§ 1831w. Safety and soundness firewalls applicable to financial subsidiaries of banks

• (a) 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) the State bank complies with the capital deduction and financial statement disclosure requirements in section 24a(c) of this title ;
  • (3) the State bank complies with the financial and operational safeguards required by section 24a(d) of this title ; and
  • (4) the State bank complies with the amendments to sections 23A and 23B of the Federal Reserve Act [ 12 U.S.C. 371c and 371c–1] made by section 121(b) of the Gramm-Leach-Bliley Act.
• (b) 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 November 12, 1999 , and conduct through such subsidiary any activities lawfully conducted in such subsidiary as of such date.
• (c) For purposes of this section, the following definitions shall apply:
  • (1) The term “subsidiary” means any company that is a subsidiary (as defined in section 1813(w)(4) of this title ) of 1 or more insured banks.
  • (2) The term “financial subsidiary” has the meaning given the term in section 24a(g) of this title .
• (d)
  • (1) No provision of this section shall be construed as superseding the authority of the Federal Deposit Insurance Corporation to review subsidiary activities under section 1831a of this title .
  • (2) No provision of this section shall be construed as affecting the applicability of the 20th undesignated paragraph of section 9 of the Federal Reserve Act [ 12 U.S.C. 335 ].