Bank holding company act of 1956
The bank holding company act of 1956 states that a bank holding company owning more than two other banks or other bank holding companies must have to register with the Federal Reserve's Board of Governors. After this is done, the bank will be a registered bank holding company. This Federal act was put in place because banks used to combine commercial banking with securities and insurance underwriting which is deemed too risky, noting that these institutions held huge sums of consumer deposits. The Bank Holding Company Act of 1956 was ammended by the Financial Services Modernization Act of 1999.