Major bank and bank holding company legislation since 1933 clearly demonstrates congressional intent that banking businesses be separate from nonbanking businesses. Bank holding companies control banks but also engage in certain nonbanking activities. With enactment of the Bank Holding Company Act in 1956, and its amendments in 1966 and 1970, the Congress defined the term "bank holding company" and, in general terms, the activities in which the companies may engage. The 1970 amendments required bank holding companies to qualify for an exemption under the Act, divest their nonbanking activities, or divest their banks by December 31, 1980. As part of a review of the Federal Reserve's supervision and regulation of bank holding companies, GAO assessed the management of the divestiture requirement in the 1970 amendments to the Act.
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