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Understanding the Savings Bank Holding Company in Banking Law
Definition & Meaning
A savings bank holding company is defined as a company that controls one or more qualified savings banks. To meet this definition, the total assets of these savings banks must represent at least 70 percent of the holding company's total assets at the time of formation and at all times thereafter. This structure allows the holding company to manage the savings banks while ensuring that the majority of its assets are tied to these financial institutions.
Table of content
Legal Use & context
The term "savings bank holding company" is primarily used in the context of banking and financial regulation. It is relevant in areas such as corporate law and financial services regulation. Understanding this term is essential for businesses looking to form or operate a holding company that controls savings banks. Users can manage related legal processes using resources like US Legal Forms, which offers templates for various banking and corporate documents.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A company forms a holding company to acquire two local savings banks. The combined assets of these banks are valued at $700 million, while the holding company has total assets of $1 billion. This structure qualifies as a savings bank holding company.
Example 2: A holding company that initially meets the asset requirement loses a significant portion of its assets due to market changes. If the savings banks' assets drop below the 70 percent threshold, the holding company may no longer qualify under the definition. (hypothetical example)
Relevant laws & statutes
The primary statute governing savings bank holding companies is found in Title 12 of the United States Code, specifically 12 USCS § 1841 (l). This law outlines the definition and requirements for such companies.
Comparison with related terms
Term
Definition
Key Differences
Bank Holding Company
A company that controls one or more banks.
May include commercial banks, not limited to savings banks.
Financial Holding Company
A company that can engage in a broader range of financial activities.
Includes investment and insurance services, beyond just banking.
Common misunderstandings
What to do if this term applies to you
If you are considering forming a savings bank holding company, ensure that you understand the asset requirements and regulatory obligations. It may be beneficial to consult with a legal professional to navigate the complexities of banking regulations. Additionally, explore US Legal Forms for templates that can assist you in drafting necessary documents.
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