12 CFR § 225.81 - What is a financial holding company?
---
identifier: "/us/cfr/t12/s225.81"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "12 CFR § 225.81 - What is a financial holding company?"
title_number: 12
title_name: "Banks and Banking"
section_number: "225.81"
section_name: "What is a financial holding company?"
chapter_name: "FEDERAL RESERVE SYSTEM"
subchapter_number: "A"
subchapter_name: "BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM"
part_number: "225"
part_name: "BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL (REGULATION Y)"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
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."
regulatory_source: "Reg. Y, 49 FR 818, Jan. 5, 1984, unless otherwise noted."
cfr_part: "225"
---
# 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, and §§ 225.90 through 225.92 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, 225.84, 225.93, and 225.94.
(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, and §§ 225.90 through 225.92 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, 225.84, 225.93, and 225.94.