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







110th CONGRESS
  1st Session
                                H. R. 698

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 29, 2007

 Mr. Gillmor (for himself, Mr. Frank of Massachusetts, Mrs. Maloney of 
New York, Mr. Schiff, Mrs. Jones of Ohio, Mr. Doyle, Mr. Gutierrez, Ms. 
 Watson, Mr. Smith of New Jersey, Mrs. Musgrave, Mr. George Miller of 
   California, Mr. Goode, Mr. Alexander, Mr. Farr, Mr. Grijalva, Mr. 
Holden, Mr. Fortenberry, Mr. LaHood, Mr. Salazar, Mr. McGovern, Mr. Al 
Green of Texas, Mr. Price of North Carolina, Mr. Peterson of Minnesota, 
   Ms. Fallin, Ms. Castor, Mr. Udall of Colorado, Mr. Chandler, Mr. 
  Lamborn, Ms. Carson, Mr. Hodes, and Ms. Schakowsky) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
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 described in section 
        2(c)(2)(H) of the Bank Holding Company Act of 1956.''.
            (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 paragraph:
            ``(8) Industrial bank holding company.--The term 
        `industrial bank holding company' means any company that--
                    ``(A) controls (as determined by the Corporation), 
                directly or indirectly, any industrial bank; and
                    ``(B) is not a bank holding company, a savings and 
                loan holding company, or 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.''.
            (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'' 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) Registration.--
            ``(1) In general.--Within 90 days after becoming an 
        industrial bank holding company, each industrial bank holding 
        company shall register with the Corporation on forms prescribed 
        by the Corporation.
            ``(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 (b)(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.
            ``(4) Application to prior holding companies.--In the case 
        of any company that becomes an industrial bank holding company 
        by virtue of the enactment of the Industrial Bank Holding 
        Company Act of 2007, the 90-day period referred to in paragraph 
        (1) shall begin on the date of the enactment of such Act.
    ``(b) 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 its subsidiaries;
                            ``(ii) the financial condition of the 
                        industrial bank holding company and such 
                        subsidiaries, together with information on 
                        systems maintained within the holding company 
                        for monitoring and controlling financial and 
                        operating risks, and transactions with 
                        industrial bank subsidiaries of the holding 
                        company;
                            ``(iii) compliance by the industrial bank 
                        holding company and its 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 Federal agency or any appropriate State bank 
                supervisor.
                    ``(C) Use of reports from other agencies.--The 
                Corporation may use, for the purposes of this 
                subsection, reports of examination made by any other 
                Federal agency or any appropriate State bank supervisor 
                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.
    ``(c) 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.
                    ``(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 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 paragraph, and remains an 
                affiliate at all times after such date.
            ``(4) Pre-2007 exclusions.--
                    ``(A) Grandfathered commercial firms.--Paragraph 
                (1) shall not apply to any commercial firm--
                            ``(i) which became an industrial bank 
                        holding company 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 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 paragraph, and remains an affiliate at all times 
                after such date.
            ``(5) Transition provision.--Any divestiture of any 
        industrial bank by an industrial bank holding company that is 
        required by operation of this section shall be completed as 
        quickly as is reasonably possible and not later than the end of 
        the 2-year period beginning on the earliest of, as 
        appropriate--
                    ``(A) the date on which control of the industrial 
                bank is acquired by a commercial firm;
                    ``(B) the date on which the industrial bank holding 
                company that controls such bank becomes a commercial 
                firm; or
                    ``(C) the date on which an industrial bank 
                subsidiary of the industrial bank holding company 
                ceases to comply with any limitation applicable to such 
                bank under paragraph (4)(B).
    ``(d) 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.''.
    (c) Enforcement.--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 an industrial bank) of an 
        industrial bank holding company in the same manner as such 
        subsections apply to State nonmember banks.''.
    (d) Technical and Conforming Amendment.--Section 10(e)(2) of the 
Federal Deposit Insurance Act (12 U.S.C. 1820(e)(2)) is amended by 
inserting ``or section 50(b)(2)'' after ``subsection (b)(4)''.
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