Commonly Controlled Correspondent Law and Legal Definition

According to 12 CFR 206.2 [Title 12 -- Banks and Banking; Chapter II -- Federal Reserve System; Subchapter A -- Board of Governors of the Federal Reserve System; Part 206 -- Limitations on Inter-bank Liabilities (Regulation F)], commonly-controlled correspondent means “a correspondent that is commonly controlled with the bank and for which the bank is subject to liability under section 5(e) of the Federal Deposit Insurance Act. A correspondent is considered to be commonly controlled with the bank if:

(1) 25 percent or more of any class of voting securities of the bank and the correspondent are owned, directly or indirectly, by the same depository institution or company; or

(2) Either the bank or the correspondent owns 25 percent or more of any class of voting securities of the other.”