What is the Bank Holding Company Act?

The Bank Holding Company Act (BHCA) is a federal law that regulates the structure and activities of bank holding companies in the United States. First passed in 1956, the BHCA was designed to limit the ability of individual banks to become too large and powerful. Under the law, each bank holding company must control only one bank and is prohibited from owning any other type of business. This means that a bank holding company cannot be an insurance company, a securities firm, or a real estate company, among other prohibited activities. The Bank Holding Company Act also imposes certain requirements on bank holding companies. For instance, these companies must obtain approval from the Federal Reserve before merging with or acquiring another bank. They must also comply with the Community Reinvestment Act, which requires banks to serve those living in the areas where they are located. The regulations outlined in the Bank Holding Company Act also apply to banks located in Kansas. Kansas has its own set of banking laws, but the Bank Holding Company Act provides federal oversight to ensure that banks in the state are operating in compliance with applicable federal regulations.

Related FAQs

What is the federal Consumer Financial Protection Bureau?
What is the purpose of the Uniform Commercial Code?
What is the Bank Holding Company Supervision Act?
What is the Federal Credit Union Act?
What laws protect personal banking information?
What does a bank need to consider when making a loan?
What are the U.S. banking laws?
What is the Home Ownership and Equity Protection Act?
What are some common banking laws?
What is the Bankruptcy Abuse Prevention and Consumer Protection Act?

What is the Bank Holding Company Act?

Related FAQs

Related Blog Posts