What is the Bank Holding Company Supervision Act?

The Bank Holding Company Supervision Act is a federal law that regulates how certain companies interact with banks. The act applies to any company or individual that owns, controls, or has power to vote 25 percent or more of a bank’s voting shares. It requires that the company must register with the Federal Reserve Board (FRB) as a bank holding company (BHC). The BHC Supervision Act allows the Federal Reserve Board to establish guidelines for companies that want to own banks or create a bank holding company. The act also provides the FRB with the power to examine the operations of these BHCs and to take corrective action if necessary. The act provides that companies who own banks must follow all federal banking laws, including the Federal Deposit Insurance Corporation Act, the Truth in Lending Act, the Fair Credit Reporting Act, the Federal Reserve Act, and the Electronic Fund Transfer Act. It also requires the BHCs to maintain sound financial conditions and to ensure that they have sufficient capital to protect their assets. If a BHC is found to be operating in an unsafe or unsound manner, the FRB can impose fines and sanctions. In Kansas, the Bank Holding Company Supervision Act is enforced by the Kansas Bank Commissioner and the Kansas Department of Banking and Finance. The law is enforced to ensure that BHCs are properly managed and that their activities don’t lead to risks that could harm banks, consumers, or the public.

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What is the Bank Holding Company Supervision Act?

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