This site uses cookies to improve your browsing experience, gather site analytics and activity, track shopping cart contents, and deliver relevant marketing information.
View our privacy policy and manage your settings here. By using our site you agree to these terms.

2.1 Companies Eligible for Orderly Liquidation

<< Title II Overview

2.1 Companies Eligible for Orderly Liquidation

 

 


2.1.       Companies Eligible for Orderly Liquidation.  The Act authorizes the Federal government to place certain types of entities in receivership.  Companies that are potentially subject to receivership are referred to as "covered financial companies".  Farm Credit institutions would be excluded from this definition. 

A "financial company" is any company that is incorporated or organized under Federal law or state law, that is:

·         a BHC;

·         a Significant Nonbank;

·         any company that is predominantly engaged in activities that the Fed has determined are financial in nature or incidental thereto under Section 4(k) of the BHC Act (other than a BHC or a Significant Nonbank), or

 

·         any subsidiary of the foregoing types of companies that is predominantly engaged in activities that the Fed has determined are financial in nature or incidental thereto under Section 4(k) of the BHC Act (other than a subsidiary that is an insured depository institution or an insurance company). 

 

For purposes of the term "financial company," a company will not be deemed to be engaged in financial activities for purposes of Section 4(k) of the BHC Act if the consolidated revenue of such company from such activities constitutes less than 85 percent of total consolidated revenues, as the FDIC, in consultation with the Treasury Secretary, shall establish by regulation.