[Code of Federal Regulations]
[Title 12, Volume 3, Parts 220 to 299]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR225.81]

[Page 108-109]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL (REGULATION Y)--Table of Contents
 
                 Subpart I--Financial Holding Companies
 
Sec. 225.81  What is a financial holding company?

    Source: Reg. Y, 65 FR 3791, Jan. 25, 2000, unless otherwise noted.


    (a) Definition. A financial holding company is a bank holding 
company that meets the requirements of this section.
    (b) Requirements to be a financial holding company. In order to be a 
financial holding company:
    (1) All depository institutions controlled by the bank holding 
company must be and remain well capitalized;
    (2) All depository institutions controlled by the bank holding 
company must be and remain well managed; and
    (3) The bank holding company must have made an effective election to 
become a financial holding company.
    (c) Well managed--(1) In general. For purposes of this subpart, a 
depository institution is well managed if:
    (i) At its most recent inspection or examination or subsequent 
review by the appropriate Federal banking agency for the depository 
institution, the institution received:

[[Page 109]]

    (A) At least a satisfactory composite rating; and
    (B) At least a satisfactory rating for management; or
    (ii) In the case of a depository institution that has not received 
an examination rating, the Board has determined, after a review of 
managerial and other resources of the depository institution and after 
consulting the appropriate Federal banking agency for the institution, 
that the institution is well managed.
    (2) Merged institutions. A depository institution that results from 
the merger of two or more depository institutions that are well managed 
shall be considered to be well managed unless the Board determines 
otherwise after consulting with the appropriate Federal banking agency 
for each depository institution involved in the merger.
    (d) Requirements for foreign banks that are or are owned by bank 
holding companies--(1) Foreign banks with U.S. branches or agencies. A 
foreign bank that is a bank holding company and that operates a branch 
or agency or owns or controls a commercial lending company in the United 
States must comply with the requirements of this section, Sec. 225.82 
and Secs. 225.90 through 225.93 in order to be a financial holding 
company.
    (2) Bank holding companies that own foreign banks with U.S. branches 
or agencies. A bank holding company that owns a foreign bank that 
operates a branch or agency or owns or controls a commercial lending 
company in the United States must comply with the requirements of this 
section and Sec. 225.82, and the foreign bank must comply with 
Secs. 225.90 through 225.93 in order for the company to be a financial 
holding company.

Reg. Y, 65 FR 3791, Jan. 25, 2000, as amended at 65 FR 15055, Mar. 21, 
2000]