IB 
Union Calendar No. 92 
110TH CONGRESS 
1ST SESSION 
H. R. 698 
[Report No. 110–155] 
To amend the Federal Deposit Insurance Act to establish industrial bank 
holding company regulation, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 29, 2007 
Mr. GILLMOR (for himself, Mr. FRANK of Massachusetts, Mrs. MALONEY of 
New York, Mr. SCHIFF, Mrs. JONES of Ohio, Mr. DOYLE, Mr. GUTIER-
REZ, Ms. WATSON, Mr. SMITH of New Jersey, Mrs. MUSGRAVE, Mr. 
GEORGE MILLER of California, Mr. GOODE, Mr. ALEXANDER, Mr. FARR, 
Mr. GRIJALVA, Mr. HOLDEN, Mr. FORTENBERRY, Mr. LAHOOD, Mr. 
SALAZAR, Mr. MCGOVERN, Mr. AL GREEN of Texas, Mr. PRICE of North 
Carolina, Mr. PETERSON of Minnesota, Ms. FALLIN, Ms. CASTOR, Mr. 
UDALL of Colorado, Mr. CHANDLER, Mr. LAMBORN, Ms. CARSON, Mr. 
HODES, and Ms. SCHAKOWSKY) introduced the following bill; which was 
referred to the Committee on Financial Services 
MAY 16, 2007 
Additional sponsors: Mr. LINCOLN DAVIS of Tennessee, Mr. ELLISON, Mr. 
CAPUANO, Mr. WELCH of Vermont, Mr. BOREN, Ms. LORETTA SANCHEZ 
of California, Mr. BOSWELL, Mr. BISHOP of Georgia, Mr. DEAL of Geor-
gia, Mr. JORDAN, Ms. DEGETTE, Mr. WILSON of Ohio, Mr. ETHERIDGE, 
Mr. OBERSTAR, Mr. PATRICK MURPHY of Pennsylvania, Ms. MCCOLLUM 
of Minnesota, Mr. REHBERG, Mr. GILCHREST, Mr. WOLF, Mr. 
WHITFIELD, Mr. RYAN of Ohio, Mr. COBLE, Ms. BALDWIN, Ms. FOXX, 
Mr. TIERNEY, Mr. WICKER, Mr. YARMUTH, Mr. CARNAHAN, Ms. SUT-
TON, Mr. DOGGETT, Mr. GOHMERT, Mr. ROGERS of Alabama, Mr. 
PERLMUTTER, Mr. SESTAK, Ms. BERKLEY, Ms. HERSETH SANDLIN, Mr. 
LUCAS, Mr. BRALEY of Iowa, Mr. SPACE, Mr. GORDON, Ms. EDDIE BER-
NICE JOHNSON of Texas, Mr. HOLT, Mr. WEXLER, Mr. CARNEY, Mr. 
PASCRELL, Mr. CARDOZA, Mr. MICHAUD, Mr. BOUCHER, Ms. MATSUI, 
Mr. ROTHMAN, Mr. SMITH of Nebraska, Mr. MILLER of North Carolina, 
Mr. NEAL of Massachusetts, Mr. TERRY, Mr. LYNCH, Mr. SHERMAN, Mr. 
DELAHUNT, Mr. MURTHA, Ms. WASSERMAN SCHULTZ, Mr. POMEROY, 
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Mrs. BOYDA of Kansas, Mrs. MYRICK, Mr. BARRETT of South Carolina, 
Ms. WOOLSEY, Mr. TURNER, Mr. MARSHALL, Ms. MOORE of Wisconsin, 
Mr. JOHNSON of Illinois, Mr. DEFAZIO, Mr. WALZ of Minnesota, Mr. 
LOEBSACK, Mr. MILLER of Florida, Mr. KAGEN, Ms. HOOLEY, Mr. ROSS, 
Mr. JINDAL, Ms. NORTON, Mr. THORNBERRY, Mrs. MCCARTHY of New 
York, Mr. LEWIS
of Georgia, Ms. HARMAN, Mr. RAHALL, Mr. 
MCNERNEY, Mr. FILNER, Mr. PEARCE, Mr. ABERCROMBIE, Mr. 
ADERHOLT, Mr. BLUMENAUER, Mr. MORAN of Kansas, Mr. BARTLETT 
of Maryland, Mr. HAYES, Mr. GERLACH, Ms. GIFFORDS, Mr. EDWARDS, 
Ms. SCHWARTZ, Mr. MANZULLO, Mr. BURGESS, Mr. LATHAM, Mrs. WIL-
SON of New Mexico, Mr. BAIRD, Mr. LATOURETTE, Mr. PLATTS, Mr. 
RENZI, Mr. HARE, Mr. BARROW, Mr. BLUNT, Mr. SIRES, Mrs. CAPPS, 
Mr. ALTMIRE, Mr. MORAN of Virginia, Ms. VELA´ZQUEZ, Mr. HOEKSTRA, 
Mr. WAMP, Ms. ESHOO, and Mr. WYNN 
MAY 16, 2007 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on January 29, 2007] 
A BILL 
To amend the Federal Deposit Insurance Act to establish 
industrial bank holding company regulation, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Industrial Bank Hold-
ing Company Act of 2007’’. 
SEC. 2. INDUSTRIAL BANK HOLDING COMPANY REGULA-
TION. 
(a) DEFINITIONS.— 
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(1) INDUSTRIAL BANK.—Section 3(a) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1813(a)) is 
amended by adding at the end the following new 
paragraph: 
‘‘(4) INDUSTRIAL BANK.—The term ‘industrial 
bank’ means any insured State bank that is an in-
dustrial bank, industrial loan company, or other in-
stitution that is excluded, pursuant to section 
2(c)(2)(H) of the Bank Holding Company Act of 
1956, from the definition of the term ‘bank’ for pur-
poses of such Act.’’. 
(2) INDUSTRIAL BANK HOLDING COMPANY.—Sec-
tion 3(w) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(w)) is amended by adding at the end the 
following new paragraphs: 
‘‘(8) INDUSTRIAL
BANK
HOLDING
COMPANY.— 
The term ‘industrial bank holding company’ means 
any company that— 
‘‘(A) controls (as determined by the Cor-
poration pursuant to section 2(a) of the Bank 
Holding Company Act of 1956), directly or indi-
rectly, any industrial bank; and 
‘‘(B) is not— 
‘‘(i) 1 or more of the following: a bank 
holding company, a savings and loan hold-
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ing company, a company that is subject to 
the Bank Holding Company Act of 1956 
pursuant to section 8(a) of the Inter-
national Banking Act of 1978, or a holding 
company 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 Janu-
ary 29, 2007); or 
‘‘(ii) controlled by a company de-
scribed in clause (i). 
‘‘(9) CAPITAL TERMS RELATING TO INDUSTRIAL 
BANK HOLDING COMPANIES.— 
‘‘(A) ADEQUATELY CAPITALIZED.—With re-
spect to an industrial bank holding company, the 
term ‘adequately capitalized’ means a level of 
capitalization which meets or exceeds all appli-
cable Federal regulatory capital standards. 
‘‘(B) WELL CAPITALIZED.—With respect to 
an industrial bank holding company, the term 
‘well capitalized’ means a level of capitalization 
which meets or exceeds the required capital levels 
for well capitalized industrial bank holding com-
panies established by the Corporation.’’. 
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(3) TECHNICAL AND CONFORMING AMENDMENTS 
TO OTHER DEFINITIONS.— 
(A) APPROPRIATE FEDERAL BANKING AGEN-
CY.—Section 3(q)(3) of the Federal Deposit In-
surance Act (12 U.S.C. 1813(q)(3)) is amend-
ed— 
(i) by striking ‘‘or a foreign’’ and in-
serting ‘‘, any foreign’’; and 
(ii) by inserting ‘‘, and any industrial 
bank holding company and any subsidiary 
of an industrial bank holding company 
(other 
than 
a 
bank)’’ 
after 
‘‘insured 
branch’’. 
(B) DEPOSITORY
INSTITUTION
HOLDING 
COMPANY.—Section 3(w)(1) of the Federal De-
posit Insurance Act (12 U.S.C. 1813(w)(1)) is 
amended— 
(i) by striking ‘‘or a savings’’ and in-
serting ‘‘, any savings’’; and 
(ii) by inserting ‘‘, and any industrial 
bank holding company’’ before the period at 
the end. 
(b) INDUSTRIAL BANK HOLDING COMPANY REGISTRA-
TION AND OWNERSHIP.—The Federal Deposit Insurance 
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Act (12 U.S.C. 1811 et seq.) is amended by adding at the 
end the following new section: 
‘‘SEC. 51. INDUSTRIAL BANK HOLDING COMPANY REGULA-
TION. 
‘‘(a) ACQUISITION OF INDUSTRIAL BANK SHARES OR 
ASSETS.—Section 3 of the Bank Holding Company Act of 
1956 (other than section 3(c)(3)(B) of that Act) shall apply 
to any company that is or would become an industrial bank 
holding company in the same manner as such section ap-
plies to a company that is or would become a bank holding 
company, except that for purposes of applying this sub-
section— 
‘‘(1) any reference to a ‘bank holding company’ 
in such section 3 shall be deemed to be a reference to 
an ‘industrial bank holding company’; 
‘‘(2) any reference to a ‘bank’ in such section 
shall be deemed to be a reference to an ‘industrial 
bank’; 
‘‘(3) any reference to the ‘Board’ in such section 
shall be deemed to be a reference to the Corporation; 
‘‘(4) any reference to the ‘Bank Holding Com-
pany Act Amendments of 1970’ in such section shall 
be deemed to be a reference to the ‘Industrial Bank 
Holding Company Act of 2007’; 
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‘‘(5) any reference to a ‘home State’ in such sec-
tion 3 shall be deemed to be a reference to— 
‘‘(A) with respect to an industrial bank 
holding company, the State in which the total 
deposits of all banking subsidiaries of such com-
pany were the largest on the later of— 
‘‘(i) January 28, 2007; or 
‘‘(ii) the date on which the company 
becomes an industrial bank holding com-
pany under this section; and 
‘‘(B) with respect to an industrial bank, the 
home State of the bank as determined under sec-
tion 44(g); 
‘‘(6) any reference to a ‘host State’ in such sec-
tion 3 shall be deemed to be a reference to— 
‘‘(A) with respect to an industrial bank 
holding company, a State, other than the home 
State of the company, in which the company 
controls, or seeks to control, an industrial bank 
subsidiary; and 
‘‘(B) with respect to an industrial bank, the 
host State of the bank as determined under sec-
tion 44(g); 
‘‘(7) any reference to an ‘out-of-State bank hold-
ing company’ in such section 3 shall be deemed to be 
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a reference to, with respect to any State, an indus-
trial bank holding company whose home State is an-
other State; and 
‘‘(8) any reference to an ‘out-of-State bank’ in 
such section 3 shall be deemed to be a reference to, 
with respect to any State, an industrial bank whose 
home State is another State. 
‘‘(b) APPLICATION PROCESS.—An application filed 
under subsection (a) to acquire control of an industrial 
bank shall be treated as an application for a deposit facility 
for purposes of this Act and any other Federal law. 
‘‘(c) REGISTRATION.— 
‘‘(1) IN GENERAL.—Each industrial bank hold-
ing company shall register with the Corporation on 
forms prescribed by the Corporation before the end of 
the 180-day period beginning on the later of— 
‘‘(A) the date the company becomes an in-
dustrial bank holding company; or 
‘‘(B) the date of the enactment of the Indus-
trial Bank Holding Company Act of 2007. 
‘‘(2) INFORMATION TO BE INCLUDED.—Each reg-
istration submitted under paragraph (1) shall include 
such information, under oath, with respect to the fi-
nancial condition, ownership, operations, manage-
ment, and intercompany relationships of the indus-
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trial bank holding company and subsidiaries of such 
holding company, and other factors (including infor-
mation described in subsection (d)(1)(C)), as the Cor-
poration may determine to be appropriate to carry 
out the purposes of this section. 
‘‘(3) EXTENSION OF TIME FOR SUBMITTING COM-
PLETE INFORMATION.—Upon application by an in-
dustrial bank holding company and subject to such 
requirements, factors, and evidence as the Corporation 
may require, the Corporation may extend the period 
described in paragraph (1) within which such com-
pany shall register and file the requisite information. 
‘‘(d) REPORTS AND EXAMINATIONS.— 
‘‘(1) REPORTS.— 
‘‘(A) REPORTS
REQUIRED.—Each indus-
trial bank holding company and each subsidiary 
of an industrial bank holding company, other 
than an industrial bank, shall file with the Cor-
poration such reports as may be required by the 
Corporation. 
‘‘(B) FORM
AND
MANNER.—Reports filed 
under subparagraph (A) shall be made under 
oath and shall be in such form and for such peri-
ods, as the Corporation may prescribe. 
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respect to any industrial bank holding company 
or subsidiary of any such holding company, to 
the extent the Corporation may determine such 
use to be feasible for such purposes. 
‘‘(3) CAPITAL.— 
‘‘(A) IN GENERAL.— The Corporation may 
not, by regulation, guideline, order, or otherwise, 
prescribe or impose any capital or capital ade-
quacy rules, guidelines, standards, or require-
ments on any functionally regulated affiliate (as 
defined in section 45) of any depository institu-
tion that is controlled by an industrial bank 
holding company that— 
‘‘(i) is not a depository institution; 
and 
‘‘(ii) is— 
‘‘(I) in compliance with the appli-
cable capital requirements of the ap-
propriate Federal supervisory agency 
of the affiliate (including the Securities 
and Exchange Commission or State in-
surance authority); 
‘‘(II) properly registered as an in-
vestment adviser under the Investment 
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Advisers Act of 1940, or with any 
State; or 
‘‘(III) is licensed as an insurance 
agent with the appropriate State in-
surance authority. 
‘‘(B) RULE OF CONSTRUCTION.—Subpara-
graph (A) shall not be construed as preventing 
the Corporation from imposing capital or cap-
ital adequacy rules, guidelines, standards, or re-
quirements with respect to— 
‘‘(i) activities of a registered invest-
ment adviser other than with respect to in-
vestment advisory activities or activities in-
cidental to investment advisory activities; 
or 
‘‘(ii) activities of a licensed insurance 
agent other than insurance agency activities 
or activities incidental to insurance agency 
activities. 
‘‘(e) ACCESS TO INFORMATION.— 
‘‘(1) INFORMATION
PROVIDED
BY
CORPORA-
TION.—Any confidential supervisory information, in-
cluding examination or other reports, pertaining to 
an industrial bank furnished by the Corporation to 
any other Federal agency or any appropriate State 
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supervisory agency shall remain confidential unless 
the Corporation, in writing, otherwise consents. 
‘‘(2) DEFERENCE TO DEPOSITORY INSTITUTION 
EXAMINATIONS.—Any appropriate Federal super-
visory agency of a holding company of an industrial 
bank shall, to the fullest extent possible, forego any ex-
amination of any depository institution subsidiary of 
the holding company and use the reports of examina-
tions of the institution made by the appropriate Fed-
eral banking agency and the appropriate State bank 
supervisor in lieu of a direct examination. 
‘‘(3) INFORMATION TO BE PROVIDED TO COR-
PORATION.— 
‘‘(A) REQUEST TO AGENCY.—Upon request 
by the Corporation, an appropriate Federal su-
pervisory agency may provide to the Corporation 
information regarding the condition of an indus-
trial bank, any holding company that controls 
such industrial bank, or any other affiliate of 
any such holding company that is necessary to 
assess risk to the industrial bank. 
‘‘(B) AVAILABILITY
FROM
HOLDING
COM-
PANY
DIRECTLY.—Notwithstanding section 45, 
section 115 of the Gramm-Leach-Bliley Act, or 
any other provision of law (including any regu-
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lation), if the information requested under sub-
paragraph (A) is not provided to the Corpora-
tion, and the information is necessary to assess 
risk to the industrial bank, the Corporation may 
require the holding company or affiliate referred 
to in such subparagraph with respect to such 
bank to provide such information to the Corpora-
tion. 
‘‘(4) EXAMINATIONS BY CORPORATION.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B) and notwithstanding section 45, sec-
tion 115 of the Gramm-Leach-Bliley Act, or any 
other provision of law (including any regula-
tion), no law shall be construed as preventing the 
Corporation from examining an affiliate of an 
industrial bank pursuant to paragraph (2), (3), 
or (4) of section 10(b), as may be necessary to 
disclose fully the relationship between the indus-
trial bank and the affiliate, and the effect of such 
relationship on the industrial bank, if the Cor-
poration finds such examination necessary to de-
termine the condition of an industrial bank. 
‘‘(B) FUNCTIONALLY
REGULATED
AFFILI-
ATES.— Before the Corporation may examine 
any affiliate of an industrial bank that is— 
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‘‘(i) a broker, a dealer, an investment 
company, or an investment advisor, or 
‘‘(ii) an entity that is subject to con-
solidated supervision by the Securities and 
Exchange Commission, other than a deposi-
tory institution, 
the Corporation shall request the Commission to 
provide the information that the Corporation is 
seeking to obtain through examination and may 
proceed with the examination only if the re-
quested information is not provided by the Com-
mission in a timely manner. 
‘‘(f) LIMITATION ON CONTROL.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (3) or (4), no industrial bank may be con-
trolled, directly or indirectly, by a commercial firm. 
‘‘(2) COMMERCIAL FIRM DEFINED.—For purposes 
of this section, the term ‘commercial firm’ means any 
entity at least 15 percent of the annual gross revenues 
of which on a consolidated basis, including all affili-
ates of the entity, were derived from engaging, on an 
on-going basis, in activities that are not financial in 
nature or incidental to a financial activity during at 
least 3 of the prior 4 calendar quarters, as determined 
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by the Corporation in accordance with regulations 
which the Corporation shall prescribe. 
‘‘(3) PRE-2003 EXCLUSIONS.— 
‘‘(A) 
GRANDFATHERED
INSTITUTIONS.— 
Paragraph (1) shall not apply with respect to 
any industrial bank— 
‘‘(i) which became an insured deposi-
tory institution before October 1, 2003, or 
pursuant to an application for deposit in-
surance which was approved by the Cor-
poration before such date; and 
‘‘(ii) with respect to which there is no 
change in control, directly or indirectly, of 
the bank after September 30, 2003, that re-
quires a registration 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, 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; 
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‘‘(II) 
immediately 
after 
such 
change of control the resulting ultimate 
holding company is not a commercial 
firm; and 
‘‘(III) the resulting ultimate hold-
ing company is subject to consolidated 
supervision by the Office of Thrift Su-
pervision or a holding company regu-
lated 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). 
‘‘(B) CORPORATE
REORGANIZATIONS
PER-
MITTED.—The acquisition of direct or indirect 
control of the industrial bank referred to in sub-
paragraph (A)(ii) shall not be treated as a 
‘change in control’ for purposes of such subpara-
graph 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 
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‘‘(ii) the transaction through which the 
company acquired control of the industrial 
bank constituted solely a corporate reorga-
nization 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 
October 1, 2003, and before January 29, 
2007; 
‘‘(ii) which does not acquire control of 
any other depository institution after Janu-
ary 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 
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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 com-
mercial firm described in clauses (i), (ii) and 
(iii) of subparagraph (A) is in compliance with 
the requirements of this subparagraph for pur-
poses of subparagraph (A)(iv) so long as the in-
dustrial bank— 
‘‘(i) engages only in activities in which 
the industrial bank was engaged on Janu-
ary 28, 2007; and 
‘‘(ii) does not acquire, establish, or op-
erate any branch, deposit production office, 
loan production office, automated teller ma-
chine, 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-
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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 depository 
institution constituted solely a corporate re-
organization of a company that controlled 
the depository institution on the date re-
ferred 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 in-
dustrial bank subsidiary of the company not 
later than the end of the 2-year period beginning 
on the first date that the company ceased to com-
ply with subsection (f). 
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‘‘(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 com-
pany for not more than 1 year if, in such 
agency’s judgment, such an extension would 
not be detrimental to the public interest. 
‘‘(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 extension of 
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such period, the appropriate Federal supervisory 
agency may impose any conditions or restrictions on 
the company or any subsidiary of the company (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 circumstances. 
‘‘(3) TERMINATION OF ACTIVITIES OR DIVESTI-
TURE OF NONBANK SUBSIDIARIES CONSTITUTING SE-
RIOUS 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 com-
pany— 
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direct) the ownership or control 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 share-
holders of the distributing company, and such 
company shall not make any charge to any 
shareholder in connection with such distribution. 
‘‘(4) FOREIGN BANK OWNERSHIP.—After Janu-
ary 28, 2007, no foreign bank may acquire, directly 
or indirectly, control of an industrial bank unless the 
Board of Governors of the Federal Reserve System has 
determined, by order, in connection with the change 
in control or acquisition of the industrial bank and 
after consultation with the Corporation, that the for-
eign bank is subject to comprehensive supervision or 
regulation on a consolidated basis by the appropriate 
authorities 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. 
‘‘(5) HOLDING COMPANY RESPONSIBILITY.— 
‘‘(A) SOURCE
OF
STRENGTH.—Notwith-
standing section 45, a holding company of an 
industrial bank— 
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‘‘(i) shall serve as a source of financial 
and managerial strength to the subsidiary 
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. 
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‘‘(i) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) 
APPROPRIATE
FEDERAL
SUPERVISORY 
AGENCY.—The term ‘appropriate Federal supervisory 
agency’ means, with respect to a company that con-
trols 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 Federal 
Reserve System, in the case of a company that 
is a bank holding company or that is subject to 
the Bank Holding Company Act of 1956 pursu-
ant 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 Commis-
sion, in the case of a company that is regulated 
by 
the 
Commission 
pursuant 
to 
section 
240.15c3–1(a)(7) of title 17 of the Code of Fed-
eral Regulations (as in effect on January 29, 
2007). 
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‘‘(2) RULE OF CONSTRUCTION.—Under the defi-
nition of the term ‘appropriate Federal supervisory 
agency’ in paragraph (1), more than 1 agency may 
be an appropriate Federal supervisory agency with 
respect to any given company that controls an indus-
trial bank.’’. 
(c) ENFORCEMENT.— 
(1) Section 8(b) of the Federal Deposit Insurance 
Act (12 U.S.C. 1818(b)) is amended by adding at the 
end the following new paragraph: 
‘‘(11) INDUSTRIAL BANK HOLDING COMPANIES.— 
This subsection and subsections (c) through (s) and 
subsection (u) of this section shall apply to any in-
dustrial bank holding company, and to any sub-
sidiary (other than a bank) of an industrial bank 
holding company in the same manner as such sub-
sections apply to State nonmember insured banks.’’. 
(2) Section 8(h)(2) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1818(h)(2)) is amended by strik-
ing ‘‘(2) Any party to’’ and inserting ‘‘(2) Any party 
aggrieved by an order of any appropriate Federal su-
pervisory agency under section 51 or any party to’’. 
(3) Section 8(i) of the Federal Deposit Insurance 
Act (12 U.S.C. 1818(i)) is amended by striking ‘‘or 
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39’’ each place such term appears and inserting ‘‘, 39, 
or 51’’. 
(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.—Pro-
hibiting any bank’’ and inserting ‘‘HOLDING COM-
PANY.— 
‘‘(i) BANK
HOLDING
COMPANY.—Pro-
hibiting any bank’’; and 
(2) by adding at the end the following new 
clause: 
‘‘(ii) INDUSTRIAL BANK HOLDING COM-
PANY.—Prohibiting any industrial bank 
holding company having control of the in-
sured 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 in-
serting ‘‘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— 
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(A) in subparagraph (B), by striking ‘‘and’’ 
after the semicolon; 
(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 De-
posit 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 ‘‘, indus-
trial 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.’’. 
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(4) Section 304(g)(1) of the Home Mortgage Dis-
closure Act of 1975 (12 U.S.C. 2803(g)(1)) is amend-
ed 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. 
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Union Calendar No. 92 
110TH CONGRESS 
1ST SESSION 
H. R. 698 
[Report No. 110–155] 
A BILL 
To amend the Federal Deposit Insurance Act to es-
tablish industrial bank holding company regula-
tion, and for other purposes. 
MAY 16, 2007 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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