Part IV: U.S. Bancorp Subsidiary Regulation

This part was written with the contribution of David Holtcamp 

               The banking industry has seen rapid growth and expansion over the past two decades.  This has occurred in two ways.  Banks have expanded their area coverage spreading across the nation in an effort to gobble up market share.  They have also expanded into new areas of business.  Historically regulators have been leery of both ways in which banks have recently broadened their power.  This Part of the series expands on the regulatory discussion from Part III and the historical background outlined in Part II of the series.  In all, U.S. Bancorp, the holding company, has twenty subsidiaries.  Of the twenty subsidiaries five are banks.  All of these banks are nationally chartered banks, including U.S. Bank N.A, U.S. Bancorp’s largest bank.[i]   Further, because all of these banks are nationally chartered they are under the supervision and may be examined by the Office of the Comptroller of Currency (“OCC”).[ii]  Additionally, all of the Banks are members of the Federal Insurance Deposit Corporation (FDIC).[iii]

 

Part III: Regulation of U.S. Bancorp

This Part was written with the contribution of David Holtcamp 

The banking industry is heavily regulated.  Recently that regulation has come under critical review.  The Department of the Treasury has issued their Blueprint for a Modernized Financial Regulatory Structure.  To understand why bank regulation is a major topic of discussion is no great mystery.  However, understanding the current general regulatory structure is important in deciphering why there is a call for reform.  This part addresses how Financial Holding Companies are regulated using U.S. Bancorp as a model.

U.S. Bancorp is a Financial Holding Company (FHC) and thus it is subject to the regulation and examination of the Board of Governors of the Federal Reserve.[i]  To become a FHC, U.S. Bancorp had to take four steps.  First it had to be recognized as a Bank Holding Company (BHC).[ii]  A BHC, as defined by the Bank Holding Company Act, is any company that has control over any bank or control over any other company that controls a bank.[iii]  Second, all of U.S. Bancorp’s FDIC insured subsidiaries must be well-capitalized and well-managed.[iv]  Third, each of those subsidiaries must receive at least a satisfactory examination rating pursuant to the Community Reinvestment Act.[v]Finally, U.S. Bancorp must file with the Federal Reserve Board declaring that it elects to be a FHC.[vi]

 

Content Theft Issues

I regret that my site has been the target of a rash of content theft.  Nearly half my material has been taken for use by others without my permission.  As a result, I have pulled some material and have suspended publishing several articles that are ready.  There is some recourse available that I will take to resolve the issue.  Currently, I am in the midst of preparing for my final exams for the semester.  I will return to resolve this problem as well as post new material once my exams are completed.