Regulatory Alerts2000-03-29
Conditional Approval for Pennsylvania State-Chartered Bank Subsidiary to Hold Interest in Title Insurance Limited Partnership
The Pennsylvania Department of Banking issued conditional approval for a state-chartered bank to form a subsidiary holding a 75% non-controlling interest in a limited partnership engaged in real estate settlement and title agent services. The Department determined that such activities are incidental to banking under the Banking Code of 1965 and permissible under the Insurance Department Act of 1921, provided the bank adheres to a four-prong test ensuring the investment is useful to banking and limits liability. The approval requires the bank to establish borrowing limits and submit specific corporate documentation, while noting that federal regulators like the FDIC may also require approval for this structure.
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