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other than banking or a business closely related to banking. See
12 U.S.C. sec. 1841 (1994). In 1987, in part to deal with the
problem of “nonbank banks” (institutions regulated as banks but
exempt from key provisions of BHCA because of their failure to
meet the definition of a bank under BHCA), Congress amended BHCA.
See the Competitive Equality Banking Act of 1987 (CEBA), Pub. L.
100-86, sec. 1004(b), 101 Stat. 552, 659.3 CEBA broadened the
3 S. Rept. 100-19 (1987) accompanied S. 790, 100th Cong. 1st
Sess. (1987), which, substantially as passed by the Senate,
became Pub. L. 100-86, 101 Stat. 552 (Competitive Equality
Banking Act of 1987 (CEBA), Pub. L. 100-86, 101 Stat. 552). See
H. Conf. Rept. 100-261 (1987). Immediately prior to CEBA, the
Bank Holding Company Act of 1956 (BHCA), ch. 240, 70 Stat. 133,
currently codified at 12 U.S.C. secs. 1841-1850 (1994), defined a
“bank” as an institution that both accepted demand deposits and
made commercial loans. 12 U.S.C. 1841(c)(1) and (2) (1982). The
Senate Comm. on Banking, Housing, and Urban Affairs (the
Committee) believed that that definition created a loophole (the
“nonbank loophole”) for a bank that refrained from one of those
two activities and, thus, was not considered a bank for purposes
of BHCA. For instance, the Committee believed that a nonbank
bank could offer interest bearing NOW accounts rather than demand
deposits and escape regulation under BHCA. S. Rept. 100-19,
supra at 5-6. The Committee found:
The impetus for nonbank banks stems primarily from
large diversified companies wanting to invade the
banking business while avoiding the regulatory
restraints of the Bank Holding Company Act. Thus some
of the nation’s largest retailing, securities, and
insurance companies have been able to enter the banking
business through the nonbank loophole while banks are
prevented from entering those businesses by the Bank
Holding Company Act.
Id. at 6. The Committee believed that a failure to close the
nonbank loophole would cause a number of problems in the banking
system, including creating new competitive inequalities for bank
holding companies, whose activities, under BHCA, must be closely
(continued...)
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