12 CFR § 354.5 - Restrictions on industrial bank subsidiaries of Covered Companies.

---
identifier: "/us/cfr/t12/s354.5"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "12 CFR § 354.5 - Restrictions on industrial bank subsidiaries of Covered Companies."
title_number: 12
title_name: "Banks and Banking"
section_number: "354.5"
section_name: "Restrictions on industrial bank subsidiaries of Covered Companies."
chapter_name: "FEDERAL DEPOSIT INSURANCE CORPORATION"
subchapter_number: "B"
subchapter_name: "REGULATIONS AND STATEMENTS OF GENERAL POLICY"
part_number: "354"
part_name: "INDUSTRIAL BANKS"
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. 1811, 1815, 1816, 1817, 1818, 1819(a) (Seventh) and (Tenth), 1820(g), 1831-1, 3108, 3207."
regulatory_source: "86 FR 10727, Feb. 23, 2021, unless otherwise noted."
cfr_part: "354"
---


# 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.