Vickars-Henry Corporation v. Board of Governors of the Federal Reserve System

Vickars-Henry Corporation (V-H) petitions for review of an order of the Board of Governors of the Federal Reserve System (Board) denying V-H’s request for certification as a “qualified bank holding company,” as defined in section 1103 of the Internal Revenue Code (I.R.C.), 26 U.S.C. § 1103 , and section 2 of the Bank Holding Company Act, 12 U.S.C. § 1841 . The requested certification would have permitted V-H to distribute to its two shareholders its holdings in an Oregon bank by way of a tax-free distribution under I.R.C. § 1101(b). Under section 1101, a company wishing to distribute to its shareholders the property that causes the company to be considered a bank holding company may do so without any gain being recognized to its shareholders, provided the company has been certified as a “qualified bank holding company” by the Board. V-H argues that it should have received such certification as a matter of law under both the Bank Holding Company Act, 12 U.S.C. §§ 1841-1849 , (sometimes referred to as “Act”) and the Board’s regulations. V-H also argues that, since it has already been required to submit to regulation, albeit without certification, as a bank holding company for six…