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the bank after September 30, 2003, that 
requires a registration under this section 
or an application under section 7(j) or 
18(c), section 3 of the Bank Holding Com-
pany Act of 1956, or section 10 of the 
Home Owners’ Loan Act, except a direct 
or indirect change of control in which— 
‘‘(I) immediately prior to such 
change in control neither the ultimate 
acquiring holding company nor the ul-
timate acquired holding company is a 
commercial firm; 
‘‘(II) 
immediately 
after 
such 
change of control the resulting ulti-
mate holding company is not a com-
mercial firm; and 
‘‘(III) 
the 
resulting 
ultimate 
holding company is subject to consoli-
dated supervision by the Office of 
Thrift Supervision or a holding com-
pany regulated by the Securities and 
Exchange Commission pursuant to 
section 240.15c3–1(a)(7) of title 17 of 
the Code of Federal Regulations (as 
in effect on January 29, 2007). 
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‘‘(B) CORPORATE REORGANIZATIONS PER-
MITTED.—The acquisition of direct or indirect 
control of the industrial bank referred to in 
subparagraph (A)(ii) shall not be treated as a 
‘change in control’ for purposes of such sub-
paragraph if— 
‘‘(i) the company acquiring control is 
itself directly or indirectly controlled by a 
company that was an affiliate of such bank 
on the date referred to in such subpara-
graph, and remains an affiliate at all times 
after such date; and 
‘‘(ii) the transaction through which 
the company acquired control of the indus-
trial bank constituted solely a corporate re-
organization of a company that controlled 
the industrial bank on the date referred to 
in such subparagraph. 
‘‘(4) PRE-2007 EXCLUSIONS.— 
‘‘(A) 
GRANDFATHERED
COMMERCIAL 
FIRMS.—Paragraph (1) shall not apply to any 
commercial firm— 
‘‘(i) which became a holding company 
of an industrial bank by virtue of acquiring 
control of an industrial bank on or after 
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October 1, 2003, and before January 29, 
2007; 
‘‘(ii) which does not acquire control of 
any other depository institution after Jan-
uary 28, 2007; 
‘‘(iii) with respect to which there is no 
change in control, directly or indirectly, of 
any depository institution subsidiary after 
January 28, 2007, that requires a registra-
tion under this section or an application 
under section 7(j) or 18(c), section 3 of 
the Bank Holding Company Act of 1956, 
or section 10 of the Home Owners’ Loan 
Act; and 
‘‘(iv) each industrial bank subsidiary 
of which remains in compliance with the 
limitations contained in subparagraph (B). 
‘‘(B) ACTIVITY AND BRANCHING LIMITA-
TIONS.—An industrial bank subsidiary of a 
commercial firm described in clauses (i), (ii) 
and (iii) of subparagraph (A) is in compliance 
with the requirements of this subparagraph for 
purposes of subparagraph (A)(iv) so long as the 
industrial bank— 
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‘‘(i) engages only in activities in which 
the industrial bank was engaged on Janu-
ary 28, 2007; and 
‘‘(ii) does not acquire, establish, or 
operate any branch, deposit production of-
fice, loan production office, automated tell-
er machine, or remote service unit in any 
State other than the home State of the 
bank or any host State in which such bank 
operated branches on January 28, 2007. 
‘‘(C) CORPORATE REORGANIZATIONS PER-
MITTED.—The acquisition of direct or indirect 
control of a depository institution subsidiary re-
ferred to in subparagraph (A)(iii) shall not be 
treated as a ‘change in control’ for purposes of 
such subparagraph if— 
‘‘(i) the company acquiring control is 
itself directly or indirectly controlled by a 
company that was an affiliate of such sub-
sidiary on the date referred to in such sub-
paragraph, and remains an affiliate at all 
times after such date; and 
‘‘(ii) the transaction through which 
the company acquired control of the depos-
itory institution constituted solely a cor-
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porate reorganization of a company that 
controlled the depository institution on the 
date referred to in such subparagraph. 
‘‘(g) PROCEDURES AND TIMING FOR TERMINATION 
OF ACTIVITIES OR DIVESTITURE.— 
‘‘(1) TRANSITION PROVISION.— 
‘‘(A) IN
GENERAL.—Any company that 
fails to comply with the provisions of subsection 
(f) shall divest its ownership or control of each 
industrial bank subsidiary of the company not 
later than the end of the 2-year period begin-
ning on the first date that the company ceased 
to comply with subsection (f). 
‘‘(B) EXTENSION OF TIME PERIOD.— 
‘‘(i) IN GENERAL.—Upon application 
by a holding company that controls an in-
dustrial bank, the appropriate Federal su-
pervisory agency of such holding company 
may extend the 2-year period referred to in 
subparagraph (A) with respect to such 
company for not more than 1 year if, in 
such agency’s judgment, such an extension 
would not be detrimental to the public in-
terest. 
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‘‘(ii) FACTORS.—In making any deci-
sion to grant an extension under clause (i) 
to a holding company of an industrial 
bank, the appropriate Federal supervisory 
agent of such holding company shall con-
sider whether— 
‘‘(I) the company has made a 
good faith effort to divest such inter-
ests; and 
‘‘(II) such extension is necessary 
to avert substantial loss to the com-
pany. 
‘‘(2) CONDITIONS BEFORE DIVESTITURE.—Dur-
ing the 2-year period referred to in paragraph 
(1)(A) with respect to any company and any exten-
sion of such period, the appropriate Federal super-
visory agency may impose any conditions or restric-
tions on the company or any subsidiary of the com-
pany (other than a bank), including restricting or 
prohibiting transactions between the company or 
subsidiary and any depository institution subsidiary 
of the company, as are appropriate under the cir-
cumstances. 
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‘‘(3) TERMINATION OF ACTIVITIES OR DIVESTI-
TURE
OF
NONBANK
SUBSIDIARIES
CONSTITUTING 
SERIOUS RISK.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of this section, the appropriate 
Federal supervisory agency may, whenever such 
agency has reasonable cause to believe that the 
continuation by a holding company of an indus-
trial bank of any activity or of ownership or 
control of any nonbank subsidiary of such hold-
ing company, other than a nonbank subsidiary 
of a depository institution, constitutes a serious 
risk to the financial safety, soundness, or sta-
bility of a depository institution subsidiary of 
the holding company and is inconsistent with 
sound banking principles or with the purposes 
of this section, at the election of the holding 
company— 
‘‘(i) order such holding company or 
any such nonbank subsidiary, after due no-
tice and opportunity for hearing, and after 
considering the views of the appropriate 
Federal banking agency and, if applicable, 
appropriate State bank supervisor, to ter-
minate such activities or to terminate 
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(within 120 days or such longer period as 
the appropriate Federal supervisory agency 
may direct in unusual circumstances) the 
ownership or control by such holding com-
pany or nonbank subsidiary of any such 
depository institution subsidiary either by 
sale or by distribution of the shares of the 
depository institution subsidiary, in accord-
ance with subparagraph (B), to the share-
holders of the holding company of the in-
dustrial bank; or 
‘‘(ii) order the holding company of the 
industrial bank, after due notice and op-
portunity for hearing, and after consulta-
tion with the appropriate State bank su-
pervisor for the industrial bank, to termi-
nate (within 120 days or such longer pe-
riod as the appropriate Federal supervisory 
agency may direct) the ownership or con-
trol of any such industrial bank by such 
company. 
‘‘(B) PRO RATA DISTRIBUTION.—Any dis-
tribution to shareholders referred to in clause 
(i) shall be pro rata with respect to all of the 
shareholders of the distributing company, and 
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such company shall not make any charge to any 
shareholder in connection with such distribu-
tion. 
‘‘(4) FOREIGN BANK OWNERSHIP.— 
‘‘(A) INDUSTRIAL BANKS.—After January 
28, 2007, no foreign bank may acquire, directly 
or indirectly, control of an industrial bank un-
less the Board of Governors of the Federal Re-
serve System has determined by order, or in the 
case of a foreign bank that is a savings and 
loan holding company the Board of Governors 
of the Federal Reserve System and the Director 
of Office of Thrift Supervision have jointly de-
termined by order, in connection with the 
change in control or acquisition of the indus-
trial bank and after consultation with the Cor-
poration, that the foreign bank is subject to 
comprehensive supervision or regulation on a 
consolidated basis by the appropriate authori-
ties in the bank’s home country in accordance 
with the standard in section 3(c)(3)(B) of the 
Bank Holding Company Act of 1956. 
‘‘(B) CONFORMING
AMENDMENT.—Not-
withstanding any other provision of law, after 
the date of enactment of the Industrial Bank 
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Holding Company Act of 2007, the Director of 
the Office of Thrift Supervision shall not ap-
prove any acquisition of a savings association 
under section 10(e)(2) of the Home Owners’ 
Loan Act by a foreign bank that is subject to 
the Bank Holding Company Act of 1956 pursu-
ant to section 8(a) of the International Banking 
Act of 1978 and that is not a bank holding 
company unless the Director of the Office of 
Thrift Supervision and the Board of Governors 
of the Federal Reserve System have jointly de-
termined, by order, in connection with the ac-
quisition of the savings association that the for-
eign bank is subject to comprehensive super-
vision or regulation on a consolidated basis by 
the appropriate authorities in the bank’s home 
country in accordance with the standard in sec-
tion 3(c)(3)(B) of the Bank Holding Company 
Act of 1956. 
‘‘(5) HOLDING COMPANY RESPONSIBILITY.— 
‘‘(A) SOURCE
OF
STRENGTH.—Notwith-
standing section 45, a holding company of an 
industrial bank— 
‘‘(i) shall serve as a source of finan-
cial and managerial strength to the sub-
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sidiary banks of such holding company; 
and 
‘‘(ii) shall not conduct the operations 
of the holding company in an unsafe or un-
sound manner. 
‘‘(B) IMPLEMENTATION.—The appropriate 
Federal supervisory agency of the holding com-
pany of an industrial bank shall implement the 
requirements under subparagraph (A). 
‘‘(h) ADMINISTRATIVE PROVISIONS.— 
‘‘(1) AGENT FOR SERVICE OF PROCESS.—The 
Corporation may require any industrial bank holding 
company, or persons connected with such holding 
company if it is not a corporation, to execute and 
file a prescribed form of irrevocable appointment of 
agent for service of process. 
‘‘(2) RELEASE FROM REGISTRATION.—The Cor-
poration may at any time, upon the Corporation’s 
own motion or upon application, release a registered 
industrial bank holding company from any registra-
tion previously made by such company, if the Cor-
poration determines that such company no longer 
controls any industrial bank. 
‘‘(i) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
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‘‘(1) APPROPRIATE
FEDERAL
SUPERVISORY 
AGENCY.—The term ‘appropriate Federal super-
visory agency’ means, with respect to a company 
that controls an industrial bank— 
‘‘(A) the Corporation, in the case of a com-
pany that is an industrial bank holding com-
pany; 
‘‘(B) the Board of Governors of the Fed-
eral Reserve System, in the case of a company 
that is a bank holding company or that is sub-
ject to the Bank Holding Company Act of 1956 
pursuant to section 8(a) of the International 
Banking Act of 1978; 
‘‘(C) the Office of Thrift Supervision, in 
the case of a company that is a savings and 
loan holding company; and 
‘‘(D) the Securities and Exchange Com-
mission, in the case of a company that is regu-
lated by the Commission pursuant to section 
240.15c3–1(a)(7) of title 17 of the Code of 
Federal Regulations (as in effect on January 
29, 2007). 
‘‘(2) RULE OF CONSTRUCTION.—Under the def-
inition of the term ‘appropriate Federal supervisory 
agency’ in paragraph (1), more than 1 agency may 
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(d) 
PROMPT
CORRECTIVE
ACTION.—Section 
38(f)(2)(H) of the Federal Deposit Insurance Act (12 
U.S.C. 1831o(f)(2)(H)) is amended by— 
(1) by striking ‘‘BANK HOLDING COMPANY.— 
Prohibiting any bank’’ and inserting ‘‘HOLDING 
COMPANY.— 
‘‘(i) BANK HOLDING COMPANY.—Pro-
hibiting any bank’’; and 
(2) by adding at the end the following new 
clause: 
‘‘(ii) INDUSTRIAL
BANK
HOLDING 
COMPANY.—Prohibiting 
any 
industrial 
bank holding company having control of 
the insured depository institution from 
making any capital distribution without 
the prior approval of the Corporation.’’. 
(e) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) Section 10(e)(2) of the Federal Deposit In-
surance Act (12 U.S.C. 1820(e)(2)) is amended by 
inserting ‘‘or section 51’’ after ‘‘subsection (b)(4)’’. 
(2) Section 1101(6) of the Right to Financial 
Privacy Act of 1978 (12 U.S.C. 3401(6)) is amend-
ed— 
(A) in subparagraph (B), by striking 
‘‘and’’ after the semicolon; 
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(B) in subparagraph (C), by inserting 
‘‘and’’ after the semicolon; and 
(C) by inserting after paragraph (C) the 
following new paragraph: 
‘‘(D) any industrial bank holding company 
(as defined in section 3(w)(8) of the Federal 
Deposit Insurance Act);’’. 
(3) Section 115 of the Gramm-Leach-Bliley Act 
(12 U.S.C. 1820a) is amended— 
(A) in subsection (a), by striking ‘‘or’’ 
after ‘‘bank holding company’’ and inserting ‘‘, 
industrial bank holding company, or’’; 
(B) in subsection (d)— 
(i) by redesignating paragraphs (5), 
(6), and (7) as paragraphs (6), (7), and 
(8), respectively; and 
(ii) by inserting after paragraph (4) 
the following new paragraph: 
‘‘(5) INDUSTRIAL BANK HOLDING COMPANY.— 
The term ‘industrial bank holding company’ has the 
same meaning as in section 3(w)(8) of the Federal 
Deposit Insurance Act.’’. 
(4) Section 304(g)(1) of the Home Mortgage 
Disclosure Act of 1975 (12 U.S.C. 2803(g)(1)) is 
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amended by inserting ‘‘, industrial bank holding 
company,’’ after ‘‘bank holding company’’. 
SEC. 3. REGULATIONS. 
The Corporation shall prescribe such regulations as 
the Corporation determines to be appropriate to carry out 
the amendments made by this Act. 
Passed the House of Representatives May 21, 2007. 
Attest: 
LORRAINE C. MILLER, 
Clerk. 
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