A bank holding company is any entity that meets any of the following requirements:
Directly or indirectly owns, controls or has the power to vote 25% or more of a class of a bank's securities.
Controls in any manner the election of a majority of a bank's directors or trustees.
The Federal Reserve Board (www.practicallaw.com/7-386-5656) determines, after notice and opportunity for hearing, that the entity directly or indirectly exercises a controlling influence over a bank's management or policies.
To become a bank holding company, a company must obtain the consent of the Federal Reserve Board and must comply with the conditions and requirements set out in the Bank Holding Company Act (www.practicallaw.com/2-503-0086) and Regulation Y (www.practicallaw.com/0-503-0092). For information on bank holding companies and how they are regulated, see Practice Note, US Banking Law: Overview: Bank Holding Companies (www.practicallaw.com/0-504-4367). For information on determining whether an investment in a bank causes the investor to become a bank holding company, see Practice Note, Investments Involving Banks: Control Issues (www.practicallaw.com/2-502-8880).