Case 2:24-cv-00569-TSZ

Agency decision

Ask Donna

What actually matters in this document.

Text

Document 199

Filed 08/17/26

Page 1 of 166

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF

WASHINGTON

FEDERAL TRADE COMMISSION,

Case No. ____________

Plaintiff,

STIPULATED ORDER FOR

PERMANENT INJUNCTION,

MONETARY JUDGMENT, AND

OTHER RELIEF

DOXO, INC., a corporation,

STEVE SHIVERS, individually and as an officer of

DOXO, INC., and

ROGER PARKS, individually and as an officer of

DOXO, INC.,

Defendants.

Plaintiff, the Federal Trade Commission (“Commission”), filed its Complaint for

Permanent Injunction, Monetary Judgment, and Other Relief (“Complaint”), for a permanent

injunction, monetary relief and other relief in this matter, pursuant to Sections 5(a), 13(b), and 19

of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 45(a), 53(b), 57b; Sections 521

and 522(a) of the Gramm-Leach-Bliley Act (“GLB Act”), 15 U.S.C. §§ 6821, 6822(a); and the

Restore Online Shoppers’ Confidence Act (“ROSCA”), 15 U.S.C. § 8404. The Commission and

Defendants stipulate to the entry of this Stipulated Order for Permanent Injunction, Monetary

Judgment, and Other Relief (“Order”) to resolve all matters in dispute in this action between

them.

THEREFORE, IT IS ORDERED as follows:

FINDINGS

This Court has jurisdiction over this matter.

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 2 of 166

The Complaint charges that Defendants participated in deceptive and unfair acts

or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45, in the advertising,

marketing, promotion, or provision of bill payment services to consumers throughout the United

States. The Complaint further charges that Defendants made false, fictitious, or fraudulent

statements or representations to customers of financial institutions to obtain or attempt to obtain

information from those customers, in violation of Section 521 of the GLB Act, 15 U.S.C. § 6821.

The Complaint also charges that Defendants violated ROSCA, 15 U.S.C. § 8403, by failing to

disclose material transaction terms before obtaining consumers’ billing information and charging

consumers without their express informed consent.

Defendants neither admit nor deny any of the allegations in the Complaint, except

as specifically stated in this Order. Only for purposes of this action, Defendants admit the facts

necessary to establish jurisdiction.

Defendants waive any claim that they may have under the Equal Access to Justice

Act, 28 U.S.C. § 2412, concerning the prosecution of this action through the date of this Order,

and agree to bear their own costs and attorney fees.

Defendants and the Commission waive all rights to appeal or otherwise challenge

or contest the validity of this Order.

DEFINITIONS

For the purpose of this Order, the following definitions apply:

“Billing Information” means payment information, such as a credit card,

checking, savings, share or similar account, utility bill, mortgage loan account, or debit card.

“Charge,” “Charged,” or “Charging” means any attempt to collect money or

other consideration from a consumer, including but not limited to causing Billing Information to

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 3 of 166

be submitted for payment, including against the consumer’s credit card, debit card, bank account,

telephone bill, or other account.

“Clearly and Conspicuously” means that a required disclosure is easily

noticeable (i.e., difficult to miss) and easily understandable by reasonable consumers, including

in all of the following ways:

In any communication that is solely visual or solely audible, the disclosure

must be made through the same means through which the communication is presented.

In any communication made through both visual and audible means, such as a television

advertisement, the disclosure must be presented simultaneously in both the visual and

audible portions of the communication even if the representation requiring the disclosure

is made in only one means.

A visual disclosure, by its size, contrast, location, the length of time it

appears, and other characteristics, must stand out from any accompanying text or other

visual elements so that it is easily noticed, read, and understood.

An audible disclosure, including by telephone or streaming video, must be

delivered in a volume, speed, and cadence sufficient for reasonable consumers to easily

hear and understand it.

In any communication using an interactive electronic medium, such as the

Internet, mobile application, or software, the disclosure must be unavoidable.

The disclosure must use diction and syntax understandable to reasonable

consumers and must appear in each language in which the representation that requires the

disclosure appears.

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 4 of 166

The disclosure must comply with these requirements in each medium

through which it is received, including all electronic devices and face-to-face

communications.

The disclosure must not be contradicted or mitigated by, or inconsistent

with, anything else in the communication.

When the representation or sales practice targets a specific audience, such

as children, older adults, or the terminally ill, “reasonable consumers” includes members

of that group.

“Defendants” means the Individual Defendants and the Corporate Defendant,

individually, collectively, or in any combination.

“Corporate Defendant” means Doxo, Inc. and its successors and assigns.

“Individual Defendants” means Steve Shivers and Roger Parks.

“Express Informed Consent” means an affirmative act communicating

unambiguous assent to be Charged, made after receiving and in close proximity to a Clear and

Conspicuous disclosure, in writing, and also orally for in-person transactions, of all Material

terms.

“Material” means likely to affect a person’s choice of, or conduct regarding,

goods or services.

“Negative Option Feature” means, in an offer or agreement to sell or provide

any goods or services, a provision under which the customer’s silence or failure to take an

affirmative action to reject goods or services or to cancel the agreement is interpreted by the

Defendants as acceptance of the offer or agreement.

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 5 of 166

ORDER

PROHIBITION AGAINST MISREPRESENTING

BILLER AFFILIATION

IT IS FURTHER ORDERED that Defendants and Defendants’ officers, agents, employees

and all other persons in active concert or participation with any of them, who receive actual

notice of this Order, whether acting directly or indirectly, in connection with promoting or

offering for sale any good or service, are permanently restrained and enjoined from:

Making any misrepresentation, including through the use of any name, logo,

photograph, or otherwise, that consumers who pay a bill through any website owned, operated,

managed, or controlled by Defendants are paying the bill directly through their biller or an entity

acting directly for the biller (unless Defendants are acting directly for the biller), including by:

Using a biller’s website address in any search engine advertisement; or

Using the branded name or logo of any biller in any search engine

advertisement, actual or display URL, website, webpage, or any other form of advertising

for bill payment services in a manner that misrepresents, expressly or by implication, that

the advertisement is from or sponsored by the biller or an entity acting directly for the

biller;

Making any misrepresentation, including through the use of any name, logo,

photograph, or otherwise, that Defendants are, or are working directly for, an advertised biller.

II.

PROHIBITION AGAINST MISREPRESENTATIONS

IT IS FURTHER ORDERED that Defendants and Defendants’ officers, agents,

employees, and attorneys, and all other persons in active concert or participation with any of

them, who receive actual notice of this Order, whether acting directly or indirectly, in connection

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 6 of 166

with promoting or offering for sale any good or service, are permanently restrained and enjoined

from misrepresenting, expressly or by implication:

The amount consumers will pay, including by representing an amount that

excludes additional fees or other amounts Defendants Charge;

The nature or purpose of any fee, Charge, or amount; or

Any other fact Material to consumers concerning any good or service, such as:

total costs or fees and any Material restrictions, limitations, or conditions; or any Material aspect

of its performance, efficacy, nature, or central characteristics.

III.

INJUNCTION RELATING TO CONSUMER

INFORMATION

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, employees,

and attorneys, and all other persons in active concert or participation with any of them, who

receive actual notice of this Order, whether acting directly or indirectly, in connection with

promoting or offering for sale any good or service, are hereby permanently restrained and

enjoined from:

Obtaining, or attempting to obtain, customer information of a financial institution

(including bank account, credit card, or debit card information) from a consumer by making

false, fictitious, or fraudulent representations to any consumer or financial institution; or

Violating the GLB Act, 15 U.S.C. §§ 6801-6809, §§ 6821-6827, a copy of which

is attached as ATTACHMENT A.

IV.

PROHIBITION AGAINST MISREPRESENTATIONS

RELATING TO NEGATIVE OPTION FEATURES

IT IS FURTHER ORDERED that Defendants and Defendants’ officers, agents,

employees, and attorneys, and all other persons in active concert or participation with any of

them, who receive actual notice of this Order, whether acting directly or indirectly, in connection

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 7 of 166

with promoting or offering for sale any good or service with a Negative Option Feature, are

permanently restrained and enjoined from misrepresenting, expressly or by implication, any

Material fact, including any of the following:

The existence of a Negative Option Feature;

Any term of the Negative Option Feature, including:

how and to what consumers are consenting;

any deadline to prevent or stop a Charge, or

the cancellation of the Negative Option Feature; or

Cost.

REQUIRED DISCLOSURES RELATING TO

NEGATIVE OPTION FEATURES

IT IS FURTHER ORDERED that Defendants and Defendants’ officers, agents,

employees, and attorneys, and all other persons in active concert or participation with any of

them, who receive actual notice of this Order, whether acting directly or indirectly, in connection

with promoting or offering for sale any good or service with a Negative Option Feature, are

permanently restrained and enjoined from failing to Clearly and Conspicuously disclose to a

consumer, prior to obtaining the consumer’s Billing Information, all Material terms, including,

but not limited to:

That consumers will be Charged for the good or service, or that those Charges

will increase after any applicable trial period ends, and, if applicable, that the Charges will be on

a recurring basis, unless the consumer timely takes steps to prevent or stop such Charges;

Each deadline (by date or frequency) by which the consumer must act to prevent

or stop the Charges; and

The amount (or range of costs) the consumer will be Charged and, if applicable,

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 8 of 166

the frequency of the Charges a consumer will incur unless the consumer takes timely steps to

prevent or stop those Charges.

VI.

OBTAINING EXPRESS INFORMED CONSENT FOR

NEGATIVE OPTION FEATURES

IT IS FURTHER ORDERED that Defendants and Defendants’ officers, agents,

employees, and attorneys, and all other persons in active concert or participation with any of

them, who receive actual notice of this Order, whether acting directly or indirectly, in connection

with promoting or offering for sale any good or service with a Negative Option Feature, are

permanently restrained and enjoined from failing to obtain the consumer’s Express Informed

Consent before Charging the consumer.

VII.

SIMPLE CANCELLATION MECHANISMS

FOR NEGATIVE OPTION FEATURES

IT IS FURTHER ORDERED that Defendants and Defendants’ officers, agents,

employees, and attorneys, and all other persons in active concert or participation with any of

them, who receive actual notice of this Order, whether acting directly or indirectly, in connection

with promoting or offering for sale any good or service with a Negative Option Feature, are

permanently restrained and enjoined from failing to provide simple mechanisms for a consumer

to: cancel the Negative Option Feature; avoid being Charged, or Charged an increased amount,

for the good or service; and immediately stop any recurring Charges. The simple mechanism

must not be difficult, costly, confusing, or time consuming and must be at least as easy to use as

the mechanism the consumer used to consent to the Negative Option Feature, and:

At a minimum, Defendants must provide such simple mechanism through the

same medium the consumer used to consent to the Negative Option Feature, and:

For cancellation by Internet, the cancellation mechanism must be easy to find

when the consumer seeks to cancel.

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 9 of 166

For cancellation by telephone call, Defendants must promptly effectuate

cancellations requested by the consumer via a telephone number that is (i) answered by

Defendants or records a message, (ii) available during normal business hours, (iii) not more

costly to use than calls consumers use to consent to the Negative Option Feature, and (iv) easy to

find.

VIII.

MONETARY JUDGMENT

IT IS FURTHER ORDERED that:

Judgment in the amount of Two Million, One Hundred Thousand Dollars

($2,100,000) is entered in favor of the Commission against Corporate Defendant as monetary

relief.

Corporate Defendant is ordered to pay the Commission $2,100,000 by electronic

fund transfer in accordance with instructions to be provided by a representative of the

Commission in three payments, as follows:

Within 7 days of entry of this Order (for purposes of this Section, the

“First Payment Date”), Corporate Defendant is ordered to pay to the Commission One

Million Fifty Thousand Dollars ($1,050,000).

Within 180 days of the First Payment Date, Corporate Defendant is

ordered to pay to the Commission Five Hundred Twenty-Five Thousand Dollars

($525,000).

Within 365 days of the First Payment Date, Corporate Defendant is

ordered to pay to the Commission Five Hundred Twenty-Five Thousand Dollars

($525,000).

If Corporate Defendant fails to make any required payment when due under

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 10 of 166

Subsections VIII.B.1-3 above, the judgment becomes immediately due as to Corporate

Defendant in the amount specified in Subsection VIII.A above (which the parties stipulate only

for purposes of this Section represents the consumer injury alleged in the Complaint), less any

payment previously made pursuant to this Section, plus interest computed from the date of entry

of this Order. Time is of the essence for the payments specified in Subsections VIII.B.1-3 above.

IX.

ADDITIONAL MONETARY PROVISIONS

IT IS FURTHER ORDERED that:

Corporate Defendant relinquishes dominion and all legal and equitable right, title,

and interest in all assets transferred pursuant to this Order and may not seek the return of any

assets.

The facts alleged in the Complaint will be taken as true, without further proof, in

any subsequent civil litigation by or on behalf of the Commission, including in a proceeding to

enforce its rights to any payment or monetary judgment pursuant to this Order, such as a

nondischargeability complaint in any bankruptcy case.

The facts alleged in the Complaint establish all elements necessary to sustain an

action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C.

§ 523(a)(2)(A), and this Order will have collateral estoppel effect for such purposes.

Corporate Defendant acknowledges that Corporate Defendant’s Employer

Identification Number, Social Security Number, or other Taxpayer Identification Number

(“TIN”), including all TINs that Corporate Defendant previously provided, may be used by the

Commission for reporting and other lawful purposes, including collecting on any delinquent

amount arising out of this Order, in accordance with 31 U.S.C. § 7701.

All money received by the Commission pursuant to this Order may be deposited

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 11 of 166

into a fund administered by the Commission or its designee to be used for consumer relief, such

as redress and any attendant expenses for the administration of any redress fund. If a

representative of the Commission decides that direct redress to consumers is wholly or partially

impracticable or money remains after such redress is completed, the Commission may apply any

remaining money for such related relief (including consumer information remedies) as it

determines to be reasonably related to Corporate Defendant’s practices alleged in the Complaint.

Any money not used for relief is to be deposited to the U.S. Treasury. Defendants have no right

to challenge any actions the Commission or its representatives may take pursuant to this

Subsection.

CUSTOMER INFORMATION

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, employees,

and attorneys, and all other persons in active concert or participation with any of them, who

receive actual notice of this Order, whether acting directly or indirectly, in connection with

promoting or offering for sale any good or service, are permanently restrained and enjoined from

directly or indirectly failing to provide sufficient customer information to enable the Commission

to efficiently administer consumer redress. If a representative of the Commission requests in

writing any information related to redress, Defendants must provide it, in the form prescribed by

the Commission, within 14 days.

XI.

COOPERATION

IT IS FURTHER ORDERED that, for 5 years after the entry of this Order, Corporate

Defendant must fully cooperate with representatives of the Commission in this case and in any

investigation related to or associated with the transactions or the occurrences that are the subject

of the Complaint. Such Defendant must provide truthful and complete information, evidence,

and testimony. Corporate Defendant “must cause Defendants’ officers, employees,

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 12 of 166

representatives, or agents to appear” for interviews, discovery, hearings, trials, and any other

proceedings that a Commission representative may reasonably request upon 5 days written

notice, or other reasonable notice, at such places and times as a Commission representative may

designate, without the service of a subpoena.

XII.

ORDER ACKNOWLEDGMENTS

IT IS FURTHER ORDERED that Defendants obtain acknowledgments of receipt of this

Order:

Each Defendant, within 7 days of entry of this Order, must submit to the

Commission an acknowledgment of receipt of this Order sworn under penalty of perjury.

For 5 years after entry of this Order, Corporate Defendant must deliver a copy of

this Order to: (1) all principals, officers, directors, and LLC managers and members; (2) all

employees having managerial responsibilities for conduct related to the subject matter of the

Order and all agents and representatives who participate in conduct related to the subject matter

of the Order; and (3) any business entity resulting from any change in structure as set forth in the

Section titled Compliance Reporting. Delivery must occur within 7 days of entry of this Order

for current personnel. For all others, delivery must occur before they assume their

responsibilities.

From each individual or entity to which Corporate Defendant delivered a copy of

this Order, Corporate Defendant must obtain, within 30 days, a signed and dated

acknowledgment of receipt of this Order.

XIII.

COMPLIANCE REPORTING

IT IS FURTHER ORDERED that Corporate Defendant make timely submissions to the

Commission:

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 13 of 166

One year after entry of this Order, Corporate Defendant must submit a

compliance report, sworn under penalty of perjury:

Corporate Defendant must: (a) identify the primary physical, postal, and

email address and telephone number, as designated points of contact, which

representatives of the Commission may use to communicate with Corporate Defendant;

(b) identify all of Corporate Defendant’s businesses by all of their names, telephone

numbers, and physical, postal, email, and Internet addresses; (c) describe the activities of

each business, including the goods and services offered, the means of advertising,

marketing, and sales, and the involvement of any other Defendant; (d) describe in detail

whether and how Corporate Defendant is in compliance with each Section of this Order;

and (e) provide a copy of each Order Acknowledgment obtained pursuant to this Order,

unless previously submitted to the Commission.

For 5 years after entry of this Order, Corporate Defendant must submit a

compliance notice, sworn under penalty of perjury, within 14 days of any change in the

following:

Corporate Defendant must report any change in: (a) any designated point

of contact; or (b) the structure of the Corporate Defendant or any entity that Corporate

Defendant has any ownership interest in or controls directly or indirectly that may affect

compliance obligations arising under this Order, including: creation, merger, sale, or

dissolution of the entity or any subsidiary, parent, or affiliate that engages in any acts or

practices subject to this Order.

Corporate Defendant must submit to the Commission notice of the filing of any

bankruptcy petition, insolvency proceeding, or similar proceeding by or against Corporate

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 14 of 166

Defendant within 14 days of its filing.

Any submission to the Commission required by this Order to be sworn under

penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by

concluding: “I declare under penalty of perjury under the laws of the United States of America

that the foregoing is true and correct. Executed on: _____” and supplying the date, signatory’s

full name, title (if applicable), and signature.

Unless otherwise directed by a Commission representative in writing, all

submissions to the Commission pursuant to this Order must be emailed to DEbrief@ftc.gov or

sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement,

Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW,

Washington, DC 20580. The subject line must begin: FTC v. Doxo, Inc., 2323006.

XIV.

RECORDKEEPING

IT IS FURTHER ORDERED that Corporate Defendant must create certain records for 5

years after entry of the Order, and retain each such record for 5 years. Specifically, Corporate

Defendant must create and retain the following records:

Accounting records showing the revenues from all goods or services sold;

Personnel records showing, for each person providing services, whether as an

employee or otherwise, that person’s: name; addresses; telephone numbers; job title or position;

dates of service; and (if applicable) the reason for termination;

Records of all consumer complaints and refund requests, whether received

directly or indirectly, such as through a third party, and any response;

Copies of all subpoenas and other communications with domestic law

enforcement, if such communications relate to Corporate Defendant’s compliance with this

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 15 of 166

Order;

All custodial records for individuals with managerial responsibility for user

interface; and

All records necessary to demonstrate full compliance with each provision of this

Order, including all submissions to the Commission.

XV.

COMPLIANCE MONITORING

IT IS FURTHER ORDERED that, for the purpose of monitoring Defendants’ compliance

with this Order, and any failure to transfer any assets as required by this Order, for a period of 5

years after the entry of this Order:

Within 14 days of receipt of a written request from a representative of the

Commission, Corporate Defendant must: submit additional compliance reports or other

requested information, which must be sworn under penalty of perjury; appear for depositions;

and produce documents for inspection and copying. The Commission is also authorized to

obtain discovery, without further leave of court, using any of the procedures prescribed by

Federal Rules of Civil Procedure 29, 30 (including depositions by remote means), 31, 33, 34, 36,

45, and 69.

For matters concerning this Order, the Commission is authorized to communicate

directly with Corporate Defendant. Corporate Defendant must permit representatives of the

Commission to interview any employee or other person affiliated with Corporate Defendant who

has agreed to such an interview. The person interviewed may have counsel present.

The Commission may use all other lawful means, including posing through its

representatives as consumers, suppliers, or other individuals or entities to Corporate Defendant

or any individual or entity affiliated with Corporate Defendant, without the necessity of

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 16 of 166

identification or prior notice. Nothing in this Order limits the Commission’s lawful use of

compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1.

XVI.

RETENTION OF JURISDICTION

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for

purposes of construction, modification, and enforcement of this Order.

SO ORDERED this

day of

, 2026.

_______________________________

UNITED STATES DISTRICT JUDGE

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

SO STIPULATED AND AGREED:

FOR PLAINTIFF:

FEDERAL TRADE COMMISSION

s/ Edward Smith

Date:

James Doty

Edward Smith

Wendy Miller

Neal Perlman

Attorneys

Federal Trade Commission

600 Pennsylvania Ave. NW

Mail Stop CC-10232

Washington, DC 20580

Tel: 202-326-2628 (Doty)

202-326-2980 (Smith)

202-326-3571 (Miller)

202-326-2567 (Perlman)

Fax: 202-326-2752

jdoty@ftc.gov

esmith2@ftc.gov

wmiller@ftc.gov

nperlman@ftc.gov

8/17/26

Page 17 of 166

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 18 of 166

FOR DEFE DA T :

Date:

Roger M. Townsend

TOWN E D LEGAL PLLC

380 Winslow Way, Suite 200

Bainbridge Island, WA 98110

Telephone: (206) 761-2480

Courtland L. Reichman

David A. King, Jr.

teven J. Collins

Taylor N. Mauze

REICHMA JORGENSEN LEHMAN & FELDBERG LLP

I 00 Marine Parkway, Suite 300

Redwood hares, CA 94065

Telephone: (650) 623-140 I (Reichman)

(202) 894-7310 (King)

(332) 208-7171 (Collins)

(650) 623-140 I (Mauze)

DEFENDANTS:

Date: _ _ _ __ _ __

Doxo, Inc.

Date: _ _ _ _ _ _ __

Steve Shivers

Date: _ __ _ _ _ __

Roger Parks

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 19 of 166

FORDEFE DA T

Date: _ _ _ _ _ __

Roger M. fo \\ n end

TO'v

1 E

D LEG L PLL

3 0 Win low Wa , uitc 200

Bainbridge l land, WA 98 1 I 0

Telephone: (206) 76 1-2480

ourtland L. Reichman

Da id A. King, Jr.

teven J. Collins

Taylor . Mauze

RElCHM

JORG E

E LEHMA & FELDBERG LLP

I 00 Marine Parkway, uite 300

Redwood Shores, CA 94065

Telephone: (650) 623-140 I (Reichman)

(202) 894-7310 (King)

(332) 208-7 171 (Collins)

(650) 623-1401 (Mauze)

Date:

_1__1Lf__2--_G_

Date:

Date: _ _ _ _ _ __

Roger Parks

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

FOR DEFENDANTS:

Date:

Roger M. Townsend

TOWNSEND LEGAL PLLC

380 Winslow Way, Suite 200

Bainbridge Island, WA 98110

Telephone: (206) 761-2480

Courtland L. Reichman

David A. King, Jr.

Steven J. Collins

Taylor N. Mauze

REICHMAN JORGENSEN LEHMAN & FELDBERG LLP

100 Marine Parkway, Suite 300

Redwood Shores, CA 94065

Telephone: (650) 623-1401 (Reichman)

(202) 894-7310 (King)

(332) 208-7171 (Collins)

(650) 623-1401 (Mauze)

DEFENDANTS:

Date:

Doxo, Inc.

Date:

Steve Shivers

Date:

Roger Parks

7/14/26

Page 20 of 166

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 21 of 166

Attachment A

AUT H ENTICATE ~

U.S. GOVERNMENT

INFORMATION

GPO

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

Page 22 of 166

PUBLIC LAW 106-102-NOV. 12, 1999

GRAMM-LEACH-BLILEY ACT

Case 2:24-cv-00569-TSZ

113 STAT. 1338

Document 199

Filed 08/17/26

Page 23 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

Public Law 106–102

106th Congress

An Act

Nov. 12, 1999

[S. 900]

Gramm-LeachBliley Act.

Intergovernmental

relations.

12 USC 1811

note.

To enhance competition in the financial services industry by providing a prudential

framework for the affiliation of banks, securities firms, insurance companies,

and other financial service providers, and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Gramm-LeachBliley Act’’.

(b) TABLE OF CONTENTS.—The table of contents for this Act

is as follows:

Sec. 1. Short title; table of contents.

TITLE I—FACILITATING AFFILIATION AMONG BANKS, SECURITIES FIRMS,

AND INSURANCE COMPANIES

Subtitle A—Affiliations

Sec. 101. Glass-Steagall Act repeals.

Sec. 102. Activity restrictions applicable to bank holding companies that are not financial holding companies.

Sec. 103. Financial activities.

Sec. 104. Operation of State law.

Sec. 105. Mutual bank holding companies authorized.

Sec. 106. Prohibition on deposit production offices.

Sec. 107. Cross marketing restriction; limited purpose bank relief; divestiture.

Sec. 108. Use of subordinated debt to protect financial system and deposit funds

from ‘‘too big to fail’’ institutions.

Sec. 109. Study of financial modernization’s effect on the accessibility of small business and farm loans.

Subtitle B—Streamlining Supervision of Bank Holding Companies

Sec. 111. Streamlining bank holding company supervision.

Sec. 112. Authority of State insurance regulator and Securities and Exchange Commission.

Sec. 113. Role of the Board of Governors of the Federal Reserve System.

Sec. 114. Prudential safeguards.

Sec. 115. Examination of investment companies.

Sec. 116. Elimination of application requirement for financial holding companies.

Sec. 117. Preserving the integrity of FDIC resources.

Sec. 118. Repeal of savings bank provisions in the Bank Holding Company Act of

1956.

Sec. 119. Technical amendment.

Subtitle C—Subsidiaries of National Banks

Sec. 121. Subsidiaries of national banks.

Sec. 122. Consideration of merchant banking activities by financial subsidiaries.

Subtitle D—Preservation of FTC Authority

Sec. 131. Amendment to the Bank Holding Company Act of 1956 to modify notification and post-approval waiting period for section 3 transactions.

Sec. 132. Interagency data sharing.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00002

Fmt 6580

Sfmt 6582

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 24 of 166

113 STAT. 1339

Sec. 133. Clarification of status of subsidiaries and affiliates.

Subtitle E—National Treatment

Sec. 141. Foreign banks that are financial holding companies.

Sec. 142. Representative offices.

Subtitle F—Direct Activities of Banks

Sec. 151. Authority of national banks to underwrite certain municipal bonds.

Subtitle G—Effective Date

Sec. 161. Effective date.

TITLE II—FUNCTIONAL REGULATION

Subtitle A—Brokers and Dealers

Sec. 201. Definition of broker.

Sec. 202. Definition of dealer.

Sec. 203. Registration for sales of private securities offerings.

Sec. 204. Information sharing.

Sec. 205. Treatment of new hybrid products.

Sec. 206. Definition of identified banking product.

Sec. 207. Additional definitions.

Sec. 208. Government securities defined.

Sec. 209. Effective date.

Sec. 210. Rule of construction.

Subtitle B—Bank Investment Company Activities

Sec. 211. Custody of investment company assets by affiliated bank.

Sec. 212. Lending to an affiliated investment company.

Sec. 213. Independent directors.

Sec. 214. Additional SEC disclosure authority.

Sec. 215. Definition of broker under the Investment Company Act of 1940.

Sec. 216. Definition of dealer under the Investment Company Act of 1940.

Sec. 217. Removal of the exclusion from the definition of investment adviser for

banks that advise investment companies.

Sec. 218. Definition of broker under the Investment Advisers Act of 1940.

Sec. 219. Definition of dealer under the Investment Advisers Act of 1940.

Sec. 220. Interagency consultation.

Sec. 221. Treatment of bank common trust funds.

Sec. 222. Statutory disqualification for bank wrongdoing.

Sec. 223. Conforming change in definition.

Sec. 224. Conforming amendment.

Sec. 225. Effective date.

Subtitle C—Securities and Exchange Commission Supervision of Investment Bank

Holding Companies

Sec. 231. Supervision of investment bank holding companies by the Securities and

Exchange Commission.

Subtitle D—Banks and Bank Holding Companies

Sec. 241. Consultation.

TITLE III—INSURANCE

Subtitle A—State Regulation of Insurance

Sec. 301. Functional regulation of insurance.

Sec. 302. Insurance underwriting in national banks.

Sec. 303. Title insurance activities of national banks and their affiliates.

Sec. 304. Expedited and equalized dispute resolution for Federal regulators.

Sec. 305. Insurance customer protections.

Sec. 306. Certain State affiliation laws preempted for insurance companies and affiliates.

Sec. 307. Interagency consultation.

Sec. 308. Definition of State.

Subtitle B—Redomestication of Mutual Insurers

Sec. 311. General application.

Sec. 312. Redomestication of mutual insurers.

Sec. 313. Effect on State laws restricting redomestication.

Sec. 314. Other provisions.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00003

Fmt 6580

Sfmt 6582

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1340

Document 199

Filed 08/17/26

Page 25 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

Sec. 315. Definitions.

Sec. 316. Effective date.

Subtitle C—National Association of Registered Agents and Brokers

Sec. 321. State flexibility in multistate licensing reforms.

Sec. 322. National Association of Registered Agents and Brokers.

Sec. 323. Purpose.

Sec. 324. Relationship to the Federal Government.

Sec. 325. Membership.

Sec. 326. Board of directors.

Sec. 327. Officers.

Sec. 328. Bylaws, rules, and disciplinary action.

Sec. 329. Assessments.

Sec. 330. Functions of the NAIC.

Sec. 331. Liability of the association and the directors, officers, and employees of

the association.

Sec. 332. Elimination of NAIC oversight.

Sec. 333. Relationship to State law.

Sec. 334. Coordination with other regulators.

Sec. 335. Judicial review.

Sec. 336. Definitions.

Subtitle D—Rental Car Agency Insurance Activities

Sec. 341. Standard of regulation for motor vehicle rentals.

TITLE IV—UNITARY SAVINGS AND LOAN HOLDING COMPANIES

Sec. 401. Prevention of creation of new S&L holding companies with commercial affiliates.

TITLE V—PRIVACY

Subtitle A—Disclosure of Nonpublic Personal Information

Sec. 501. Protection of nonpublic personal information.

Sec. 502. Obligations with respect to disclosures of personal information.

Sec. 503. Disclosure of institution privacy policy.

Sec. 504. Rulemaking.

Sec. 505. Enforcement.

Sec. 506. Protection of Fair Credit Reporting Act.

Sec. 507. Relation to State laws.

Sec. 508. Study of information sharing among financial affiliates.

Sec. 509. Definitions.

Sec. 510. Effective date.

Subtitle B—Fraudulent Access to Financial Information

Sec. 521. Privacy protection for customer information of financial institutions.

Sec. 522. Administrative enforcement.

Sec. 523. Criminal penalty.

Sec. 524. Relation to State laws.

Sec. 525. Agency guidance.

Sec. 526. Reports.

Sec. 527. Definitions.

TITLE VI—FEDERAL HOME LOAN BANK SYSTEM MODERNIZATION

Sec. 601. Short title.

Sec. 602. Definitions.

Sec. 603. Savings association membership.

Sec. 604. Advances to members; collateral.

Sec. 605. Eligibility criteria.

Sec. 606. Management of banks.

Sec. 607. Resolution Funding Corporation.

Sec. 608. Capital structure of Federal home loan banks.

TITLE VII—OTHER PROVISIONS

Subtitle A—ATM Fee Reform

Sec. 701. Short title.

Sec. 702. Electronic fund transfer fee disclosures at any host ATM.

Sec. 703. Disclosure of possible fees to consumers when ATM card is issued.

Sec. 704. Feasibility study.

Sec. 705. No liability if posted notices are damaged.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00004

Fmt 6580

Sfmt 6582

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 26 of 166

113 STAT. 1341

Subtitle B—Community Reinvestment

Sec. 711. CRA sunshine requirements.

Sec. 712. Small bank regulatory relief.

Sec. 713. Federal Reserve Board study of CRA lending.

Sec. 714. Preserving the Community Reinvestment Act of 1977.

Sec. 715. Responsiveness to community needs for financial services.

Subtitle C—Other Regulatory Improvements

Sec. 721. Expanded small bank access to S corporation treatment.

Sec. 722. ‘‘Plain language’’ requirement for Federal banking agency rules.

Sec. 723. Retention of ‘‘Federal’’ in name of converted Federal savings association.

Sec. 724. Control of bankers’ banks.

Sec. 725. Provision of technical assistance to microenterprises.

Sec. 726. Federal Reserve audits.

Sec. 727. Authorization to release reports.

Sec. 728. General Accounting Office study of conflicts of interest.

Sec. 729. Study and report on adapting existing legislative requirements to online

banking and lending.

Sec. 730. Clarification of source of strength doctrine.

Sec. 731. Interest rates and other charges at interstate branches.

Sec. 732. Interstate branches and agencies of foreign banks.

Sec. 733. Fair treatment of women by financial advisers.

Sec. 734. Membership of loan guarantee boards.

Sec. 735. Repeal of stock loan limit in Federal Reserve Act.

Sec. 736. Elimination of SAIF and DIF special reserves.

Sec. 737. Bank officers and directors as officers and directors of public utilities.

Sec. 738. Approval for purchases of securities.

Sec. 739. Optional conversion of Federal savings associations.

Sec. 740. Grand jury proceedings.

TITLE I—FACILITATING AFFILIATION

AMONG BANKS, SECURITIES FIRMS,

AND INSURANCE COMPANIES

Subtitle A—Affiliations

SEC. 101. GLASS-STEAGALL ACT REPEALS.

(a) SECTION 20 REPEALED.—Section 20 of the Banking Act

of 1933 (12 U.S.C. 377) (commonly referred to as the ‘‘Glass-Steagall

Act’’) is repealed.

(b) SECTION 32 REPEALED.—Section 32 of the Banking Act

of 1933 (12 U.S.C. 78) is repealed.

SEC. 102. ACTIVITY RESTRICTIONS APPLICABLE TO BANK HOLDING

COMPANIES THAT ARE NOT FINANCIAL HOLDING COMPANIES.

(a) IN GENERAL.—Section 4(c)(8) of the Bank Holding Company

Act of 1956 (12 U.S.C. 1843(c)(8)) is amended to read as follows:

‘‘(8) shares of any company the activities of which had

been determined by the Board by regulation or order under

this paragraph as of the day before the date of the enactment

of the Gramm-Leach-Bliley Act, to be so closely related to

banking as to be a proper incident thereto (subject to such

terms and conditions contained in such regulation or order,

unless modified by the Board);’’.

(b) CONFORMING CHANGES TO OTHER STATUTES.—

(1) AMENDMENT TO THE BANK HOLDING COMPANY ACT

AMENDMENTS OF 1970.—Section 105 of the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1850) is amended

by striking ‘‘, to engage directly or indirectly in a nonbanking

activity pursuant to section 4 of such Act,’’.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00005

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1342

Document 199

Filed 08/17/26

Page 27 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

(2) AMENDMENT TO THE BANK SERVICE COMPANY ACT.—

Section 4(f) of the Bank Service Company Act (12 U.S.C.

1864(f)) is amended by inserting before the period at the end

the following: ‘‘as of the day before the date of the enactment

of the Gramm-Leach-Bliley Act’’.

SEC. 103. FINANCIAL ACTIVITIES.

Notification.

Deadline.

Notification.

VerDate 11-MAY-2000

(a) IN GENERAL.—Section 4 of the Bank Holding Company

Act of 1956 (12 U.S.C. 1843) is amended by adding at the end

the following new subsections:

‘‘(k) ENGAGING IN ACTIVITIES THAT ARE FINANCIAL IN

NATURE.—

‘‘(1) IN GENERAL.—Notwithstanding subsection (a), a financial holding company may engage in any activity, and may

acquire and retain the shares of any company engaged in

any activity, that the Board, in accordance with paragraph

(2), determines (by regulation or order)—

‘‘(A) to be financial in nature or incidental to such

financial activity; or

‘‘(B) is complementary to a financial activity and does

not pose a substantial risk to the safety or soundness

of depository institutions or the financial system generally.

‘‘(2) COORDINATION BETWEEN THE BOARD AND THE SECRETARY OF THE TREASURY.—

‘‘(A) PROPOSALS RAISED BEFORE THE BOARD.—

‘‘(i) CONSULTATION.—The Board shall notify the

Secretary of the Treasury of, and consult with the

Secretary of the Treasury concerning, any request, proposal, or application under this subsection for a determination of whether an activity is financial in nature

or incidental to a financial activity.

‘‘(ii) TREASURY VIEW.—The Board shall not determine that any activity is financial in nature or incidental to a financial activity under this subsection

if the Secretary of the Treasury notifies the Board

in writing, not later than 30 days after the date of

receipt of the notice described in clause (i) (or such

longer period as the Board determines to be appropriate under the circumstances) that the Secretary of

the Treasury believes that the activity is not financial

in nature or incidental to a financial activity or is

not otherwise permissible under this section.

‘‘(B) PROPOSALS RAISED BY THE TREASURY.—

‘‘(i) TREASURY RECOMMENDATION.—The Secretary

of the Treasury may, at any time, recommend in

writing that the Board find an activity to be financial

in nature or incidental to a financial activity.

‘‘(ii) TIME PERIOD FOR BOARD ACTION.—Not later

than 30 days after the date of receipt of a written

recommendation from the Secretary of the Treasury

under clause (i) (or such longer period as the Secretary

of the Treasury and the Board determine to be appropriate under the circumstances), the Board shall determine whether to initiate a public rulemaking proposing

that the recommended activity be found to be financial

in nature or incidental to a financial activity under

this subsection, and shall notify the Secretary of the

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00006

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 28 of 166

113 STAT. 1343

Treasury in writing of the determination of the Board

and, if the Board determines not to seek public comment on the proposal, the reasons for that determination.

‘‘(3) FACTORS TO BE CONSIDERED.—In determining whether

an activity is financial in nature or incidental to a financial

activity, the Board shall take into account—

‘‘(A) the purposes of this Act and the Gramm-LeachBliley Act;

‘‘(B) changes or reasonably expected changes in the

marketplace in which financial holding companies compete;

‘‘(C) changes or reasonably expected changes in the

technology for delivering financial services; and

‘‘(D) whether such activity is necessary or appropriate

to allow a financial holding company and the affiliates

of a financial holding company to—

‘‘(i) compete effectively with any company seeking

to provide financial services in the United States;

‘‘(ii) efficiently deliver information and services

that are financial in nature through the use of technological means, including any application necessary to

protect the security or efficacy of systems for the transmission of data or financial transactions; and

‘‘(iii) offer customers any available or emerging

technological means for using financial services or for

the document imaging of data.

‘‘(4) ACTIVITIES THAT ARE FINANCIAL IN NATURE.—For purposes of this subsection, the following activities shall be considered to be financial in nature:

‘‘(A) Lending, exchanging, transferring, investing for

others, or safeguarding money or securities.

‘‘(B) Insuring, guaranteeing, or indemnifying against

loss, harm, damage, illness, disability, or death, or providing and issuing annuities, and acting as principal, agent,

or broker for purposes of the foregoing, in any State.

‘‘(C) Providing financial, investment, or economic

advisory services, including advising an investment company (as defined in section 3 of the Investment Company

Act of 1940).

‘‘(D) Issuing or selling instruments representing

interests in pools of assets permissible for a bank to hold

directly.

‘‘(E) Underwriting, dealing in, or making a market

in securities.

‘‘(F) Engaging in any activity that the Board has determined, by order or regulation that is in effect on the date

of the enactment of the Gramm-Leach-Bliley Act, to be

so closely related to banking or managing or controlling

banks as to be a proper incident thereto (subject to the

same terms and conditions contained in such order or regulation, unless modified by the Board).

‘‘(G) Engaging, in the United States, in any activity

that—

‘‘(i) a bank holding company may engage in outside

of the United States; and

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00007

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1344

Document 199

Filed 08/17/26

Page 29 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

‘‘(ii) the Board has determined, under regulations

prescribed or interpretations issued pursuant to subsection (c)(13) (as in effect on the day before the date

of the enactment of the Gramm-Leach-Bliley Act) to

be usual in connection with the transaction of banking

or other financial operations abroad.

‘‘(H) Directly or indirectly acquiring or controlling,

whether as principal, on behalf of 1 or more entities

(including entities, other than a depository institution or

subsidiary of a depository institution, that the bank holding

company controls), or otherwise, shares, assets, or ownership interests (including debt or equity securities, partnership interests, trust certificates, or other instruments representing ownership) of a company or other entity, whether

or not constituting control of such company or entity,

engaged in any activity not authorized pursuant to this

section if—

‘‘(i) the shares, assets, or ownership interests are

not acquired or held by a depository institution or

subsidiary of a depository institution;

‘‘(ii) such shares, assets, or ownership interests

are acquired and held by—

‘‘(I) a securities affiliate or an affiliate thereof;

‘‘(II) an affiliate of an insurance company

described in subparagraph (I)(ii) that provides

investment advice to an insurance company and

is registered pursuant to the Investment Advisers

Act of 1940, or an affiliate of such investment

adviser;

as part of a bona fide underwriting or merchant or

investment banking activity, including investment

activities engaged in for the purpose of appreciation

and ultimate resale or disposition of the investment;

‘‘(iii) such shares, assets, or ownership interests

are held for a period of time to enable the sale or

disposition thereof on a reasonable basis consistent

with the financial viability of the activities described

in clause (ii); and

‘‘(iv) during the period such shares, assets, or

ownership interests are held, the bank holding company does not routinely manage or operate such company or entity except as may be necessary or required

to obtain a reasonable return on investment upon

resale or disposition.

‘‘(I) Directly or indirectly acquiring or controlling,

whether as principal, on behalf of 1 or more entities

(including entities, other than a depository institution or

subsidiary of a depository institution, that the bank holding

company controls) or otherwise, shares, assets, or ownership interests (including debt or equity securities, partnership interests, trust certificates or other instruments representing ownership) of a company or other entity, whether

or not constituting control of such company or entity,

engaged in any activity not authorized pursuant to this

section if—

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00008

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 30 of 166

113 STAT. 1345

‘‘(i) the shares, assets, or ownership interests are

not acquired or held by a depository institution or

a subsidiary of a depository institution;

‘‘(ii) such shares, assets, or ownership interests

are acquired and held by an insurance company that

is predominantly engaged in underwriting life, accident

and health, or property and casualty insurance (other

than credit-related insurance) or providing and issuing

annuities;

‘‘(iii) such shares, assets, or ownership interests

represent an investment made in the ordinary course

of business of such insurance company in accordance

with relevant State law governing such investments;

and

‘‘(iv) during the period such shares, assets, or

ownership interests are held, the bank holding company does not routinely manage or operate such company except as may be necessary or required to obtain

a reasonable return on investment.

‘‘(5) ACTIONS REQUIRED.—

‘‘(A) IN GENERAL.—The Board shall, by regulation or

order, define, consistent with the purposes of this Act,

the activities described in subparagraph (B) as financial

in nature, and the extent to which such activities are

financial in nature or incidental to a financial activity.

‘‘(B) ACTIVITIES.—The activities described in this

subparagraph are as follows:

‘‘(i) Lending, exchanging, transferring, investing

for others, or safeguarding financial assets other than

money or securities.

‘‘(ii) Providing any device or other instrumentality

for transferring money or other financial assets.

‘‘(iii) Arranging, effecting, or facilitating financial

transactions for the account of third parties.

‘‘(6) REQUIRED NOTIFICATION.—

‘‘(A) IN GENERAL.—A financial holding company that

acquires any company or commences any activity pursuant

to this subsection shall provide written notice to the Board

describing the activity commenced or conducted by the

company acquired not later than 30 calendar days after

commencing the activity or consummating the acquisition,

as the case may be.

‘‘(B) APPROVAL NOT REQUIRED FOR CERTAIN FINANCIAL

ACTIVITIES.—Except as provided in subsection (j) with

regard to the acquisition of a savings association, a financial holding company may commence any activity, or

acquire any company, pursuant to paragraph (4) or any

regulation prescribed or order issued under paragraph (5),

without prior approval of the Board.

‘‘(7) MERCHANT BANKING ACTIVITIES.—

‘‘(A) JOINT REGULATIONS.—The Board and the Secretary of the Treasury may issue such regulations implementing paragraph (4)(H), including limitations on transactions between depository institutions and companies

controlled pursuant to such paragraph, as the Board and

the Secretary jointly deem appropriate to assure compliance

with the purposes and prevent evasions of this Act and

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00009

Fmt 6580

Sfmt 6581

Regulations.

Deadline.

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1346

Document 199

Filed 08/17/26

Page 31 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

the Gramm-Leach-Bliley Act and to protect depository

institutions.

‘‘(B) SUNSET OF RESTRICTIONS ON MERCHANT BANKING

ACTIVITIES OF FINANCIAL SUBSIDIARIES.—The restrictions

contained in paragraph (4)(H) on the ownership and control

of shares, assets, or ownership interests by or on behalf

of a subsidiary of a depository institution shall not apply

to a financial subsidiary (as defined in section 5136A of

the Revised Statutes of the United States) of a bank, if

the Board and the Secretary of the Treasury jointly

authorize financial subsidiaries of banks to engage in merchant banking activities pursuant to section 122 of the

Gramm-Leach-Bliley Act.

‘‘(l) CONDITIONS FOR ENGAGING IN EXPANDED FINANCIAL ACTIVITIES.—

‘‘(1) IN GENERAL.—Notwithstanding subsection (k), (n), or

(o), a bank holding company may not engage in any activity,

or directly or indirectly acquire or retain shares of any company

engaged in any activity, under subsection (k), (n), or (o), other

than activities permissible for any bank holding company under

subsection (c)(8), unless—

‘‘(A) all of the depository institution subsidiaries of

the bank holding company are well capitalized;

‘‘(B) all of the depository institution subsidiaries of

the bank holding company are well managed; and

‘‘(C) the bank holding company has filed with the

Board—

‘‘(i) a declaration that the company elects to be

a financial holding company to engage in activities

or acquire and retain shares of a company that were

not permissible for a bank holding company to engage

in or acquire before the enactment of the GrammLeach-Bliley Act; and

‘‘(ii) a certification that the company meets the

requirements of subparagraphs (A) and (B).

‘‘(2) CRA REQUIREMENT.—Notwithstanding subsection (k)

or (n) of this section, section 5136A(a) of the Revised Statutes

of the United States, or section 46(a) of the Federal Deposit

Insurance Act, the appropriate Federal banking agency shall

prohibit a financial holding company or any insured depository

institution from—

‘‘(A) commencing any new activity under subsection

(k) or (n) of this section, section 5136A(a) of the Revised

Statutes of the United States, or section 46(a) of the Federal

Deposit Insurance Act; or

‘‘(B) directly or indirectly acquiring control of a company engaged in any activity under subsection (k) or (n)

of this section, section 5136A(a) of the Revised Statutes

of the United States, or section 46(a) of the Federal Deposit

Insurance Act (other than an investment made pursuant

to subparagraph (H) or (I) of subsection (k)(4), or section

122 of the Gramm-Leach-Bliley Act, or under section 46(a)

of the Federal Deposit Insurance Act by reason of such

section 122, by an affiliate already engaged in activities

under any such provision);

if any insured depository institution subsidiary of such financial

holding company, or the insured depository institution or any

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00010

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 32 of 166

113 STAT. 1347

of its insured depository institution affiliates, has received in

its most recent examination under the Community Reinvestment Act of 1977, a rating of less than ‘satisfactory record

of meeting community credit needs’.

‘‘(3) FOREIGN BANKS.—For purposes of paragraph (1), the

Board shall apply comparable capital and management standards to a foreign bank that operates a branch or agency or

owns or controls a commercial lending company in the United

States, giving due regard to the principle of national treatment

and equality of competitive opportunity.

‘‘(m) PROVISIONS APPLICABLE TO FINANCIAL HOLDING COMPANIES THAT FAIL TO MEET CERTAIN REQUIREMENTS.—

‘‘(1) IN GENERAL.—If the Board finds that—

‘‘(A) a financial holding company is engaged, directly

or indirectly, in any activity under subsection (k), (n), or

(o), other than activities that are permissible for a bank

holding company under subsection (c)(8); and

‘‘(B) such financial holding company is not in compliance with the requirements of subsection (l)(1);

the Board shall give notice to the financial holding company

to that effect, describing the conditions giving rise to the notice.

‘‘(2) AGREEMENT TO CORRECT CONDITIONS REQUIRED.—Not

later than 45 days after the date of receipt by a financial

holding company of a notice given under paragraph (1) (or

such additional period as the Board may permit), the financial

holding company shall execute an agreement with the Board

to comply with the requirements applicable to a financial

holding company under subsection (l)(1).

‘‘(3) BOARD MAY IMPOSE LIMITATIONS.—Until the conditions

described in a notice to a financial holding company under

paragraph (1) are corrected, the Board may impose such limitations on the conduct or activities of that financial holding

company or any affiliate of that company as the Board determines to be appropriate under the circumstances and consistent

with the purposes of this Act.

‘‘(4) FAILURE TO CORRECT.—If the conditions described in

a notice to a financial holding company under paragraph (1)

are not corrected within 180 days after the date of receipt

by the financial holding company of a notice under paragraph

(1), the Board may require such financial holding company,

under such terms and conditions as may be imposed by the

Board and subject to such extension of time as may be granted

in the discretion of the Board, either—

‘‘(A) to divest control of any subsidiary depository

institution; or

‘‘(B) at the election of the financial holding company

instead to cease to engage in any activity conducted by

such financial holding company or its subsidiaries (other

than a depository institution or a subsidiary of a depository

institution) that is not an activity that is permissible for

a bank holding company under subsection (c)(8).

‘‘(5) CONSULTATION.—In taking any action under this subsection, the Board shall consult with all relevant Federal and

State regulatory agencies and authorities.

‘‘(n) AUTHORITY TO RETAIN LIMITED NONFINANCIAL ACTIVITIES

AND AFFILIATIONS.—

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00011

Fmt 6580

Sfmt 6581

Deadline.

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1348

Document 199

Filed 08/17/26

Page 33 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

‘‘(1) IN GENERAL.—Notwithstanding subsection (a), a company that is not a bank holding company or a foreign bank

(as defined in section 1(b)(7) of the International Banking Act

of 1978) and becomes a financial holding company after the

date of the enactment of the Gramm-Leach-Bliley Act may

continue to engage in any activity and retain direct or indirect

ownership or control of shares of a company engaged in any

activity if—

‘‘(A) the holding company lawfully was engaged in the

activity or held the shares of such company on September

30, 1999;

‘‘(B) the holding company is predominantly engaged

in financial activities as defined in paragraph (2); and

‘‘(C) the company engaged in such activity continues

to engage only in the same activities that such company

conducted on September 30, 1999, and other activities

permissible under this Act.

‘‘(2) PREDOMINANTLY FINANCIAL.—For purposes of this subsection, a company is predominantly engaged in financial activities if the annual gross revenues derived by the holding company and all subsidiaries of the holding company (excluding

revenues derived from subsidiary depository institutions), on

a consolidated basis, from engaging in activities that are financial in nature or are incidental to a financial activity under

subsection (k) represent at least 85 percent of the consolidated

annual gross revenues of the company.

‘‘(3) NO EXPANSION OF GRANDFATHERED COMMERCIAL ACTIVITIES THROUGH MERGER OR CONSOLIDATION.—A financial holding

company that engages in activities or holds shares pursuant

to this subsection, or a subsidiary of such financial holding

company, may not acquire, in any merger, consolidation, or

other type of business combination, assets of any other company

that is engaged in any activity that the Board has not determined to be financial in nature or incidental to a financial

activity under subsection (k), except this paragraph shall not

apply with respect to a company that owns a broadcasting

station licensed under title III of the Communications Act of

1934 and the shares of which are under common control with

an insurance company since January 1, 1998, unless such company is acquired by, or otherwise becomes an affiliate of, a

bank holding company that, at the time such acquisition or

affiliation is consummated, is 1 of the 5 largest domestic bank

holding companies (as determined on the basis of the consolidated total assets of such companies).

‘‘(4) CONTINUING REVENUE LIMITATION ON GRANDFATHERED

COMMERCIAL ACTIVITIES.—Notwithstanding any other provision

of this subsection, a financial holding company may continue

to engage in activities or hold shares in companies pursuant

to this subsection only to the extent that the aggregate annual

gross revenues derived from all such activities and all such

companies does not exceed 15 percent of the consolidated

annual gross revenues of the financial holding company

(excluding revenues derived from subsidiary depository institutions).

‘‘(5) CROSS MARKETING RESTRICTIONS APPLICABLE TO

COMMERCIAL ACTIVITIES.—

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00012

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 34 of 166

113 STAT. 1349

‘‘(A) IN GENERAL.—A depository institution controlled

by a financial holding company shall not—

‘‘(i) offer or market, directly or through any

arrangement, any product or service of a company

whose activities are conducted or whose shares are

owned or controlled by the financial holding company

pursuant to this subsection or subparagraph (H) or

(I) of subsection (k)(4); or

‘‘(ii) permit any of its products or services to be

offered or marketed, directly or through any arrangement, by or through any company described in clause

(i).

‘‘(B) RULE OF CONSTRUCTION.—Subparagraph (A) shall

not be construed as prohibiting an arrangement between

a depository institution and a company owned or controlled

pursuant to subsection (k)(4)(I) for the marketing of products or services through statement inserts or Internet

websites if—

‘‘(i) such arrangement does not violate section 106

of the Bank Holding Company Act Amendments of

1970; and

‘‘(ii) the Board determines that the arrangement

is in the public interest, does not undermine the separation of banking and commerce, and is consistent

with the safety and soundness of depository institutions.

‘‘(6) TRANSACTIONS WITH NONFINANCIAL AFFILIATES.—A

depository institution controlled by a financial holding company

may not engage in a covered transaction (as defined in section

23A(b)(7) of the Federal Reserve Act) with any affiliate controlled by the company pursuant to this subsection.

‘‘(7) SUNSET OF GRANDFATHER.—A financial holding company engaged in any activity, or retaining direct or indirect

ownership or control of shares of a company, pursuant to this

subsection, shall terminate such activity and divest ownership

or control of the shares of such company before the end of

the 10-year period beginning on the date of the enactment

of the Gramm-Leach-Bliley Act. The Board may, upon application by a financial holding company, extend such 10-year period

by a period not to exceed an additional 5 years if such extension

would not be detrimental to the public interest.

‘‘(o) REGULATION OF CERTAIN FINANCIAL HOLDING COMPANIES.—Notwithstanding subsection (a), a company that is not a

bank holding company or a foreign bank (as defined in section

1(b)(7) of the International Banking Act of 1978) and becomes

a financial holding company after the date of enactment of the

Gramm-Leach-Bliley Act, may continue to engage in, or directly

or indirectly own or control shares of a company engaged in, activities related to the trading, sale, or investment in commodities

and underlying physical properties that were not permissible for

bank holding companies to conduct in the United States as of

September 30, 1997, if—

‘‘(1) the holding company, or any subsidiary of the holding

company, lawfully was engaged, directly or indirectly, in any

of such activities as of September 30, 1997, in the United

States;

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00013

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1350

Document 199

Filed 08/17/26

Page 35 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

‘‘(2) the attributed aggregate consolidated assets of the

company held by the holding company pursuant to this subsection, and not otherwise permitted to be held by a financial

holding company, are equal to not more than 5 percent of

the total consolidated assets of the bank holding company,

except that the Board may increase that percentage by such

amounts and under such circumstances as the Board considers

appropriate, consistent with the purposes of this Act; and

‘‘(3) the holding company does not permit—

‘‘(A) any company, the shares of which it owns or

controls pursuant to this subsection, to offer or market

any product or service of an affiliated depository institution;

‘‘(B) any affiliated depository institution to offer or

market any product or service of any company, the shares

of which are owned or controlled by such holding company

pursuant to this subsection.’’.

(b) COMMUNITY REINVESTMENT REQUIREMENT.—Section 804 of

the Community Reinvestment Act of 1977 (12 U.S.C. 2903) is

amended by adding at the end the following new subsection:

‘‘(c) FINANCIAL HOLDING COMPANY REQUIREMENT.—

‘‘(1) IN GENERAL.—An election by a bank holding company

to become a financial holding company under section 4 of the

Bank Holding Company Act of 1956 shall not be effective if—

‘‘(A) the Board finds that, as of the date the declaration

of such election and the certification is filed by such holding

company under section 4(l)(1)(C) of the Bank Holding Company Act of 1956, not all of the subsidiary insured depository institutions of the bank holding company had achieved

a rating of ‘satisfactory record of meeting community credit

needs’, or better, at the most recent examination of each

such institution; and

‘‘(B) the Board notifies the company of such finding

before the end of the 30-day period beginning on such

date.

‘‘(2) LIMITED EXCLUSIONS FOR NEWLY ACQUIRED INSURED

DEPOSITORY INSTITUTIONS.—Any insured depository institution

acquired by a bank holding company during the 12-month

period preceding the date of the submission to the Board of

the declaration and certification under section 4(l)(1)(C) of the

Bank Holding Company Act of 1956 may be excluded for purposes of paragraph (1) during the 12-month period beginning

on the date of such acquisition if—

‘‘(A) the bank holding company has submitted an

affirmative plan to the appropriate Federal financial supervisory agency to take such action as may be necessary

in order for such institution to achieve a rating of ‘satisfactory record of meeting community credit needs’, or better,

at the next examination of the institution; and

‘‘(B) the plan has been accepted by such agency.

‘‘(3) DEFINITIONS.—For purposes of this subsection, the following definitions shall apply:

‘‘(A) BANK HOLDING COMPANY; FINANCIAL HOLDING COMPANY.—The terms ‘bank holding company’ and ‘financial

holding company’ have the meanings given those terms

in section 2 of the Bank Holding Company Act of 1956.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00014

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 36 of 166

113 STAT. 1351

‘‘(B) BOARD.—The term ‘Board’ means the Board of

Governors of the Federal Reserve System.

‘‘(C) INSURED DEPOSITORY INSTITUTION.—The term

‘insured depository institution’ has the meaning given the

term in section 3(c) of the Federal Deposit Insurance Act.’’.

(1) DEFINITIONS.—Section 2 of the Bank Holding Company

Act of 1956 (12 U.S.C. 1841) is amended—

(A) in subsection (n), by inserting ‘‘ ‘depository institution’,’’ after ‘‘the terms’’; and

(B) by adding at the end the following new subsections:

‘‘(p) FINANCIAL HOLDING COMPANY.—For purposes of this Act,

the term ‘financial holding company’ means a bank holding company

that meets the requirements of section 4(l)(1).

‘‘(q) INSURANCE COMPANY.—For purposes of sections 4 and 5,

the term ‘insurance company’ includes any person engaged in the

business of insurance to the extent of such activities.’’.

(2) NOTICE PROCEDURES.—Section 4(j) of the Bank Holding

Company Act of 1956 (12 U.S.C. 1843(j)) is amended—

(A) in each of subparagraphs (A) and (E) of paragraph

(1), by inserting ‘‘or in any complementary activity under

subsection (k)(1)(B)’’ after ‘‘subsection (c)(8) or (a)(2)’’; and

(B) in paragraph (3)—

(i) by inserting ‘‘, other than any complementary

activity under subsection (k)(1)(B),’’ after ‘‘to engage

in any activity’’; and

(ii) by inserting ‘‘or a company engaged in any

complementary activity under subsection (k)(1)(B)’’

after ‘‘insured depository institution’’.

(d) REPORT.—

(1) IN GENERAL.—By the end of the 4-year period beginning

on the date of the enactment of this Act, the Board of Governors

of the Federal Reserve System and the Secretary of the

Treasury shall submit a joint report to the Congress containing

a summary of new activities, including grandfathered commercial activities, in which any financial holding company is

engaged pursuant to subsection (k)(1) or (n) of section 4 of

the Bank Holding Company Act of 1956 (as added by subsection

(a)).

(2) OTHER CONTENTS.—The report submitted to the Congress pursuant to paragraph (1) shall also contain the following:

(A) A discussion of actions by the Board of Governors

of the Federal Reserve System and the Secretary of the

Treasury, whether by regulation, order, interpretation, or

guideline or by approval or disapproval of an application,

with regard to activities of financial holding companies

that are incidental to activities that are financial in nature

or complementary to such financial activities.

(B) An analysis and discussion of the risks posed by

commercial activities of financial holding companies to the

safety and soundness of affiliate depository institutions.

and acquisitions under section 4(k) of the Bank Holding

Company Act of 1956 on market concentration in the financial services industry.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00015

Fmt 6580

Sfmt 6581

12 USC 1843

note.

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1352

15 USC 6701.

Document 199

Filed 08/17/26

Page 37 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

SEC. 104. OPERATION OF STATE LAW.

(a) STATE REGULATION OF THE BUSINESS OF INSURANCE.—The

Act entitled ‘‘An Act to express the intent of Congress with reference

to the regulation of the business of insurance’’ and approved March

9, 1945 (15 U.S.C. 1011 et seq.) (commonly referred to as the

‘‘McCarran-Ferguson Act’’) remains the law of the United States.

(b) MANDATORY INSURANCE LICENSING REQUIREMENTS.—No

person shall engage in the business of insurance in a State as

principal or agent unless such person is licensed as required by

the appropriate insurance regulator of such State in accordance

with the relevant State insurance law, subject to subsections (c),

(d), and (e).

(1) IN GENERAL.—Except as provided in paragraph (2), no

State may, by statute, regulation, order, interpretation, or other

action, prevent or restrict a depository institution, or an affiliate

thereof, from being affiliated directly or indirectly or associated

with any person, as authorized or permitted by this Act or

any other provision of Federal law.

(2) INSURANCE.—With respect to affiliations between

depository institutions, or any affiliate thereof, and any insurer,

paragraph (1) does not prohibit—

(A) any State from—

(i) collecting, reviewing, and taking actions

(including approval and disapproval) on applications

and other documents or reports concerning any proposed acquisition of, or a change or continuation of

control of, an insurer domiciled in that State; and

(ii) exercising authority granted under applicable

State law to collect information concerning any proposed acquisition of, or a change or continuation of

control of, an insurer engaged in the business of insurance in, and regulated as an insurer by, such State;

during the 60-day period preceding the effective date of

the acquisition or change or continuation of control, so

long as the collecting, reviewing, taking actions, or exercising authority by the State does not have the effect of

discriminating, intentionally or unintentionally, against a

depository institution or an affiliate thereof, or against

any other person based upon an association of such person

with a depository institution;

(B) any State from requiring any person that is

acquiring control of an insurer domiciled in that State

to maintain or restore the capital requirements of that

insurer to the level required under the capital regulations

of general applicability in that State to avoid the requirement of preparing and filing with the insurance regulatory

authority of that State a plan to increase the capital of

the insurer, except that any determination by the State

insurance regulatory authority with respect to such requirement shall be made not later than 60 days after the date

of notification under subparagraph (A); or

purpose of controlling such insurer, after the conversion

of the insurer from mutual to stock form so long as such

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00016

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 38 of 166

113 STAT. 1353

restriction does not have the effect of discriminating, intentionally or unintentionally, against a depository institution

or an affiliate thereof, or against any other person based

upon an association of such person with a depository

institution.

(d) ACTIVITIES.—

(1) IN GENERAL.—Except as provided in paragraph (3), and

except with respect to insurance sales, solicitation, and cross

marketing activities, which shall be governed by paragraph

(2), no State may, by statute, regulation, order, interpretation,

or other action, prevent or restrict a depository institution

or an affiliate thereof from engaging directly or indirectly,

either by itself or in conjunction with an affiliate, or any other

person, in any activity authorized or permitted under this Act

and the amendments made by this Act.

(2) INSURANCE SALES.—

(A) IN GENERAL.—In accordance with the legal standards for preemption set forth in the decision of the Supreme

Court of the United States in Barnett Bank of Marion

County N.A. v. Nelson, 517 U.S. 25 (1996), no State may,

by statute, regulation, order, interpretation, or other action,

prevent or significantly interfere with the ability of a

depository institution, or an affiliate thereof, to engage,

directly or indirectly, either by itself or in conjunction

with an affiliate or any other person, in any insurance

sales, solicitation, or crossmarketing activity.

(B) CERTAIN STATE LAWS PRESERVED.—Notwithstanding subparagraph (A), a State may impose any of

the following restrictions, or restrictions that are substantially the same as but no more burdensome or restrictive

than those in each of the following clauses:

(i) Restrictions prohibiting the rejection of an

insurance policy by a depository institution or an affiliate of a depository institution, solely because the policy

has been issued or underwritten by any person who

is not associated with such depository institution or

affiliate when the insurance is required in connection

with a loan or extension of credit.

(ii) Restrictions prohibiting a requirement for any

debtor, insurer, or insurance agent or broker to pay

a separate charge in connection with the handling

of insurance that is required in connection with a

loan or other extension of credit or the provision of

another traditional banking product by a depository

institution, or any affiliate of a depository institution,

unless such charge would be required when the depository institution or affiliate is the licensed insurance

agent or broker providing the insurance.

(iii) Restrictions prohibiting the use of any

advertisement or other insurance promotional material

by a depository institution or any affiliate of a depository institution that would cause a reasonable person

to believe mistakenly that—

(I) the Federal Government or a State is

responsible for the insurance sales activities of,

or stands behind the credit of, the institution or

affiliate; or

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00017

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1354

Document 199

Filed 08/17/26

Page 39 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

(II) a State, or the Federal Government

guarantees any returns on insurance products, or

is a source of payment on any insurance obligation

of or sold by the institution or affiliate;

(iv) Restrictions prohibiting the payment or receipt

of any commission or brokerage fee or other valuable

consideration for services as an insurance agent or

broker to or by any person, unless such person holds

a valid State license regarding the applicable class

of insurance at the time at which the services are

performed, except that, in this clause, the term ‘‘services as an insurance agent or broker’’ does not include

a referral by an unlicensed person of a customer or

potential customer to a licensed insurance agent or

broker that does not include a discussion of specific

insurance policy terms and conditions.

(v) Restrictions prohibiting any compensation paid

to or received by any individual who is not licensed

to sell insurance, for the referral of a customer that

seeks to purchase, or seeks an opinion or advice on,

any insurance product to a person that sells or provides

opinions or advice on such product, based on the purchase of insurance by the customer.

(vi) Restrictions prohibiting the release of the

insurance information of a customer (defined as

information concerning the premiums, terms, and

conditions of insurance coverage, including expiration

dates and rates, and insurance claims of a customer

contained in the records of the depository institution

or an affiliate thereof) to any person other than an

officer, director, employee, agent, or affiliate of a

depository institution, for the purpose of soliciting or

selling insurance, without the express consent of the

customer, other than a provision that prohibits—

(I) a transfer of insurance information to an

unaffiliated insurer in connection with transferring

insurance in force on existing insureds of the

depository institution or an affiliate thereof, or

in connection with a merger with or acquisition

of an unaffiliated insurer; or

(II) the release of information as otherwise

authorized by State or Federal law.

(vii) Restrictions prohibiting the use of health

information obtained from the insurance records of

a customer for any purpose, other than for its activities

as a licensed agent or broker, without the express

consent of the customer.

(viii) Restrictions prohibiting the extension of

credit or any product or service that is equivalent

to an extension of credit, lease or sale of property

of any kind, or furnishing of any services or fixing

or varying the consideration for any of the foregoing,

on the condition or requirement that the customer

obtain insurance from a depository institution or an

affiliate of a depository institution, or a particular

insurer, agent, or broker, other than a prohibition that

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00018

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 40 of 166

113 STAT. 1355

would prevent any such depository institution or

affiliate—

(I) from engaging in any activity described

in this clause that would not violate section 106

of the Bank Holding Company Act Amendments

of 1970, as interpreted by the Board of Governors

of the Federal Reserve System; or

(II) from informing a customer or prospective

customer that insurance is required in order to

obtain a loan or credit, that loan or credit approval

is contingent upon the procurement by the customer of acceptable insurance, or that insurance

is available from the depository institution or an

affiliate of the depository institution.

(ix) Restrictions requiring, when an application by

a consumer for a loan or other extension of credit

from a depository institution is pending, and insurance

is offered or sold to the consumer or is required in

connection with the loan or extension of credit by the

depository institution or any affiliate thereof, that a

written disclosure be provided to the consumer or

prospective customer indicating that the customer’s

choice of an insurance provider will not affect the

credit decision or credit terms in any way, except that

the depository institution may impose reasonable

requirements concerning the creditworthiness of the

insurer and scope of coverage chosen.

(x) Restrictions requiring clear and conspicuous

disclosure, in writing, where practicable, to the customer prior to the sale of any insurance policy that

such policy—

(I) is not a deposit;

(II) is not insured by the Federal Deposit

Insurance Corporation;

(III) is not guaranteed by any depository

institution or, if appropriate, an affiliate of any

such institution or any person soliciting the purchase of or selling insurance on the premises

thereof; and

(IV) where appropriate, involves investment

risk, including potential loss of principal.

(xi) Restrictions requiring that, when a customer

obtains insurance (other than credit insurance or flood

insurance) and credit from a depository institution,

or any affiliate of such institution, or any person soliciting the purchase of or selling insurance on the premises thereof, the credit and insurance transactions be

completed through separate documents.

(xii) Restrictions prohibiting, when a customer

obtains insurance (other than credit insurance or flood

insurance) and credit from a depository institution or

an affiliate of such institution, or any person soliciting

the purchase of or selling insurance on the premises

thereof, inclusion of the expense of insurance premiums

in the primary credit transaction without the express

written consent of the customer.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00019

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1356

Document 199

Filed 08/17/26

Page 41 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

(xiii) Restrictions requiring maintenance of separate and distinct books and records relating to insurance transactions, including all files relating to and

reflecting consumer complaints, and requiring that

such insurance books and records be made available

to the appropriate State insurance regulator for inspection upon reasonable notice.

(i) OCC DEFERENCE.—Section 304(e) does not apply

with respect to any State statute, regulation, order,

interpretation, or other action regarding insurance

sales, solicitation, or cross marketing activities

described in subparagraph (A) that was issued,

adopted, or enacted before September 3, 1998, and

that is not described in subparagraph (B).

(ii) NONDISCRIMINATION.—Subsection (e) does not

apply with respect to any State statute, regulation,

order, interpretation, or other action regarding insurance sales, solicitation, or cross marketing activities

described in subparagraph (A) that was issued,

adopted, or enacted before September 3, 1998, and

that is not described in subparagraph (B).

(iii) CONSTRUCTION.—Nothing in this paragraph

shall be construed—

(I) to limit the applicability of the decision

of the Supreme Court in Barnett Bank of Marion

County N.A. v. Nelson, 517 U.S. 25 (1996) with

respect to any State statute, regulation, order,

interpretation, or other action that is not referred

to or described in subparagraph (B); or

(II) to create any inference with respect to

any State statute, regulation, order, interpretation,

or other action that is not described in this paragraph.

(3) INSURANCE ACTIVITIES OTHER THAN SALES.—State statutes, regulations, interpretations, orders, and other actions

shall not be preempted under paragraph (1) to the extent

that they—

(A) relate to, or are issued, adopted, or enacted for

the purpose of regulating the business of insurance in

accordance with the Act entitled ‘‘An Act to express the

intent of Congress with reference to the regulation of the

business of insurance’’ and approved March 9, 1945 (15

U.S.C. 1011 et seq.) (commonly referred to as the

‘‘McCarran-Ferguson Act’’);

(B) apply only to persons that are not depository

institutions, but that are directly engaged in the business

of insurance (except that they may apply to depository

institutions engaged in providing savings bank life insurance as principal to the extent of regulating such insurance);

insurance sales, solicitations, or cross marketing activities;

and

(D) are not prohibited under subsection (e).

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00020

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 42 of 166

113 STAT. 1357

(4) FINANCIAL ACTIVITIES OTHER THAN INSURANCE.—No

State statute, regulation, order, interpretation, or other action

shall be preempted under paragraph (1) to the extent that—

(A) it does not relate to, and is not issued and adopted,

or enacted for the purpose of regulating, directly or

indirectly, insurance sales, solicitations, or cross marketing

activities covered under paragraph (2);

(B) it does not relate to, and is not issued and adopted,

or enacted for the purpose of regulating, directly or

indirectly, the business of insurance activities other than

sales, solicitations, or cross marketing activities, covered

under paragraph (3);

enforcement actions referred to in subsection (f); and

(D) it—

(i) does not distinguish by its terms between

depository institutions, and affiliates thereof, engaged

in the activity at issue and other persons engaged

in the same activity in a manner that is in any way

adverse with respect to the conduct of the activity

by any such depository institution or affiliate engaged

in the activity at issue;

(ii) as interpreted or applied, does not have, and

will not have, an impact on depository institutions,

or affiliates thereof, engaged in the activity at issue,

or any person who has an association with any such

depository institution or affiliate, that is substantially

more adverse than its impact on other persons engaged

in the same activity that are not depository institutions

or affiliates thereof, or persons who do not have an

association with any such depository institution or affiliate;

(iii) does not effectively prevent a depository

institution or affiliate thereof from engaging in activities authorized or permitted by this Act or any other

provision of Federal law; and

(iv) does not conflict with the intent of this Act

generally to permit affiliations that are authorized or

permitted by Federal law.

(e) NONDISCRIMINATION.—Except as provided in any restrictions

described in subsection (d)(2)(B), no State may, by statute, regulation, order, interpretation, or other action, regulate the insurance

activities authorized or permitted under this Act or any other

provision of Federal law of a depository institution, or affiliate

thereof, to the extent that such statute, regulation, order,

interpretation, or other action—

(1) distinguishes by its terms between depository institutions, or affiliates thereof, and other persons engaged in such

activities, in a manner that is in any way adverse to any

such depository institution, or affiliate thereof;

(2) as interpreted or applied, has or will have an impact

on depository institutions, or affiliates thereof, that is substantially more adverse than its impact on other persons providing

the same products or services or engaged in the same activities

that are not depository institutions, or affiliates thereof, or

persons or entities affiliated therewith;

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00021

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1358

Document 199

Filed 08/17/26

Page 43 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

(3) effectively prevents a depository institution, or affiliate

thereof, from engaging in insurance activities authorized or

permitted by this Act or any other provision of Federal law;

(4) conflicts with the intent of this Act generally to permit

affiliations that are authorized or permitted by Federal law

between depository institutions, or affiliates thereof, and persons engaged in the business of insurance.

(f) LIMITATION.—Subsections (c) and (d) shall not be construed

to affect—

(1) the jurisdiction of the securities commission (or any

agency or office performing like functions) of any State, under

the laws of such State—

(A) to investigate and bring enforcement actions, consistent with section 18(c) of the Securities Act of 1933,

with respect to fraud or deceit or unlawful conduct by

any person, in connection with securities or securities

transactions; or

(B) to require the registration of securities or the licensure or registration of brokers, dealers, or investment

advisers (consistent with section 203A of the Investment

Advisers Act of 1940), or the associated persons of a broker,

dealer, or investment adviser (consistent with such section

203A); or

(2) State laws, regulations, orders, interpretations, or other

actions of general applicability relating to the governance of

corporations, partnerships, limited liability companies, or other

business associations incorporated or formed under the laws

of that State or domiciled in that State, or the applicability

of the antitrust laws of any State or any State law that is

similar to the antitrust laws if such laws, regulations, orders,

interpretations, or other actions are not inconsistent with the

purposes of this Act to authorize or permit certain affiliations

and to remove barriers to such affiliations.

(g) DEFINITIONS.—For purposes of this section, the following

definitions shall apply:

(1) AFFILIATE.—The term ‘‘affiliate’’ means any company

that controls, is controlled by, or is under common control

with another company.

(2) ANTITRUST LAWS.—The term ‘‘antitrust laws’’ has the

meaning given the term in subsection (a) of the first section

of the Clayton Act, and includes section 5 of the Federal Trade

Commission Act (to the extent that such section 5 relates

to unfair methods of competition).

(3) DEPOSITORY INSTITUTION.—The term ‘‘depository

institution’’—

(A) has the meaning given the term in section 3 of

the Federal Deposit Insurance Act; and

(B) includes any foreign bank that maintains a branch,

agency, or commercial lending company in the United

States.

(4) INSURER.—The term ‘‘insurer’’ means any person

engaged in the business of insurance.

(5) STATE.—The term ‘‘State’’ means any State of the

United States, the District of Columbia, any territory of the

United States, Puerto Rico, Guam, American Samoa, the Trust

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00022

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 44 of 166

113 STAT. 1359

Territory of the Pacific Islands, the Virgin Islands, and the

Northern Mariana Islands.

SEC. 105. MUTUAL BANK HOLDING COMPANIES AUTHORIZED.

Section 3(g)(2) of the Bank Holding Company Act of 1956

(12 U.S.C. 1842(g)(2)) is amended to read as follows:

‘‘(2) REGULATIONS.—A bank holding company organized as

a mutual holding company shall be regulated on terms, and

shall be subject to limitations, comparable to those applicable

to any other bank holding company.’’.

SEC. 106. PROHIBITION ON DEPOSIT PRODUCTION OFFICES.

Section 109(e)(4) of the Riegle-Neal Interstate Banking and

Branching Efficiency Act of 1994 (12 U.S.C. 1835a(e)(4)) is amended

by inserting ‘‘and any branch of a bank controlled by an outof-State bank holding company (as defined in section 2(o)(7) of

the Bank Holding Company Act of 1956)’’ before the period.

SEC. 107. CROSS MARKETING RESTRICTION; LIMITED PURPOSE BANK

RELIEF; DIVESTITURE.

(a) CROSS MARKETING RESTRICTION.—Section 4(f) of the Bank

Holding Company Act of 1956 (12 U.S.C. 1843(f)) is amended by

striking paragraph (3).

(b) DAYLIGHT OVERDRAFTS.—Section 4(f) of the Bank Holding

Company Act of 1956 (12 U.S.C. 1843(f)) is amended by inserting

after paragraph (2) the following new paragraph:

‘‘(3) PERMISSIBLE OVERDRAFTS DESCRIBED.—For purposes

of paragraph (2)(C), an overdraft is described in this paragraph

if—

‘‘(A) such overdraft results from an inadvertent computer or accounting error that is beyond the control of

both the bank and the affiliate;

‘‘(B) such overdraft—

‘‘(i) is permitted or incurred on behalf of an affiliate

that is monitored by, reports to, and is recognized

as a primary dealer by the Federal Reserve Bank of

New York; and

‘‘(ii) is fully secured, as required by the Board,

by bonds, notes, or other obligations that are direct

obligations of the United States or on which the principal and interest are fully guaranteed by the United

States or by securities and obligations eligible for

settlement on the Federal Reserve book entry system;

‘‘(C) such overdraft—

‘‘(i) is permitted or incurred by, or on behalf of,

an affiliate in connection with an activity that is financial in nature or incidental to a financial activity; and

‘‘(ii) does not cause the bank to violate any provision of section 23A or 23B of the Federal Reserve

Act, either directly, in the case of a bank that is

a member of the Federal Reserve System, or by virtue

of section 18(j) of the Federal Deposit Insurance Act,

in the case of a bank that is not a member of the

Federal Reserve System.’’.

(c) INDUSTRIAL LOAN COMPANIES; AFFILIATE OVERDRAFTS.—Section 2(c)(2)(H) of the Bank Holding Company Act of 1956 (12 U.S.C.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00023

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1360

Document 199

Filed 08/17/26

Page 45 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

1841(c)(2)(H)) is amended by inserting ‘‘, or that is otherwise permissible for a bank controlled by a company described in section 4(f)(1)’’

before the period at the end.

(d) ACTIVITIES LIMITATIONS.—Section 4(f)(2) of the Bank

Holding Company Act of 1956 (12 U.S.C. 1843(f)(2)) is amended—

(1) by striking ‘‘Paragraph (1) shall cease to apply to any

company described in such paragraph if—’’ and inserting ‘‘Subject to paragraph (3), a company described in paragraph (1)

shall no longer qualify for the exemption provided under that

paragraph if—’’;

(2) in subparagraph (A)—

(A) in clause (ii)(IX), by striking ‘‘and’’ at the end;

(B) in clause (ii)(X), by inserting ‘‘and’’ after the semicolon;

following new subclause:

‘‘(XI) assets that are derived from, or incidental to, activities in which institutions described

in subparagraph (F) or (H) of section 2(c)(2) are

permitted to engage;’’; and

(D) by striking ‘‘or’’ at the end; and

(3) by striking subparagraph (B) and inserting the following:

‘‘(B) any bank subsidiary of such company—

‘‘(i) accepts demand deposits or deposits that the

depositor may withdraw by check or similar means

for payment to third parties; and

‘‘(ii) engages in the business of making commercial

loans (except that, for purposes of this clause, loans

made in the ordinary course of a credit card operation

shall not be treated as commercial loans); or

‘‘(C) after the date of the enactment of the Competitive

Equality Amendments of 1987, any bank subsidiary of such

company permits any overdraft (including any intraday

overdraft), or incurs any such overdraft in the account

of the bank at a Federal reserve bank, on behalf of an

affiliate, other than an overdraft described in paragraph

(3).’’.

(e) DIVESTITURE REQUIREMENT.—Section 4(f)(4) of the Bank

Holding Company Act of 1956 (12 U.S.C. 1843(f)(4)) is amended

to read as follows:

‘‘(4) DIVESTITURE IN CASE OF LOSS OF EXEMPTION.—If any

company described in paragraph (1) fails to qualify for the

exemption provided under paragraph (1) by operation of paragraph (2), such exemption shall cease to apply to such company

and such company shall divest control of each bank it controls

before the end of the 180-day period beginning on the date

on which the company receives notice from the Board that

the company has failed to continue to qualify for such exemption, unless, before the end of such 180-day period, the company

has—

‘‘(A) either—

‘‘(i) corrected the condition or ceased the activity

that caused the company to fail to continue to qualify

for the exemption; or

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00024

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 46 of 166

113 STAT. 1361

‘‘(ii) submitted a plan to the Board for approval

to cease the activity or correct the condition in a timely

manner (which shall not exceed 1 year); and

‘‘(B) implemented procedures that are reasonably

adapted to avoid the reoccurrence of such condition or

activity.’’.

(f) FOREIGN BANK SUBSIDIARIES OF LIMITED PURPOSE CREDIT

CARD BANKS.—Section 4(f) of the Bank Holding Company Act of

1956 (12 U.S.C. 1843(f)) is amended by adding at the end the

following new paragraph:

‘‘(14) FOREIGN BANK SUBSIDIARIES OF LIMITED PURPOSE

CREDIT CARD BANKS.—

‘‘(A) IN GENERAL.—An institution described in section

2(c)(2)(F) may control a foreign bank if—

‘‘(i) the investment of the institution in the foreign

bank meets the requirements of section 25 or 25A

of the Federal Reserve Act and the foreign bank qualifies under such sections;

‘‘(ii) the foreign bank does not offer any products

or services in the United States; and

‘‘(iii) the activities of the foreign bank are permissible under otherwise applicable law.

‘‘(B) OTHER LIMITATIONS INAPPLICABLE.—The limitations contained in any clause of section 2(c)(2)(F) shall

not apply to a foreign bank described in subparagraph

(A) that is controlled by an institution described in such

section.’’.

SEC. 108. USE OF SUBORDINATED DEBT TO PROTECT FINANCIAL

SYSTEM AND DEPOSIT FUNDS FROM ‘‘TOO BIG TO FAIL’’

INSTITUTIONS.

12 USC 4801

note.

(a) STUDY REQUIRED.—The Board of Governors of the Federal

Reserve System and the Secretary of the Treasury shall conduct

a study of—

(1) the feasibility and appropriateness of establishing a

requirement that, with respect to large insured depository

institutions and depository institution holding companies the

failure of which could have serious adverse effects on economic

conditions or financial stability, such institutions and holding

companies maintain some portion of their capital in the form

of subordinated debt in order to bring market forces and market

discipline to bear on the operation of, and the assessment

of the viability of, such institutions and companies and reduce

the risk to economic conditions, financial stability, and any

deposit insurance fund;

(2) if such requirement is feasible and appropriate, the

appropriate amount or percentage of capital that should be

subordinated debt consistent with such purposes; and

(3) the manner in which any such requirement could be

incorporated into existing capital standards and other issues

relating to the transition to such a requirement.

(b) REPORT.—Before the end of the 18-month period beginning

on the date of the enactment of this Act, the Board of Governors

of the Federal Reserve System and the Secretary of the Treasury

shall submit a report to the Congress containing the findings and

conclusions of the Board and the Secretary in connection with

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00025

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1362

Document 199

Filed 08/17/26

Page 47 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

the study required under subsection (a), together with such legislative and administrative proposals as the Board and the Secretary

may determine to be appropriate.

definitions shall apply:

(1) BANK HOLDING COMPANY.—The term ‘‘bank holding company’’ has the meaning given the term in section 2 of the

Bank Holding Company Act of 1956.

(2) INSURED DEPOSITORY INSTITUTION.—The term ‘‘insured

depository institution’’ has the meaning given the term in section 3(c) of the Federal Deposit Insurance Act.

(3) SUBORDINATED DEBT.—The term ‘‘subordinated debt’’

means unsecured debt that—

(A) has an original weighted average maturity of not

less than 5 years;

(B) is subordinated as to payment of principal and

interest to all other indebtedness of the bank, including

deposits;

including a guarantee or standby letter of credit; and

(D) is not held in whole or in part by any affiliate

or institution-affiliated party of the insured depository

institution or bank holding company.

12 USC 252 note.

SEC. 109. STUDY OF FINANCIAL MODERNIZATION’S EFFECT ON THE

ACCESSIBILITY OF SMALL BUSINESS AND FARM LOANS.

(a) STUDY.—The Secretary of the Treasury, in consultation

with the Federal banking agencies (as defined in section 3(z) of

the Federal Deposit Insurance Act), shall conduct a study of the

extent to which credit is being provided to and for small businesses

and farms, as a result of this Act and the amendments made

by this Act.

(b) REPORT.—Before the end of the 5-year period beginning

on the date of the enactment of this Act, the Secretary, in consultation with the Federal banking agencies, shall submit a report to

the Congress on the study conducted pursuant to subsection (a)

and shall include such recommendations as the Secretary determines to be appropriate for administrative and legislative action.

Subtitle B—Streamlining Supervision of

Bank Holding Companies

SEC. 111. STREAMLINING BANK HOLDING COMPANY SUPERVISION.

Section 5(c) of the Bank Holding Company Act of 1956 (12

U.S.C. 1844(c)) is amended to read as follows:

‘‘(c) REPORTS AND EXAMINATIONS.—

‘‘(1) REPORTS.—

‘‘(A) IN GENERAL.—The Board, from time to time, may

require a bank holding company and any subsidiary of

such company to submit reports under oath to keep the

Board informed as to—

‘‘(i) its financial condition, systems for monitoring

and controlling financial and operating risks, and

transactions with depository institution subsidiaries of

the bank holding company; and

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00026

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 48 of 166

113 STAT. 1363

‘‘(ii) compliance by the company or subsidiary with

applicable provisions of this Act or any other Federal

law that the Board has specific jurisdiction to enforce

against such company or subsidiary.

‘‘(B) USE OF EXISTING REPORTS.—

‘‘(i) IN GENERAL.—For purposes of compliance with

this paragraph, the Board shall, to the fullest extent

possible, accept—

‘‘(I) reports that a bank holding company or

any subsidiary of such company has provided or

been required to provide to other Federal or State

supervisors or to appropriate self-regulatory

organizations;

‘‘(II) information that is otherwise required

to be reported publicly; and

‘‘(III) externally audited financial statements.

‘‘(ii) AVAILABILITY.—A bank holding company or

a subsidiary of such company shall provide to the

Board, at the request of the Board, a report referred

to in clause (i).

‘‘(iii) REPORTS FILED WITH OTHER AGENCIES.—

‘‘(I) IN GENERAL.—In the event that the Board

requires a report under this subsection from a

functionally regulated subsidiary of a bank holding

company of a kind that is not required by another

Federal or State regulatory authority or an appropriate self-regulatory organization, the Board shall

first request that the appropriate regulatory

authority or self-regulatory organization obtain

such report.

‘‘(II) AVAILABILITY FROM OTHER SUBSIDIARY.—

If the report is not made available to the Board,

and the report is necessary to assess a material

risk to the bank holding company or any of its

depository institution subsidiaries or compliance

with this Act or any other Federal law that the

Board has specific jurisdiction to enforce against

such company or subsidiary or the systems

described in paragraph (2)(A)(ii)(II), the Board may

require such functionally regulated subsidiary to

provide such a report to the Board.

‘‘(2) EXAMINATIONS.—

‘‘(A) EXAMINATION AUTHORITY FOR BANK HOLDING

COMPANIES AND SUBSIDIARIES.—Subject to subparagraph

(B), the Board may make examinations of each bank

holding company and each subsidiary of such holding company in order—

‘‘(i) to inform the Board of the nature of the operations and financial condition of the holding company

and such subsidiaries;

‘‘(ii) to inform the Board of—

‘‘(I) the financial and operational risks within

the holding company system that may pose a

threat to the safety and soundness of any depository institution subsidiary of such holding company; and

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00027

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1364

Document 199

Filed 08/17/26

Page 49 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

‘‘(II) the systems for monitoring and controlling such risks; and

‘‘(iii) to monitor compliance with the provisions

of this Act or any other Federal law that the Board

has specific jurisdiction to enforce against such company or subsidiary and those governing transactions

and relationships between any depository institution

subsidiary and its affiliates.

‘‘(B) FUNCTIONALLY REGULATED SUBSIDIARIES.—Notwithstanding subparagraph (A), the Board may make

examinations of a functionally regulated subsidiary of a

bank holding company only if—

‘‘(i) the Board has reasonable cause to believe that

such subsidiary is engaged in activities that pose a

material risk to an affiliated depository institution;

‘‘(ii) the Board reasonably determines, after

reviewing relevant reports, that examination of the

subsidiary is necessary to adequately inform the Board

of the systems described in subparagraph (A)(ii)(II);

‘‘(iii) based on reports and other available information, the Board has reasonable cause to believe that

a subsidiary is not in compliance with this Act or

any other Federal law that the Board has specific

jurisdiction to enforce against such subsidiary,

including provisions relating to transactions with an

affiliated depository institution, and the Board cannot

make such determination through examination of the

affiliated depository institution or the bank holding

company.

‘‘(C) RESTRICTED FOCUS OF EXAMINATIONS.—The Board

shall, to the fullest extent possible, limit the focus and

scope of any examination of a bank holding company to—

‘‘(i) the bank holding company; and

‘‘(ii) any subsidiary of the bank holding company

that could have a materially adverse effect on the

safety and soundness of any depository institution subsidiary of the holding company due to—

‘‘(I) the size, condition, or activities of the subsidiary; or

‘‘(II) the nature or size of transactions between

the subsidiary and any depository institution that

is also a subsidiary of the bank holding company.

‘‘(D) DEFERENCE TO BANK EXAMINATIONS.—The Board

shall, to the fullest extent possible, for the purposes of

this paragraph, use the reports of examinations of depository institutions made by the appropriate Federal and State

depository institution supervisory authority.

‘‘(E) DEFERENCE TO OTHER EXAMINATIONS.—The Board

shall, to the fullest extent possible, forego an examination

by the Board under this paragraph and instead review

the reports of examination made of—

‘‘(i) any registered broker or dealer by or on behalf

of the Securities and Exchange Commission;

‘‘(ii) any registered investment adviser properly

registered by or on behalf of either the Securities and

Exchange Commission or any State;

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00028

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 50 of 166

113 STAT. 1365

‘‘(iii) any licensed insurance company by or on

behalf of any State regulatory authority responsible

for the supervision of insurance companies; and

‘‘(iv) any other subsidiary that the Board finds

to be comprehensively supervised by a Federal or State

authority.

‘‘(3) CAPITAL.—

‘‘(A) IN GENERAL.—The Board may not, by regulation,

guideline, order, or otherwise, prescribe or impose any capital or capital adequacy rules, guidelines, standards, or

requirements on any functionally regulated subsidiary of

a bank holding company that—

‘‘(i) is not a depository institution; and

‘‘(ii) is—

‘‘(I) in compliance with the applicable capital

requirements of its Federal regulatory authority

(including the Securities and Exchange Commission) or State insurance authority;

‘‘(II) properly registered as an investment

adviser under the Investment Advisers Act of 1940,

or with any State; or

‘‘(III) is licensed as an insurance agent with

the appropriate State insurance authority.

‘‘(B) RULE OF CONSTRUCTION.—Subparagraph (A) shall

not be construed as preventing the Board from imposing

capital or capital adequacy rules, guidelines, standards,

or requirements with respect to—

‘‘(i) activities of a registered investment adviser

other than with respect to investment advisory activities or activities incidental to investment advisory

activities; or

‘‘(ii) activities of a licensed insurance agent other

than insurance agency activities or activities incidental

to insurance agency activities.

‘‘(C) LIMITATIONS ON INDIRECT ACTION.—In developing,

establishing, or assessing bank holding company capital

or capital adequacy rules, guidelines, standards, or requirements for purposes of this paragraph, the Board may not

take into account the activities, operations, or investments

of an affiliated investment company registered under the

Investment Company Act of 1940, unless the investment

company is—

‘‘(i) a bank holding company; or

‘‘(ii) controlled by a bank holding company by reason of ownership by the bank holding company

(including through all of its affiliates) of 25 percent

or more of the shares of the investment company,

and the shares owned by the bank holding company

have a market value equal to more than $1,000,000.

‘‘(4) FUNCTIONAL REGULATION OF SECURITIES AND INSURANCE ACTIVITIES.—

‘‘(A) SECURITIES ACTIVITIES.—Securities activities conducted in a functionally regulated subsidiary of a depository

institution shall be subject to regulation by the Securities

and Exchange Commission, and by relevant State securities

authorities, as appropriate, subject to section 104 of the

Gramm-Leach-Bliley Act, to the same extent as if they

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00029

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1366

Document 199

Filed 08/17/26

Page 51 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

were conducted in a nondepository institution subsidiary

of a bank holding company.

‘‘(B) INSURANCE ACTIVITIES.—Subject to section 104 of

the Gramm-Leach-Bliley Act, insurance agency and brokerage activities and activities as principal conducted in a

functionally regulated subsidiary of a depository institution

shall be subject to regulation by a State insurance authority

to the same extent as if they were conducted in a nondepository institution subsidiary of a bank holding company.

‘‘(5) DEFINITION.—For purposes of this subsection, the term

‘functionally regulated subsidiary’ means any company—

‘‘(A) that is not a bank holding company or a depository

institution; and

‘‘(B) that is—

‘‘(i) a broker or dealer that is registered under

the Securities Exchange Act of 1934;

‘‘(ii) a registered investment adviser, properly registered by or on behalf of either the Securities and

Exchange Commission or any State, with respect to

the investment advisory activities of such investment

adviser and activities incidental to such investment

advisory activities;

‘‘(iii) an investment company that is registered

under the Investment Company Act of 1940;

‘‘(iv) an insurance company, with respect to insurance activities of the insurance company and activities

incidental to such insurance activities, that is subject

to supervision by a State insurance regulator; or

‘‘(v) an entity that is subject to regulation by the

Commodity Futures Trading Commission, with respect

to the commodities activities of such entity and activities incidental to such commodities activities.’’.

SEC. 112. AUTHORITY OF STATE INSURANCE REGULATOR AND SECURITIES AND EXCHANGE COMMISSION.

(a) BANK HOLDING COMPANIES.—Section 5 of the Bank Holding

Company Act of 1956 (12 U.S.C. 1844) is amended by adding

at the end the following new subsection:

‘‘(g) AUTHORITY OF STATE INSURANCE REGULATOR AND THE

SECURITIES AND EXCHANGE COMMISSION.—

‘‘(1) IN GENERAL.—Notwithstanding any other provision of

law, any regulation, order, or other action of the Board that

requires a bank holding company to provide funds or other

assets to a subsidiary depository institution shall not be effective nor enforceable with respect to an entity described in

subparagraph (A) if—

‘‘(A) such funds or assets are to be provided by—

‘‘(i) a bank holding company that is an insurance

company, a broker or dealer registered under the Securities Exchange Act of 1934, an investment company

registered under the Investment Company Act of 1940,

or an investment adviser registered by or on behalf

of either the Securities and Exchange Commission or

any State; or

‘‘(ii) an affiliate of the depository institution that

is an insurance company or a broker or dealer registered under the Securities Exchange Act of 1934,

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00030

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 52 of 166

113 STAT. 1367

an investment company registered under the Investment Company Act of 1940, or an investment adviser

registered by or on behalf of either the Securities and

Exchange Commission or any State; and

‘‘(B) the State insurance authority for the insurance

company or the Securities and Exchange Commission for

the registered broker, dealer, investment adviser (solely

with respect to investment advisory activities or activities

incidental thereto), or investment company, as the case

may be, determines in writing sent to the holding company

and the Board that the holding company shall not provide

such funds or assets because such action would have a

material adverse effect on the financial condition of the

insurance company or the broker, dealer, investment company, or investment adviser, as the case may be.

‘‘(2) NOTICE TO STATE INSURANCE AUTHORITY OR SEC

REQUIRED.—If the Board requires a bank holding company,

or an affiliate of a bank holding company, that is an insurance

company or a broker, dealer, investment company, or investment adviser described in paragraph (1)(A) to provide funds

or assets to a depository institution subsidiary of the holding

company pursuant to any regulation, order, or other action

of the Board referred to in paragraph (1), the Board shall

promptly notify the State insurance authority for the insurance

company, the Securities and Exchange Commission, or State

securities regulator, as the case may be, of such requirement.

‘‘(3) DIVESTITURE IN LIEU OF OTHER ACTION.—If the Board

receives a notice described in paragraph (1)(B) from a State

insurance authority or the Securities and Exchange Commission with regard to a bank holding company or affiliate referred

to in that paragraph, the Board may order the bank holding

company to divest the depository institution not later than

180 days after receiving the notice, or such longer period as

the Board determines consistent with the safe and sound operation of the depository institution.

‘‘(4) CONDITIONS BEFORE DIVESTITURE.—During the period

beginning on the date an order to divest is issued by the

Board under paragraph (3) to a bank holding company and

ending on the date the divestiture is completed, the Board

may impose any conditions or restrictions on the holding company’s ownership or operation of the depository institution,

including restricting or prohibiting transactions between the

depository institution and any affiliate of the institution, as

are appropriate under the circumstances.

‘‘(5) RULE OF CONSTRUCTION.—No provision of this subsection may be construed as limiting or otherwise affecting,

except to the extent specifically provided in this subsection,

the regulatory authority, including the scope of the authority,

of any Federal agency or department with regard to any entity

that is within the jurisdiction of such agency or department.’’.

(b) SUBSIDIARIES OF DEPOSITORY INSTITUTIONS.—The Federal

Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended by

adding at the end the following new section:

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00031

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1368

12 USC 1831v.

Document 199

Filed 08/17/26

Page 53 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

‘‘SEC. 45. AUTHORITY OF STATE INSURANCE REGULATOR AND SECURITIES AND EXCHANGE COMMISSION.

‘‘(a) IN GENERAL.—Notwithstanding any other provision of law,

the provisions of—

‘‘(1) section 5(c) of the Bank Holding Company Act of 1956

that limit the authority of the Board of Governors of the Federal

Reserve System to require reports from, to make examinations

of, or to impose capital requirements on holding companies

and their functionally regulated subsidiaries or that require

deference to other regulators;

‘‘(2) section 5(g) of the Bank Holding Company Act of

1956 that limit the authority of the Board to require a functionally regulated subsidiary of a holding company to provide capital or other funds or assets to a depository institution subsidiary of the holding company and to take certain actions

including requiring divestiture of the depository institution;

and

‘‘(3) section 10A of the Bank Holding Company Act of

1956 that limit whatever authority the Board might otherwise

have to take direct or indirect action with respect to holding

companies and their functionally regulated subsidiaries;

shall also limit whatever authority that a Federal banking agency

might otherwise have under any statute or regulation to require

reports, make examinations, impose capital requirements, or take

any other direct or indirect action with respect to any functionally

regulated affiliate of a depository institution, subject to the same

standards and requirements as are applicable to the Board under

those provisions.

‘‘(b) CERTAIN EXEMPTION AUTHORIZED.—No provision of this

section shall be construed as preventing the Corporation, if the

Corporation finds it necessary to determine the condition of a

depository institution for insurance purposes, from examining an

affiliate of any depository institution, pursuant to section 10(b)(4),

as may be necessary to disclose fully the relationship between

the depository institution and the affiliate, and the effect of such

relationship on the depository institution.

‘‘(c) DEFINITIONS.—For purposes of this section, the following

definitions shall apply:

‘‘(1) FUNCTIONALLY REGULATED SUBSIDIARY.—The term

‘functionally regulated subsidiary’ has the meaning given the

term in section 5(c)(5) of the Bank Holding Company Act of

1956.

‘‘(2) FUNCTIONALLY REGULATED AFFILIATE.—The term ‘functionally regulated affiliate’ means, with respect to any depository institution, any affiliate of such depository institution that

is—

‘‘(A) not a depository institution holding company; and

‘‘(B) a company described in any clause of section

5(c)(5)(B) of the Bank Holding Company Act of 1956.’’.

SEC. 113. ROLE OF THE BOARD OF GOVERNORS OF THE FEDERAL

RESERVE SYSTEM.

The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et

seq.) is amended by inserting after section 10 the following new

section:

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00032

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 54 of 166

113 STAT. 1369

‘‘SEC. 10A. LIMITATION ON RULEMAKING, PRUDENTIAL, SUPERVISORY, AND ENFORCEMENT AUTHORITY OF THE BOARD.

12 USC 1848a.

‘‘(a) LIMITATION ON DIRECT ACTION.—The Board may not prescribe regulations, issue or seek entry of orders, impose restraints,

restrictions, guidelines, requirements, safeguards, or standards, or

otherwise take any action under or pursuant to any provision of

this Act or section 8 of the Federal Deposit Insurance Act against

or with respect to a functionally regulated subsidiary of a bank

holding company unless—

‘‘(1) the action is necessary to prevent or redress an unsafe

or unsound practice or breach of fiduciary duty by such subsidiary that poses a material risk to—

‘‘(A) the financial safety, soundness, or stability of an

affiliated depository institution; or

‘‘(B) the domestic or international payment system;

and

‘‘(2) the Board finds that it is not reasonably possible

to protect effectively against the material risk at issue through

action directed at or against the affiliated depository institution

or against depository institutions generally.

‘‘(b) LIMITATION ON INDIRECT ACTION.—The Board may not

prescribe regulations, issue or seek entry of orders, impose

restraints, restrictions, guidelines, requirements, safeguards, or

standards, or otherwise take any action under or pursuant to any

provision of this Act or section 8 of the Federal Deposit Insurance

Act against or with respect to a bank holding company that requires

the bank holding company to require a functionally regulated subsidiary of the holding company to engage, or to refrain from

engaging, in any conduct or activities unless the Board could take

such action directly against or with respect to the functionally

regulated subsidiary in accordance with subsection (a).

‘‘(c) ACTIONS SPECIFICALLY AUTHORIZED.—Notwithstanding subsection (a) or (b), the Board may take action under this Act or

section 8 of the Federal Deposit Insurance Act to enforce compliance

by a functionally regulated subsidiary of a bank holding company

with any Federal law that the Board has specific jurisdiction to

enforce against such subsidiary.

‘‘(d) FUNCTIONALLY REGULATED SUBSIDIARY DEFINED.—For purposes of this section, the term ‘functionally regulated subsidiary’

has the meaning given the term in section 5(c)(5).’’.

SEC. 114. PRUDENTIAL SAFEGUARDS.

12 USC 1828a.

(a) COMPTROLLER OF THE CURRENCY.—

(1) IN GENERAL.—The Comptroller of the Currency may,

by regulation or order, impose restrictions or requirements

on relationships or transactions between a national bank and

a subsidiary of the national bank that the Comptroller finds

are—

(A) consistent with the purposes of this Act, title LXII

of the Revised Statutes of the United States, and other

Federal law applicable to national banks; and

(B) appropriate to avoid any significant risk to the

safety and soundness of insured depository institutions or

any Federal deposit insurance fund or other adverse effects,

such as undue concentration of resources, decreased or

unfair competition, conflicts of interests, or unsound

banking practices.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00033

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1370

Document 199

Filed 08/17/26

Page 55 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

(2) REVIEW.—The Comptroller of the Currency shall

regularly—

(A) review all restrictions or requirements established

pursuant to paragraph (1) to determine whether there is

a continuing need for any such restriction or requirement

to carry out the purposes of the Act, including the avoidance

of any adverse effect referred to in paragraph (1)(B); and

(B) modify or eliminate any such restriction or requirement the Comptroller finds is no longer required for such

purposes.

(b) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.—

(1) IN GENERAL.—The Board of Governors of the Federal

Reserve System may, by regulation or order, impose restrictions

or requirements on relationships or transactions—

(A) between a depository institution subsidiary of a

bank holding company and any affiliate of such depository

institution (other than a subsidiary of such institution);

(B) between a State member bank and a subsidiary

of such bank;

if the Board makes a finding described in paragraph (2) with

respect to such restriction or requirement.

(2) FINDING.—The Board of Governors of the Federal

Reserve System may exercise authority under paragraph (1)

if the Board finds that the exercise of such authority is—

(A) consistent with the purposes of this Act, the Bank

Holding Company Act of 1956, the Federal Reserve Act,

and other Federal law applicable to depository institution

subsidiaries of bank holding companies or State member

banks, as the case may be; and

(B) appropriate to prevent an evasion of any provision

of law referred to in subparagraph (A) or to avoid any

significant risk to the safety and soundness of depository

institutions or any Federal deposit insurance fund or other

adverse effects, such as undue concentration of resources,

decreased or unfair competition, conflicts of interests, or

unsound banking practices.

(3) REVIEW.—The Board of Governors of the Federal

Reserve System shall regularly—

(A) review all restrictions or requirements established

pursuant to paragraph (1) or (4) to determine whether

there is a continuing need for any such restriction or

requirement to carry out the purposes of the Act, including

the avoidance of any adverse effect referred to in paragraph

(2)(B) or (4)(B); and

(B) modify or eliminate any such restriction or requirement the Board finds is no longer required for such purposes.

(4) FOREIGN BANKS.—The Board may, by regulation or

order, impose restrictions or requirements on relationships or

transactions between a branch, agency, or commercial lending

company of a foreign bank in the United States and any affiliate

in the United States of such foreign bank that the Board

finds are—

(A) consistent with the purposes of this Act, the Bank

Holding Company Act of 1956, the Federal Reserve Act,

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00034

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 56 of 166

113 STAT. 1371

and other Federal law applicable to foreign banks and

their affiliates in the United States; and

(B) appropriate to prevent an evasion of any provision

of law referred to in subparagraph (A) or to avoid any

significant risk to the safety and soundness of depository

institutions or any Federal deposit insurance fund or other

adverse effects, such as undue concentration of resources,

decreased or unfair competition, conflicts of interests, or

unsound banking practices.

(1) IN GENERAL.—The Federal Deposit Insurance Corporation may, by regulation or order, impose restrictions or requirements on relationships or transactions between a State nonmember bank (as defined in section 3 of the Federal Deposit

Insurance Act) and a subsidiary of the State nonmember bank

that the Corporation finds are—

(A) consistent with the purposes of this Act, the Federal

Deposit Insurance Act, or other Federal law applicable

to State nonmember banks; and

(B) appropriate to avoid any significant risk to the

safety and soundness of depository institutions or any Federal deposit insurance fund or other adverse effects, such

as undue concentration of resources, decreased or unfair

competition, conflicts of interests, or unsound banking practices.

(2) REVIEW.—The Federal Deposit Insurance Corporation

shall regularly—

(A) review all restrictions or requirements established

pursuant to paragraph (1) to determine whether there is

a continuing need for any such restriction or requirement

to carry out the purposes of the Act, including the avoidance

of any adverse effect referred to in paragraph (1)(B); and

(B) modify or eliminate any such restriction or requirement the Corporation finds is no longer required for such

purposes.

SEC. 115. EXAMINATION OF INVESTMENT COMPANIES.

12 USC 1820a.

(a) EXCLUSIVE COMMISSION AUTHORITY.—Except as provided

in subsection (c), a Federal banking agency may not inspect or

examine any registered investment company that is not a bank

holding company or a savings and loan holding company.

(b) EXAMINATION RESULTS AND OTHER INFORMATION.—The

Commission shall provide to any Federal banking agency, upon

request, the results of any examination, reports, records, or other

information with respect to any registered investment company

to the extent necessary for the agency to carry out its statutory

responsibilities.

(c) CERTAIN EXAMINATIONS AUTHORIZED.—Nothing in this section shall prevent the Corporation, if the Corporation finds it necessary to determine the condition of an insured depository institution for insurance purposes, from examining an affiliate of any

insured depository institution, pursuant to its authority under section 10(b)(4) of the Federal Deposit Insurance Act, as may be

necessary to disclose fully the relationship between the insured

depository institution and the affiliate, and the effect of such relationship on the insured depository institution.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00035

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1372

Document 199

Filed 08/17/26

Page 57 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

(d) DEFINITIONS.—For purposes of this section, the following

definitions shall apply:

(1) BANK HOLDING COMPANY.—The term ‘‘bank holding company’’ has the meaning given the term in section 2 of the

Bank Holding Company Act of 1956.

(2) COMMISSION.—The term ‘‘Commission’’ means the Securities and Exchange Commission.

(3) CORPORATION.—The term ‘‘Corporation’’ means the Federal Deposit Insurance Corporation.

(4) FEDERAL BANKING AGENCY.—The term ‘‘Federal banking

agency’’ has the meaning given the term in section 3(z) of

the Federal Deposit Insurance Act.

(5) INSURED DEPOSITORY INSTITUTION.—The term ‘‘insured

depository institution’’ has the meaning given the term in section 3(c) of the Federal Deposit Insurance Act.

(6) REGISTERED INVESTMENT COMPANY.—The term ‘‘registered investment company’’ means an investment company

that is registered with the Commission under the Investment

Company Act of 1940.

(7) SAVINGS AND LOAN HOLDING COMPANY.—The term

‘‘savings and loan holding company’’ has the meaning given

the term in section 10(a)(1)(D) of the Home Owners’ Loan

Act.

SEC. 116. ELIMINATION OF APPLICATION REQUIREMENT FOR FINANCIAL HOLDING COMPANIES.

(a) PREVENTION OF DUPLICATIVE FILINGS.—Section 5(a) of the

Bank Holding Company Act of 1956 (12 U.S.C. 1844(a)) is amended

by adding at the end the following new sentence: ‘‘A declaration

filed in accordance with section 4(l)(1)(C) shall satisfy the requirements of this subsection with regard to the registration of a bank

holding company but not any requirement to file an application

to acquire a bank pursuant to section 3.’’.

(b) DIVESTITURE PROCEDURES.—Section 5(e)(1) of the Bank

Holding Company Act of 1956 (12 U.S.C. 1844(e)(1)) is amended—

(1) by striking ‘‘Financial Institutions Supervisory Act of

1966, order’’ and inserting ‘‘Financial Institutions Supervisory

Act of 1966, at the election of the bank holding company—

‘‘(A) order’’; and

(2) by striking ‘‘shareholders of the bank holding company.

Such distribution’’ and inserting ‘‘shareholders of the bank

holding company; or

‘‘(B) order the bank holding company, after due notice

and opportunity for hearing, and after consultation with the

primary supervisor for the bank, which shall be the Comptroller

of the Currency in the case of a national bank, and the Federal

Deposit Insurance Corporation and the appropriate State supervisor in the case of an insured nonmember bank, to terminate

(within 120 days or such longer period as the Board may

direct) the ownership or control of any such bank by such

company.

The distribution referred to in subparagraph (A)’’.

SEC. 117. PRESERVING THE INTEGRITY OF FDIC RESOURCES.

Section 11(a)(4)(B) of the Federal Deposit Insurance Act (12

U.S.C. 1821(a)(4)(B)) is amended by striking ‘‘to benefit any shareholder of’’ and inserting ‘‘to benefit any shareholder or affiliate

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00036

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 58 of 166

113 STAT. 1373

(other than an insured depository institution that receives assistance in accordance with the provisions of this Act) of’’.

SEC. 118. REPEAL OF SAVINGS BANK PROVISIONS IN THE BANK

HOLDING COMPANY ACT OF 1956.

Section 3(f) of the Bank Holding Company Act of 1956 (12

U.S.C. 1842(f)) is amended to read as follows:

‘‘(f) [Repealed].’’.

SEC. 119. TECHNICAL AMENDMENT.

Section 2(o)(1)(A) of the Bank Holding Company Act of 1956

(12 U.S.C. 1841(o)(1)(A)) is amended by striking ‘‘section 38(b)’’

and inserting ‘‘section 38’’.

Subtitle C—Subsidiaries of National Banks

SEC. 121. SUBSIDIARIES OF NATIONAL BANKS.

(a) IN GENERAL.—Chapter one of title LXII of the Revised

Statutes of the United States (12 U.S.C. 21 et seq.) is amended—

(1) by redesignating section 5136A as section 5136B; and

(2) by inserting after section 5136 (12 U.S.C. 24) the following new section:

12 USC 25a.

‘‘SEC. 5136A. FINANCIAL SUBSIDIARIES OF NATIONAL BANKS.

12 USC 24a.

‘‘(a) AUTHORIZATION TO CONDUCT IN SUBSIDIARIES CERTAIN

ACTIVITIES THAT ARE FINANCIAL IN NATURE.—

‘‘(1) IN GENERAL.—Subject to paragraph (2), a national bank

may control a financial subsidiary, or hold an interest in a

financial subsidiary.

‘‘(2) CONDITIONS AND REQUIREMENTS.—A national bank may

control a financial subsidiary, or hold an interest in a financial

subsidiary, only if—

‘‘(A) the financial subsidiary engages only in—

‘‘(i) activities that are financial in nature or incidental to a financial activity pursuant to subsection

(b); and

‘‘(ii) activities that are permitted for national banks

to engage in directly (subject to the same terms and

conditions that govern the conduct of the activities

by a national bank);

‘‘(B) the activities engaged in by the financial subsidiary as a principal do not include—

‘‘(i) insuring, guaranteeing, or indemnifying

against loss, harm, damage, illness, disability, or death

(except to the extent permitted under section 302 or

303(c) of the Gramm-Leach-Bliley Act) or providing

or issuing annuities the income of which is subject

to tax treatment under section 72 of the Internal Revenue Code of 1986;

‘‘(ii) real estate development or real estate investment activities, unless otherwise expressly authorized

by law; or

‘‘(iii) any activity permitted in subparagraph (H)

or (I) of section 4(k)(4) of the Bank Holding Company

Act of 1956, except activities described in section

4(k)(4)(H) that may be permitted in accordance with

section 122 of the Gramm-Leach-Bliley Act;

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00037

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1374

Regulations.

Applicability.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Document 199

Filed 08/17/26

Page 59 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

‘‘(C) the national bank and each depository institution

affiliate of the national bank are well capitalized and well

managed;

‘‘(D) the aggregate consolidated total assets of all financial subsidiaries of the national bank do not exceed the

lesser of—

‘‘(i) 45 percent of the consolidated total assets of

the parent bank; or

‘‘(ii) $50,000,000,000;

‘‘(E) except as provided in paragraph (4), the national

bank meets any applicable rating or other requirement

set forth in paragraph (3); and

‘‘(F) the national bank has received the approval of

the Comptroller of the Currency for the financial subsidiary

to engage in such activities, which approval shall be based

solely upon the factors set forth in this section.

‘‘(3) RATING OR COMPARABLE REQUIREMENT.—

‘‘(A) IN GENERAL.—A national bank meets the requirements of this paragraph if—

‘‘(i) the bank is 1 of the 50 largest insured banks

and has not fewer than 1 issue of outstanding eligible

debt that is currently rated within the 3 highest investment grade rating categories by a nationally recognized

statistical rating organization; or

‘‘(ii) the bank is 1 of the second 50 largest insured

banks and meets the criteria set forth in clause (i)

or such other criteria as the Secretary of the Treasury

and the Board of Governors of the Federal Reserve

System may jointly establish by regulation and determine to be comparable to and consistent with the purposes of the rating required in clause (i).

‘‘(B) CONSOLIDATED TOTAL ASSETS.—For purposes of

this paragraph, the size of an insured bank shall be determined on the basis of the consolidated total assets of the

bank as of the end of each calendar year.

‘‘(4) FINANCIAL AGENCY SUBSIDIARY.—The requirement in

paragraph (2)(E) shall not apply with respect to the ownership

or control of a financial subsidiary that engages in activities

described in subsection (b)(1) solely as agent and not directly

or indirectly as principal.

‘‘(5) REGULATIONS REQUIRED.—Before the end of the 270day period beginning on the date of the enactment of the

Gramm-Leach-Bliley Act, the Comptroller of the Currency shall,

by regulation, prescribe procedures to implement this section.

‘‘(6) INDEXED ASSET LIMIT.—The dollar amount contained

in paragraph (2)(D) shall be adjusted according to an indexing

mechanism jointly established by regulation by the Secretary

of the Treasury and the Board of Governors of the Federal

Reserve System.

‘‘(7) COORDINATION WITH SECTION 4(l)(2) OF THE BANK

HOLDING COMPANY ACT OF 1956.—Section 4(l)(2) of the Bank

Holding Company Act of 1956 applies to a national bank that

controls a financial subsidiary in the manner provided in that

section.

‘‘(b) ACTIVITIES THAT ARE FINANCIAL IN NATURE.—

‘‘(1) FINANCIAL ACTIVITIES.—

Jkt 079139

PO 00102

Frm 00038

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 60 of 166

113 STAT. 1375

‘‘(A) IN GENERAL.—An activity shall be financial in

nature or incidental to such financial activity only if—

‘‘(i) such activity has been defined to be financial

in nature or incidental to a financial activity for bank

holding companies pursuant to section 4(k)(4) of the

Bank Holding Company Act of 1956; or

‘‘(ii) the Secretary of the Treasury determines the

activity is financial in nature or incidental to a financial activity in accordance with subparagraph (B).

‘‘(B) COORDINATION BETWEEN THE BOARD AND THE SECRETARY OF THE TREASURY.—

‘‘(i) PROPOSALS RAISED BEFORE THE SECRETARY OF

THE TREASURY.—

‘‘(I) CONSULTATION.—The Secretary of the

Treasury shall notify the Board of, and consult

with the Board concerning, any request, proposal,

or application under this section for a determination of whether an activity is financial in nature

or incidental to a financial activity.

‘‘(II) BOARD VIEW.—The Secretary of the

Treasury shall not determine that any activity is

financial in nature or incidental to a financial

activity under this section if the Board notifies

the Secretary in writing, not later than 30 days

after the date of receipt of the notice described

in subclause (I) (or such longer period as the Secretary determines to be appropriate under the circumstances) that the Board believes that the

activity is not financial in nature or incidental

to a financial activity or is not otherwise permissible under this section.

‘‘(ii) PROPOSALS RAISED BY THE BOARD.—

‘‘(I) BOARD RECOMMENDATION.—The Board

may, at any time, recommend in writing that the

Secretary of the Treasury find an activity to be

financial in nature or incidental to a financial

activity for purposes of this section.

‘‘(II) TIME PERIOD FOR SECRETARIAL ACTION.—

Not later than 30 days after the date of receipt

of a written recommendation from the Board under

subclause (I) (or such longer period as the Secretary of the Treasury and the Board determine

to be appropriate under the circumstances), the

Secretary shall determine whether to initiate a

public rulemaking proposing that the subject recommended activity be found to be financial in

nature or incidental to a financial activity under

this section, and shall notify the Board in writing

of the determination of the Secretary and, in the

event that the Secretary determines not to seek

public comment on the proposal, the reasons for

that determination.

‘‘(2) FACTORS TO BE CONSIDERED.—In determining whether

an activity is financial in nature or incidental to a financial

activity, the Secretary shall take into account—

‘‘(A) the purposes of this Act and the Gramm-LeachBliley Act;

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00039

Fmt 6580

Sfmt 6581

Notification.

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1376

Regulations.

VerDate 11-MAY-2000

Document 199

Filed 08/17/26

Page 61 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

‘‘(B) changes or reasonably expected changes in the

marketplace in which banks compete;

‘‘(C) changes or reasonably expected changes in the

technology for delivering financial services; and

‘‘(D) whether such activity is necessary or appropriate

to allow a bank and the subsidiaries of a bank to—

‘‘(i) compete effectively with any company seeking

to provide financial services in the United States;

‘‘(ii) efficiently deliver information and services

that are financial in nature through the use of technological means, including any application necessary to

protect the security or efficacy of systems for the transmission of data or financial transactions; and

‘‘(iii) offer customers any available or emerging

technological means for using financial services or for

the document imaging of data.

‘‘(3) AUTHORIZATION OF NEW FINANCIAL ACTIVITIES.—The

Secretary of the Treasury shall, by regulation or order and

in accordance with paragraph (1)(B), define, consistent with

the purposes of this Act and the Gramm-Leach-Bliley Act,

the following activities as, and the extent to which such activities are, financial in nature or incidental to a financial activity:

‘‘(A) Lending, exchanging, transferring, investing for

others, or safeguarding financial assets other than money

or securities.

‘‘(B) Providing any device or other instrumentality for

transferring money or other financial assets.

‘‘(C) Arranging, effecting, or facilitating financial transactions for the account of third parties.

‘‘(c) CAPITAL DEDUCTION.—

‘‘(1) CAPITAL DEDUCTION REQUIRED.—In determining

compliance with applicable capital standards—

‘‘(A) the aggregate amount of the outstanding equity

investment, including retained earnings, of a national bank

in all financial subsidiaries shall be deducted from the

assets and tangible equity of the national bank; and

‘‘(B) the assets and liabilities of the financial subsidiaries shall not be consolidated with those of the national

bank.

‘‘(2) FINANCIAL STATEMENT DISCLOSURE OF CAPITAL DEDUCTION.—Any published financial statement of a national bank

that controls a financial subsidiary shall, in addition to providing information prepared in accordance with generally

accepted accounting principles, separately present financial

information for the bank in the manner provided in paragraph

(1).

‘‘(d) SAFEGUARDS FOR THE BANK.—A national bank that establishes or maintains a financial subsidiary shall assure that—

‘‘(1) the procedures of the national bank for identifying

and managing financial and operational risks within the

national bank and the financial subsidiary adequately protect

the national bank from such risks;

‘‘(2) the national bank has, for the protection of the bank,

reasonable policies and procedures to preserve the separate

corporate identity and limited liability of the national bank

and the financial subsidiaries of the national bank; and

‘‘(3) the national bank is in compliance with this section.

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00040

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 62 of 166

113 STAT. 1377

‘‘(e) PROVISIONS APPLICABLE TO NATIONAL BANKS THAT FAIL

TO CONTINUE TO MEET CERTAIN REQUIREMENTS.—

‘‘(1) IN GENERAL.—If a national bank or insured depository

institution affiliate does not continue to meet the requirements

of subsection (a)(2)(C) or subsection (d), the Comptroller of

the Currency shall promptly give notice to the national bank

to that effect describing the conditions giving rise to the notice.

‘‘(2) AGREEMENT TO CORRECT CONDITIONS.—Not later than

45 days after the date of receipt by a national bank of a

notice given under paragraph (1) (or such additional period

as the Comptroller of the Currency may permit), the national

bank shall execute an agreement with the Comptroller of the

Currency and any relevant insured depository institution affiliate shall execute an agreement with its appropriate Federal

banking agency to comply with the requirements of subsection

(a)(2)(C) and subsection (d).

‘‘(3) IMPOSITION OF CONDITIONS.—Until the conditions

described in a notice under paragraph (1) are corrected—

‘‘(A) the Comptroller of the Currency may impose such

limitations on the conduct or activities of the national

bank or any subsidiary of the national bank as the Comptroller of the Currency determines to be appropriate under

the circumstances and consistent with the purposes of this

section; and

‘‘(B) the appropriate Federal banking agency may

impose such limitations on the conduct or activities of

any relevant insured depository institution affiliate or any

subsidiary of the institution as such agency determines

to be appropriate under the circumstances and consistent

with the purposes of this section.

‘‘(4) FAILURE TO CORRECT.—If the conditions described in

a notice to a national bank under paragraph (1) are not corrected within 180 days after the date of receipt by the national

bank of the notice, the Comptroller of the Currency may require

the national bank, under such terms and conditions as may

be imposed by the Comptroller and subject to such extension

of time as may be granted in the discretion of the Comptroller,

to divest control of any financial subsidiary.

‘‘(5) CONSULTATION.—In taking any action under this subsection, the Comptroller shall consult with all relevant Federal

and State regulatory agencies and authorities.

‘‘(f) FAILURE TO MAINTAIN PUBLIC RATING OR MEET APPLICABLE

CRITERIA.—

‘‘(1) IN GENERAL.—A national bank that does not continue

to meet any applicable rating or other requirement of subsection

(a)(2)(E) after acquiring or establishing a financial subsidiary

shall not, directly or through a subsidiary, purchase or acquire

any additional equity capital of any financial subsidiary until

the bank meets such requirements.

‘‘(2) EQUITY CAPITAL.—For purposes of this subsection, the

term ‘equity capital’ includes, in addition to any equity

instrument, any debt instrument issued by a financial subsidiary, if the instrument qualifies as capital of the subsidiary

under any Federal or State law, regulation, or interpretation

applicable to the subsidiary.

‘‘(g) DEFINITIONS.—For purposes of this section, the following

definitions shall apply:

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00041

Fmt 6580

Sfmt 6581

Notice.

Deadline.

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1378

Document 199

Filed 08/17/26

Page 63 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

‘‘(1) AFFILIATE, COMPANY, CONTROL, AND SUBSIDIARY.—The

terms ‘affiliate’, ‘company’, ‘control’, and ‘subsidiary’ have the

meanings given those terms in section 2 of the Bank Holding

Company Act of 1956.

‘‘(2) APPROPRIATE FEDERAL BANKING AGENCY, DEPOSITORY

INSTITUTION, INSURED BANK, AND INSURED DEPOSITORY INSTITUTION.—The terms ‘appropriate Federal banking agency’, ‘depository institution’, ‘insured bank’, and ‘insured depository institution’ have the meanings given those terms in section 3 of

the Federal Deposit Insurance Act.

‘‘(3) FINANCIAL SUBSIDIARY.—The term ‘financial subsidiary’

means any company that is controlled by 1 or more insured

depository institutions other than a subsidiary that—

‘‘(A) engages solely in activities that national banks

are permitted to engage in directly and are conducted

subject to the same terms and conditions that govern the

conduct of such activities by national banks; or

‘‘(B) a national bank is specifically authorized by the

express terms of a Federal statute (other than this section),

and not by implication or interpretation, to control, such

as by section 25 or 25A of the Federal Reserve Act or

the Bank Service Company Act.

‘‘(4) ELIGIBLE DEBT.—The term ‘eligible debt’ means

unsecured long-term debt that—

‘‘(A) is not supported by any form of credit enhancement, including a guarantee or standby letter of credit;

and

‘‘(B) is not held in whole or in any significant part

by any affiliate, officer, director, principal shareholder, or

employee of the bank or any other person acting on behalf

of or with funds from the bank or an affiliate of the bank.

‘‘(5) WELL CAPITALIZED.—The term ‘well capitalized’ has

the meaning given the term in section 38 of the Federal Deposit

Insurance Act.

‘‘(6) WELL MANAGED.—The term ‘well managed’ means—

‘‘(A) in the case of a depository institution that has

been examined, unless otherwise determined in writing

by the appropriate Federal banking agency—

‘‘(i) the achievement of a composite rating of 1

or 2 under the Uniform Financial Institutions Rating

System (or an equivalent rating under an equivalent

rating system) in connection with the most recent

examination or subsequent review of the depository

institution; and

‘‘(ii) at least a rating of 2 for management, if

such rating is given; or

‘‘(B) in the case of any depository institution that has

not been examined, the existence and use of managerial

resources that the appropriate Federal banking agency

determines are satisfactory.’’.

(b) SECTIONS 23A AND 23B OF THE FEDERAL RESERVE ACT.—

(1) LIMITING THE EXPOSURE OF A BANK TO A FINANCIAL

SUBSIDIARY TO THE AMOUNT OF PERMISSIBLE EXPOSURE TO AN

AFFILIATE.—Section 23A of the Federal Reserve Act (12 U.S.C.

371c) is amended—

(A) by redesignating subsection (e) as subsection (f);

and

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00042

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

Document 199

Filed 08/17/26

PUBLIC LAW 106–102—NOV. 12, 1999

Page 64 of 166

113 STAT. 1379

(B) by inserting after subsection (d), the following new

subsection:

‘‘(e) RULES RELATING TO BANKS WITH FINANCIAL SUBSIDIARIES.—

‘‘(1) FINANCIAL SUBSIDIARY DEFINED.—For purposes of this

section and section 23B, the term ‘financial subsidiary’ means

any company that is a subsidiary of a bank that would be

a financial subsidiary of a national bank under section 5136A

of the Revised Statutes of the United States.

‘‘(2) FINANCIAL SUBSIDIARY TREATED AS AN AFFILIATE.—

For purposes of applying this section and section 23B, and

notwithstanding subsection (b)(2) of this section or section

23B(d)(1), a financial subsidiary of a bank—

‘‘(A) shall be deemed to be an affiliate of the bank;

and

‘‘(B) shall not be deemed to be a subsidiary of the

bank.

‘‘(3) EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL

SUBSIDIARIES.—

‘‘(A) EXCEPTION FROM LIMIT ON COVERED TRANSACTIONS

WITH ANY INDIVIDUAL FINANCIAL SUBSIDIARY.—Notwithstanding paragraph (2), the restriction contained in subsection (a)(1)(A) shall not apply with respect to covered

transactions between a bank and any individual financial

subsidiary of the bank.

‘‘(B) EXCEPTION FOR EARNINGS RETAINED BY FINANCIAL

SUBSIDIARIES.—Notwithstanding paragraph (2) or subsection (b)(7), a bank’s investment in a financial subsidiary

of the bank shall not include retained earnings of the

financial subsidiary.

‘‘(4) ANTI-EVASION PROVISION.—For purposes of this section

and section 23B—

‘‘(A) any purchase of, or investment in, the securities

of a financial subsidiary of a bank by an affiliate of the

bank shall be considered to be a purchase of or investment

in such securities by the bank; and

‘‘(B) any extension of credit by an affiliate of a bank

to a financial subsidiary of the bank shall be considered

to be an extension of credit by the bank to the financial

subsidiary if the Board determines that such treatment

is necessary or appropriate to prevent evasions of this

Act and the Gramm-Leach-Bliley Act.’’.

(2) REBUTTABLE PRESUMPTION OF CONTROL OF PORTFOLIO

COMPANY.—Section 23A(b) of the Federal Reserve Act (12 U.S.C.

371c(b)) is amended by adding at the end the following new

paragraph—

‘‘(11) REBUTTABLE PRESUMPTION OF CONTROL OF PORTFOLIO

COMPANIES.—In addition to paragraph (3), a company or shareholder shall be presumed to control any other company if the

company or shareholder, directly or indirectly, or acting through

1 or more other persons, owns or controls 15 percent or more

of the equity capital of the other company pursuant to subparagraph (H) or (I) of section 4(k)(4) of the Bank Holding Company

Act of 1956 or rules adopted under section 122 of the GrammLeach-Bliley Act, if any, unless the company or shareholder

provides information acceptable to the Board to rebut this

presumption of control.’’.

VerDate 11-MAY-2000

15:09 Aug 30, 2000

Jkt 079139

PO 00102

Frm 00043

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL102.106

apps13

PsN: PUBL102

Case 2:24-cv-00569-TSZ

113 STAT. 1380

Document 199

Filed 08/17/26

Page 65 of 166

PUBLIC LAW 106–102—NOV. 12, 1999

(3) RULEMAKING REQUIRED CONCERNING DERIVATIVE TRANSACTIONS AND INTRADAY CREDIT.—Section 23A(f) of the Federal

Deadline.

12 USC 1831w.

Reserve Act (12 U.S.C. 371c(f)) (as so redesignated by paragraph

(1)(A) of this subsection) is amended by inserting at the end

the following new paragraph:

‘‘(3) RULEMAKING REQUIRED CONCERNING DERIVATIVE

TRANSACTIONS AND INTRADAY CREDIT.—

‘‘(A) IN GENERAL.—Not later than 18 months after the

date of the enactment of the Gramm-Leach-Bliley Act, the

Board shall adopt final rules under this section to address

as covered transactions credit exposure arising out of

derivative transactions between member banks and their

affiliates and intraday extensions of credit by member

banks to their affiliates.

‘‘(B) EFFECTIVE DATE.—The effective date of any final

rule adopted by the Board pursuant to subparagraph (A)

shall be delayed for such period as the Board deems necessary or appropriate to permit banks to conform their

activities to the requirements of the final rule without

undue hardship.’’.

Act Amendments of 1970 (12 U.S.C. 1971) is amended by adding

at the end the following: ‘‘For purposes of this section, a financial

subsidiary of a national bank engaging in activities pursuant to

section 5136A(a) of the Revised Statutes of the United States shall

be deemed to be a subsidiary of a bank holding company, and

not a subsidiary of a bank.’’.

(d) SAFETY AND SOUNDNESS FIREWALLS FOR STATE BANKS WITH

FINANCIAL SUBSIDIARIES.—

(1) FEDERAL DEPOSIT INSURANCE ACT.—The Federal Deposit

Insurance Act (12 U.S.C. 1811 et seq.) is amended by inserting

after section 45 (as added by section 112(b) of this title) the

following new section:

‘‘SEC. 46. SAFETY AND SOUNDNESS FIREWALLS

FINANCIAL SUBSIDIARIES OF BANKS.

APPLICABLE

‘‘(a) IN GENERAL.—An insured State bank may control or hold

an interest in a subsidiary that engages in activities as principal

that would only be permissible for a national bank to conduct

through a financial subsidiary if—

‘‘(1) the State bank and each insured depository institution

affiliate of the State bank are well capitalized (after the capital

deduction required by paragraph (2));

‘‘(2) the State bank complies with the capital deduction

and financial statement disclosure requirements in section

5136A(c) of the Revised Statutes of the United States;

‘‘(3) the State bank complies with the financial and operational safeguards required by section 5136A(d) of the Revised

Statutes of the United States; and

‘‘(4) the State bank complies with the amendments to sections 23A and 23B of the Federal Reserve Act made by section

121(b) of the Gramm-Leach-Bliley Act.

‘‘(b) PRESERVATION OF EXISTING SUBSIDIARIES.—Notwithstanding subsection (a), an insured State bank may retain control

of a subsi

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.