Bank Holding Companies and Change in Bank Control

The Board of Governors is adopting on an interim basis, effective immediately, amendments to the interim rule published in the Federal Register on January 25, 2000, that established procedures for bank holding companies and foreign banks that operate a branch, agency, or commercial lending company in the United States to elect to become financial holding companies. The rule was promulgated on an interim basis, effective March 11, 2000, to implement provisions of the recently enacted Gramm-Leach-Bliley Act that enable bank holding companies and foreign banks that meet applicable statutory requirements to become financial holding companies and thereby engage in a broader range of financial and other activities than are permissible for bank holding companies. As a result of its experience in processing elections under the interim rule, the Board is amending the interim rule to make three changes concerning the elections by foreign banks. First, in order to make the processing of elections by foreign banks parallel to the processing of elections filed by domestic bank holding companies, the interim rule is being amended to permit elections filed by foreign banks that meet the rule's well managed and well capitalized standards to become effective on the 31st day after filing, unless the Board finds the election ineffective or the foreign bank agrees to extend the review period. Second, in order to make the requirements for foreign banks consistent with the requirements imposed on bank holding companies, the Board is amending the interim rule to require that all U.S. depository institution subsidiaries (such as thrifts and nonbank trust companies) of electing foreign banks be well capitalized and well managed and have satisfactory or better composite and Community Reinvestment Act ratings. Third, the Board is amending the interim rule to encourage foreign banks that are chartered in countries where no other bank from that country has received a comprehensive consolidated