1. U.S. Code
  2. title 12
  3. chapter 18
  4. § 1867

Collapse to view only § 1867. Regulation and examination of bank service companies

§ 1861. Short title and definitions
(a) Short title
(b) DefinitionsFor the purpose of this chapter—
(1) the term “appropriate Federal banking agency” shall have the meaning provided in section 1813(q) of this title;
(2) the term “bank service company” means—
(A) any corporation—
(i) which is organized to perform services authorized by this chapter; and
(ii) all of the capital stock of which is owned by 1 or more insured depository institutions; and
(B) any limited liability company—
(i) which is organized to perform services authorized by this chapter; and
(ii) all of the members of which are 1 or more insured depository institutions.
(3) the term “Board” means the Board of Governors of the Federal Reserve System;
(4) the term “depository institution” means, except when such term appears in connection with the term “insured depository institution”, an insured bank, a savings association, a financial institution subject to examination by the appropriate Federal banking agency or the National Credit Union Administration Board, or a financial institution the accounts or deposits of which are insured or guaranteed under State law and are eligible to be insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration Board;
(5)Insured depository institution.—The terms “depository institution” and “savings association” have the same meanings as in section 1813 of this title;
(6) the term “invest” includes any advance of funds to a bank service company, whether by the purchase of stock, the making of a loan, or otherwise, except a payment for rent earned, goods sold and delivered, or services rendered prior to the making of such payment;
(7) the term “limited liability company” means any company, partnership, trust, or similar business entity organized under the law of a State (as defined in section 1813 of this title) which provides that a member or manager of such company is not personally liable for a debt, obligation, or liability of the company solely by reason of being, or acting as, a member or manager of such company;
(8) the term “principal investor” means the insured depository institution that has the largest dollar amount invested in the equity of a bank service company. In any case where two or more insured depository institutions have equal dollar amounts invested in a bank service company, the company shall, prior to commencing operations, select one of the insured depository institutions as its principal investor and shall notify the depository institution’s appropriate Federal banking agency of that choice within 5 business days of its selection; and
(9) the terms “State depository institution”, “Federal depository institution”, “State savings association” and “Federal savings association” have the same meanings as in section 1813 of this title.
(Pub. L. 87–856, § 1, Oct. 23, 1962, 76 Stat. 1132; Pub. L. 97–320, title VII, § 709, Oct. 15, 1982, 96 Stat. 1540; Pub. L. 97–457, § 32(a), Jan. 12, 1983, 96 Stat. 2511; Pub. L. 104–208, div. A, title II, § 2613(a), (b), Sept. 30, 1996, 110 Stat. 3009–476; Pub. L. 109–351, title VI, § 602(b)(1), Oct. 13, 2006, 120 Stat. 1979; Pub. L. 111–203, title III, § 357(1), (2), July 21, 2010, 124 Stat. 1547, 1548.)

CITE AS: 12 USC 1861

§ 1862. Amount of investment in bank service company

Notwithstanding any limitation or prohibition otherwise imposed by any provision of law exclusively relating to banks or savings associations, other than the limitation on the amount of investment by a Federal savings association contained in section 1464(c)(4)(B) of this title, an insured depository institution may invest not more than 10 per centum of paid-in and unimpaired capital and unimpaired surplus in a bank service company. No insured depository institution shall invest more than 5 per centum of its total assets in bank service companies.

(Pub. L. 87–856, § 2, Oct. 23, 1962, 76 Stat. 1132; Pub. L. 97–320, title VII, § 709, Oct. 15, 1982, 96 Stat. 1541; Pub. L. 104–208, div. A, title II, § 2613(c), Sept. 30, 1996, 110 Stat. 3009–477; Pub. L. 109–351, title VI, § 602(a), (b)(2), Oct. 13, 2006, 120 Stat. 1978, 1979.)

CITE AS: 12 USC 1862

§ 1863. Permissible bank service company activities for depository institutions

Without regard to the provisions of sections 1864 and 1865 of this title, an insured depository institution may invest in a bank service company that performs, and a bank service company may perform, the following services only for depository institutions: check and deposit sorting and posting, computation and posting of interest and other credits and charges, preparation and mailing of checks, statements, notices, and similar items, or any other clerical, bookkeeping, accounting, statistical, or similar functions performed for a depository institution.

(Pub. L. 87–856, § 3, Oct. 23, 1962, 76 Stat. 1132; Pub. L. 97–320, title VII, § 709, Oct. 15, 1982, 96 Stat. 1541; Pub. L. 104–208, div. A, title II, § 2613(d), Sept. 30, 1996, 110 Stat. 3009–477; Pub. L. 109–351, title VI, § 602(a), Oct. 13, 2006, 120 Stat. 1978.)

CITE AS: 12 USC 1863

§ 1864. Permissible bank service company activities for other persons
(a) Services permissible other than taking deposits
(b) Services to be performed in State where shareholders or members are located
Except as permissible under subsection (c), (d), or (e) or with the prior approval of the Board under section 1865(b) of this title in accordance with subsection (f) of this section—
(1) a bank service company shall not perform the services authorized by this section in any State other than that State in which its shareholders or members are located; and
(2) all insured bank shareholders or members of a bank service company shall be located in the same State.
(c) Performance where State bank or savings association is shareholder or member
(d) Performance where national bank or Federal savings association is shareholder or member
(e) Performance where State bank and national bank are shareholders or members
A bank service company may perform—
(1) only those services that each depository institution shareholder or member is otherwise authorized to perform under any applicable Federal or State law; and
(2) such services only at locations in a State in which each such shareholder or member is authorized to perform such services.
(f) Geographic location
(Pub. L. 87–856, § 4, Oct. 23, 1962, 76 Stat. 1132; Pub. L. 97–320, title VII, § 709, Oct. 15, 1982, 96 Stat. 1542; Pub. L. 97–457, § 32(b)(2), Jan. 12, 1983, 96 Stat. 2511; Pub. L. 104–208, div. A, title II, § 2613(e), Sept. 30, 1996, 110 Stat. 3009–477; Pub. L. 106–102, title I, § 102(b)(2), Nov. 12, 1999, 113 Stat. 1342; Pub. L. 109–351, title VI, § 602(b)(3), Oct. 13, 2006, 120 Stat. 1979.)

CITE AS: 12 USC 1864

§ 1865. Prior approval for investments in bank service companies
(a) Approval of Federal banking agency
(b) Approval of Board
(c) Considerations in determining approval
(d) Failure to act on application for approval
(Pub. L. 87–856, § 5, Oct. 23, 1962, 76 Stat. 1133; Pub. L. 95–630, title III, § 308, Nov. 10, 1978, 92 Stat. 3677; Pub. L. 97–320, title VII, § 709, Oct. 15, 1982, 96 Stat. 1542; Pub. L. 103–325, title III, § 323, Sept. 23, 1994, 108 Stat. 2227; Pub. L. 104–208, div. A, title II, § 2613(f), Sept. 30, 1996, 110 Stat. 3009–478; Pub. L. 109–351, title VI, § 602(b)(4), Oct. 13, 2006, 120 Stat. 1980.)

CITE AS: 12 USC 1865

§ 1866. Services to nonstockholders or nonmembers
No bank service company shall unreasonably discriminate in the provision of any services authorized under this chapter to any depository institution that does not own stock in or is not a member of the service company on the basis of the fact that such depository institution is in competition with an institution that owns stock in or is a member of the bank service company, except that—
(1) it shall not be considered unreasonable discrimination for a bank service company to provide services to a nonstockholding or nonmember institution only at a price that fully reflects all of the costs of offering those services, including the cost of capital and a reasonable return thereon; and
(2) a bank service company may refuse to provide services to a nonstockholding or nonmember institution if comparable services are available from another source at competitive overall costs, or if the providing of services would be beyond the practical capacity of the service company.
(Pub. L. 87–856, § 6, Oct. 23, 1962, as added Pub. L. 97–320, title VII, § 709, Oct. 15, 1982, 96 Stat. 1543; amended Pub. L. 104–208, div. A, title II, § 2613(g), Sept. 30, 1996, 110 Stat. 3009–478.)

CITE AS: 12 USC 1866

§ 1867. Regulation and examination of bank service companies
(a) Principal investor
(b) Applicability of section 1818 of this title
(c) Services performed by contract or otherwise
Notwithstanding subsection (a) of this section, whenever a depository institution that is regularly examined by an appropriate Federal banking agency, or any subsidiary or affiliate of such a depository institution that is subject to examination by that agency, causes to be performed for itself, by contract or otherwise, any services authorized under this chapter, whether on or off its premises—
(1) such performance shall be subject to regulation and examination by such agency to the same extent as if such services were being performed by the depository institution itself on its own premises, and
(2) the depository institution shall notify each such agency of the existence of the service relationship within thirty days after the making of such service contract or the performance of the service, whichever occurs first.
(d) Issuance of regulations and orders
(Pub. L. 87–856, § 7, Oct. 23, 1962, as added Pub. L. 97–320, title VII, § 709, Oct. 15, 1982, 96 Stat. 1543; amended Pub. L. 97–457, § 32(b)(1), Jan. 12, 1983, 96 Stat. 2511; Pub. L. 104–208, div. A, title II, § 2613(h), Sept. 30, 1996, 110 Stat. 3009–478; Pub. L. 109–351, title VI, § 602(b)(5), Oct. 13, 2006, 120 Stat. 1980; Pub. L. 111–203, title III, § 357(3), July 21, 2010, 124 Stat. 1548.)

CITE AS: 12 USC 1867