Related Organizations

Sister Bank and BMA

The sister-bank [18] and BMA exemptions are available to permit a bank to engage in covered transactions with insured affiliated depository institutions subject only to the safety and soundness requirement in section 23A and, in the case of the sister-bank exemption, the prohibition against the purchase of low-quality assets. [19] For example, an insured bank may sell its operating subsidiary to an insured sister bank, even if the purchase price exceeds 10 percent of the acquiring bank’s capital and surplus, provided the operating subsidiary has no low-quality assets and the transaction is not unsafe or unsound. If one of the transacting banks is uninsured, however, the "sisterbank" and BMA exemptions may not be available.

18.
Banks are considered "sister banks" if the same holding company controls 80 percent or more of the voting securities of each of the banks.
19.
A similar parent/subsidiary bank exemption is available when a bank controls 80 percent or more of the voting securities of an insured depository institution or when the latter controls 80 percent or more of the bank’s voting securities.
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