Banking Integrity Act of 1985

Banking Integrity Act of 1985 - Amends the Bank Holding Company Act of 1956 to redefine a "bank": (1) to include an insured bank as defined in the Federal Deposit Insurance Act and any institution eligible to become so insured; and (2) to exclude specified depository institutions as defined under the Federal Reserve Act, any foreign bank having an insured or uninsured branch in the United States, and any institution which functions only in a trust or fiduciary capacity under specified restrictions. Sets forth transitional provisions with respect to entities affected by such definitional change. Provides that an institution shall not be required to obtain insurance from the Federal Deposit Insurance Corporation as a holding company or subsidiary thereof if such institution: (1) becomes a bank by virtue of such definitional change; (2) was operating on the date of enactment of this Act; and (3) was and continues to be insured under the laws of specified States.

Prohibits a State chartered bank subsidiary of a bank holding company from making investments or conducting activities outside the State where it is chartered, unless such activities are authorized: (1) under the Bank Holding Company Act of 1956; or (2) for national banks under the National Banking Act.