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in the definition of "control”, the term "acting in concert" presupposes an agreement or understanding, written or tacit, of the parties.

As under the previous statute, a person would also be deemed to have control of an insured institution or any other company if the Corporation determines, after notice and opportunity for hearing, that such person exercises a controlling influence over the management or policies of such institution or other company. Moreover, a person who is the trustee of a trust would be deemed to have control of the trust.

(3) Exemptions from coverage as savings and loan holding companies are also provided for (A) companies controlling an insured institution in connection with the underwriting of securities, if such control is held for 120 days or less, unless such period is extended by the Corporation, and (B) any short-term trust (other than a pension, profit-sharing, shareholders', or voting trust) if such trust by its terms must terminate within 25 years or not later than 21 years and 10 months after the death of individuals living on the effective date of the trust and is (i) in existence on June 26, 1967, or (ii) a testamentary trust created on or after June 26, 1967. The prescription as to the limited term of the trust is taken from the Bank Holding Company Act (12 U.S.C. 1841(b)).

Subsection (6)—Registration and examination.—Within 180 days after enactment of the proposed bill, or within 90 days after becoming a savings and loan holding company, whichever is later, each holding company is required to register with the Corporation and to furnish such information with respect to its financial condition, ownership, operations, management, and intercompany relationships as the Corporation may require.

In addition, each holding company and subsidiary thereof is required to file financial reports with the Corporation and the Federal Home Loan Bank of the district in which its principal office is located, and to maintain such books and records as the Corporation my require. Moreover, each holding company and subsidiary thereof is subject to such examinations as the Corporation may prescribe. To the extent deemed feasible, the Corporation would use examination or other reports filed with or made by other Federal agencies or State supervisory authorities.

The Corporation's authority under paragraph (5) of subsection (b) to require the irrevocable appointment of agents for service of process is intended to enable the Corporation to obtain jurisdiction over any foreign based savings and loan holding company, and not to require needless appointments of such agents by domestic holding companies or persons connected with noncorporate holding companies within the jurisdiction of the United States.

Subsection (c)Holding company activities.This subsection restricts the nature of the activities or business which could be conducted by savings and loan holding companies. Specifically, the act prohibits

(1) Any holding company, or subsidiary thereof which is not an insured institution, from engaging, for or on behalf of a subsidiary insured institution, in any activity or rendering any service for the purpose or with the effect of evading law or regulation applicable to such insured institution; or

(2) Any multiple savings and loan holding company, or subsidiary thereof which is not an insured institution, from com

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mencing, or continuing for more than 2 years after the enactment of the bill, or for more than 180 days after becoming a savings and loan holding company or subsidiary thereof (whichever is later), any business activity other than (A) furnishing or performing management services for a subsidiary insured institution, (B) conducting an insurance agency or escrow business, (C) holding or managing or liquidating assets owned by or acquired from a subsidiary insured institution, (D) holding or managing properties used or occupied by a subsidiary insured institution, (E) acting as trustee under deed of trust, or (F) furnishing or performing such other services or engaging in such other activities as the Corporation may prescribe by regulation as being a proper incident to the operations of insured institutions and not detrimental to the interests of savings account holders therein. Upon a showing a good cause, the Corporation could extend, from year to year, the time for compliance with the abovementioned provisions for an additional period not exceeding

3 years. Subsection (d)-Prohibited transactions.-Subsection (d) of the act is designed to curb transactions between an insured institution in a holding company chain and any of its affiliates. Accordingly, it is unlawful for a controlled insured institution to (1) invest its funds in the stock, bonds, debentures, notes, or other obligations of any affiliate (other than a service corporation as authorized by law); (2) accept the stock, bonds, debentures, notes, or other obligations of any affiliate as collateral security for any loan made by the institution; (3) purchase securities or other assets or obligations under repurchase agreement from any affiliate; (4) make any loan or extend credit to any affiliate, except in a transaction authorized by subparagraph (A) of paragraph (6) of subsection (d), or to any third party on the security of any property acquired from any affiliate, or with knowledge that the loan proceeds are to be paid over to or utilized for the benefit of any affiliate; or (5) guarantee the repayment of or maintain compensating balances for any loan to any affiliate by any third party.

Paragraph (6) of subsection (d) regulates transactions which could result in the use of insured institutions for the benefit of their affiliates through devices such as management or service contracts of the purchase or sale of assets. Thus, except with the prior approval of the Corporation, it is unlawful for any subsidiary insured institution

(A) To engage in any transaction with any affiliate involving the purchase, sale, or lease of property or assets in any case where the amount of the consideration involved when added to the aggregate amount of the consideration given or received by such institution for all such transactions during the preceding 12month period exceeds the lesser of $100,000 or 0.1 percent of the institution's total assets at the end of the preceding fiscal year; or

(B) To enter into any agreement under which any affiliate is to (i) render management or advertising services for the institution, (ii) serve as a consultant, adviser, or agent for any phase of the operations of the institution, or (iii) render services of any other nature for the institution, other than those which may be exempted by regulation or order of the Corporation, unless the aggregate amount of the consideration required to be paid by such institution in the future under all such existing agreements

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cannot exceed the lesser of $100,000 or 0.1 percent of the institution's total assets at the end of the preceding fiscal year; or

(C) Make any payment to any affiliate under any agreement referred to in (B) above where the institution has previously paid to affiliates during the preceding 12-month period, pursuant to any such agreement, an amount aggregating in excess of the lesser of $100,000 or 0.1 percent of the institution's total assets

at the end of the preceding fiscal year. Subsection (e)- Acquisitions. The act controls holding company expansion by requiring Corporation approval for all additional holding company acquisitions of insured institutions, whether by purchase of stock or assets, merger, or consolidation:

(1)(A) Under this paragraph, it is unlawful for any savings and loan holding company or subsidiary thereof (i) to acquire, except with prior approval of the Corporation, control of an insured institution or a savings and loan holding company, or to retain control of such an institution or company acquired or retained in violation of section 408 as heretofore or hereafter in effect, (ii) to acquire, except with prior approval of the Corporation, by the process of merger, consolidation, or purchase of assets, another insured or uninsured institution or a savings and loan holding company, or all or substantially all of the assets of any such institution or holding company, (iii) to acquire by purchase or otherwise, or to retain for more than 1 year after the enactment of the bill, any of the voting shares of an insured institution or a savings and loan holding company, not a subsidiary, or, in the case of a multiple savings and loan holding company, more than 5 percent of the voting, shares of any company not a subsidiary which is engaged in any business activity other than those specified in paragraph (2) of subsection (c) of the bill, or (iv) to acquire, or to retain for more than 1 year, control of an uninsured institution.

(B) Any company (not a savings and loan holding company) is prohibited, except with prior approval of the Corporation, from acquiring control of one or more insured institutions. This provision is designed to control the creation of any new unitary or multiple holding company systems.

However, such approval is not required in connection with control of an insured institution acquired by (i) devise under the terms of a will creating a trust which is excluded from the definition of "savings and loan holding company” or (ii) a "reorganization" whereby an ownership group that had been in existence for a substantial period of time vests its control in a newly formed holding company,

The Corporation is required to approve an acquisition of an insured institution under subparagraph (B) unless it finds that the financial and managerial resources of the company and institution involved to be such that the acquisition would be detrimental to the institution and to the Corporation.

(2) In acting upon applications for approval of proposed acquisitions under subparagraphs (A)(i), (A)(ii), and multiple acquisitions under subparagraph (B) of paragraph (1) of subsection (e), the Corporation shall take into consideration the financial and managerial resources and future prospects of the company and institution involved, and the convenience and needs of the community to be served. The Corporation is required to render its decision within 90 days after submission to the Board of the complete record on the application.

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However, approval of any acquisition would not be given for 30 days after receipt of an application for approval thereof, to provide the Attorney General with an opportunity to report on the competitive factors involved.

As in the case of the Bank Merger Act and the Bank Holding Company Act, no proposed acquisition could be approved if the Corporation found that it would violate the antimonopoly provisions of section 2 of the Sherman Act, or the anticompetitive provisions of section 7 of the Clayton Act, unless the Corporation found that the anticompetitive effects of the acquisition would be clearly outweighed in the public interest by the probable effect of the acquisition in meeting the convenience and needs of the community to be served.

(3) No acquisition could be approved by the Corporation which would (A) result in the formation of a savings and loan holding company controlling insured institutions in more than one State, or (B) enable an existing multiple savings and loàn holding company to acquire an insured institution the principal office of which is located in a State other than the State designated by such savings and loan holding company as the State in which its principal savings and loan business is conducted.

(4) A savings and loan bolding company could, without regard to the provisions of subsection (e) and of subsections (c)(2) and (g) of this section, acquire the control of an insured institution or a savings and loan holding company, pursuant to a pledge or hypothecation to secure a loan, or in connection with the liquidation of a loan, made in the ordinary course of business; but it would be unlawful for any such company to retain such control for more than 1 year, except that the Corporation could extend such period from year to year, for an additional period not exceeding 3 years.

Subsection (f)-Declaration of dividend.--Every subsidiary insured institution is required to give the Corporation 30 days advance notice of the proposed declaration of any dividend on its guarantee, permanent, or other nonwithdrawable stock. Any such dividend declared within such 30-day period, or without the giving of notice to the Corporation, would be invalid.

Subsection (g)—Holding company indebtedness.-(1) No savings and loan holding company or subsidiary thereof which is not an insured institution could issue, sell, renew, or guarantee any debt security of such company or subsidiary, or assume any debt, without the prior approval of the Corporation.

(2) The provisions of paragraph (1) do not apply to (A) a diversified savings and loan holding company or any subsidiary thereof, or (B) the incurrence of any debt by a holding company or subsidiary which aggregates, together with all such other debt as to which the holding company or subsidiary is primarily or contingently liable, not more than 15 percent of the consolidated net worth of such company or subsidiary at the end of its preceding fiscal year.

(3) The Corporation would, upon application, approve any act or transaction not exempted from the application of paragraph (1) if it found that

(A) The proceeds would be used for (i) the purchase of permanent, guarantee, or other nonwithdrawable stock to be issued by a subsidiary insured institution, or (ii) the purpose of making a capital contribution to such an institution; or

(B) Such act or transaction is required for the purpose of refunding, extending, exchanging, or discharging an outstanding debt, or for other necessary or urgent corporate needs, and would not impose an unreasonable or imprudent financial burden on

the applicant. The Corporation could also approve any application under paragraph (3) of subsection (g) if it found that the act or transaction would not be injurious to any subsidiary insured institution in the light of its financial condition and propsects.

(4) No act or transaction within the scope of subsection (g) would be approved unless the Corporation is satisfied that there has been compliance with all State or Federal laws applicable thereto.

(5) This paragraph defines the term "debt security."

(6) This paragraph would exempt a diversified savings and loan holding company from the restrictions on the payment of dividends under subsection (g)(6)(A) if, excluding its subsidiary insured institution, its consolidated net income available for interest for its preceding fiscal year was twice its consolidated debt service requirements for the 12-month period succeeding such fiscal year, as determined in accordance with regulations issued by the Corporation.

If the Corporation finds, however, that a diversified savings and loan holding company has not met the above-mentioned earnings test, such company or any subsidiary could receive dividends on stock from a subsidiary insured institution, and such institution could declare or pay any such dividend, only if the Corporation failed to object within 30 days of receipt of notification under subsection (f) to such dividend as injurious to the insured institution in the light of its financial condition and prospects.

Subsection (h)-Administration and enforcement.-(1) The Corporation is authorized to issue such rules, regulations, and orders as it deems necessary or appropriate to enable it to define and administer section 408 and to require compliance therewith.

(2) The Corporation could make investigations to determine whether the provisions of section 408 and rules, regulations, and orders thereunder are being complied with by holding companies and subsidiaries and affiliates thereof.

(3) (A) In connection with any hearing under subsection (a)(2)(D) of the bill, the Corporation or its designated representatives has power to administer oaths and affirmations and to issue subpenas and subpenas duces tecum. Any party to the hearing could apply to the U.S. district court for enforcement of such subpenas.

(B) Hearings provided for in subsection (a) (2) (D) would be held in the Federal judicial district in which the principal office of the institution or other company is located unless the parties consent to another place. Such hearings would be conducted in accordance with the provisions of chapter 5 of title 5 of the United States Code.

(4) The Corporation would also be authorized to bring an action in the U.S. district courts to enjoin violations of or to enforce compliance with the proposed section 408, or any rule, regulation, or order thereunder, or to require the divestiture of any illegal acquisition. Thus, for example, if the Corporation determined that a savings and loan holding company or a subsidiary thereof had acquired control of

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