Ameriprise 2011 Annual Report Download - page 37

certain financial and other information about the operations of the companies within the holding company structure. In
addition, transactions between an insurance company and other companies within the same holding company structure
must be on terms that are considered to be fair and reasonable.
Federal Banking Regulation
Ameriprise Bank is a federal savings bank subject to regulation by the Office of the Comptroller of the Currency (‘‘OCC’’),
which became the primary regulator of federal savings banks in 2011, and by the FDIC in its role as insurer of Ameriprise
Bank’s deposits. As a federally chartered bank, Ameriprise Bank is subject to numerous rules and regulations governing all
aspects of the banking business, including lending practices and transactions with affiliates. Ameriprise Bank is also
subject to specific capital rules. If Ameriprise Bank’s capital falls below certain levels, the OCC is required to take remedial
actions and may take other actions, including imposing limits on dividends or business activities and directing us to divest
the subsidiary. Ameriprise Bank is also subject to limits on capital distributions, including payment of dividends. In addition,
an array of community reinvestment, fair lending, and other consumer protection laws and regulations apply to Ameriprise
Bank. Either of the OCC or the FDIC may bring administrative enforcement actions against Ameriprise Bank or its officers,
directors or employees if any of them are found to be in violation of the law or engaged in an unsafe or unsound practice.
As the controlling company of Ameriprise Bank, Ameriprise Financial is a savings and loan holding company that is subject
to regulation, supervision and examination by the Board of Governors for the Federal Reserve System (‘‘FRB’’). In
December 2011, Ameriprise Financial elected to be classified as a financial holding company subject to regulation under
the Bank Holding Company Act of 1956 (as amended). To ensure continued classification as a financial holding company,
both Ameriprise Financial and Ameriprise Bank must be well capitalized, well managed and have a sufficient standing
under the Community Reinvestment Act. In the event of our noncompliance with the foregoing requirements, the FRB may
require us to take remedial actions to correct such noncompliance and may also impose restrictions on the conduct of
Ameriprise Financial and its affiliates until such failures are corrected.
Ameriprise Financial is subject to ongoing supervision by the FRB that focuses on our corporate structure, risk exposure
across our business segments and any potential weaknesses in control in our operations, management and reporting. As a
financial holding company, our activities are limited to those that are financial in nature, incidental to a financial activity or,
with FRB approval, complementary to a financial activity. We must also ensure that our depository institutions remain well
capitalized. Ameriprise Financial has entered into a Source of Strength Agreement with Ameriprise Bank to reflect that it
will commit such capital and managerial resources to support the subsidiary as the OCC may determine necessary under
applicable regulations and supervisory standards. In the event of the appointment of a receiver or conservator for
Ameriprise Bank, the FDIC would be entitled to enforce our Source of Strength Agreement.
The Dodd-Frank Act established numerous changes to the regulation of depository institutions and their holding companies,
many of which have yet to be finalized and may in the future cause us to further modify how we engage in our banking
activities, as well as the activities of our other businesses.
Parent Company Regulation
Ameriprise Financial is a publicly traded company that is subject to SEC and New York Stock Exchange (‘‘NYSE’’) rules and
regulations regarding public disclosure, financial reporting, internal controls, and corporate governance. The adoption of the
Sarbanes-Oxley Act of 2002 significantly enhanced these rules and regulations and may continue to evolve. As noted
above, the FRB now performs the role of supervisory regulator with respect to Ameriprise Financial following the
transference of responsibilities from the Office of Thrift Supervision (‘‘OTS’’) pursuant to the Dodd-Frank Act.
We have operations in a number of geographical regions outside of the U.S. through Threadneedle and certain of our other
subsidiaries. We monitor developments in European Union (‘‘EU’’) legislation, as well as in the other markets in which we
operate, to ensure that we comply with all applicable legal requirements, including EU directives applicable to financial
institutions as implemented in the various member states. Because of the mix of business activities we conduct, we
continually assess the impact of, and insure compliance with, the EU Financial Conglomerates Directive, which
contemplates that certain financial conglomerates involved in banking, insurance and investment activities will be subject
to a system of supplementary supervision at the level of the holding company constituting the financial conglomerate. The
directive requires financial conglomerates to, among other things, implement measures to prevent excessive leverage and
multiple leveraging of capital and to maintain internal control processes to address risk concentrations as well as risks
arising from significant intragroup transactions. The FRB serves as our global consolidated supervisory regulator under the
EU Financial Conglomerates Directive.
Privacy
Many aspects of our business are subject to comprehensive legal requirements by a multitude of different functional
regulators concerning the use and protection of personal information, particularly that of clients. This includes rules
adopted pursuant to the Gramm-Leach-Bliley Act, the Fair and Accurate Credit Transactions Act, an ever increasing number
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