Policy statement on nonvoting equity investments by bank holding companies.

CFR · 2024-01-01 · US · Title 12

(a) (2) This statement sets out the Board's concerns with these investments, the considerations the Board will take into account in determining whether the investments are consistent with the Act, and the general scope of arrangements to be avoided by bank holding companies. The Board recognizes that the complexity of legitimate business arrangements precludes rigid rules designed to cover all situations (b) (i) The company directly or indirectly owns, controls, or holds with power to vote 25 per cent or more of the voting shares of the bank; (ii) The company controls in any manner the election of a majority of the board of directors of the bank; or (iii) The Board determines, after notice and opportunity for hearing, that the company has the power, directly or indirectly, to exercise a controlling influence over the management or policies of the bank. (12 U.S.C. 1841(d)). (2) In intrastate situations, the Board may approve bank holding company acquisitions of additional banking subsidiaries. However, where the acquiree is located outside the home state of the investing bank holding company, section 3(d) of the Act prevents the Board from approving any application that will permit a bank holding company to “acquire, directly or indirectly, any voting shares of, interest in, or all or substantially all of the assets of any additional bank.” (12 U.S.C. 1842(d)(1)). (c) (i) Options on, warrants for, or rights to convert nonvoting shares into substantial blocks of voting securiti

official document · source cfr-2024 · id 12:§ 225.143