12 USC 1842 - Acquisition of bank shares or assets

1 So in original.

2 So in original. Probably should be “acquired”.

is a national banking association, or to the appropriate supervisory authority of the interested State, if the applicant company or any bank the voting shares or assets of which are sought to be acquired is a State bank, in order to provide for the submission of the views and recommendations of the Comptroller of the Currency or the State supervisory authority, as the case may be. The views and recommendations shall be submitted within thirty calendar days of the date on which notice is given, or within ten calendar days of such date if the Board advises the Comptroller of the Currency or the State supervisory authority that an emergency exists requiring expeditious action. If the thirty-day notice period applies and if the Comptroller of the Currency or the State supervisory authority so notified by the Board disapproves the application in writing within this period, the Board shall forthwith give written notice of that fact to the applicant. Within three days after giving such notice to the applicant, the Board shall notify in writing the applicant and the disapproving authority of the date for commencement of a hearing by it on such application. Any such hearing shall be commenced not less than ten nor more than thirty days after the Board has given written notice to the applicant of the action of the disapproving authority. The length of any such hearing shall be determined by the Board, but it shall afford all interested parties a reasonable opportunity to testify at such hearing. At the conclusion thereof, the Board shall, by order, grant or deny the application on the basis of the record made at such hearing. In the event of the failure of the Board to act on any application for approval under this section within the ninety-one-day period which begins on the date of submission to the Board of the complete record on that application, the application shall be deemed to have been granted. Notwithstanding any other provision of this subsection, if the Board finds that it must act immediately on any application for approval under this section in order to prevent the probable failure of a bank or bank holding company involved in a proposed acquisition, merger, or consolidation transaction, the Board may dispense with the notice requirements of this subsection, and if notice is given, the Board may request that the views and recommendations of the Comptroller of the Currency or the State supervisory authority, as the case may be, be submitted immediately in any form or by any means acceptable to the Board. If the Board has found pursuant to this subsection either that an emergency exists requiring expeditious action or that it must act immediately to prevent probable failure, the Board may grant or deny any such application without a hearing notwithstanding any recommended disapproval by the appropriate supervisory authority.

3 See References in Text note below.

of this title from the appropriate Federal or State chartering authority that a bank is in danger of closing, the Board may dispense with the notice and hearing requirements of paragraph (1) with respect to any application received by the Board relating to the acquisition of such bank, the bank holding company which controls such bank, or any other affiliated bank.

4 So in original. Probably should be “of”.

trade, unless it finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.

Editorial Notes

References in Text

Section 1823(f)(8)(D) of this title, referred to in subsec. (span)(2), which defined “bank in danger of closing”, was repealed by Puspan. L. 101–73, title II, § 217(5)(H), Aug. 9, 1989, 103 Stat. 257.

Amendments

2010—Subsec. (c)(7). Puspan. L. 111–203, § 604(d), added par. (7).

Subsec. (d)(1)(A). Puspan. L. 111–203, § 607(a), substituted “well capitalized and well managed” for “adequately capitalized and adequately managed”.

2006—Subsec. (d)(1)(D)(iii). Puspan. L. 109–173 substituted “Deposit Insurance Fund” for “appropriate deposit insurance fund”.

2004—Subsec. (span)(1). Puspan. L. 108–386 struck out “or a District bank” after “national banking association” in first sentence.

2001—Subsec. (c)(6). Puspan. L. 107–56 added par. (6).

1999—Subsec. (f). Puspan. L. 106–102, § 118, amended subsec. (f) generally, substituting “(f) [Repealed].” for provisions relating to authorized activities of qualified savings banks which are subsidiaries of bank holding companies.

Subsec. (g)(2). Puspan. L. 106–102, § 105, amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “A corporation organized as a holding company under this subsection shall be regulated on the same terms and be subject to the same limitations as any other holding company which controls a savings bank.”

1994—Subsec. (a). Puspan. L. 103–325, § 319(a), substituted “(B)” for “or (B)” and added subpar. (C).

Subsec. (d). Puspan. L. 103–328 amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “Notwithstanding any other provision of this section, no application (except an application filed as a result of a transaction authorized under section 1823(f) of this title) shall be approved under this section which will permit any bank holding company or any subsidiary thereof to acquire, directly or indirectly, any voting shares of, interest in, or all or substantially all of the assets of any additional bank located outside the State in which the operations of such bank holding company’s banking subsidiaries were principally conducted on July 1, 1966, or the date on which such company became a bank holding company, whichever is later, unless the acquisition of such shares or assets of a State bank by an out-of-State bank holding company is specifically authorized by the statute laws of the State in which such bank is located, by language to that effect and not merely by implication. For the purposes of this section, the State in which the operations of a bank holding company’s subsidiaries are principally conducted is that State in which total deposits of all such banking subsidiaries are largest.”

Subsec. (e). Puspan. L. 103–325, § 322(c)(1), struck out after first sentence “This subsection does not apply to a bank described in the last sentence of section 1841(c) of this title.”

1991—Subsec. (c). Puspan. L. 102–242, § 202(d), inserted heading, inserted par. (1) designation and heading, redesignated former pars. (1) and (2) as subpars. (A) and (B), respectively, inserted par. (2) designation and heading, added par. (3), and inserted par. (4) designation and heading.

Subsec. (c)(5). Puspan. L. 102–242, § 210, added par. (5).

1989—Subsec. (e). Puspan. L. 101–73, which directed the substitution of “an insured depository institution as defined in section 1813 of this title” for “an insured bank as defined in section 1813(h) of this title”, was executed by making the substitution for “an insured bank as such term is defined in section 1813(h) of this title”, as the probable intent of Congress.

1987—Puspan. L. 100–86, § 509(a), repealed Puspan. L. 97–320, § 141. See 1982 Amendment note below.

Subsec. (span). Puspan. L. 100–86, § 502(h)(1), designated existing provisions as par. (1) and added par. (2).

Subsec. (f). Puspan. L. 100–86, § 101(d), added subsec. (f).

Subsec. (g). Puspan. L. 100–86, § 107(span), added subsec. (g).

1982—Subsec. (d). Puspan. L. 97–320, § 118(c), inserted “(except an application filed as a result of a transaction authorized under section 1823(f) of this title)” after “no application”.

Puspan. L. 97–320, § 141(a)(4), which directed that, effective Oct. 13, 1986, the provisions of law amended by section 118 of Puspan. L. 97–320 shall be amended to read as they would without such amendment, was repealed by Puspan. L. 100–86, § 509(a). See Effective and Termination Dates of 1982 Amendment note and Extension of Emergency Acquisition and Net Worth Guarantee Provisions of Puspan. L. 97–320 note set out under section 1464 of this title.

Subsec. (e). Puspan. L. 97–320, § 404(d)(2), inserted “This subsection does not apply to a bank described in the last sentence of section 1841(c) of this title.”

1980—Subsec. (c). Puspan. L. 96–221, § 713, inserted provisions relating to applications for the formation of one-bank holding companies.

Subsec. (d). Puspan. L. 96–221, § 712(span), (c), temporarily designated existing provisions as par. (1) and added par. (2). See Termination Date of 1980 Amendment note set out below.

1977—Subsec. (a). Puspan. L. 95–188, § 301(a), authorized the Board to extend the time for disposition of acquired shares for not more than one year at a time and three years in the aggregate.

Subsec. (span). Puspan. L. 95–188, § 302, inserted provision for alternative submission of views and recommendations within ten calendar days of the date on which notice is given if the Board advises the appropriate supervisory authority that an emergency exists requiring expeditious action, substituted “shall, by order,” for “shall by order” and inserted provisions respecting procedure in emergencies or probable failures requiring immediate Board action and orders.

1970—Subsec. (a). Puspan. L. 91–607, § 102(1), inserted provision deeming acquisition of bank shares after Dec. 31, 1970, as not being in good faith in a fiduciary capacity if acquiring bank or company has sole discretionary authority to exercise voting rights with respect thereto, and provision for subsequent approval of retention of acquired shares upon application filed within 90 days of acquisition and disposition of shares or sole discretionary voting rights within two years after order in an event of disapproval.

Subsec. (span). Puspan. L. 91–607, § 102(2), inserted provision deeming an application for approval as granted where Board has not acted on application within 91 day period beginning on date of submission to Board of complete record on application.

Subsec. (e). Puspan. L. 91–607, § 102(3), added subsec. (e).

1966—Subsec. (a). Puspan. L. 89–485, § 7(a), (span), expanded the list of acts requiring prior approval of the Board by including therein any action that causes a bank to become a subsidiary of a bank holding company and substituted provisions excepting shares that are held under a trust that constitutes a company as defined in section 1841(span) of this title and excepting shares as provided in pars. (2) and (3) of section 1841(g) of this title from the effect of the clause lifting the requirements of prior Board approved in the case of shares acquired by a bank in good faith in a fiduciary capacity for provisions excepting shares held for the benefit of the shareholders of a bank from the effect of the clause.

Subsec. (c). Puspan. L. 89–485, § 7(c), inserted provision prohibiting any acquisition, merger, or consolidation that would result in a monopoly or would further any combination or conspiracy to monopolize the banking business in any part of the United States or would substantially lessen competition or in any manner be in restraint of trade unless the public interest clearly outweighed the anticompetitive effects and substituted provisions requiring the Board to take into consideration the financial and managerial resources and future prospects of the company or bank concerned and the convenience and needs of the community to be served for provisions requiring the Board to take into consideration the financial history of the company or bank concerned, its prospects, the character of its management, the needs of the community, and the public interest.

Subsec. (d). Puspan. L. 89–485, § 7(d), substituted provisions restricting expansion to state in which the operations of the bank holding company’s banking subsidiaries were principally conducted, defined, as that state in which total deposits of all such banking subsidiaries were largest, on July 1, 1966, or the date on which the company became a bank holding company, whichever is later, for provisions restricting expansion to state in which the holding company maintains its principal office and place of business or in which it conducts its principal operations.

Statutory Notes and Related Subsidiaries

Effective Date of 2010 Amendment

Amendment by section 604(d) of Puspan. L. 111–203 effective on the transfer date, see section 604(j) of Puspan. L. 111–203, set out as a note under section 1462 of this title.

Amendment by section 607(a) of Puspan. L. 111–203 effective on the transfer date, see section 607(c) of Puspan. L. 111–203, set out as a note under section 1831u of this title.

Effective Date of 2006 Amendment

Amendment by Puspan. L. 109–173 effective Mar. 31, 2006, see section 9(j) of Puspan. L. 109–173, set out as a note under section 24 of this title.

Effective Date of 2004 Amendment

Amendment by Puspan. L. 108–386 effective Oct. 30, 2004, and, except as otherwise provided, applicable with respect to fiscal year 2005 and each succeeding fiscal year, see sections 8(i) and 9 of Puspan. L. 108–386, set out as notes under section 321 of this title.

Effective Date of 2001 Amendment

Puspan. L. 107–56, title III, § 327(a)(2), Oct. 26, 2001, 115 Stat. 319, as amended by Puspan. L. 108–458, title VI, § 6202(i), Dec. 17, 2004, 118 Stat. 3746, provided that:

“The amendment made by paragraph (1) [amending this section] shall apply with respect to any application submitted to the Board of Governors of the Federal Reserve System under section 3 of the Bank Holding Company Act of 1956 [12 U.S.C. 1842] after December 31, [sic].”

Effective Date of 1999 Amendment

Amendment by Puspan. L. 106–102 effective 120 days after Nov. 12, 1999, see section 161 of Puspan. L. 106–102, set out as a note under section 24 of this title.

Effective Date of 1994 Amendment

Amendment by Puspan. L. 103–328 effective at end of 1-year period beginning on Sept. 29, 1994, see section 101(e) of Puspan. L. 103–328, set out as a note under section 1828 of this title.

Termination Date of 1980 Amendment

Amendment by Puspan. L. 96–221 repealed on Oct. 1, 1981, see section 712(c) of Puspan. L. 96–221, set out as a note under section 27 of this title.

Extension of Emergency Acquisition and Net Worth Guarantee Provisions of Puspan. L. 97–320

No amendment made by section 141(a) of Puspan. L. 97–320, set out as a note under section 1464 of this title, as in effect before Aug. 10, 1987, to any other provision of law to be deemed to have taken effect before such date and any such provision of law to be in effect as if no such amendment had been made before such date, see section 509(c) of Puspan. L. 100–86, set out as a note under section 1464 of this title.

No amendment made by section 141(a) of Puspan. L. 97–320, set out as a note under section 1464 of this title, as in effect on the day before Oct. 8, 1986, to any other provision of law to be deemed to have taken effect before such date and any such provision of law to be in effect as if no such amendment had taken effect before such date, see section 1(c) of Puspan. L. 99–452, set out as a note under section 1464 of this title.

Section 141(a) of Puspan. L. 97–320, set out as a note under section 1464 of this title, as in effect on the day after Aug. 27, 1986, applicable as if included in Puspan. L. 97–320 on Oct. 15, 1982, with no amendment made by such section to any other provision of law to be deemed to have taken effect before Aug. 27, 1986, and any such provision of law to be in effect as if no such amendment had taken effect before Aug. 27, 1986, see section 1(c) of Puspan. L. 99–400, set out as a note under section 1464 of this title.