What is the Bank Holding Company Act?

The Bank Holding Company Act is a federal law that regulates the activities of a company that operates or controls one or more banks. This act was established in 1956 in order to limit the risk that companies may take in the banking industry. The law is enforced by the Federal Reserve Board and restricts the types of activities that a bank holding company can engage in outside of the banking industry. Bank holding companies are subject to additional restrictions under the Bank Holding Company Act that are not normally applicable to other financial institutions. These restrictions include prohibitions against the acquisition of banks located in another state, limits on the equity investments that bank holding companies may make in other businesses, and restrictions on loans to non-banking entities. The law also requires that bank holding companies must be managed to promote safety and soundness. The Bank Holding Company Act is an important part of the United States financial system. By ensuring that risk is limited and that safety and soundness is promoted, the Act helps to protect consumers, promote financial stability, and improve the overall strength of the banking industry in Tennessee and across the United States.

Related FAQs

What is the Financial Institutions Reform, Recovery and Enforcement Act?
What are the requirements for creating a bank?
What is a loan originator?
What is the Fair Lending Act?
What is the Unlawful Internet Gambling Enforcement Act?
What is the Check Clearing for the 21st Century Act?
What is the Gramm-Leach-Bliley Act?
What is the difference between a bank and a credit union?
What is the Dodd-Frank Wall Street Reform and Consumer Protection Act?
What is the Alternative Mortgage Transaction Parity Act?

What is the Bank Holding Company Act?

Related FAQs

Related Blog Posts