# § 1831w. Safety and soundness firewalls applicable to financial subsidiaries of banks
**(a)** **In general** An insured State bank may control or hold an interest in a subsidiary that engages in activities as principal that would only be permissible for a national bank to conduct through a financial subsidiary if—
**(1)** the State bank and each insured depository institution affiliate of the State bank are well capitalized (after the capital deduction required by paragraph (2));
**(2)** the State bank complies with the capital deduction and financial statement disclosure requirements in section 24a(c) of this title;
**(3)** the State bank complies with the financial and operational safeguards required by section 24a(d) of this title; and
**(4)** the State bank complies with the amendments to sections 23A and 23B of the Federal Reserve Act [12 U.S.C. 371c and 371c–1] made by section 121(b) of the Gramm-Leach-Bliley Act.
**(b)** **Preservation of existing subsidiaries** November 12, 1999
Notwithstanding subsection (a), an insured State bank may retain control of a subsidiary, or retain an interest in a subsidiary, that the State bank lawfully controlled or acquired before , and conduct through such subsidiary any activities lawfully conducted in such subsidiary as of such date.
**(c)** **Definitions** For purposes of this section, the following definitions shall apply:
**(1)** **Subsidiary** section 1813(w)(4) of this title
The term “subsidiary” means any company that is a subsidiary (as defined in ) of 1 or more insured banks.
**(2)** **Financial subsidiary** section 24a(g) of this title
The term “financial subsidiary” has the meaning given the term in .
**(d)** **Preservation of authority**
**(1)** **This chapter** section 1831a of this title
No provision of this section shall be construed as superseding the authority of the Federal Deposit Insurance Corporation to review subsidiary activities under .
**(2)** **Federal Reserve Act** 12 U.S.C. 335
No provision of this section shall be construed as affecting the applicability of the 20th undesignated paragraph of section 9 of the Federal Reserve Act [].
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**Source Credit**: (Sept. 21, 1950, ch. 967, § 2[46], as added Pub. L. 106–102, title I, § 121(d)(1), Nov. 12, 1999, 113 Stat. 1380.)
## Editorial Notes
### References in Text
Section 121(b) of the Gramm-Leach-Bliley Act, referred to in subsec. (a)(4), is , title I, , , which amended .
## Statutory Notes and Related Subsidiaries
### Effective Date
Section effective 120 days after , see , set out as an Effective Date of 1999 Amendment note under .