Financial System Integrity Act of 1985

Financial System Integrity Act of 1985 - Amends the Bank Holding Company Act of 1956 to redefine the term "bank" to: (1) include any bank insured by the Federal Deposit Insurance Corporation and any institution which is eligible to become so insured; and (2) exclude any foreign bank having an insured or uninsured branch in the United States, specified depository institutions as defined in the Federal Reserve Act, and institutions which function solely in a trust or fiduciary capacity and meet other specified requirements.

Requires any entity which becomes a bank holding company as a result of such revised definition (except an entity whose control of what becomes a "bank" was approved before June 30, 1983) to comply with the provisions of the Bank Holding Company Act of 1956 within 180 days. Prohibits any expansion of activities, but allows a quantitative increase in such activities, by such excepted entities. Prohibits such entities which are not excepted entities from retaining control of an institution which becomes a "bank" unless such retention is approved by the Board of Governors of the Federal Reserve System.