---
kind: "section"
citation: "12 C.F.R. § 225.81"
title: "12"
number: "225.81"
heading: "What is a financial holding company?"
url: "https://uscodex.org/cfr/12/225.81"
---

# §225.81. What is a financial holding company?

- (a) **Definition.** A financial holding company is a bank holding company that meets the requirements of this section.
- (b) **Requirements to be a financial holding company.** In order to be a financial holding company:
  - (1) All depository institutions controlled by the bank holding company must be and remain well capitalized;
  - (2) All depository institutions controlled by the bank holding company must be and remain well managed; and
  - (3) The bank holding company must have made an effective election to become a financial holding company.
- (c) **Requirements for foreign banks that are or are owned by bank holding companies—**
  - (1) **Foreign banks with U.S. branches or agencies that also own U.S. banks.** A foreign bank that is a bank holding company and that operates a branch or agency or owns or controls a commercial lending company in the United States must comply with the requirements of this section, [§ 225.82](/cfr/12/225.82.md), and [§§ 225.90 through 225.92](/cfr/12/225.90..225.92.md) in order to be a financial holding company. After it becomes a financial holding company, a foreign bank described in this paragraph will be subject to the provisions of §§ [225.83](/cfr/12/225.83.md), [225.84](/cfr/12/225.84.md), [225.93](/cfr/12/225.93.md), and [225.94](/cfr/12/225.94.md).
  - (2) **Bank holding companies that own foreign banks with U.S. branches or agencies.** A bank holding company that owns a foreign bank that operates a branch or agency or owns or controls a commercial lending company in the United States must comply with the requirements of this section, [§ 225.82](/cfr/12/225.82.md), and [§§ 225.90 through 225.92](/cfr/12/225.90..225.92.md) in order to be a financial holding company. After it becomes a financial holding company, a bank holding company described in this paragraph will be subject to the provisions of §§ [225.83](/cfr/12/225.83.md), [225.84](/cfr/12/225.84.md), [225.93](/cfr/12/225.93.md), and [225.94](/cfr/12/225.94.md).

## Notes

### Source

Source: Reg. Y, 66 FR 415, Jan. 3, 2001, unless otherwise noted.

### Authority

Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1, 1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310, 3331-3351, 3354, 3906, 3907, and 3909; 15 U.S.C. 1681s, 1681w, 6801 and 6805.

### Source

Source: Reg. Y, 49 FR 818, Jan. 5, 1984, unless otherwise noted.