# Case 2:24-cv-00569-TSZ > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Aftc%3Aca3c7f2b3ce3e505 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text Case 2:24-cv-00569-TSZ 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 v. 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 1. This Court has jurisdiction over this matter. 1 Case 2:24-cv-00569-TSZ 2. 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. 3. 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. 4. 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. 5. 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: A. “Billing Information” means payment information, such as a credit card, checking, savings, share or similar account, utility bill, mortgage loan account, or debit card. B. “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 2 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. C. “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: 1. 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. 2. 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. 3. 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. 4. In any communication using an interactive electronic medium, such as the Internet, mobile application, or software, the disclosure must be unavoidable. 5. 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. 3 Case 2:24-cv-00569-TSZ 6. 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. 7. The disclosure must not be contradicted or mitigated by, or inconsistent with, anything else in the communication. 8. 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. D. “Defendants” means the Individual Defendants and the Corporate Defendant, individually, collectively, or in any combination. E. 1. “Corporate Defendant” means Doxo, Inc. and its successors and assigns. 2. “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. F. “Material” means likely to affect a person’s choice of, or conduct regarding, goods or services. G. “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. 4 Case 2:24-cv-00569-TSZ Document 199 Filed 08/17/26 Page 5 of 166 ORDER I. 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: A. 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: 1. Using a biller’s website address in any search engine advertisement; or 2. 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; B. 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 5 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: A. The amount consumers will pay, including by representing an amount that excludes additional fees or other amounts Defendants Charge; B. The nature or purpose of any fee, Charge, or amount; or C. 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: A. 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 B. 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 6 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: A. The existence of a Negative Option Feature; B. Any term of the Negative Option Feature, including: C. 1. how and to what consumers are consenting; 2. any deadline to prevent or stop a Charge, or 3. the cancellation of the Negative Option Feature; or Cost. V. 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: A. 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; B. Each deadline (by date or frequency) by which the consumer must act to prevent or stop the Charges; and C. The amount (or range of costs) the consumer will be Charged and, if applicable, 7 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: A. At a minimum, Defendants must provide such simple mechanism through the same medium the consumer used to consent to the Negative Option Feature, and: B. For cancellation by Internet, the cancellation mechanism must be easy to find when the consumer seeks to cancel. 8 Case 2:24-cv-00569-TSZ C. 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: A. 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. B. 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: 1. 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). 2. 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). 3. 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). C. If Corporate Defendant fails to make any required payment when due under 9 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: A. 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. B. 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. C. 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. D. 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. E. All money received by the Commission pursuant to this Order may be deposited 10 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. X. 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, 11 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: A. 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. B. 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. C. 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: 12 Case 2:24-cv-00569-TSZ A. 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: 1. 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. B. 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: 1. 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. C. Corporate Defendant must submit to the Commission notice of the filing of any bankruptcy petition, insolvency proceeding, or similar proceeding by or against Corporate 13 Case 2:24-cv-00569-TSZ Document 199 Filed 08/17/26 Page 14 of 166 Defendant within 14 days of its filing. D. 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. E. 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: A. Accounting records showing the revenues from all goods or services sold; B. 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; C. Records of all consumer complaints and refund requests, whether received directly or indirectly, such as through a third party, and any response; D. Copies of all subpoenas and other communications with domestic law enforcement, if such communications relate to Corporate Defendant’s compliance with this 14 Case 2:24-cv-00569-TSZ Document 199 Filed 08/17/26 Page 15 of 166 Order; E. All custodial records for individuals with managerial responsibility for user interface; and F. 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: A. 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. B. 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. C. 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 15 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 16 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 17 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 18 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 18 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 18 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. 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; or ‘‘(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; or ‘‘(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.’’. (c) TECHNICAL AND CONFORMING AMENDMENTS.— (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. (C) An analysis and discussion of the effect of mergers 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). (c) AFFILIATIONS.— (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 (C) any State from restricting a change in the ownership of stock in an insurer, or a company formed for the 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. (C) LIMITATIONS.— (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); (C) do not relate to or directly or indirectly regulate 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); (C) it does not relate to securities investigations or 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; or (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; or ‘‘(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; (C) in clause (ii), by inserting after subclause (X) the 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. (c) DEFINITIONS.—For purposes of subsection (a), 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) 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; (C) is not supported by any form of credit enhancement, 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); or ‘‘(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. [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Aftc%3Aca3c7f2b3ce3e505. Public record. Not legal advice.