US Code

Public Law 119-73 (01/23/2026)

12 U.S.C. § 1831w

Safety and soundness firewalls applicable to financial subsidiaries of banks

(a)

In general

An insured State bank may control or hold an interest in a subsidiary that engages in activities as principal that would only be permissible for a national bank to conduct through a financial subsidiary if—
(1)
the State bank and each insured depository institution affiliate of the State bank are well capitalized (after the capital deduction required by paragraph (2));
(2)
section 24a(c) of this title the State bank complies with the capital deduction and financial statement disclosure requirements in ;
(3)
section 24a(d) of this title the State bank complies with the financial and operational safeguards required by ; and
(4)
12 U.S.C. 371c the State bank complies with the amendments to sections 23A and 23B of the Federal Reserve Act [ and 371c–1] made by section 121(b) of the Gramm-Leach-Bliley Act.
(b)

Preservation of existing subsidiaries

Notwithstanding subsection (a), an insured State bank may retain control of a subsidiary, or retain an interest in a subsidiary, that the State bank lawfully controlled or acquired before , and conduct through such subsidiary any activities lawfully conducted in such subsidiary as of such date.

(c)

Definitions

For purposes of this section, the following definitions shall apply:
(1)

Subsidiary

section 1813(w)(4) of this titleThe term “subsidiary” means any company that is a subsidiary (as defined in ) of 1 or more insured banks.

(2)

Financial subsidiary

section 24a(g) of this titleThe term “financial subsidiary” has the meaning given the term in .

(d)

Preservation of authority

(1)

This chapter

section 1831a of this titleNo provision of this section shall be construed as superseding the authority of the Federal Deposit Insurance Corporation to review subsidiary activities under .

(2)

Federal Reserve Act

12 U.S.C. 335No provision of this section shall be construed as affecting the applicability of the 20th undesignated paragraph of section 9 of the Federal Reserve Act [].

Sept. 21, 1950, ch. 967, § 2Pub. L. 106–102, title I, § 121(d)(1)113 Stat. 1380([46], as added , , .)

Editorial Notes

References in Text

section 121(b) of Pub. L. 106–102113 Stat. 1378section 371c of this titleSection 121(b) of the Gramm-Leach-Bliley Act, referred to in subsec. (a)(4), is , title I, , , which amended .

Statutory Notes and Related Subsidiaries

Effective Date

section 161 of Pub. L. 106–102section 24 of this titleSection effective 120 days after , see , set out as an Effective Date of 1999 Amendment note under .