The control of a bank by another company is defined by which act?

The control of a bank by another company is defined by the Bank Holding Company Act of 1956. This act was established to regulate the activities of bank holding companies and to ensure that they do not engage in practices that would jeopardize the safety and soundness of banking institutions or threaten the integrity of the banking system. Specifically, it provides a framework for the formation and operation of bank holding companies, including guidelines on how they can acquire control of banks.

The Act also outlines the requirement for bank holding companies to register with the Federal Reserve and establish standards for their financial condition, activities, and conduct, thus ensuring oversight. This is significant because it ensures that banks are not under undue influence from entities that might prioritize profit over safety and soundness in banking operations. Thus, the Bank Holding Company Act of 1956 plays a crucial role in maintaining the stability and integrity of the U.S. banking system.