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F ederal Reserve Bank OF DALLAS Dallas Texas, May 21, 1956 To All Banks in the Eleventh Federal Reserve District: The Bank Holding Company Act of 1956 became law on May 9, 1956. We quote below, for your information, the text of the press release issued by the Board of Governors of the Federal Reserve System. Yours very truly, Watrous H. Irons President PRESS STATEMENT “ The Bank Holding Company Act of 1956 became law on May 9, 1956. It applies to all banks whether or not members of the Federal Reserve System. Subject to certain exceptions, a bank holding company for the purposes of the law is any company which owns or controls, directly or indirectly, 25 per cent or more of the stock of each of two or more banks. In general, this act requires every bank holding company (1) to obtain the prior approval of the Board of Governors before it acquires, directly or indirectly, the stock or substantially all the assets of any bank, and (2) within two years after the date of the act to dispose of any nonbanking assets held by such bank holding company. All bank holding companies must register with the Board within 180 days after the date of the act. Any bank which is a subsidiary of a bank holding company is prohibited by the law from making any loans to, or investing in the stock or obliga tions of, such bank holding company or any other subsidiary of such company. Viola tions of the act are subject to criminal penalties. Regulations and forms pursuant to the new law are now in process of preparation. In the meantime, any bank holding company which proposes to acquire the stock or substantially all the assets of any bank, should file application for the Board’s approval with the Federal Reserve Bank of its district. Any inquiries with respect to the provi sions of the new law should also be directed to the appropriate Federal Reserve Bank.” This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)