Overview of Holding Company and Bank Regulators
In the U.S., various types of depository institutions are authorized to engage in banking. The types are primarily determined by the institution’s charter (e.g., national bank, state bank, federal savings bank, state savings bank) and whether the institution is a “member” of the Federal Reserve System (e.g., state member bank, state non-member bank). After you know the type of institution, you can determine which agency or agencies primarily regulate the institution. For national banks, the association’s name must include the word “National.” If the word “Association” is used in the name, it must be spelled out completely. The OCC (defined below) has permitted use of the appreciation “N.A.” for National Association.
The current regulatory scheme in the U.S. is a dual banking system of state and federal regulation, with federal regulation split among various regulatory authorities. The federal regulatory agencies which principally supervise banks, savings associations and savings banks are the Office of the Comptroller of the Currency (“OCC”), the Federal Deposit Insurance Corporation (“FDIC”), and the Board of Governors of the Federal Reserve System (“FRB”). The Bureau of Consumer Financial Protection (“CFPB”) regulates, among others, the consumer businesses of banks with other $10 billion in assets. In addition, state-chartered banks, savings associations, and savings banks are regulated by their state chartering authority. The following chart sets forth the agency or agencies primarily responsible for supervision and regulation of a particular type of institution:
Agency Supervised Institution(s)
OCC national banks, federal savings associations
FDIC insured state banks that are not members of the Federal Reserve System
FRB state bank members of the Federal Reserve System, bank holding
companies, and their nonbank subsidiaries; savings and loan holding
companies
State banking agencies state banks and state savings associations
CFPB consumer businesses of banks with over $10 billion in assets, certain
other consumer lenders
The determination of a particular institution’s charter and primary regulator(s) will, in many cases, determine the applicable statutes and regulations that govern. The regulations for a particular federal regulatory agency are generally codified in the following sections of the Code of Federal Regulations (“CFR”):
Agency Parts
OCC 12 C.F.R. pt. 1 (national banks and savings associations); 12 C.F.R. pt. 100
(savings associations)
FRB 12 C.F.R. pt. 200
FDIC 12 C.F.R. pt 300
CFPB 12 C.F.R. pt 1000
The “alphabet soup regulations”, which generally implement consumer protection laws such as the Trust in Lending Act, are commonly known as such because they are titled by letters. On July 21, 2011, the authority over the alphabet soup regulations were generally transferred to the CFPB from the FRB and other agencies which previously administered them.
Section 10(c)(2)(H) of the Home Owners’ Loan Act (“HOLA”) incorporates by reference the financial, incidental and complementary activities that are permissible to financial holding companies (“FHCs”) under section 4(k) of the Bank Holding Company Act (“4(k) Activities”). 4(k) Activities include, but are not limited to, the nonbonding activities that are permissible for a bank holding company (“BHC”) under section 4(c) of the BHC Act (“4(c) Activities”). Section 10(c)(2)(F)(i) of HOLA, as implemented in Section 238.54 of Regulation LL (12 C.F.R. 238.54), authorizes a savings and loan holding company (“SLHC”) to engage in 4(c) Activities. Section 225.28 of Regulation Y contains a laundry list of 4(c) Activities (the “Laundry List”).
Section 10(l) of the Home Owners’ Loan Act (HOLA) permits a state savings bank (referred to as an “electing bank”) that meets the Qualified Thrift Lender (“QTL”) test to be deemed a savings association solely for the purpose of deterring the letting bank’s parent holding company as a SLHC under section 10 of HOLA.