STREAMLINED NONBANKING ACQUISITIONS BY WELL CAPITALIZED AND WELL MANAGED BANKING ORGANIZATIONS.

SEC. 2208. STREAMLINED NONBANKING ACQUISITIONS BY WELL CAPITALIZED AND WELL MANAGED BANKING ORGANIZATIONS. (a) Notice Requirements.— Section 4(j) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(j)) is amended— (1) in paragraph (1)(A), by striking “No” and inserting “Except as provided in paragraph (3), no”; and (2) by adding at the end the following new paragraphs: “(3) No notice required for certain transactions.— No notice under paragraph (1) of this subsection or under subsection (c)(8) or (a)(2)(B) is required for a proposal by a bank holding company to engage in any activity or acquire the shares or assets of any company, other than an insured depository institution, if the proposal qualifies under paragraph (4). “(4) Criteria for statutory approval.— A proposal qualifies under this paragraph if all of the following criteria are met: “(A) Financial criteria.— Both before and immediately after the proposed transaction— “(i) the acquiring bank holding company is well capitalized; “(ii) the lead insured depository institution of such holding company is well capitalized; “(iii) well capitalized insured depository institutions control at least 80 percent of the aggregate total risk-weighted assets of insured depository institutions controlled by such holding company ; and “(iv) no insured depository institution controlled by such holding company is undercapitalized. “(B) Managerial criteria.— “(i) Well managed.— At the time of the transaction, the acquiring bank holding company, its lead insured depository institution, and insured depository institutions that control at least 90 percent of the aggregate total risk-weighted assets of insured depository institutions controlled by such holding company are well managed. “(ii) Limitation on poorly managed institutions.— Except as provided in paragraph (6), no insured depository institution controlled by the acquiring bank holding company has received 1 of the 2 110 STAT. 3009–407lowest composite ratings at the later of the institution’s most recent examination or subsequent review. “(C) Activities permissible.— Following consummation of the proposal, the bank holding company engages directly or through a subsidiary solely in— “(i) activities that are permissible under subsection (c)(8), as determined by the Board by regulation or order thereunder, subject to all of the restrictions, terms, and conditions of such subsection and such regulation or order; and “(ii) such other activities as are otherwise permissible under this section, subject to the restrictions, terms and conditions, including any prior notice or approval requirements, provided in this section. “(D) Size of acquisition.— “(i) Asset size.— The book value of the total assets to be acquired does not exceed 10 percent of the consolidated total risk-weighted assets of the acquiring bank holding company. “(ii) Consideration.— The gross consideration to be paid for the securities or assets does not exceed 15 percent of the consolidated Tier 1 capital of the acquiring bank holding company. “(E) Notice not otherwise warranted.— For proposals described in paragraph (5)(B), the Board has not, before the conclusion of the period provided in paragraph (5)(B), advised the bank holding company that a notice under paragraph (1) is required. “(F) Compliance criterion.— During the 12-month period ending on the date on which the bank holding company proposes to commence an activity or acquisition, no administrative enforcement action has been commenced, and no cease and desist order has been issued pursuant to section 8 of the Federal Deposit Insurance Act, against the bank holding company or any depository institution subsidiary of the holding company, and no such enforcement action, order, or other administrative enforcement proceeding is pending as of such date. “(5) Notification.— “(A) Commencement of activities approved by rule.— A bank holding company that qualifies under paragraph (4) and that proposes to engage de novo, directly or through a subsidiary, in any activity that is permissible under subsection (c)(8), as determined by the Board by regulation, may commence that activity without prior notice to the Board and must provide written notification to the Board not later than 10 business days after commencing the activity. “(B) Activities permitted by order and acquisitions.— “(i) In general.— At least 12 business days before commencing any activity pursuant to paragraph (3) (other than an activity described in subparagraph (A) of this paragraph) or acquiring shares or assets of 110 STAT. 3009–408any company pursuant to paragraph (3), the bank holding company shall provide written notice of the proposal to the Board, unless the Board determines that no notice or a shorter notice period is appropriate. “(ii) Description of activities and terms.— A notification under this subparagraph shall include a description of the proposed activities and the terms of any proposed acquisition. “(6) Recently acquired institutions.— Any insured depository institution which has been acquired by a bank holding company during the 12-month period preceding the date on which the company proposes to commence an activity or acquisition pursuant to paragraph (3) may be excluded for purposes of paragraph (4)(B)(ii) if— “(A) the bank holding company has developed a plan for the institution to restore the capital and management of the institution which is acceptable to the appropriate Federal banking agency; and “(B) all such insured depository institutions represent, in the aggregate, less than 10 percent of the aggregate total risk-weighted assets of all insured depository institutions controlled by the bank holding company. “(7) Adjustment of percentages.— The Board may, by regulation, adjust the percentages and the manner in which the percentages of insured depository institutions are calculated under paragraph (4)(B)(i), (4)(D), or (6)(B) if the Board determines that any such adjustment is consistent with safety and soundness and the purposes of this Act.”. (b) Definitions.— Section 2(o) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(o)) is amended— (1) by striking paragraph (1) and inserting the following new paragraph: “(1) Capital terms.— “(A) Insured depository institutions.— With respect to insured depository institutions, the terms ‘well capitalized’, ‘adequately capitalized’, and ‘undercapitalized’ have the same meanings as in section 38(b) of the Federal Deposit Insurance Act. “(B) Bank holding company.— “(i) Adequately capitalized.— With respect to a bank holding company, the term ‘adequately capitalized’ means a level of capitalization which meets or exceeds all applicable Federal regulatory capital standards. “(ii) Well capitalized.— A bank holding company is ‘well capitalized’ if it meets the required capital levels for well capitalized bank holding companies established by the Board. “(C) Other capital terms.— The terms ‘Tier 1’ and ‘risk-weighted assets’ have the meanings given those terms in the capital guidelines or regulations established by the Board for bank holding companies.”; and (2) by adding at the end the following new paragraphs: “(8) Lead insured depository institutions.— “(A) In general.— The term ‘lead insured depository institution’ means the largest insured depository institution controlled by the subject bank holding company at any 110 STAT. 3009–409time, based on a comparison of the average total risk-weighted assets controlled by each insured depository institution during the previous 12-month period. “(B) Branch or agency.— For purposes of this paragraph and section 4(j)(4), the term ‘insured depository institution’ includes any branch or agency operated in the United States by a foreign bank. “(9) Well managed.— The term ‘well managed’ means— “(A) in the case of any company or depository institution which receives examinations, the achievement of— “(i) a CAMEL composite rating of 1 or 2 (or an equivalent rating under an equivalent rating system) in connection with the most recent examination or subsequent review of such company or institution; and “(ii) at least a satisfactory rating for management, if such rating is given; or “(B) in the case of a company or depository institution that has not received an examination rating, the existence and use of managerial resources which the Board determines are satisfactory.”.