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Bank Holding Company
Practical Law Glossary Item 4-384-4321 (Approx. 3 pages)
Glossary
Bank Holding Company
A bank holding company is any entity that meets any of the following requirements:
- Directly or indirectly owns, controls or has the power to vote 25% or more of a class of a bank's securities.
- Controls in any manner the election of a majority of a bank's directors or trustees.
- The Federal Reserve Board determines, after notice and opportunity for hearing, that the entity directly or indirectly exercises a controlling influence over a bank's management or policies.
To become a bank holding company, a company must obtain the consent of the Federal Reserve Board and must comply with the conditions and requirements set out in the Bank Holding Company Act and Regulation Y.
For information on bank holding companies and how they are regulated, see Practice Note, US Banking Law: Overview: Bank Holding Companies. For information on determining whether an investment in a bank causes the investor to become a bank holding company, see Practice Note, Investments Involving Banks: Control Issues.