Related Organizations

Holding Companies

The FRB is the primary supervisory authority over BHCs. However, the OCC has limited authority, pursuant to 12 USC 481, to examine BHCs and their nonbanking subsidiaries that are affiliated with national banks. Section 305 of the Riegle Community Development and Regulatory Improvement Act of 1994, 12 USC 1820(d), requires each federal banking agency, to the extent practical and consistent with principles of safety and soundness, to coordinate examinations of an insured depository institution with those of the institution’s affiliates. Such examinations should be coordinated even if more than one federal agency is involved. The "Bank Supervision Process" booklet of the Comptroller’s Handbook provides more detail on coordination between the regulators

There are also situations in which certain special-purpose national banks are owned by holding companies that are not regulated by the FRB. The following guidance applies in those cases, as well.

Examiners should determine whether the holding company structure has strengthened the individual bank by providing financial support, diversification, economies of scale, and specialized management support, or has weakened the bank by introducing undue concentrations of credit, noncompliance with law or bank policy, and insufficient management talent.

Examiners will review transactions between the bank and the holding company, including extensions of credit and fees paid for services provided.

Examiners should consider the following factors when assessing the financial and operational effect of the parent company on the bank’s operations: management, financial support, diversification and control, economies of scale, and taxes.

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