II 

110TH CONGRESS 

1ST SESSION S. 1356 

To amend the Federal Deposit Insurance Act to establish industrial bank 

holding company regulation, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 10, 2007 

Mr. BROWN (for himself, Mr. JOHNSON, Mr. ALLARD, and Mr. FEINGOLD) 

introduced the following bill; which was read twice and referred to the 

Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend the Federal Deposit Insurance Act to establish 

industrial bank holding company regulation, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Industrial Bank Hold5 ing Company Act of 2007’’. 

6 SEC. 2. INDUSTRIAL BANK HOLDING COMPANY REGULA7 TION. 

8 (a) DEFINITIONS.— 

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1 (1) INDUSTRIAL BANK.—Section 3(a) of the 

2 Federal Deposit Insurance Act (12 U.S.C. 1813(a)) 

3 is amended by adding at the end the following new 

4 paragraph: 

5 ‘‘(4) INDUSTRIAL BANK.—The term ‘industrial 

6 bank’ means any insured State bank that is an in7 dustrial bank, industrial loan company, or other in8 stitution that is excluded, pursuant to section 

9 2(c)(2)(H) of the Bank Holding Company Act of 

10 1956, from the definition of the term ‘bank’ for pur11 poses of such Act.’’. 

12 (2) INDUSTRIAL BANK HOLDING COMPANY.— 

13 Section 3(w) of the Federal Deposit Insurance Act 

14 (12 U.S.C. 1813(w)) is amended by adding at the 

15 end the following new paragraphs: 

16 ‘‘(8) INDUSTRIAL BANK HOLDING COMPANY.— 

17 The term ‘industrial bank holding company’ means 

18 any company that— 

19 ‘‘(A) controls (as determined by the Cor20 poration pursuant to section 2(a) of the Bank 

21 Holding Company Act of 1956), directly or in22 directly, any industrial bank; and 

23 ‘‘(B) is not— 

24 ‘‘(i) 1 or more of the following: a bank 

25 holding company, a savings and loan holdmstockstill on PROD1PC66 with BILLS

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1 ing company, a company that is subject to 

2 the Bank Holding Company Act of 1956 

3 pursuant to section 8(a) of the Inter4 national Banking Act of 1978, or a holding 

5 company regulated by the Securities and 

6 Exchange Commission pursuant to section 

7 240.15c3–1(a)(7) of title 17 of the Code of 

8 Federal Regulations (as in effect on Janu9 ary 29, 2007); or 

10 ‘‘(ii) controlled by a company de11 scribed in clause (i). 

12 ‘‘(9) CAPITAL TERMS RELATING TO INDUSTRIAL

13 BANK HOLDING COMPANIES.— 

14 ‘‘(A) ADEQUATELY CAPITALIZED.—With 

15 respect to an industrial bank holding company, 

16 the term ‘adequately capitalized’ means a level 

17 of capitalization which meets or exceeds all ap18 plicable Federal regulatory capital standards. 

19 ‘‘(B) WELL CAPITALIZED.—With respect 

20 to an industrial bank holding company, the 

21 term ‘well capitalized’ means a level of capital22 ization which meets or exceeds the required 

23 capital levels for well capitalized industrial bank 

24 holding companies established by the Corpora25 tion.’’. 

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1 (3) TECHNICAL AND CONFORMING AMEND2 MENTS TO OTHER DEFINITIONS.— 

3 (A) APPROPRIATE FEDERAL BANKING

4 AGENCY.—Section 3(q)(3) of the Federal De5 posit Insurance Act (12 U.S.C. 1813(q)(3)) is 

6 amended— 

7 (i) by striking ‘‘or a foreign’’ and in8 serting ‘‘, any foreign’’; and 

9 (ii) by inserting ‘‘, and any industrial 

10 bank holding company and any subsidiary 

11 of an industrial bank holding company 

12 (other than a bank)’’ after ‘‘insured 

13 branch’’. 

14 (B) DEPOSITORY INSTITUTION HOLDING

15 COMPANY.—Section 3(w)(1) of the Federal De16 posit Insurance Act (12 U.S.C. 1813(w)(1)) is 

17 amended— 

18 (i) by striking ‘‘or a savings’’ and in19 serting ‘‘, any savings’’; and 

20 (ii) by inserting ‘‘, and any industrial 

21 bank holding company’’ before the period 

22 at the end. 

23 (b) INDUSTRIAL BANK HOLDING COMPANY REG24 ISTRATION AND OWNERSHIP.—The Federal Deposit Inmstockstill on PROD1PC66 with BILLS

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1 surance Act (12 U.S.C. 1811 et seq.) is amended by add2 ing at the end the following new section: 

3 ‘‘SEC. 51. INDUSTRIAL BANK HOLDING COMPANY REGULA4 TION. 

5 ‘‘(a) ACQUISITION OF INDUSTRIAL BANK SHARES OR

6 ASSETS.—Section 3 of the Bank Holding Company Act 

7 of 1956 (other than section 3(c)(3)(B) of that Act) shall 

8 apply to any company that is or would become an indus9 trial bank holding company in the same manner as such 

10 section applies to a company that is or would become a 

11 bank holding company, except that for purposes of apply12 ing this subsection— 

13 ‘‘(1) any reference to a ‘bank holding company’ 

14 in such section 3 shall be deemed to be a reference 

15 to an ‘industrial bank holding company’; 

16 ‘‘(2) any reference to a ‘bank’ in such section 

17 3 shall be deemed to be a reference to an ‘industrial 

18 bank’; 

19 ‘‘(3) any reference to the ‘Board’ in such sec20 tion 3 shall be deemed to be a reference to the Cor21 poration; 

22 ‘‘(4) any reference to the ‘Bank Holding Com23 pany Act Amendments of 1970’ in such section 3 

24 shall be deemed to be a reference to the ‘Industrial 

25 Bank Holding Company Act of 2007’; 

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1 ‘‘(5) any reference to a ‘home State’ in such 

2 section 3 shall be deemed to be a reference to— 

3 ‘‘(A) with respect to an industrial bank 

4 holding company, the State in which the total 

5 deposits of all banking subsidiaries of such 

6 company were the largest on the later of— 

7 ‘‘(i) January 28, 2007; or 

8 ‘‘(ii) the date on which the company 

9 becomes an industrial bank holding com10 pany under this section; and 

11 ‘‘(B) with respect to an industrial bank, 

12 the home State of the bank as determined 

13 under section 44(g); 

14 ‘‘(6) any reference to a ‘host State’ in such sec15 tion 3 shall be deemed to be a reference to— 

16 ‘‘(A) with respect to an industrial bank 

17 holding company, a State, other than the home 

18 State of the company, in which the company 

19 controls, or seeks to control, an industrial bank 

20 subsidiary; and 

21 ‘‘(B) with respect to an industrial bank, 

22 the host State of the bank as determined under 

23 section 44(g); 

24 ‘‘(7) any reference to an ‘out-of-State bank 

25 holding company’ in such section 3 shall be deemed 

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1 to be a reference to, with respect to any State, an 

2 industrial bank holding company whose home State 

3 is another State; and 

4 ‘‘(8) any reference to an ‘out-of-State bank’ in 

5 such section 3 shall be deemed to be a reference to, 

6 with respect to any State, an industrial bank whose 

7 home State is another State. 

8 ‘‘(b) APPLICATION PROCESS.—An application filed 

9 under subsection (a) to acquire control of an industrial 

10 bank shall be treated as an application for a deposit facil11 ity for purposes of this Act and any other Federal law. 

12 ‘‘(c) REGISTRATION.— 

13 ‘‘(1) IN GENERAL.—Each industrial bank hold14 ing company shall register with the Corporation on 

15 forms prescribed by the Corporation before the end 

16 of the 180-day period beginning on the later of— 

17 ‘‘(A) the date the company becomes an in18 dustrial bank holding company; or 

19 ‘‘(B) the date of the enactment of the In20 dustrial Bank Holding Company Act of 2007. 

21 ‘‘(2) INFORMATION TO BE INCLUDED.—Each 

22 registration submitted under paragraph (1) shall in23 clude such information, under oath, with respect to 

24 the financial condition, ownership, operations, man25 agement, and intercompany relationships of the inmstockstill on PROD1PC66 with BILLS

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1 dustrial bank holding company and subsidiaries of 

2 such holding company, and other factors (including 

3 information described in subsection (d)(1)(C)), as 

4 the Corporation may determine to be appropriate to 

5 carry out the purposes of this section. 

6 ‘‘(3) EXTENSION OF TIME FOR SUBMITTING

7 COMPLETE INFORMATION.—Upon application by an 

8 industrial bank holding company and subject to such 

9 requirements, factors, and evidence as the Corpora10 tion may require, the Corporation may extend the 

11 period described in paragraph (1) within which such 

12 company shall register and file the requisite infor13 mation. 

14 ‘‘(d) REPORTS AND EXAMINATIONS.— 

15 ‘‘(1) REPORTS.— 

16 ‘‘(A) REPORTS REQUIRED.—Each indus17 trial bank holding company and each subsidiary 

18 of an industrial bank holding company, other 

19 than an industrial bank, shall file with the Cor20 poration such reports as may be required by the 

21 Corporation. 

22 ‘‘(B) FORM AND MANNER.—Reports filed 

23 under subparagraph (A) shall be made under 

24 oath and shall be in such form and for such pe25 riods, as the Corporation may prescribe. 

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1 ‘‘(C) INFORMATION.—Each report filed 

2 under subparagraph (A) shall contain such in3 formation as the Corporation may require con4 cerning— 

5 ‘‘(i) the operations of the industrial 

6 bank holding company and the holding 

7 company’s subsidiaries; 

8 ‘‘(ii) the financial condition of the in9 dustrial bank holding company and such 

10 subsidiaries, together with information on 

11 systems maintained within the holding 

12 company or within any such subsidiary for 

13 monitoring and controlling financial and 

14 operating risks, and transactions with in15 sured depository institution subsidiaries of 

16 the holding company; 

17 ‘‘(iii) compliance by the industrial 

18 bank holding company and the holding 

19 company’s subsidiaries with all applicable 

20 Federal and State law; and 

21 ‘‘(iv) such other information as the 

22 Corporation may require. 

23 ‘‘(D) ACCEPTANCE OF EXISTING RE24 PORTS.—For purposes of this paragraph, the 

25 Corporation may accept reports that an indusmstockstill on PROD1PC66 with BILLS

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1 trial bank holding company or any subsidiary of 

2 such company has provided or has been re3 quired to provide to any other Federal or State 

4 supervisor or to any appropriate self-regulatory 

5 organization. 

6 ‘‘(2) EXAMINATIONS.— 

7 ‘‘(A) IN GENERAL.—Each industrial bank 

8 holding company and each subsidiary of each 

9 such holding company (other than an industrial 

10 bank) shall be subject to such examinations by 

11 the Corporation as the Corporation may pre12 scribe for purposes of this section. 

13 ‘‘(B) FURNISHING REPORTS TO OTHER

14 AGENCIES.—Examination and other reports 

15 made or received under this section may be fur16 nished by the Corporation to any other appro17 priate Federal agency or any appropriate State 

18 bank supervisor or other State financial super19 visory agency. 

20 ‘‘(C) USE OF REPORTS FROM OTHER

21 AGENCIES.—The Corporation may use, for the 

22 purposes of this subsection, reports of examina23 tion made by any other appropriate Federal 

24 agency, any appropriate State bank supervisor, 

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1 ity with respect to any industrial bank holding 

2 company or subsidiary of any such holding com3 pany, to the extent the Corporation may deter4 mine such use to be feasible for such purposes. 

5 ‘‘(3) CAPITAL.— 

6 ‘‘(A) IN GENERAL.—The Corporation may 

7 not, by regulation, guideline, order, or other8 wise, prescribe or impose any capital or capital 

9 adequacy rules, guidelines, standards, or re10 quirements on any functionally regulated affil11 iate (as defined in section 45) of any depository 

12 institution that is controlled by an industrial 

13 bank holding company that— 

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

15 and 

16 ‘‘(ii) is— 

17 ‘‘(I) in compliance with the appli18 cable capital requirements of the ap19 propriate Federal supervisory agency 

20 of the affiliate (including the Securi21 ties and Exchange Commission or 

22 State insurance authority); 

23 ‘‘(II) properly registered as an 

24 investment adviser under the Investmstockstill on PROD1PC66 with BILLS

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1 ment Advisers Act of 1940, or with 

2 any State; or 

3 ‘‘(III) is licensed as an insurance 

4 agent with the appropriate State in5 surance authority. 

6 ‘‘(B) RULE OF CONSTRUCTION.—Subpara7 graph (A) shall not be construed as preventing 

8 the Corporation from imposing capital or cap9 ital adequacy rules, guidelines, standards, or re10 quirements with respect to— 

11 ‘‘(i) activities of a registered invest12 ment adviser other than with respect to in13 vestment advisory activities or activities in14 cidental to investment advisory activities; 

15 or 

16 ‘‘(ii) activities of a licensed insurance 

17 agent other than insurance agency activi18 ties or activities incidental to insurance 

19 agency activities. 

20 ‘‘(e) ACCESS TO INFORMATION.— 

21 ‘‘(1) INFORMATION PROVIDED BY CORPORA22 TION.—Any confidential supervisory information, in23 cluding examination or other reports, pertaining to 

24 an industrial bank furnished by the Corporation to 

25 any other Federal agency or any appropriate State 

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1 supervisory agency shall remain confidential unless 

2 the Corporation, in writing, otherwise consents. 

3 ‘‘(2) DEFERENCE TO DEPOSITORY INSTITUTION

4 EXAMINATIONS.—Any appropriate Federal super5 visory agency of a holding company of an industrial 

6 bank shall, to the fullest extent possible, forego any 

7 examination of any depository institution subsidiary 

8 of the holding company and use the reports of ex9 aminations of the institution made by the appro10 priate Federal banking agency and the appropriate 

11 State bank supervisor in lieu of a direct examina12 tion. 

13 ‘‘(3) INFORMATION TO BE PROVIDED TO COR14 PORATION.— 

15 ‘‘(A) REQUEST TO AGENCY.—Upon request 

16 by the Corporation, an appropriate Federal su17 pervisory agency may provide to the Corpora18 tion information regarding the condition of an 

19 industrial bank, any holding company that con20 trols such industrial bank, or any other affiliate 

21 of any such holding company that is necessary 

22 to assess risk to the industrial bank. 

23 ‘‘(B) AVAILABILITY FROM HOLDING COM24 PANY DIRECTLY.—Notwithstanding section 45, 

25 section 115 of the Gramm-Leach-Bliley Act, or 

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1 any other provision of law (including any regu2 lation), if the information requested under sub3 paragraph (A) is not provided to the Corpora4 tion, and the information is necessary to assess 

5 risk to the industrial bank, the Corporation 

6 may require the holding company or affiliate re7 ferred to in such subparagraph with respect to 

8 such bank to provide such information to the 

9 Corporation. 

10 ‘‘(4) EXAMINATIONS BY CORPORATION.— 

11 ‘‘(A) IN GENERAL.—Subject to subpara12 graph (B) and notwithstanding section 45, sec13 tion 115 of the Gramm-Leach-Bliley Act, or 

14 any other provision of law (including any regu15 lation), no law shall be construed as preventing 

16 the Corporation from examining an affiliate of 

17 an industrial bank pursuant to paragraph (2), 

18 (3), or (4) of section 10(b), as may be nec19 essary to disclose fully the relationship between 

20 the industrial bank and the affiliate, and the ef21 fect of such relationship on the industrial bank, 

22 if the Corporation finds such examination nec23 essary to determine the condition of an indus24 trial bank. 

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1 ‘‘(B) FUNCTIONALLY REGULATED AFFILI2 ATES.—Before the Corporation may examine 

3 any affiliate of an industrial bank that is— 

4 ‘‘(i) a broker, a dealer, an investment 

5 company, or an investment advisor, or 

6 ‘‘(ii) an entity that is subject to con7 solidated supervision by the Securities and 

8 Exchange Commission, other than a depos9 itory institution, 

10 the Corporation shall request the Commission 

11 to provide the information that the Corporation 

12 is seeking to obtain through examination and 

13 may proceed with the examination only if the 

14 requested information is not provided by the 

15 Commission in a timely manner. 

16 ‘‘(f) LIMITATION ON CONTROL.— 

17 ‘‘(1) IN GENERAL.—Except as provided in para18 graph (3) or (4), no industrial bank may be con19 trolled, directly or indirectly, by a commercial firm. 

20 ‘‘(2) COMMERCIAL FIRM DEFINED.—For pur21 poses of this section, the term ‘commercial firm’ 

22 means any entity at least 15 percent of the annual 

23 gross revenues of which on a consolidated basis, in24 cluding all affiliates of the entity, were derived from 

25 engaging, on an on-going basis, in activities that are 

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1 not financial in nature or incidental to a financial 

2 activity during at least 3 of the prior 4 calendar 

3 quarters, as determined by the Corporation in ac4 cordance with regulations which the Corporation 

5 shall prescribe. 

6 ‘‘(3) PRE-2003 EXCLUSIONS.— 

7 ‘‘(A) GRANDFATHERED INSTITUTIONS.— 

8 Paragraph (1) shall not apply with respect to 

9 any industrial bank— 

10 ‘‘(i) which became an insured deposi11 tory institution before October 1, 2003, or 

12 pursuant to an application for deposit in13 surance which was approved by the Cor14 poration before such date; and 

15 ‘‘(ii) with respect to which there is no 

16 change in control, directly or indirectly, of 

17 the bank after September 30, 2003, that 

18 requires a registration under this section 

19 or an application under section 7(j) or 

20 18(c), section 3 of the Bank Holding Com21 pany Act of 1956, or section 10 of the 

22 Home Owners’ Loan Act, except a direct 

23 or indirect change of control in which— 

24 ‘‘(I) immediately prior to such 

25 change in control neither the ultimate 

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1 acquiring holding company nor the ul2 timate acquired holding company is a 

3 commercial firm; 

4 ‘‘(II) immediately after such 

5 change of control the resulting ulti6 mate holding company is not a com7 mercial firm; and 

8 ‘‘(III) the resulting ultimate 

9 holding company is subject to consoli10 dated supervision by the Office of 

11 Thrift Supervision or a holding com12 pany regulated by the Securities and 

13 Exchange Commission pursuant to 

14 section 240.15c3–1(a)(7) of title 17 of 

15 the Code of Federal Regulations (as 

16 in effect on January 29, 2007). 

17 ‘‘(B) CORPORATE REORGANIZATIONS PER18 MITTED.—The acquisition of direct or indirect 

19 control of the industrial bank referred to in 

20 subparagraph (A)(ii) shall not be treated as a 

21 ‘change in control’ for purposes of such sub22 paragraph if— 

23 ‘‘(i) the company acquiring control is 

24 itself directly or indirectly controlled by a 

25 company that was an affiliate of such bank 

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1 on the date referred to in such subpara2 graph, and remains an affiliate at all times 

3 after such date; and 

4 ‘‘(ii) the transaction through which 

5 the company acquired control of the indus6 trial bank constituted solely a corporate re7 organization of a company that controlled 

8 the industrial bank on the date referred to 

9 in such subparagraph. 

10 ‘‘(4) PRE-2007 EXCLUSIONS.— 

11 ‘‘(A) GRANDFATHERED COMMERCIAL

12 FIRMS.—Paragraph (1) shall not apply to any 

13 commercial firm— 

14 ‘‘(i) which became a holding company 

15 of an industrial bank by virtue of acquiring 

16 control of an industrial bank on or after 

17 October 1, 2003, and before January 29, 

18 2007; 

19 ‘‘(ii) which does not acquire control of 

20 any other depository institution after Jan21 uary 28, 2007; 

22 ‘‘(iii) with respect to which there is no 

23 change in control, directly or indirectly, of 

24 any depository institution subsidiary after 

25 January 28, 2007, that requires a registramstockstill on PROD1PC66 with BILLS

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1 tion under this section or an application 

2 under section 7(j) or 18(c), section 3 of 

3 the Bank Holding Company Act of 1956, 

4 or section 10 of the Home Owners’ Loan 

5 Act; and 

6 ‘‘(iv) each industrial bank subsidiary 

7 of which remains in compliance with the 

8 limitations contained in subparagraph (B). 

9 ‘‘(B) ACTIVITY AND BRANCHING LIMITA10 TIONS.—An industrial bank subsidiary of a 

11 commercial firm described in clauses (i), (ii) 

12 and (iii) of subparagraph (A) is in compliance 

13 with the requirements of this subparagraph for 

14 purposes of subparagraph (A)(iv) so long as the 

15 industrial bank— 

16 ‘‘(i) engages only in activities in which 

17 the industrial bank was engaged on Janu18 ary 28, 2007; and 

19 ‘‘(ii) does not acquire, establish, or 

20 operate any branch, deposit production of21 fice, loan production office, automated tell22 er machine, or remote service unit in any 

23 State other than the home State of the 

24 bank or any host State in which such bank 

25 operated branches on January 28, 2007. 

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1 ‘‘(C) CORPORATE REORGANIZATIONS PER2 MITTED.—The acquisition of direct or indirect 

3 control of a depository institution subsidiary re4 ferred to in subparagraph (A)(iii) shall not be 

5 treated as a ‘change in control’ for purposes of 

6 such subparagraph if— 

7 ‘‘(i) the company acquiring control is 

8 itself directly or indirectly controlled by a 

9 company that was an affiliate of such sub10 sidiary on the date referred to in such sub11 paragraph, and remains an affiliate at all 

12 times after such date; and 

13 ‘‘(ii) the transaction through which 

14 the company acquired control of the depos15 itory institution constituted solely a cor16 porate reorganization of a company that 

17 controlled the depository institution on the 

18 date referred to in such subparagraph. 

19 ‘‘(g) PROCEDURES AND TIMING FOR TERMINATION

20 OF ACTIVITIES OR DIVESTITURE.— 

21 ‘‘(1) TRANSITION PROVISION.— 

22 ‘‘(A) IN GENERAL.—Any company that 

23 fails to comply with the provisions of subsection 

24 (f) shall divest its ownership or control of each 

25 industrial bank subsidiary of the company not 

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1 later than the end of the 2-year period begin2 ning on the first date that the company ceased 

3 to comply with subsection (f). 

4 ‘‘(B) EXTENSION OF TIME PERIOD.— 

5 ‘‘(i) IN GENERAL.—Upon application 

6 by a holding company that controls an in7 dustrial bank, the appropriate Federal su8 pervisory agency of such holding company 

9 may extend the 2-year period referred to in 

10 subparagraph (A) with respect to such 

11 company for not more than 1 year if, in 

12 such agency’s judgment, such an extension 

13 would not be detrimental to the public in14 terest. 

15 ‘‘(ii) FACTORS.—In making any deci16 sion to grant an extension under clause (i) 

17 to a holding company of an industrial 

18 bank, the appropriate Federal supervisory 

19 agent of such holding company shall con20 sider whether— 

21 ‘‘(I) the company has made a 

22 good faith effort to divest such inter23 ests; and 

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1 ‘‘(II) such extension is necessary 

2 to avert substantial loss to the com3 pany. 

4 ‘‘(2) CONDITIONS BEFORE DIVESTITURE.—Dur5 ing the 2-year period referred to in paragraph 

6 (1)(A) with respect to any company and any exten7 sion of such period, the appropriate Federal super8 visory agency may impose any conditions or restric9 tions on the company or any subsidiary of the com10 pany (other than a bank), including restricting or 

11 prohibiting transactions between the company or 

12 subsidiary and any depository institution subsidiary 

13 of the company, as are appropriate under the cir14 cumstances. 

15 ‘‘(3) TERMINATION OF ACTIVITIES OR DIVESTI16 TURE OF NONBANK SUBSIDIARIES CONSTITUTING

17 SERIOUS RISK.— 

18 ‘‘(A) IN GENERAL.—Notwithstanding any 

19 other provision of this section, the appropriate 

20 Federal supervisory agency may, whenever such 

21 agency has reasonable cause to believe that the 

22 continuation by a holding company of an indus23 trial bank of any activity or of ownership or 

24 control of any nonbank subsidiary of such hold25 ing company, other than a nonbank subsidiary 

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1 of a depository institution, constitutes a serious 

2 risk to the financial safety, soundness, or sta3 bility of a depository institution subsidiary of 

4 the holding company and is inconsistent with 

5 sound banking principles or with the purposes 

6 of this section, at the election of the holding 

7 company— 

8 ‘‘(i) order such holding company or 

9 any such nonbank subsidiary, after due no10 tice and opportunity for hearing, and after 

11 considering the views of the appropriate 

12 Federal banking agency and, if applicable, 

13 appropriate State bank supervisor, to ter14 minate such activities or to terminate 

15 (within 120 days or such longer period as 

16 the appropriate Federal supervisory agency 

17 may direct in unusual circumstances) the 

18 ownership or control by such holding com19 pany or nonbank subsidiary of any such 

20 depository institution subsidiary either by 

21 sale or by distribution of the shares of the 

22 depository institution subsidiary, in accord23 ance with subparagraph (B), to the share24 holders of the holding company of the in25 dustrial bank; or 

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1 ‘‘(ii) order the holding company of the 

2 industrial bank, after due notice and op3 portunity for hearing, and after consulta4 tion with the appropriate State bank su5 pervisor for the industrial bank, to termi6 nate (within 120 days or such longer pe7 riod as the appropriate Federal supervisory 

8 agency may direct) the ownership or con9 trol of any such industrial bank by such 

10 company. 

11 ‘‘(B) PRO RATA DISTRIBUTION.—Any dis12 tribution to shareholders referred to in clause 

13 (i) shall be pro rata with respect to all of the 

14 shareholders of the distributing company, and 

15 such company shall not make any charge to any 

16 shareholder in connection with such distribu17 tion. 

18 ‘‘(4) FOREIGN BANK OWNERSHIP.—After Janu19 ary 28, 2007, no foreign bank may acquire, directly 

20 or indirectly, control of an industrial bank unless the 

21 Board of Governors of the Federal Reserve System 

22 has determined, by order, in connection with the 

23 change in control or acquisition of the industrial 

24 bank and after consultation with the Corporation, 

25 that the foreign bank is subject to comprehensive sumstockstill on PROD1PC66 with BILLS

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1 pervision or regulation on a consolidated basis by 

2 the appropriate authorities in the bank’s home coun3 try in accordance with the standard in section 

4 3(c)(3)(B) of the Bank Holding Company Act of 

5 1956. 

6 ‘‘(5) HOLDING COMPANY RESPONSIBILITY.— 

7 ‘‘(A) SOURCE OF STRENGTH.—Notwith8 standing section 45, a holding company of an 

9 industrial bank— 

10 ‘‘(i) shall serve as a source of finan11 cial and managerial strength to the sub12 sidiary banks of such holding company; 

13 and 

14 ‘‘(ii) shall not conduct the operations 

15 of the holding company in an unsafe or un16 sound manner. 

17 ‘‘(B) IMPLEMENTATION.—The appropriate 

18 Federal supervisory agency of the holding com19 pany of an industrial bank shall implement the 

20 requirements under subparagraph (A). 

21 ‘‘(h) ADMINISTRATIVE PROVISIONS.— 

22 ‘‘(1) AGENT FOR SERVICE OF PROCESS.—The 

23 Corporation may require any industrial bank holding 

24 company, or persons connected with such holding 

25 company if it is not a corporation, to execute and 

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1 file a prescribed form of irrevocable appointment of 

2 agent for service of process. 

3 ‘‘(2) RELEASE FROM REGISTRATION.—The Cor4 poration may at any time, upon the Corporation’s 

5 own motion or upon application, release a registered 

6 industrial bank holding company from any registra7 tion previously made by such company, if the Cor8 poration determines that such company no longer 

9 controls any industrial bank. 

10 ‘‘(i) DEFINITIONS.—For purposes of this section, the 

11 following definitions shall apply: 

12 ‘‘(1) APPROPRIATE FEDERAL SUPERVISORY

13 AGENCY.—The term ‘appropriate Federal super14 visory agency’ means, with respect to a company 

15 that controls an industrial bank— 

16 ‘‘(A) the Corporation, in the case of a com17 pany that is an industrial bank holding com18 pany; 

19 ‘‘(B) the Board of Governors of the Fed20 eral Reserve System, in the case of a company 

21 that is a bank holding company or that is sub22 ject to the Bank Holding Company Act of 1956 

23 pursuant to section 8(a) of the International 

24 Banking Act of 1978; 

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1 ‘‘(C) the Office of Thrift Supervision, in 

2 the case of a company that is a savings and 

3 loan holding company; and 

4 ‘‘(D) the Securities and Exchange Com5 mission, in the case of a company that is regu6 lated by the Commission pursuant to section 

7 240.15c3–1(a)(7) of title 17 of the Code of 

8 Federal Regulations (as in effect on January 

9 29, 2007). 

10 ‘‘(2) RULE OF CONSTRUCTION.—Under the def11 inition of the term ‘appropriate Federal supervisory 

12 agency’ in paragraph (1), more than 1 agency may 

13 be an appropriate Federal supervisory agency with 

14 respect to any given company that controls an indus15 trial bank.’’. 

16 (c) ENFORCEMENT.— 

17 (1) Section 8(b) of the Federal Deposit Insur18 ance Act (12 U.S.C. 1818(b)) is amended by adding 

19 at the end the following new paragraph: 

20 ‘‘(11) INDUSTRIAL BANK HOLDING COMPA21 NIES.—This subsection and subsections (c) through 

22 (s) and subsection (u) of this section shall apply to 

23 any industrial bank holding company, and to any 

24 subsidiary (other than a bank) of an industrial bank 

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1 holding company in the same manner as such sub2 sections apply to State nonmember insured banks.’’. 

3 (2) Section 8(h)(2) of the Federal Deposit In4 surance Act (12 U.S.C. 1818(h)(2)) is amended by 

5 striking ‘‘(2) Any party to’’ and inserting ‘‘(2) Any 

6 party aggrieved by an order of any appropriate Fed7 eral supervisory agency under section 51 or any 

8 party to’’. 

9 (3) Section 8(i) of the Federal Deposit Insur10 ance Act (12 U.S.C. 1818(i)) is amended by striking 

11 ‘‘or 39’’ each place such term appears and inserting 

12 ‘‘, 39, or 51’’. 

13 (d) PROMPT CORRECTIVE ACTION.—Section 

14 38(f)(2)(H) of the Federal Deposit Insurance Act (12 

15 U.S.C. 1831o(f)(2)(H)) is amended by— 

16 (1) by striking ‘‘BANK HOLDING COMPANY.— 

17 Prohibiting any bank’’ and inserting ‘‘HOLDING

18 COMPANY.— 

19 ‘‘(i) BANK HOLDING COMPANY.—Pro20 hibiting any bank’’; and 

21 (2) by adding at the end the following new 

22 clause: 

23 ‘‘(ii) INDUSTRIAL BANK HOLDING

24 COMPANY.—Prohibiting any industrial 

25 bank holding company having control of 

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1 the insured depository institution from 

2 making any capital distribution without 

3 the prior approval of the Corporation.’’. 

4 (e) TECHNICAL AND CONFORMING AMENDMENTS.— 

5 (1) Section 10(e)(2) of the Federal Deposit In6 surance Act (12 U.S.C. 1820(e)(2)) is amended by 

7 inserting ‘‘or section 51’’ after ‘‘subsection (b)(4)’’. 

8 (2) Section 1101(6) of the Right to Financial 

9 Privacy Act of 1978 (12 U.S.C. 3401(6)) is amend10 ed— 

11 (A) in subparagraph (B), by striking 

12 ‘‘and’’ after the semicolon; 

13 (B) in subparagraph (C), by inserting 

14 ‘‘and’’ after the semicolon; and 

15 (C) by inserting after paragraph (C) the 

16 following new paragraph: 

17 ‘‘(D) any industrial bank holding company 

18 (as defined in section 3(w)(8) of the Federal 

19 Deposit Insurance Act);’’. 

20 (3) Section 115 of the Gramm-Leach-Bliley Act 

21 (12 U.S.C. 1820a) is amended— 

22 (A) in subsection (a), by striking ‘‘or’’ 

23 after ‘‘bank holding company’’ and inserting ‘‘, 

24 industrial bank holding company, or’’; 

25 (B) in subsection (d)— 

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1 (i) by redesignating paragraphs (5), 

2 (6), and (7) as paragraphs (6), (7), and 

3 (8), respectively; and 

4 (ii) by inserting after paragraph (4) 

5 the following new paragraph: 

6 ‘‘(5) INDUSTRIAL BANK HOLDING COMPANY.— 

7 The term ‘industrial bank holding company’ has the 

8 same meaning as in section 3(w)(8) of the Federal 

9 Deposit Insurance Act.’’. 

10 (4) Section 304(g)(1) of the Home Mortgage 

11 Disclosure Act of 1975 (12 U.S.C. 2803(g)(1)) is 

12 amended by inserting ‘‘, industrial bank holding 

13 company,’’ after ‘‘bank holding company’’. 

14 SEC. 3. REGULATIONS. 

15 The Corporation shall prescribe such regulations as 

16 the Corporation determines to be appropriate to carry out 

17 the amendments made by this Act. 

Æ 

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