[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 698 Engrossed in House (EH)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
110th CONGRESS
  1st Session
                                H. R. 698

_______________________________________________________________________

                                 AN ACT


 
To amend the Federal Deposit Insurance Act to establish industrial bank 
          holding company regulation, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Industrial Bank Holding Company Act 
of 2007''.

SEC. 2. INDUSTRIAL BANK HOLDING COMPANY REGULATION.

    (a) Definitions.--
            (1) Industrial bank.--Section 3(a) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(a)) is amended by adding at the 
        end the following new paragraph:
            ``(4) Industrial bank.--The term `industrial bank' means 
        any insured State bank that is an industrial bank, industrial 
        loan company, or other institution that is excluded, pursuant 
        to section 2(c)(2)(H) of the Bank Holding Company Act of 1956, 
        from the definition of the term `bank' for purposes of such 
        Act.''.
            (2) Industrial bank holding company.--Section 3(w) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1813(w)) is amended by 
        adding at the end the following new paragraphs:
            ``(8) Industrial bank holding company.--The term 
        `industrial bank holding company' means any company that--
                    ``(A) controls (as determined by the Corporation 
                pursuant to section 2(a) of the Bank Holding Company 
                Act of 1956), directly or indirectly, any industrial 
                bank; and
                    ``(B) is not--
                            ``(i) 1 or more of the following: a bank 
                        holding company, a savings and loan holding 
                        company, a company that is subject to the Bank 
                        Holding Company Act of 1956 pursuant to section 
                        8(a) of the International Banking Act of 1978, 
                        or a holding company regulated by the 
                        Securities and Exchange Commission pursuant to 
                        section 240.15c3-1(a)(7) of title 17 of the 
                        Code of Federal Regulations (as in effect on 
                        January 29, 2007); or
                            ``(ii) controlled by a company described in 
                        clause (i).
            ``(9) Capital terms relating to industrial bank holding 
        companies.--
                    ``(A) Adequately capitalized.--With respect to an 
                industrial bank holding company, the term `adequately 
                capitalized' means a level of capitalization which 
                meets or exceeds all applicable Federal regulatory 
                capital standards.
                    ``(B) Well capitalized.--With respect to an 
                industrial bank holding company, the term `well 
                capitalized' means a level of capitalization which 
                meets or exceeds the required capital levels for well 
                capitalized industrial bank holding companies 
                established by the Corporation.''.
            (3) Technical and conforming amendments to other 
        definitions.--
                    (A) Appropriate federal banking agency.--Section 
                3(q)(3) of the Federal Deposit Insurance Act (12 U.S.C. 
                1813(q)(3)) is amended--
                            (i) by striking ``or a foreign'' and 
                        inserting ``, any foreign''; and
                            (ii) by inserting ``, and any industrial 
                        bank holding company and any subsidiary of an 
                        industrial bank holding company (other than a 
                        bank)'' after ``insured branch''.
                    (B) Depository institution holding company.--
                Section 3(w)(1) of the Federal Deposit Insurance Act 
                (12 U.S.C. 1813(w)(1)) is amended--
                            (i) by striking ``or a savings'' and 
                        inserting ``, any savings''; and
                            (ii) by inserting ``, and any industrial 
                        bank holding company'' before the period at the 
                        end.
    (b) Industrial Bank Holding Company Registration and Ownership.--
The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended 
by adding at the end the following new section:

``SEC. 51. INDUSTRIAL BANK HOLDING COMPANY REGULATION.

    ``(a) Acquisition of Industrial Bank Shares or Assets.--Section 3 
of the Bank Holding Company Act of 1956 (other than section 3(c)(3)(B) 
of that Act) shall apply to any company that is or would become an 
industrial bank holding company in the same manner as such section 
applies to a company that is or would become a bank holding company, 
except that for purposes of applying this subsection--
            ``(1) any reference to a `bank holding company' in such 
        section 3 shall be deemed to be a reference to an `industrial 
        bank holding company';
            ``(2) any reference to a `bank' in such section 3 shall be 
        deemed to be a reference to an `industrial bank';
            ``(3) any reference to the `Board' in such section 3 shall 
        be deemed to be a reference to the Corporation;
            ``(4) any reference to the `Bank Holding Company Act 
        Amendments of 1970' in such section 3 shall be deemed to be a 
        reference to the `Industrial Bank Holding Company Act of 2007';
            ``(5) any reference to a `home State' in such section 3 
        shall be deemed to be a reference to--
                    ``(A) with respect to an industrial bank holding 
                company, the State in which the total deposits of all 
                banking subsidiaries of such company were the largest 
                on the later of--
                            ``(i) January 28, 2007; or
                            ``(ii) the date on which the company 
                        becomes an industrial bank holding company 
                        under this section; and
                    ``(B) with respect to an industrial bank, the home 
                State of the bank as determined under section 44(g);
            ``(6) any reference to a `host State' in such section 3 
        shall be deemed to be a reference to--
                    ``(A) with respect to an industrial bank holding 
                company, a State, other than the home State of the 
                company, in which the company controls, or seeks to 
                control, an industrial bank subsidiary; and
                    ``(B) with respect to an industrial bank, the host 
                State of the bank as determined under section 44(g);
            ``(7) any reference to an `out-of-State bank holding 
        company' in such section 3 shall be deemed to be a reference 
        to, with respect to any State, an industrial bank holding 
        company whose home State is another State; and
            ``(8) any reference to an `out-of-State bank' in such 
        section 3 shall be deemed to be a reference to, with respect to 
        any State, an industrial bank whose home State is another 
        State.
    ``(b) Application Process.--An application filed under subsection 
(a) to acquire control of an industrial bank shall be treated as an 
application for a deposit facility for purposes of this Act and any 
other Federal law.
    ``(c) Registration.--
            ``(1) In general.--Each industrial bank holding company 
        shall register with the Corporation on forms prescribed by the 
        Corporation before the end of the 180-day period beginning on 
        the later of--
                    ``(A) the date the company becomes an industrial 
                bank holding company; or
                    ``(B) the date of the enactment of the Industrial 
                Bank Holding Company Act of 2007.
            ``(2) Information to be included.--Each registration 
        submitted under paragraph (1) shall include such information, 
        under oath, with respect to the financial condition, ownership, 
        operations, management, and intercompany relationships of the 
        industrial bank holding company and subsidiaries of such 
        holding company, and other factors (including information 
        described in subsection (d)(1)(C)), as the Corporation may 
        determine to be appropriate to carry out the purposes of this 
        section.
            ``(3) Extension of time for submitting complete 
        information.--Upon application by an industrial bank holding 
        company and subject to such requirements, factors, and evidence 
        as the Corporation may require, the Corporation may extend the 
        period described in paragraph (1) within which such company 
        shall register and file the requisite information.
    ``(d) Reports and Examinations.--
            ``(1) Reports.--
                    ``(A) Reports required.--Each industrial bank 
                holding company and each subsidiary of an industrial 
                bank holding company, other than an industrial bank, 
                shall file with the Corporation such reports as may be 
                required by the Corporation.
                    ``(B) Form and manner.--Reports filed under 
                subparagraph (A) shall be made under oath and shall be 
                in such form and for such periods, as the Corporation 
                may prescribe.
                    ``(C) Information.--Each report filed under 
                subparagraph (A) shall contain such information as the 
                Corporation may require concerning--
                            ``(i) the operations of the industrial bank 
                        holding company and the holding company's 
                        subsidiaries;
                            ``(ii) the financial condition of the 
                        industrial bank holding company and such 
                        subsidiaries, together with information on 
                        systems maintained within the holding company 
                        or within any such subsidiary for monitoring 
                        and controlling financial and operating risks, 
                        and transactions with insured depository 
                        institution subsidiaries of the holding 
                        company;
                            ``(iii) compliance by the industrial bank 
                        holding company and the holding company's 
                        subsidiaries with all applicable Federal and 
                        State law; and
                            ``(iv) such other information as the 
                        Corporation may require.
                    ``(D) Acceptance of existing reports.--For purposes 
                of this paragraph, the Corporation may accept reports 
                that an industrial bank holding company or any 
                subsidiary of such company has provided or has been 
                required to provide to any other Federal or State 
                supervisor or to any appropriate self-regulatory 
                organization.
            ``(2) Examinations.--
                    ``(A) In general.--Each industrial bank holding 
                company and each subsidiary of each such holding 
                company (other than an industrial bank) shall be 
                subject to such examinations by the Corporation as the 
                Corporation may prescribe for purposes of this section.
                    ``(B) Furnishing reports to other agencies.--
                Examination and other reports made or received under 
                this section may be furnished by the Corporation to any 
                other appropriate Federal agency or any appropriate 
                State bank supervisor or other State financial 
                supervisory agency.
                    ``(C) Use of reports from other agencies.--The 
                Corporation may use, for the purposes of this 
                subsection, reports of examination made by any other 
                appropriate Federal agency, any appropriate State bank 
                supervisor, or any other State financial supervisory 
                authority with respect to any industrial bank holding 
                company or subsidiary of any such holding company, to 
                the extent the Corporation may determine such use to be 
                feasible for such purposes.
            ``(3) Capital.--
                    ``(A) In general.--The Corporation may not, by 
                regulation, guideline, order, or otherwise, prescribe 
                or impose any capital or capital adequacy rules, 
                guidelines, standards, or requirements on any 
                functionally regulated affiliate (as defined in section 
                45) of any depository institution that is controlled by 
                an industrial bank holding company that--
                            ``(i) is not a depository institution; and
                            ``(ii) is--
                                    ``(I) in compliance with the 
                                applicable capital requirements of the 
                                appropriate Federal supervisory agency 
                                of the affiliate (including the 
                                Securities and Exchange Commission or 
                                State insurance authority);
                                    ``(II) properly registered as an 
                                investment adviser under the Investment 
                                Advisers Act of 1940, or with any 
                                State; or
                                    ``(III) is licensed as an insurance 
                                agent with the appropriate State 
                                insurance authority.
                    ``(B) Rule of construction.--Subparagraph (A) shall 
                not be construed as preventing the Corporation from 
                imposing capital or capital adequacy rules, guidelines, 
                standards, or requirements with respect to--
                            ``(i) activities of a registered investment 
                        adviser other than with respect to investment 
                        advisory activities or activities incidental to 
                        investment advisory activities; or
                            ``(ii) activities of a licensed insurance 
                        agent other than insurance agency activities or 
                        activities incidental to insurance agency 
                        activities.
    ``(e) Access to Information.--
            ``(1) Information provided by corporation.--Any 
        confidential supervisory information, including examination or 
        other reports, pertaining to an industrial bank furnished by 
        the Corporation to any other Federal agency or any appropriate 
        State supervisory agency shall remain confidential unless the 
        Corporation, in writing, otherwise consents.
            ``(2) Deference to depository institution examinations.--
        Any appropriate Federal supervisory agency of a holding company 
        of an industrial bank shall, to the fullest extent possible, 
        forego any examination of any depository institution subsidiary 
        of the holding company and use the reports of examinations of 
        the institution made by the appropriate Federal banking agency 
        and the appropriate State bank supervisor in lieu of a direct 
        examination.
            ``(3) Information to be provided to corporation.--
                    ``(A) Request to agency.--Upon request by the 
                Corporation, an appropriate Federal supervisory agency 
                may provide to the Corporation information regarding 
                the condition of an industrial bank, any holding 
                company that controls such industrial bank, or any 
                other affiliate of any such holding company that is 
                necessary to assess risk to the industrial bank.
                    ``(B) Availability from holding company directly.--
                Notwithstanding section 45, section 115 of the Gramm-
                Leach-Bliley Act, or any other provision of law 
                (including any regulation), if the information 
                requested under subparagraph (A) is not provided to the 
                Corporation, and the information is necessary to assess 
                risk to the industrial bank, the Corporation may 
                require the holding company or affiliate referred to in 
                such subparagraph with respect to such bank to provide 
                such information to the Corporation.
            ``(4) Examinations by corporation.--
                    ``(A) In general.--Subject to subparagraph (B) and 
                notwithstanding section 45, section 115 of the Gramm-
                Leach-Bliley Act, or any other provision of law 
                (including any regulation), no law shall be construed 
                as preventing the Corporation from examining an 
                affiliate of an industrial bank pursuant to paragraph 
                (2), (3), or (4) of section 10(b), as may be necessary 
                to disclose fully the relationship between the 
                industrial bank and the affiliate, and the effect of 
                such relationship on the industrial bank, if the 
                Corporation finds such examination necessary to 
                determine the condition of an industrial bank.
                    ``(B) Functionally regulated affiliates.--Before 
                the Corporation may examine any affiliate of an 
                industrial bank that is--
                            ``(i) a broker, a dealer, an investment 
                        company, or an investment advisor, or
                            ``(ii) an entity that is subject to 
                        consolidated supervision by the Securities and 
                        Exchange Commission, other than a depository 
                        institution,
                the Corporation shall request the Commission to provide 
                the information that the Corporation is seeking to 
                obtain through examination and may proceed with the 
                examination only if the requested information is not 
                provided by the Commission in a timely manner.
    ``(f) Limitation on Control.--
            ``(1) In general.--Except as provided in paragraph (3) or 
        (4), no industrial bank may be controlled, directly or 
        indirectly, by a commercial firm.
            ``(2) Commercial firm defined.--For purposes of this 
        section, the term `commercial firm' means any entity at least 
        15 percent of the annual gross revenues of which on a 
        consolidated basis, including all affiliates of the entity, 
        were derived from engaging, on an on-going basis, in activities 
        that are not financial in nature or incidental to a financial 
        activity during at least 3 of the prior 4 calendar quarters, as 
        determined by the Corporation in accordance with regulations 
        which the Corporation shall prescribe.
            ``(3) Pre-2003 exclusions.--
                    ``(A) Grandfathered institutions.--Paragraph (1) 
                shall not apply with respect to any industrial bank--
                            ``(i) which became an insured depository 
                        institution before October 1, 2003, or pursuant 
                        to an application for deposit insurance which 
                        was approved by the Corporation before such 
                        date; and
                            ``(ii) with respect to which there is no 
                        change in control, directly or indirectly, of 
                        the bank after September 30, 2003, that 
                        requires a registration under this section or 
                        an application under section 7(j) or 18(c), 
                        section 3 of the Bank Holding Company Act of 
                        1956, or section 10 of the Home Owners' Loan 
                        Act, except a direct or indirect change of 
                        control in which--
                                    ``(I) immediately prior to such 
                                change in control neither the ultimate 
                                acquiring holding company nor the 
                                ultimate acquired holding company is a 
                                commercial firm;
                                    ``(II) immediately after such 
                                change of control the resulting 
                                ultimate holding company is not a 
                                commercial firm; and
                                    ``(III) the resulting ultimate 
                                holding company is subject to 
                                consolidated supervision by the Office 
                                of Thrift Supervision or a holding 
                                company regulated by the Securities and 
                                Exchange Commission pursuant to section 
                                240.15c3-1(a)(7) of title 17 of the 
                                Code of Federal Regulations (as in 
                                effect on January 29, 2007).
                    ``(B) Corporate reorganizations permitted.--The 
                acquisition of direct or indirect control of the 
                industrial bank referred to in subparagraph (A)(ii) 
                shall not be treated as a `change in control' for 
                purposes of such subparagraph if--
                            ``(i) the company acquiring control is 
                        itself directly or indirectly controlled by a 
                        company that was an affiliate of such bank on 
                        the date referred to in such subparagraph, and 
                        remains an affiliate at all times after such 
                        date; and
                            ``(ii) the transaction through which the 
                        company acquired control of the industrial bank 
                        constituted solely a corporate reorganization 
                        of a company that controlled the industrial 
                        bank on the date referred to in such 
                        subparagraph.
            ``(4) Pre-2007 exclusions.--
                    ``(A) Grandfathered commercial firms.--Paragraph 
                (1) shall not apply to any commercial firm--
                            ``(i) which became a holding company of an 
                        industrial bank by virtue of acquiring control 
                        of an industrial bank on or after October 1, 
                        2003, and before January 29, 2007;
                            ``(ii) which does not acquire control of 
                        any other depository institution after January 
                        28, 2007;
                            ``(iii) with respect to which there is no 
                        change in control, directly or indirectly, of 
                        any depository institution subsidiary after 
                        January 28, 2007, that requires a registration 
                        under this section or an application under 
                        section 7(j) or 18(c), section 3 of the Bank 
                        Holding Company Act of 1956, or section 10 of 
                        the Home Owners' Loan Act; and
                            ``(iv) each industrial bank subsidiary of 
                        which remains in compliance with the 
                        limitations contained in subparagraph (B).
                    ``(B) Activity and branching limitations.--An 
                industrial bank subsidiary of a commercial firm 
                described in clauses (i), (ii) and (iii) of 
                subparagraph (A) is in compliance with the requirements 
                of this subparagraph for purposes of subparagraph 
                (A)(iv) so long as the industrial bank--
                            ``(i) engages only in activities in which 
                        the industrial bank was engaged on January 28, 
                        2007; and
                            ``(ii) does not acquire, establish, or 
                        operate any branch, deposit production office, 
                        loan production office, automated teller 
                        machine, or remote service unit in any State 
                        other than the home State of the bank or any 
                        host State in which such bank operated branches 
                        on January 28, 2007.
                    ``(C) Corporate reorganizations permitted.--The 
                acquisition of direct or indirect control of a 
                depository institution subsidiary referred to in 
                subparagraph (A)(iii) shall not be treated as a `change 
                in control' for purposes of such subparagraph if--
                            ``(i) the company acquiring control is 
                        itself directly or indirectly controlled by a 
                        company that was an affiliate of such 
                        subsidiary on the date referred to in such 
                        subparagraph, and remains an affiliate at all 
                        times after such date; and
                            ``(ii) the transaction through which the 
                        company acquired control of the depository 
                        institution constituted solely a corporate 
                        reorganization of a company that controlled the 
                        depository institution on the date referred to 
                        in such subparagraph.
    ``(g) Procedures and Timing for Termination of Activities or 
Divestiture.--
            ``(1) Transition provision.--
                    ``(A) In general.--Any company that fails to comply 
                with the provisions of subsection (f) shall divest its 
                ownership or control of each industrial bank subsidiary 
                of the company not later than the end of the 2-year 
                period beginning on the first date that the company 
                ceased to comply with subsection (f).
                    ``(B) Extension of time period.--
                            ``(i) In general.--Upon application by a 
                        holding company that controls an industrial 
                        bank, the appropriate Federal supervisory 
                        agency of such holding company may extend the 
                        2-year period referred to in subparagraph (A) 
                        with respect to such company for not more than 
                        1 year if, in such agency's judgment, such an 
                        extension would not be detrimental to the 
                        public interest.
                            ``(ii) Factors.--In making any decision to 
                        grant an extension under clause (i) to a 
                        holding company of an industrial bank, the 
                        appropriate Federal supervisory agent of such 
                        holding company shall consider whether--
                                    ``(I) the company has made a good 
                                faith effort to divest such interests; 
                                and
                                    ``(II) such extension is necessary 
                                to avert substantial loss to the 
                                company.
            ``(2) Conditions before divestiture.--During the 2-year 
        period referred to in paragraph (1)(A) with respect to any 
        company and any extension of such period, the appropriate 
        Federal supervisory agency may impose any conditions or 
        restrictions on the company or any subsidiary of the company 
        (other than a bank), including restricting or prohibiting 
        transactions between the company or subsidiary and any 
        depository institution subsidiary of the company, as are 
        appropriate under the circumstances.
            ``(3) Termination of activities or divestiture of nonbank 
        subsidiaries constituting serious risk.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this section, the appropriate Federal 
                supervisory agency may, whenever such agency has 
                reasonable cause to believe that the continuation by a 
                holding company of an industrial bank of any activity 
                or of ownership or control of any nonbank subsidiary of 
                such holding company, other than a nonbank subsidiary 
                of a depository institution, constitutes a serious risk 
                to the financial safety, soundness, or stability of a 
                depository institution subsidiary of the holding 
                company and is inconsistent with sound banking 
                principles or with the purposes of this section, at the 
                election of the holding company--
                            ``(i) order such holding company or any 
                        such nonbank subsidiary, after due notice and 
                        opportunity for hearing, and after considering 
                        the views of the appropriate Federal banking 
                        agency and, if applicable, appropriate State 
                        bank supervisor, to terminate such activities 
                        or to terminate (within 120 days or such longer 
                        period as the appropriate Federal supervisory 
                        agency may direct in unusual circumstances) the 
                        ownership or control by such holding company or 
                        nonbank subsidiary of any such depository 
                        institution subsidiary either by sale or by 
                        distribution of the shares of the depository 
                        institution subsidiary, in accordance with 
                        subparagraph (B), to the shareholders of the 
                        holding company of the industrial bank; or
                            ``(ii) order the holding company of the 
                        industrial bank, after due notice and 
                        opportunity for hearing, and after consultation 
                        with the appropriate State bank supervisor for 
                        the industrial bank, to terminate (within 120 
                        days or such longer period as the appropriate 
                        Federal supervisory agency may direct) the 
                        ownership or control of any such industrial 
                        bank by such company.
                    ``(B) Pro rata distribution.--Any distribution to 
                shareholders referred to in clause (i) shall be pro 
                rata with respect to all of the shareholders of the 
                distributing company, and such company shall not make 
                any charge to any shareholder in connection with such 
                distribution.
            ``(4) Foreign bank ownership.--
                    ``(A) Industrial banks.--After January 28, 2007, no 
                foreign bank may acquire, directly or indirectly, 
                control of an industrial bank unless the Board of 
                Governors of the Federal Reserve System has determined 
                by order, or in the case of a foreign bank that is a 
                savings and loan holding company the Board of Governors 
                of the Federal Reserve System and the Director of 
                Office of Thrift Supervision have jointly determined by 
                order, in connection with the change in control or 
                acquisition of the industrial bank and after 
                consultation with the Corporation, that the foreign 
                bank is subject to comprehensive supervision or 
                regulation on a consolidated basis by the appropriate 
                authorities in the bank's home country in accordance 
                with the standard in section 3(c)(3)(B) of the Bank 
                Holding Company Act of 1956.
                    ``(B) Conforming amendment.--Notwithstanding any 
                other provision of law, after the date of enactment of 
                the Industrial Bank Holding Company Act of 2007, the 
                Director of the Office of Thrift Supervision shall not 
                approve any acquisition of a savings association under 
                section 10(e)(2) of the Home Owners' Loan Act by a 
                foreign bank that is subject to the Bank Holding 
                Company Act of 1956 pursuant to section 8(a) of the 
                International Banking Act of 1978 and that is not a 
                bank holding company unless the Director of the Office 
                of Thrift Supervision and the Board of Governors of the 
                Federal Reserve System have jointly determined, by 
                order, in connection with the acquisition of the 
                savings association that the foreign bank is subject to 
                comprehensive supervision or regulation on a 
                consolidated basis by the appropriate authorities in 
                the bank's home country in accordance with the standard 
                in section 3(c)(3)(B) of the Bank Holding Company Act 
                of 1956.
            ``(5) Holding company responsibility.--
                    ``(A) Source of strength.--Notwithstanding section 
                45, a holding company of an industrial bank--
                            ``(i) shall serve as a source of financial 
                        and managerial strength to the subsidiary banks 
                        of such holding company; and
                            ``(ii) shall not conduct the operations of 
                        the holding company in an unsafe or unsound 
                        manner.
                    ``(B) Implementation.--The appropriate Federal 
                supervisory agency of the holding company of an 
                industrial bank shall implement the requirements under 
                subparagraph (A).
    ``(h) Administrative Provisions.--
            ``(1) Agent for service of process.--The Corporation may 
        require any industrial bank holding company, or persons 
        connected with such holding company if it is not a corporation, 
        to execute and file a prescribed form of irrevocable 
        appointment of agent for service of process.
            ``(2) Release from registration.--The Corporation may at 
        any time, upon the Corporation's own motion or upon 
        application, release a registered industrial bank holding 
        company from any registration previously made by such company, 
        if the Corporation determines that such company no longer 
        controls any industrial bank.
    ``(i) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Appropriate federal supervisory agency.--The term 
        `appropriate Federal supervisory agency' means, with respect to 
        a company that controls an industrial bank--
                    ``(A) the Corporation, in the case of a company 
                that is an industrial bank holding company;
                    ``(B) the Board of Governors of the Federal Reserve 
                System, in the case of a company that is a bank holding 
                company or that is subject to the Bank Holding Company 
                Act of 1956 pursuant to section 8(a) of the 
                International Banking Act of 1978;
                    ``(C) the Office of Thrift Supervision, in the case 
                of a company that is a savings and loan holding 
                company; and
                    ``(D) the Securities and Exchange Commission, in 
                the case of a company that is regulated by the 
                Commission pursuant to section 240.15c3-1(a)(7) of 
                title 17 of the Code of Federal Regulations (as in 
                effect on January 29, 2007).
            ``(2) Rule of construction.--Under the definition of the 
        term `appropriate Federal supervisory agency' in paragraph (1), 
        more than 1 agency may be an appropriate Federal supervisory 
        agency with respect to any given company that controls an 
        industrial bank.''.
    (c) Enforcement.--
            (1) Section 8(b) of the Federal Deposit Insurance Act (12 
        U.S.C. 1818(b)) is amended by adding at the end the following 
        new paragraph:
            ``(11) Industrial bank holding companies.--This subsection 
        and subsections (c) through (s) and subsection (u) of this 
        section shall apply to any industrial bank holding company, and 
        to any subsidiary (other than a bank) of an industrial bank 
        holding company in the same manner as such subsections apply to 
        State nonmember insured banks.''.
            (2) Section 8(h)(2) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1818(h)(2)) is amended by striking ``(2) Any party 
        to'' and inserting ``(2) Any party aggrieved by an order of any 
        appropriate Federal supervisory agency under section 51 or any 
        party to''.
            (3) Section 8(i) of the Federal Deposit Insurance Act (12 
        U.S.C. 1818(i)) is amended by striking ``or 39'' each place 
        such term appears and inserting ``, 39, or 51''.
    (d) Prompt Corrective Action.--Section 38(f)(2)(H) of the Federal 
Deposit Insurance Act (12 U.S.C. 1831o(f)(2)(H)) is amended by--
            (1) by striking ``bank holding company.--Prohibiting any 
        bank'' and inserting ``holding company.--
                            ``(i) Bank holding company.--Prohibiting 
                        any bank''; and
            (2) by adding at the end the following new clause:
                            ``(ii) Industrial bank holding company.--
                        Prohibiting any industrial bank holding company 
                        having control of the insured depository 
                        institution from making any capital 
                        distribution without the prior approval of the 
                        Corporation.''.
    (e) Technical and Conforming Amendments.--
            (1) Section 10(e)(2) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1820(e)(2)) is amended by inserting ``or section 
        51'' after ``subsection (b)(4)''.
            (2) Section 1101(6) of the Right to Financial Privacy Act 
        of 1978 (12 U.S.C. 3401(6)) is amended--
                    (A) in subparagraph (B), by striking ``and'' after 
                the semicolon;
                    (B) in subparagraph (C), by inserting ``and'' after 
                the semicolon; and
                    (C) by inserting after paragraph (C) the following 
                new paragraph:
                    ``(D) any industrial bank holding company (as 
                defined in section 3(w)(8) of the Federal Deposit 
                Insurance Act);''.
            (3) Section 115 of the Gramm-Leach-Bliley Act (12 U.S.C. 
        1820a) is amended--
                    (A) in subsection (a), by striking ``or'' after 
                ``bank holding company'' and inserting ``, industrial 
                bank holding company, or'';
                    (B) in subsection (d)--
                            (i) by redesignating paragraphs (5), (6), 
                        and (7) as paragraphs (6), (7), and (8), 
                        respectively; and
                            (ii) by inserting after paragraph (4) the 
                        following new paragraph:
            ``(5) Industrial bank holding company.--The term 
        `industrial bank holding company' has the same meaning as in 
        section 3(w)(8) of the Federal Deposit Insurance Act.''.
            (4) Section 304(g)(1) of the Home Mortgage Disclosure Act 
        of 1975 (12 U.S.C. 2803(g)(1)) is amended by inserting ``, 
        industrial bank holding company,'' after ``bank holding 
        company''.

SEC. 3. REGULATIONS.

    The Corporation shall prescribe such regulations as the Corporation 
determines to be appropriate to carry out the amendments made by this 
Act.

            Passed the House of Representatives May 21, 2007.

            Attest:

                                                                 Clerk.
110th CONGRESS

  1st Session

                               H. R. 698

_______________________________________________________________________

                                 AN ACT

To amend the Federal Deposit Insurance Act to establish industrial bank 
          holding company regulation, and for other purposes.