Competition in Banking Act

Summary

Competition in Banking Act - Sets standards to be followed, by the appropriate agency, for approving or disapproving bank mergers and acquisitions of banks by bank holding companies pursuant to the Federal Deposit Insurance Act and the Bank Holding Company Act. Prohibits bank mergers or acquisitions of banks by bank holding companies if such transactions would result in a monopoly, furtherance of a combination or conspiracy to monopolize , or substantially lessen competition in any section of the country unless such anticompetitive effects are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served. Prohibits such tranactions if the appropriate regulatory agency finds that as a result of such transaction any one bank or holding company will control more than 20 percent of the banking assets held by banks in the States in which such bank or holding company is located. Excepts from this 20 percent prohibition a transaction which the appropriate agency finds to be immediately necessary to prevent the probable failure of a bank and where such agency finds that a less anticompetitive alternative is not available. Gives the appropriate agency discretion to prohibit such a transaction even if it is not disallowed by any other part of this Act if it is found to have probable adverse effects on competition or market concentration which are not clearly outweighed by the public interest. Gives the Department of Justice an independent right to seek a court injunction for any violation of this Act. Gives the district courts of the United States jurisdiction to prevent and restrain violations of this Act. Restricts standards for the entry of bank holding companies into bank related activities by requiring that such companies may not enter into such activities unless they are so closely and directly related to banking or managing or controlling banks that they are considered a proper and necessary incident thereto. Requires that such activity be likely to produce substantial benefits to the public which clearly and significantly outweigh possible adverse affects. Includes as necessary to the substantial benefit test of this Act the requirements that such activity: (1) increase competition over time; (2) not tend to lead to undue concentration of economic or financial resources; (3) not risk the financial resources of the bank holding company or its banking subsidiaries; and (4) not interfere with the primary responsibility of a bank holding company or its banking subsidiary to provide effective banking services to the public. Allows a bank holding company to continue specified activities so long as it has continuously engaged in those activities. Prohibits enlargement of the scope or size of such activities to any significant degree if they do not conform to the substantial benefit test of this Act. Permits the Federal Reserve Board to terminate such continuous activites if it determines that they are of an anticompetitive nature inconsistant with the purposes of this Act. Prohibits any national bank from engaging in any activity which the Board finds to be an improper activity for bank holding companies in general, or the holding company owning the bank in question, in particular. Requires bank holding companies and their subsidiaries to be capitalized in a safe and sound manner and to refrain from discriminating in making loans in favor of their parent holding company or their affiliated subsidiaries. Requires regular reports to the Board dealing with all intercompany loans. Sets forth procedures for administration of this Act and for judicial review. Gives to any interested person the right to petition the Board to commence a proceeding to consider the issuance, amendment, or revocation of a regulation promulgated hereunder. Provides for appeal if such petition is denied, and requires if such petition is granted that a hearing be conducted in accordance with the Administrative Procedure Act. States that the facts which warrant the issuance, amendment, or revocation of a regulation include: (1) a finding by the Board that a particular activity conducted on the part of a bank holding company or its subsidiary fails to conform to the scope of the activity for which Board approval was originally given; (2) a finding that such activity fails to conform to new or amended Board regulations or judicial determinations altering the scope of the activity for which Board approval was originally given; (3) a finding that the continued conduct of such activity on the part of a bank holding company or its subsidiary has ceased to produce substantial net benefits to the public; or (4) a finding that the continued conduct of a particular activity on the part of a bank holding company or its subsidiary otherwise violates the established standards for permissible bank holding company activity. Makes the provisions of this Act effective 90 days after the date of enactment of this Act.

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• Introduced in Senate

  summary · EN · 1 December 1975

  Open at official source

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