Source: https://uscode.house.gov/view.xhtml?req=(title:12%20section:371c%20edition:prelim)
Timestamp: 2020-07-03 18:18:32
Document Index: 575085702

Matched Legal Cases: ['§ 371', '§23', '§13', '§327', '§1', '§1', '§12', '§410', '§22', '§121', '§608', '§608', '§608', '§121', '§22', '§608', '§609', '§410']

[USC02] 12 USC 371c: Banking affiliates
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12 USC 371c: Banking affiliates Text contains those laws in effect on July 2, 2020
(1) A member bank and its subsidiaries may engage in a covered transaction with an affiliate only if-
(1) the term "affiliate" with respect to a member bank means-
(C) any company-
(3)(A) a company or shareholder shall be deemed to have control over another company if-
(7) the term "covered transaction" means with respect to an affiliate of a member bank-
(11) Rebuttable presumption of control of portfolio companies.-In addition to paragraph (3), a company or shareholder shall be presumed to control any other company if the company or shareholder, directly or indirectly, or acting through 1 or more other persons, owns or controls 15 percent or more of the equity capital of the other company pursuant to subparagraph (H) or (I) of section 1843(k)(4) of this title or rules adopted under section 122 of the Gramm-Leach-Bliley Act, if any, unless the company or shareholder provides information acceptable to the Board to rebut this presumption of control.
(1) Each loan or extension of credit to, or guarantee, acceptance, or letter of credit issued on behalf of, an affiliate by a member bank or its subsidiary, and any credit exposure of a member bank or a subsidiary to an affiliate resulting from a securities borrowing or lending transaction, or a derivative transaction, shall be secured at all times by collateral having a market value equal to-
(A) 100 per centum of the amount of such loan or extension of credit, guarantee, acceptance, letter of credit, or credit exposure, if the collateral is composed of-
The provisions of this section, except paragraph (a)(4),1 shall not be applicable to-
(1) any transaction, subject to the prohibition contained in subsection (a)(3), with a bank-
(4) making a loan or extension of credit to, issuing a guarantee, acceptance, or letter of credit on behalf of, or having credit exposure resulting from a securities borrowing or lending transaction, or derivative transaction to, an affiliate that is fully secured by-
For purposes of applying this section and section 371c–1 of this title, and notwithstanding subsection (b)(2) of this section or section 371c–1(d)(1) of this title, a financial subsidiary of a bank-
For purposes of this section and section 371c–1 of this title-
(2)(A) In general.-The Board may, at its discretion, by regulation exempt transactions or relationships from the requirements of this section if-
(B) Additional exemptions.-
(i) National banks.-The Comptroller of the Currency may, by order, exempt a transaction of a national bank from the requirements of this section if-
(ii) State banks.-The Federal Deposit Insurance Corporation may, by order, exempt a transaction of a State nonmember bank, and the Board may, by order, exempt a transaction of a State member bank, from the requirements of this section if-
(3) Rulemaking required concerning derivative transactions and intraday credit.-
(A) In general.-Not later than 18 months after November 12, 1999, the Board shall adopt final rules under this section to address as covered transactions credit exposure arising out of derivative transactions between member banks and their affiliates and intraday extensions of credit by member banks to their affiliates.
(B) Effective date.-The effective date of any final rule adopted by the Board pursuant to subparagraph (A) shall be delayed for such period as the Board deems necessary or appropriate to permit banks to conform their activities to the requirements of the final rule without undue hardship.
(4) Amounts of covered transactions.-The Board may issue such regulations or interpretations as the Board determines are necessary or appropriate with respect to the manner in which a netting agreement may be taken into account in determining the amount of a covered transaction between a member bank or a subsidiary and an affiliate, including the extent to which netting agreements between a member bank or a subsidiary and an affiliate may be taken into account in determining whether a covered transaction is fully secured for purposes of subsection (d)(4). An interpretation under this paragraph with respect to a specific member bank, subsidiary, or affiliate shall be issued jointly with the appropriate Federal banking agency for such member bank, subsidiary, or affiliate.
(Dec. 23, 1913, ch. 6, §23A, as added June 16, 1933, ch. 89, §13, 48 Stat. 183 ; amended Aug. 23, 1935, ch. 614, title III, §327, 49 Stat. 717 ; June 30, 1954, ch. 434, §1, 68 Stat. 358 ; Pub. L. 86–230, §1(b), Sept. 8, 1959, 73 Stat. 457 ; Pub. L. 89–485, §§12(a), 13(h), July 1, 1966, 80 Stat. 241 , 243; Pub. L. 97–320, title IV, §410(b), Oct. 15, 1982, 96 Stat. 1515 ; Pub. L. 97–457, §22, Jan. 12, 1983, 96 Stat. 2509 ; Pub. L. 106–102, title I, §121(b), Nov. 12, 1999, 113 Stat. 1378 ; Pub. L. 111–203, title VI, §§608(a), 609(a), July 21, 2010, 124 Stat. 1608 , 1611.)
The Gramm-Leach-Bliley Act, referred to in subsecs. (b)(11) and (e)(4)(B), is Pub. L. 106–102, Nov. 12, 1999, 113 Stat. 1338 . Section 122 of the Act is set out as a note under section 1843 of this title. For complete classification of this Act to the Code, see Short Title of 1999 Amendment note set out under section 1811 of this title and Tables.
This chapter, referred to in subsec. (e)(4)(B), was in the original "this Act", meaning act Dec. 23, 1913, ch. 6, 38 Stat. 251 , as amended, known as the Federal Reserve Act. For complete classification of this act to the Code, see References in Text note set out under section 226 of this title and Tables.
2010-Subsec. (b)(1)(D). Pub. L. 111–203, §608(a)(1)(A), added subpar. (D) and struck out former subpar. (D) which read as follows:
"(A) Exception from limit on covered transactions with any individual financial subsidiary.-Notwithstanding paragraph (2), the restriction contained in subsection (a)(1)(A) of this section shall not apply with respect to covered transactions between a bank and any individual financial subsidiary of the bank.
"(B) Exception for earnings retained by financial subsidiaries.-Notwithstanding paragraph (2) or subsection (b)(7) of this section, a bank's investment in a financial subsidiary of the bank shall not include retained earnings of the financial subsidiary."
Pub. L. 111–203, §608(a)(4)(A)(ii), substituted "if-" for "if it finds such exemptions to be in the public interest and consistent with the purposes of this section." and added cls. (i) and (ii).
1999-Subsec. (b)(11). Pub. L. 106–102, §121(b)(2), added par. (11).
1983-Subsec. (d)(1). Pub. L. 97–457, §22(1), substituted "subject to the prohibition contained in subsection (a)(3)" for "except for the purchase of a low-quality asset which is prohibited".
1982-Pub. L. 97–320 amended section generally by substituting provisions in lettered subsections relating to restrictions on transactions with affiliates, collateral for such transactions, exemptions for certain transactions and rulemaking and additional exemptions, for prior undesignated paragraphs which read as follows:
1966-Pub. L. 89–485 added last three pars. and struck out from third par. introductory statement that term "affiliate" shall include holding company affiliates as well as other affiliates, respectively. Such added pars. make "extension of credit" cover all purchases under repurchase agreements and the discount of promissory notes, bills of exchange, conditional sales contracts, or similar paper, whether with or without recourse, excluding therefrom such discounts by one bank for another, if without recourse, exclude from being deemed a loan, advance, or extension of credit noninterest bearing deposits to the credit of a bank or the giving of immediate credit to a bank for uncollected items received in the ordinary course of business, define term "affiliate" (superseding one stricken from par. three), and exempt stocks, bonds, debentures, or other obligations of companies described in section 4(c)(1) of the Bank Holding Company Act of 1956, as amended; or accepted as security for debts previously contracted, shares of the kind and amounts eligible for investment by national banks under section 24 of this title, loans by a bank to its holding company or a fellow subsidiary if made within one year after July 1, 1966 and pursuant to a contract lawfully entered before Jan. 1, 1966, and transactions between a member bank and a majority-owned insured bank.
1959-Pub. L. 86–230 struck out from second and third pars. references to Home Owners' Loan Corporation after Federal Home Loan Banks.
1954-Act June 30, 1954, amended third par. substituting "solely" for "on June 16, 1934" after "(1) engaged" and struck out "or in maintaining and operating properties acquired for banking purposes prior to such date" after "is affiliated".
1935-Act Aug. 23, 1935, amended third par.
Pub. L. 111–203, title VI, §608(d), July 21, 2010, 124 Stat. 1611 , provided that: "The amendments made by this section [amending this section and sections 371c–1 and 1468 of this title] shall take effect 1 year after the transfer date."
Pub. L. 111–203, title VI, §609(b), (c), July 21, 2010, 124 Stat. 1611 , provided that:
"(b) Prospective Application of Amendment.-The amendments made by this section [amending this section] shall apply with respect to any covered transaction between a bank and a subsidiary of the bank, as those terms are defined in section 23A of the Federal Reserve Act (12 U.S.C. 371c), that is entered into on or after the date of enactment of this Act [July 21, 2010].
"(c) Effective Date.-The amendments made by this section shall take effect 1 year after the transfer date."
Pub. L. 97–320, title IV, §410(c), Oct. 15, 1982, 96 Stat. 1520 , provided that: "Section 23A of the Federal Reserve Act, as amended by this section [this section], shall apply to any transaction entered into after the date of enactment of this Act [Oct. 15, 1982], except for transactions which are the subject of a binding written contract or commitment entered into on or before July 28, 1982, and except that any renewal of a participation in a loan outstanding on July 28, 1982, to a company that becomes an affiliate as a result of the enactment of this Act [see section 1 of Pub. L. 97–320, set out as a Short Title of 1982 Amendments note under section 226 of this title], or any participation in a loan to such an affiliate emanating from the renewal of a binding written contract or commitment outstanding on July 28, 1982, shall not be subject to the collateral requirements of this Act."