William A. Prado Torres
FINA4015
9 de septiembre de 2019
For each of the actions described, explain which government agency or agencies a
financial manager must deal with and what laws are involved.
a. Chartering a new bank
a. To charter a new bank there has to be the intervention of the Comptroller
of the Currency who issues the chartering of new national banks. The
State Boards might also be interested in the charter of new depository
institutions. The Federal Reserve System will deal with the new institution
once it becomes chartered because they monitor this kind of banks. The
National Bank Act (1863-64) provides the mandamus that brings
chartering to banks.
b. Establishing new bank branch offices.
a. Establishing a new bank branch requires the approval of the Federal
Reserve System, the Comptroller of the Currency (if it’s a national bank). If
the bank is insured by the Federal Deposit Insurance Corporation, that
company has to approve the application. The Glass-Steagall (1933) and
the Riegle-Neal interstate Banking and Branching Efficiency Act (1994)
are the resolutions related to establishing bank branch offices.
c. Forming Bank Holding Companies or Financial Holding Companies.
a. To either create a Bank Holding Company or a Financial Holding
Company, there will be the intervention of Federal Reserve System. They
act as supervisor of the companies allowed to combine multiple financial
services. The Department of Justice may be interested when trying to
create or acquire a Bank or Financial Holding Company. That agency
should look up for a balance in market competition. The Bank Holding
Company Act of 1956, Riegle-Neal interstate Banking and Branching
Efficiency Act (1994) and the Gramm-Leach-Bliley Act (1999) were
legislated to cover that social need.
d. Complete a bank merger.
a. A bank merger can be completed by the approval of the Federal Reserve
System (for members). Another agency that regulates the merging of
institutions is the Federal Deposit Insurance Company (is at least one of
the merging banks is insured). The Department of Justice needs to
evaluate the competition and determine what would be the effect on the
market resulting from the new to be agency. The laws that regulate
mergers are Bank Merger Act (1960) and the Riegle-Neal interstate
Banking and Branching Efficiency Act (1994).
e. Making holding company acquisitions of nonbank business.
a. For a holding company to be acquired of nonbank businesses there will be
actions from the Department of Justice, as well as the Federal Reserve
System. Nonbank businesses are sometimes regulated by the dual
system. The Depository Institutions Deregulation and Monetary Control
Act (1980), the Garn-St Germain Depository Institutions Act (1982) and
the Gramm-Leach-Bliley Act (1999) dictate the requirements related to
such corporative actions.