Bill summaries are authored by CRS.

Shown Here:
Passed House amended (05/21/2007)

Industrial Bank Holding Company Act of 2007 - Amends the Federal Deposit Insurance Act (FDIA) to apply the bank share or asset acquisition requirements of the Bank Holding Company Act of 1956 to any company that is or would become an industrial bank holding company.

States that an application filed to acquire control of an industrial bank shall be treated as an application for a deposit facility.

Subjects an industrial bank to Federal Deposit Insurance Corporation (FDIC) requirements regarding registration, reporting, and bank examinations.

Authorizes the FDIC to accept reports that an industrial bank holding company or its subsidiary has provided to another federal or state supervisor or to any appropriate self-regulatory organization.

Prohibits the FDIC from imposing any capital or capital adequacy rules, guidelines, standards, or requirements on any functionally regulated affiliate of any depository institution controlled by an industrial bank holding company that: (1) is not a depository institution; but (2) is in compliance with applicable capital requirements, and is properly registered as an investment adviser or licensed as an insurance agent.

States that such prohibition shall not be construed as preventing the FDIC from imposing capital or capital adequacy regulations regarding: (1) activities of a registered investment adviser other than with respect to investment advisory activities or activities incidental to investment advisory activities; or (2) activities of a licensed insurance agent other than insurance agency activities or activities incidental to insurance agency activities.

Requires a federal supervisory agency of an industrial bank holding company to: (1) forego, to the fullest extent possible, any examination of any depository institution subsidiary of the holding company; and (2) use the reports of examinations of the institution made by the appropriate federal or state regulatory agency in lieu of a direct examination.

Authorizes the FDIC to require from either a regulatory agency or a holding company that controls an industrial bank any information necessary to: (1) assess risk to the industrial bank; or (2) determine its condition.

Prohibits the construction of any law as preventing the FDIC from examining an industrial bank affiliate in order to disclose fully the effect of its relationship with the bank, if the FDIC finds it necessary to determine an industrial bank's condition.

Prohibits an industrial bank from being controlled, directly or indirectly, by a commercial firm. Exempts certain grandfathered institutions and corporate reorganizations.

Prescribes activity and branching limitations affecting industrial bank subsidiaries of certain commercial firms.

Sets forth transition requirements for divestiture by a non-complying commercial firm of ownership or control of industrial bank subsidiary.

Authorizes a federal supervisory agency to order a holding company or a nonbank subsidiary to terminate an activity or its ownership or control over certain depository institution subsidiaries if the activity or ownership or control of a nonbank subsidiary (other than a depository institution's nonbank subsidiary) represents a serious risk to a depository institution subsidiary of the holding company.

Prohibits any foreign bank, after January 28, 2007, from acquiring direct or indirect control of an industrial bank unless the Board of Governors of the Federal Reserve System (Federal Reserve Board) has determined 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. Requires the Federal Reserve Board to make such a determination jointly with the Director of Office of Thrift Supervision in the case of a foreign bank that is a savings and loan holding company.

Requires a holding company of an industrial bank to serve as a source of financial and managerial strength to its subsidiary banks.

Prohibits such holding company from conducting its operations in an unsafe or unsound manner.

Declares FDIC enforcement provisions, particularly cease-and-desist proceedings, applicable to an industrial bank holding company and its nonbank subsidiaries in the same manner as such provisions apply to state nonmember insured banks.

Subjects industrial bank holding companies to the prompt corrective action requirements of the FDIA. Authorizes the appropriate federal banking agency to prohibit any industrial bank holding company having control of the insured depository institution from making any capital distribution without prior FDIC approval if such industrial bank holding company is significantly undercapitalized and fails to submit and implement capital restoration plans.