Summary: No comprehensive systematic way exists to collect data on all foreign investments in depository institutions in this country. Therefore, the level of all foreign investments in U.S. banks can not be monitored. The Department of Commerce (DOC) is authorized to collect data on foreign investments in banks; the Board of Governors of the Federal Reserve System (FRS) also collects this data, although it has no legislative requirement to do so. Current systems to identify foreign investments are inadequate, because banking agencies have no legislative requirement for this, and the information is collected incidental to a variety of regulatory functions. Banking agencies will collect data on those who purchase a significant amount of shares in a company required to register under the Securities Exchange Act, as amended; most commercial banks and savings and loan associations are not registered, and are not covered by this requirement. Domestic bank holding companies are required to report annually the citizenship of owners of 5 percent of any class of securities, but the data are not stored by FRS in a manner conducive to monitoring the level of foreign investments. DOC will get information on foreign investors who gain control of banks from bank regulators collecting this data pursuant to the Change in Bank Control Act after March 1979. Should Congress decide more information is needed on all levels of investment, a new system will be needed to collect it. This system should: have the financial institutions' regulatory agencies collect data from the institutions supervised, rather than the individual investors; be based on periodic reports to the regulators by the institutions; and require regulators to share this data with DOC. With this approach agencies could expect reports at regular intervals, and could enforce the reporting requirement through their regular examination process. This method is disadvantageous in that financial institutions may not know who their owners are or their citizenship; these institutions have no statutory authority to collect such information.
