the
voting shares of the bank (exclusive in both instances
of shares owned by the United States or by any company
wholly owned by the United States); or
"(C) Which is a subsidiary of a company which is an
affiliate of the specified bank by virtue of clause (B)
of this paragraph.
"(7) 'Person' means any individual or company.
"(3) 'Director' means any director, trustee, or other individual
exercising similar functions.
-5"(9) 'Effective date* means the date of the enactment of the Act
containing this amendment, exoept that with respect to a bank holding
company determined to be such by the Board under clause (B) of paragraph (4) of this subsection, 'effective date* means the date of such
determination by the Board.
"(c) Engaging in Nonbanking Business. - It shall be unlawful for
any bank holding company, after the effective date, to engage in any
business other than thet of managing or controlling subsidiary banks
of which it is a bank holding company.
The prohibition in this sub-
section shall not apply to the exercise of any rights in connection
with voting shares of nonbanking companies lawfully acquired or retained
by a bank holding company pursuant to subsection (f) of this section or
to the management or control of any subsidiary companies so acquired or
retained.
"(d) New Bank Holding Companies. - It shall be unlawful, after the
date of the enactment of the Act containing this amendment, for any company to become the owner of voting shares of any bank if the acquisition
of such voting shares would cause such company to be the owner of as
much a3 20 per cent of the outstanding voting shares of each of two
banks (excluding shares owned by the United States or any company wholly
owned by the United States.)
"(e) Acquisition of Voting Shares of Banks. - Except as otherwise
expressly provided in this subsection, it shall be unlawful for any bank
holding company, after the effective date, directly or indirectly to
become the owner of voting shares of any bank or after two years after
effective date to continue to own or directly or indirectly to vote
-6-
any voting shares of any bank of which it became the owner subsequent to
January 1, 1943 and on or before the effective date: Pj^v^ed_, That
the Board may, in individual cases, when in its judgment it would not be
detrimental to the public interest, from time to time extend for not
more than one year at a time the period during which a company may continue to own such voting shares so acquired before the effective date.
The prohibition in this subsection shall not apply to the acquisition or
retention of any voting shares of any bank 50 per cent of the outstanding
voting shares of which (excluding shares owned by the United States or
any company wholly owned by the United States and any voting shares acquired directly or indirectly by the bank holding company subsequent to
January 1, .1.943) were owned, by the bank holding company on the date of
the enactment of the Act containing this amendment; Provided, That, when
such shares are acquired, the bank holding company offers to acquire the
voting shares of all minority shareholders on the same terms.
"[?) Acquisition of Voting Shares of rJeiibankiug Companies. - It
shall be unlawful for* any bank holding company, after the effective date,
directly or indirectly to become the owner of any voting shares of any
company other .than & bank or after two years after the effective date to
continue to own voting shares of any such company acquired on or before
the effective date, unless in any such case the consent of the Board shall
have been first obtained and the Board shall have determined that the
business of such company is so closely related to the bank holding company's business of holding the stock of or managing or controlling banks as
to be an incident thereto:
Provided, That the Board may in individual
cases, when in its judgment it would not be detrimental to the public
interest, from time to time extend for not more than one year at a time
the period during which a bank holding company may continue to own stock
so acquired.
The prohibition in this subsection shall net apply to the
acquisition of voting shares of companies other than banks when such
shares are acquired' (1) by purchase from a subsidiary bank of such bank
holding company at the request of any Federal or State authority having
statutory power to examine and supervise such bank, or (2) in the collection of a lawful debt previously contracted to the bank holding company
or any of its subsidiaries:
Provided, That it shall be unlawful for
such bank holding company, after two years after such acquisition, to
continue to own such shares except as authorized by the Board as provided
in this subsection.
Any nonbanking company which becomes or continues
to be a subsidiary of e bank holding company as the result of the acquisition or retention of its voting shares pursuant to the provisions
of this subsection shall be deemed also to be a bonk holding company.
"(g) Consolidations with Subsidiary Banks. - Except as otherwise
expressly provided in this section, it snail be unlawful for any subsidiary bank, after the effective date, to acquire all or a substantial
portion of the assets of another bank through the purchase of such assets
or by consolidation or merger with such other bank or to enter into any
other arrangement with another bank or its shareholders for the purpose
of obtaining all or a substantial part of the business of such other bank,
"(h) Insurance of Deposits of Subsidiary Banks. - After one year
after the effective date, it shr.il be unlawful for any bank holding
company to have any subsidiary bank which is not an insured bank:
-8Provided. That the Board, with respect to a noninsured bank which
was a subsidiary bank on the effective date, may from time to time
and for good cause shown by such bank holding company, extend for not
more than one year at a time the period in which such bank shall become
an insured bank.
"(i) AcQ;uisitioris and CoriGoiidatiQns in Exigent Cases. - Notwithstanding any other provision, of this section, no acquisition or retention of voting shares of any bank by a bank holding company and no acquisition of assets of another bank by a subsidiary bank through the
purchase of such assets or by consolidation or merger shall be deemed
to be a violation of this section if such acquisition or retention
occurs only after a request by and with the approval of the Board:
Provided, however, That the Board shall make such request and give its
approval only in exigent cases to relieve a distressed banking situation,
to provide or preserve clearly needed banking facilities, or otherwise
to protect the public interest.
"(j) Borrowing by Bank lidding Company. - Except as otherwise
expressly provided in this subsection, it shall be unlawful for any bank
holding company directly or indirectly (1) to obtain any loan or extension of credit from any bank which is a subsidiary of such bank holding
company, or (2) to sell any securities to any such subsidiary bank;
but it shall not be unlavtf'ul under this subsection to renew, or extend
the time of, any such loan or credit outstanding on the effective date.
The Board may, by rules, regulations, or orders, permit such loans,
-9-
extensions of credit, or sales tc the extent that it may find the same
necessary and appropriate in order (i} to facilitate adjustments in
the business and assets of bank holding companies to meet the requirements of this section; (2) to meet the proper financial requirements of
any subsidiary the retention of which by the .bank holding company has
been authorized by the Board pursuant to subsection (f) of this section;
or (3) to meet emergencies as may be determined by the Board.
"(k) Dividends, - It shall be unlawful for any bank holding company, except with the approval of the Board, to pay any dividend, or to
make any distribution in the nature of a dividend payment, wholly or
partly from any source other than (1) such company's accumulated, undistributed net income, determined in accordance with good accounting practice and not including profits or losses realised upon the sale of
securities or other properties, or (2) such company's net income so
determined for the current or preceding fiscal year.
"(1) Service Fees. - If any Federal or State authority having
statutory power to examine and supervise any subsidiary bank shall have
reason to believe that exorbitant or unreasonable service, management,
or Similar charges or fees are being assessed against such bank by the
bank holding company of which such bank is a subsidiary, such authority
may apply to the Board for relief.
If, after notice and opportunity
for hearing, the Board determines that all or any part of the charges
or fees being assessed are exorbitant or unreasonable, it shall be unlawful for such bank holding company thereafter to assess or collect
any such charges or fees in contravention of the Board's order.
-10-
"(m) Reserve fund. - After the effective date, every bank holding
company shell use all its net earnings over and above 6 per centum per
ann\JB of the book value of its own shares to accumulate a fund consisting of cash and of readily marketable assets of the kinds eligible for
investment by national banks under the provisions of section 5136 of
the United States Revised Statutes in an amount equal to at least 12 per
centum of the aggregate par value of all bank shares owned by it. Assets
comprising such fund shall be identified in an appropriate manner and
shall be kept free and clear of any lien, pledge or hypothecation of any
kind or nature. Such assets, however, may be used by the bank holding
company to replace capital of its subsidiary banks and to eliminate
losses and depreciation from the assets of such banks, but, except as
permitted by the Board, shall not be used by the company for any other
purpose end any deficiency in such assets resulting from, such use shall
be replaced at the same rate as above provided.
"(n) Registration, Reports, andfcavminatioas.- (1) Within 90 days
after the effective date, every bank holding company shall register
with the Board on forms prescribed by the Board, which shall include,
among such other information as the Board may require, a statement showing (A) name and address of each of the bank holding company's subsidiary
banks and address of each branch of each such bank; (B) name and address
of each other bank of which the bank holding company owns shares; (C)
number of shares of each class of stock of ez.ch bank owned by the bonk
holding company; (D) information concerning the manner in which such
shares are owned; (E) name, address, and nature of business of each of
the bank holding company's subsidiaries, other than banks, and the
-11manner in which the relationship arises; and (F) information concerning
all changes in the foregoing which have occurred since January 1, 1943,
including dates thereof.
The Board may, in Its discretion, extend the
time within which a bank holding company shall register and file the
requisite statement.
Any willful failure to register or to file the
requisite statement within the time permitted by this subsection or as
extended by the Board shall be deemed to be a violation of this subsection and each day such failure continues shall be a separate offense.
"(2) No buik. holding company, which is not registered in accordance
with the terms of paragraph (l) of this subsection, shell directly or
indirectly use the mails or any means or instrumentality of interstate
commerce in communicating with, effecting any transaction with, or
exercising any control over, any subsidiary bank of which it is a bank
holding company.
"(3) Each bank holding company shall furniajb to the Board from
time to time such reports as may be required by the Board and in such
form and detail bs the Board may prescribe.
Such reports shall con-
tain such information concerning the bank holding company and its subsidiaries as the Board shall deem necessary to disclose fully the relations between such companies, the effect of such relations upon the
affairs of the subsidiary banks, and whether the provisions of this
subsection have been complied with.
"(4) Each bank holding company and each subsidiary thereof shall
be subject to such examinations by examiners selected or approved by
the Board as shall be necessary to disclose fully the relations between
-12each such bank holding company and its subsidiaries, the effect of
such relations upon the affairs of the subsidiary banks, and whether
the provisions of this section or of the Board's orders, rules, or
regulations have keen complied with; and the examiner making such an
examination shall have power to administer oaths and to examine any
of the officers, directors, employees, and agents of such bank, holding
company or subsidiary under oath*
The expenses of any such examination
may, in the discretion of the Board, be assessed against the bank holding company and, when so assessed, shall be paid by such bank holding
company.
"(o) Regulations. - The Board shall have the authority to make and
issue such rules, regulations, and orders as may be necessary to enable
it effectively to administer and carry out the purposes of this section
and prevent evasion thereof and to amend, modify or rescind any such
rules, regulations, or orders so made or issued.
All powers and func-
tions of the Board prescribed by this section, other than the issuance,
amendment, modification, or rescission of rules, regulations, and orders
and the determination of matters of general policy, may be performed
through such members of the Board or such officers and employees thereof
or of such Federal Reserve Banks or officers or employees thereof as
the Board may deem advisable in order to facilitate the administration
of this section.
"(p) Penalties. - (l) If, after notice and opportunity for hearing,
the Board finds that a bank holding company has willfully violated any
of the provisions of this section, or of any rules, regulations, or
-13ordera of the Beard issued pursuant thereto, or has knowingly permitted or assented to or participated in any such violation by any subsidiary, the Board may order, with respect to all or any of the following lettered -provisions, that thereafter, or during such period as may
be fixed by the order, or ponding further order by the Board, (A) the
bank holding company shall not pay any dividends to its shareholders;
(B) no bank of which the bank holding company owns any shares shall pay
dividends on such shares or pay or become liable to pay to the bank
holding company or any of its subsidiaries any compensation for supervision or other services; or (C) shares of banks owned by the bank hold*
ing company Shall not be voted and the bank holding company shall not
in any manner participate directly or indirectly in the management or
control of any subsidiary bank.
"(2) Any person who willfully violates any provision of this section or any rule, regulation, or order issued by the Board pursuant
thereto shall upon conviction be fined not more than $10,000 or imprisoned not more than two years, or both, except that in the case of
a violation of a provision of paragraphs (c), (d), (e), or (f) of this
section by a bank holding company, the fine imposed upon such holding
company shall be a fine not exceeding $100,000.
Every officer, direc-
tor, agent and employee of a bank holding company shall be subject to
the same penalties for false entries in any book, report, or statement
of such bank holding company as are applicable to officers, directors,
agents, and employees of member banks under section 5209 of the Revised Statutes, as amended.11
-14SEC. 2.
The Federal Reserve Act, as amended, is hereby
farther amended by inserting after section 23A thereof a new section
to read as fo11 ow s:
"SECTIOIJ &&B-. AFFILIATES OF INSURED 3AIJKS
"Sec. 233.
(a) Definitions. - When used in this section, the
terms 'bank holding company', 'bank1, 'company', 'subsidiary', 'voting
share', 'affiliate', 'person', 'director1, and 'effective date' have the
same meanings as are assigned to them, respectively, in section 23A
of this Act, as amended.
Loans to Bank Holding Companies. - It shall be unlawful,
after the effective date, for any insured bank which is a subsidiary
of a bank holding company directly or indirectly (l) to make any
loan or extension of credit to, or (2) to purchase any securities
from such bank holding company if the transaction would result in
violation by such bank holding company of subsection (i) of section
23A of this Act.
"(c) Loans to Affiliates. - (l) It shell be unlawful, after the
effective date, for any insured bank (l) to make any loan or extension
of credit to, or purchase securities under a repurchase agreement from
any of its affiliates, or (2) to invest any of its funds in the capital
stock, bonds, debentures, or other such obligations of any such affiliate,
or (3) to accept the capital stock, bonds, debentures, or other such obligations of any such affiliate as collateral security for advances
made to any person, partnership, association, or corporation, if, in
the case of any such affiliate, the aggregate amount of such loans, extensions of credit, repurchase agreements, investments, and advances
against such collateral security will exceed 20 per Centura of the
capital stock and surplus of such insured ban]-:.
"(2) Within the foregoing limitations, each loan or extension of
credit of any kind or character to an affiliate shall be secured by
collateral in the form of stocks, bonds, debentures, or other such
obligations having a market value at the time of making the loan or extension of credit of at least 20 per centum more than the amount of the
loan or extension of credit, or of at least 10 per centum inore than the
amount of the loan or extension of credit if it is secured by obligations of any State, or of any political subdivision cr agency thereof:
Provided, That the provisions of this paragraph shall not apply to
loans or extension:.; of credit secured by obligations of the United
States Government, the Federal intermediate credit banks, the Federal
land banks, the Federal Home Loan Banks, or the Rome Owners' Loan Corporation, or by such notes, drafts, bills of exohange, or bankers' acceptances as are eligible for rediscount or for purchase by Federal
reserve banks. A loan or extension of credit to a director, officer,
clerk, or other employee or any representative of any such affiliate
shall be deemed a loan to the affiliate to the extent that the proceeds
of such lorai are used for the benefit of, or transferred to, the
affiliate.
"(3) The provisions of this subsection shall not be applicable to
any affiliate (l) engaged on the effective date in holding the bank
promises of the insured bank with which it is affiliated or in maintaining
and operating properties acquired for banking purposes prior to such date;
-16(2) engaged solely in conducting a safe-deposit business or the business of an agricultural credit corporation or livestock loan company;
(3) in the capital stock of which a national banking association is
authorized to invest pursuant to section 25 of this Act, ac amended,
or a subsidiary of such affiliate, all the stock of which (except
qualifying shares of directors in an amount not to exceed 10 per centum)
is owned by such affiliate; (4) organized under section 25(a) of this
Act, as amended, or a subsidiary of such affiliate, all the stock of
which (except qualifying shares of directors in an amount not to exceed 10 per centun) is owned by such affiliate; (5) engaged solely in
holding obligations of the United States or obligations fully guaranteed
by the United States as to principal and interest, the Federal intermediate credit banks, the Federal land banks, the Federal. Home Loan
Banks, or the Home Owners' Loan Corporation] (6) whore the affiliate
relationship has arisen cut of a. bona fide debt contracted prior to the
date of the creation of such relationship; or (7) where the affiliate
relationship exists by reason of the ownership or control of any voting
shares thereof by an insured bank as executor, administrator, trustee,
receiver, arent, depositary, or in any other fiduciary capacity, oxcept
where such shares arc3 held for the benefit of all or a majority of the
stockholders of such insured bank; but as to any such affiliate, insured
banks shall continue to be subject to other provisions of law applicable to loans by such banks and investments by such banks in stocks,
bonds, debentures, or other such obligations. The provisions of this
subsection shall likewise not apply to indebtedness of any affiliate for
-17unpaid balances due a bank on assets purchased from such bank or to
loans secured by, or extensions of credit against, obligations of the
United States or obligations fully guaranteed by the United States as
to principal and interest.
"(d) Reports. - Each insured bank shall obtain such reports from
its affiliates (other than insured banks) as (l) in the case of a State
member bank, way be required by the Board; or (2) in the case of a
national bank or a District bank, may be required, by the Comptroller
of the Currency; or (3) in the case of any other subsidiary bank, may
be required by the board of directors of the Federal Deposit Insurance
Corporation.
Bach such report shall be filed with the authority re-
quiring it within such time as such authority may prescribe,
Such re-
ports may be required and shall be in such form as in the judgment of
the appropriate authority shall be necessary to disclose fully the relations between the banks and their affiliates, the effect of such
relations upon the affairs of the banks, and whether the provisions of
this subsection have been complied with.
The authority requiring any
such report may require that it be published by the bank under such
conditions as such authority nay direct.
Any willful failure to obtain
any report required under this paragraph shall be deemed to be a violation of this subsection and each day such violation continues shall be
a separate offens e.
B
(e) Examinations. - ^-ocaniners authorized to examine national banks
are authorised to examine affiliates of national banks; examiners authorized to examine State member banks are authorized to examine affiliates
-18of State member banks; and examiners authorized to examine norm ember
insured banks which are subsidiary banks are authorized to examine
affiliates of such subsidiary banks.
In connection with the examina-
tion of any insured bank, examiners selected or approved by the Board,
the Comptroller of the Currency, or the board of directors of the
Federal Deposit Insurance Corporation, as the case may be, shall be
authorized to make such examination of all affiliates of such bank as
shall be necessary, in the judgment of the appropriate authority atiove
mentioned, to disclose fully the relations between the affiliates and
the bank, the effect of such relations upon the affairs of the bank,
and whether the provisions of this section have been complied with;
and the examiner making such examination shall have power to administer
onths and tc examine any of the officers, directors, employees, and
agents of any such affiliate under oath.
The expenses of any such ex-
amination, in the discretion of the appropriate authority above, mentioned, may be treated as expenses of examination of the bank.
"(f) viecurity AffilifctGS. - It shall be unlawful for any member
bank to have after June 16, 1934, and for any other insured bank to
nave after one year after the effective date, any affiliate which is
engaged principally in the issue, flotation, underwriting, public
sale, or distribution at wholesale or retail or through syndicate
participation of stocks, bonds, debentures, notes, or other securities:
Provided, That nothing in this subsection shall apply to any such organization which shall have been placed in formal liquidation and which
shall transact no business except such as may be incidental tc the
/
-19liquidation of its affairs.
Each day such a violation shall continue
shall be a separate-? offense.
"(g) 'Penalties. - (l) If any violation of this section shall continue Tor all calendar months after the bank shall have been warned by
the Board, in the case of a member bank, or by the board of directors
of the Federal Deposit Insurance Corporation, in the case of any other
insured bank, to discontinue the same, (1) in the case of a national
bank, all the rights, privileges, and franchises granted to it under
the National Bank Act may be forfeited in the manner prescribed in section 2 of this Act, as amended, or (2) in the case of a State member
bank, all of its rights and privileges of membership in the Federal Reserve System may be forfeited in the manner prescribed in section 9 of
this Act, as amended, or (3) in the case of any other insured bank, the
insurance of its deposits may be terminated in the manner prescribed in
subsection (i) of section 12B of this Act, as amended.
"(2) Any person who willfully violates any provision of this section shall upon conviction be fined not more than $l,0O0.M
SEC. 3. Technica 1 Air.endinents. - (a) The paragraph of section 4
of the Federal Reserve Act, as amended! which commences with the words
"The Board of Governors of the Federal Reserve System shall classify" is
amended by striking out ail of the language therein which follows the
colon and by inserting in lieu thereof the following:
"Provided, That
whenever any member bank, or member banks within the same Federal Reserve
district are subsidiaries of the same bank holding company within the
o
meaning of section 23A of this Act, participation in any such nomination
-20or election by such •member banks, including such bank holding company
if it is also a member bank, shall be confined to one of such banks,
which may be designated for the purpose by such bank holding company."
(b) The sixteenth, seventeenth, eighteenth, twenty-first, and
twenty-second paragraphs of section 9 of the Federal Reserve Act, as
amended, are repealed.
(c)(i) The second sentence of the first paragraph of section 5240
of the Revised Statutes, as amended, is amended by changing the colon
following the words "Comptroller of the Currency" to a period and by
striking out the remainder of the sentence.
(2) The last two sentences of the first paragraph of section 5240
of the Revised Statutes, as amended, are amended by striking out the
words "or affiliate" in each sentence.
(3) The second paragraph of section 5240 of the Revised Statutes,
as amended, is amended by striking out the first three sentences, including the proviso at the end of the third sentence, and by striking
out the Last two sentences.
(4) The fourth sentence of the second paragraph of section 5240
of the Revised Statutes, as amended, is amended by striking out the
words "and affiliates thereof therein provided for" and "or affiliates
thereof".
(5) The fifth sentence of the second paragraph of section 5240 of
the Revised Statutes, as amended, is amended by striking out the words
"and/or affiliates".
c
(d) The last paragraph of section 21 of the Federal Reserve Act,
as amended, is repealed.
(e) Subsections (b) and (c) of section 2 of the Banking Act of
1933, as amended, are repealed.
(f) Section 20 of the Banking Act of 1933, as emended, ia repealed.
(g)(l) The first sentence of section 5144 of the Revised Statutes,
as amended, is amended by inserting the word "and" immediately before
"(3)", and by changing to a period the comma preceding the words "r<nd
(4)", and by striking out that which follows in such sentence*
(2) The second paragraph and all succeeding paragraphs of section 5144 of the Revised Statutes, as amended, are repealed.
(h) The second paragraph of section 521L of the Revised Statutes,
as amended, is repealed.
(i)(i) Subsection (d) of section 26 of the Revenue Act of 1936,
as amended, is amended to read as follows:
"(d) Bank Ho 1.ding; CoiTipanies. - In the case of a bank holding company (as defined in section 22A of the Federal Reserve Act), the amount
of the earnings or profits which the Board of Governors of the Federal
Reserve System certifies to the Coriimiosioner has been devoted by such
company during the taxable year to the acquisition of cash or readily
marketable assets of the kinds eligible for investment by national banks
under the provisions of section 5136 of the United States Revised Statutes, in compliance with subsection (m) of section 23A of the Federal
Reserve Act. The aggregate of trie credits allowable under this subsection for all taxable years shall not exceed the amount required to
be devoted under such subsection (111} to such purposes."
(2) Subdivision (1)(C) of subsection (a) of section 14 of the
Revenue Act of 1936, as amended, is amended to read as follows:
"(C) In the case of a bsnk holding company (as defined in section 2I5A of the Federal Reserve Act), the amount allowed as a credit
under section 26(d)."
(3) Subdivision (i)(D) of subsection (c) of section 102 of the
Revenue Act of 1936, as amended, is amended to read as follows:
"(D) In the case of a bank holding company (as defined in section 23A of the Federal Reserve Act) , the amount allowed as a credit
under section 26(d)."
(j)(I) The first sentence of paragraph (4) of subsection (c) of
section .r5 of the Investment Company Act of .1940 is amended to read as
follows:
"(4) Any bank holding company which registers with the Board of
Governors of the Federal Reserve System pursuant to section 23A of
the Federal Reserve Act, as amended."
(2) Paragraph (11) of subsection (a) of section 202 of.the Investment Advisers Act of 1940 is amended by changing the words "or any
holding company affiliate, as defined, in the Banking Act of 1932" to
read "or any barn: holding company, as defined in section 25A of the
Federal Reserve Act."
SEC. 4.
Separability of Provisions. - If any provision of this
Act, or the application of such provision to any person or circumstance,
shall be held invalid, the remainder of the Act, and the application of
such provision to persons or circumstances other than those to which it
is held invalid, shall cot be affected thereby.
@FedFRASER