Financial Modernization Act of 1987 - Title I: Securities Affiliates of Bank Holding Companies - Amends the Banking Act of 1933 to repeal specified provisions of such Act which: (1) bar member banks from affiliating with securities firms; and (2) prohibit member banks from employing officers, directors, or employees who are also employed by a firm primarily engaged in securities underwriting.
Amends the Bank Holding Company Act of 1956 to allow bank holding companies to own shares of securities affiliates which engage in: (1) underwriting, distributing, or dealing in securities of any type; (2) securities brokerage, investment advisory, or other accepted securities activities; and (3) other activities permitted by the Board of Governors of the Federal Reserve System. Establishes criteria for Board approval of such acquisitions. Prohibits mergers between certain large banks or bank holding companies (those having assets of more than $30,000,000,000) and investment banking organizations (those having assets of more than $15,000,000,000).
Establishes criteria (including a notice requirement) for bank holding company funding of securities affiliates. Establishes capital adequacy criteria to be used by the Board in determining whether a bank holding company meets the acquisition guidelines.
Establishes restrictions on inter-affiliate transactions, including prohibiting a member bank from: (1) extending credit to the securities affiliate; or (2) purchasing the assets of the securities affiliate.
Requires each appropriate Federal banking agency to establish a program for: (1) enforcing compliance with the requirements of this Act; and (2) responding to consumer complaints.
Provides that bank holding companies having a securities affiliate that accounts for at least 80 percent of the company's revenues and assets shall not be subject to the inspection, examination, or reporting requirements of the Board.
States that acquisition applications which are not acted upon by the Board within 91 days shall be deemed to be granted.
Preempts State laws which are inconsistent with this Act.
Amends the Federal Deposit Insurance Act to impose additional restrictions on securities affiliations of insured banks.
Authorizes national banks to: (1) underwrite certain types of government bonds; (2) sponsor unit investment trusts; and (3) distribute investment company securities.
Title II: Expedited Procedures - Amends the Bank Holding Company Act of 1956 to establish (under limited circumstances, where a company acquires control of a bank in a reorganization) expedited procedures for forming a bank holding company.
Requires any bank holding company seeking to engage in certain nonbanking activities (as determined by the Board) to notify the Board of such intentions. Allows the Board 60 days to: (1) disapprove the proposal; or (2) extend the time period for Board consideration. Provides limited exceptions from such notice requirements. Requires the Board, in determining whether to disapprove an application under this Act, to consider whether the activity described would produce benefits to the public.
Allows the Board to reduce the post-approval waiting period for: (1) bank holding company acquisitions; and (2) bank mergers.
Introduced in House
Introduced in House
Referred to House Committee on Banking, Finance and Urban Affairs.
Referred to House Committee on Energy and Commerce.
Referred to Subcommittee on Financial Institutions Supervision, Regulation and Insurance.
Referred to Subcommittee on Telecommunications and Finance.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line