---
kind: "section"
citation: "12 C.F.R. § 354.5"
title: "12"
number: "354.5"
heading: "Restrictions on industrial bank subsidiaries of Covered Companies."
url: "https://uscodex.org/cfr/12/354.5"
---

# §354.5. Restrictions on industrial bank subsidiaries of Covered Companies.


Without the FDIC's prior written approval, an industrial bank that is controlled by a Covered Company shall not:

- (a) Make a material change in its business plan after becoming a subsidiary of such Covered Company;
- (b) Add or replace a member of the board of directors, board of managers, or a managing member, as the case may be, of the subsidiary industrial bank during the first three years after becoming a subsidiary of such Covered Company;
- (c) Add or replace a senior executive officer during the first three years after becoming a subsidiary of such Covered Company;
- (d) Employ a senior executive officer who is, or during the past three years has been, associated in any manner (e.g., as a director, officer, employee, agent, owner, partner, or consultant) with an affiliate of the industrial bank; or
- (e) Enter into any contract for services material to the operations of the industrial bank (for example, loan servicing function) with such Covered Company or any subsidiary thereof.

## Notes

### Authority

Authority: 12 U.S.C. 1811, 1815, 1816, 1817, 1818, 1819(a) (Seventh) and (Tenth), 1820(g), 1831 o -1, 3108, 3207.

### Source

Source: 86 FR 10727, Feb. 23, 2021, unless otherwise noted.