Related Organizations

Parallel-Owned Banking Groups

In a parallel-owned banking group, at least one U.S. bank and at least one foreign bank are independently chartered but controlled either directly or indirectly by the same individual, family, or group of individuals who are closely associated in their business dealings or who otherwise act in concert. If a person or group of persons controls 10 percent or more of any class of voting shares of a depository institution, the banking agencies may deem the person or group to control the institution. The presence of certain other characteristics may indicate that a bank or bank holding company located in the United States is part of a parallel-owned banking group:

• An individual or group of individuals acting in concert that controls a foreign bank also controls any class of voting shares of a U.S. depository institution, or persons owning or controlling the shares receive financing from or arranged by the foreign bank, especially if the shares of the U.S. depository institution are collateral for the stock purchase loan.

• The U.S. bank or bank holding company has adopted particular or unique policies or strategies similar to those of the foreign bank, such as common or joint marketing strategies, sharing of customer information, cross-selling of products, or linked Web sites.

• An officer or director of the U.S. bank or bank holding company either (1) serves as an officer or director of a foreign bank or (2) controls a foreign bank or is a member of a group of individuals acting in concert or with common ties that controls a foreign bank.

• The name of the U.S. bank or bank holding company is similar to that of the foreign bank.

For purposes of applying legal restrictions on a bank’s transactions with its affiliates within a parallel-owned banking group, the 25 percent control threshold in sections 23A and 23B and Regulation W applies. Like chain banking affiliates, members of a parallel-owned banking group that are affiliates cannot take advantage of the sister-bank exemption because that exemption requires ownership by a holding company.

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