[2] All bank holding companies in the US are required to register with the Board of Governors of the Federal Reserve System.
This authority applies even though a bank owned by a holding company may be under the primary supervision of the Office of the Comptroller of the Currency or the Federal Deposit Insurance Corporation.
The holding company can assume debt of shareholders on a tax free basis, borrow money, acquire other banks and non-bank entities more easily, and issue stock with greater regulatory ease.
The downside includes responding to additional regulatory authorities, especially if there are more than 2,000 shareholders (note: prior to the Jobs Act or Jumpstart Our Business Startups Act, the shareholder number was 300), at which point the bank holding company is forced to register with the Securities and Exchange Commission.
As a result of the 2007–2008 financial crisis, many traditional investment banks and finance corporations such as Goldman Sachs, Morgan Stanley,[3] American Express, CIT Group and GMAC (now Ally Financial)[4] converted to bank holding companies to gain access to the Federal Reserve's credit facilities.