USA Law and Practice Contributed by: Edward P. O’Keefe, Neil T. Bloomfield, John A. Stoker and Kathryn (Kate) G. Wellman, Moore & Van Allen, PLLC
1. Legal Framework 1.1 Key Laws and Regulations There are three types of depository institutions in the United States (“banks”): • commercial banks; • savings associations (which specialise in deposit taking and mortgage lending); and • credit unions (a co-operative financial institu - tion formed for members of a common group who collectively own the institution). Bank charters are available at the state and fed - eral levels. The selection of the charter type can be driven by expected product and service offer - ings, anticipated customer base, the markets in which the bank will operate, examination costs, preference for a particular primary regulator, and the importance of federal law pre-emption of certain state laws to the bank’s business plans. A state-chartered bank is regulated and super - vised by both the state’s banking agency and by a federal bank regulator. The primary federal bank regulators are: • the Office of the Comptroller of the Currency (OCC), which charters and regulates national banks and federal savings associations; • the Federal Deposit Insurance Corporation (FDIC), which insures bank deposit accounts and serves as the primary federal regulator of state-chartered banks that elected not to become members of the Federal Reserve System; • the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which regulates bank and financial holding companies, foreign banking organisa - tions operating in the USA, and any designat - ed systemically important non-bank financial
companies; it is also the primary federal regulator of state-chartered banks that are members of the Federal Reserve System; and • the National Credit Union Association (NCUA), which charters and regulates national credit unions and insures deposit accounts of credit unions. In addition to these federal agencies, the Con - sumer Financial Protection Bureau (CFPB) is responsible for implementing and enforcing compliance with federal consumer financial laws by large banks and certain other consum - er financial services companies. Depending on their activities, banks and their affiliates also may be subject to supervision and regulation by the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission, and state insurance regulators. Important federal legislation that governs the banking system in the United States includes: • The National Banking Acts of 1863 and 1864 established a national banking system and national bank charters. • The Federal Reserve Act of 1913 established the Federal Reserve System as the central banking system. • The Banking Act of 1933 (the “Glass-Steagall Act”) separated commercial banking from investment banking. • The Bank Holding Company Act of 1956 (BHCA) required the approval for the estab - lishment of a bank holding company (BHC). • The Gramm-Leach-Bliley Act of 1999 repealed the Glass-Steagall Act and created financial holding companies authorised to engage in certain insurance and securities activities. • The Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010
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