Comerica 2015 Annual Report Download - page 16

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presence in Comerica's market area, may make available to their customers a broader array of product, pricing and structure
alternatives and, due to their asset size, may more easily absorb credit losses in a larger overall portfolio. Some of Comerica's
competitors (larger or smaller) may have more liberal lending policies and processes. Further, Comerica's banking competitors
may be subject to a significantly different or reduced degree of regulation due to their asset size or types of products offered. They
may also have the ability to more efficiently utilize resources to comply with regulations or may be able to more effectively absorb
the costs of regulations into their existing cost structure. Comerica believes that the level of competition in all geographic markets
will continue to increase in the future.
In addition to banks, Comerica's banking subsidiaries also face competition from other financial intermediaries, including
savings and loan associations, consumer finance companies, leasing companies, venture capital funds, credit unions, investment
banks, insurance companies and securities firms. Competition among providers of financial products and services continues to
increase, with consumers having the opportunity to select from a growing variety of traditional and nontraditional alternatives.
The ability of non-banking financial institutions to provide services previously limited to commercial banks has intensified
competition. Because non-banking financial institutions are not subject to many of the same regulatory restrictions as banks and
bank holding companies, they can often operate with greater flexibility and lower cost structures.
In addition, the industry continues to consolidate, which affects competition by eliminating some regional and local
institutions, while strengthening the franchises of acquirers.
SUPERVISION AND REGULATION
Banks, bank holding companies, and financial institutions are highly regulated at both the state and federal level. Comerica
is subject to supervision and regulation at the federal level by the Board of Governors of the Federal Reserve System (“FRB”)
under the Bank Holding Company Act of 1956, as amended. The Gramm-Leach-Bliley Act expanded the activities in which a
bank holding company registered as a financial holding company can engage. The conditions to be a financial holding company
include, among others, the requirement that each depository institution subsidiary of the holding company be well capitalized and
well managed. Effective July 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”)
also requires the well capitalized and well managed standards to be met at the financial holding company level. Comerica became
a financial holding company in 2000. As a financial holding company, Comerica may affiliate with securities firms and insurance
companies, and engage in activities that are financial in nature. Activities that are “financial in nature” include, but are not limited
to: securities underwriting; securities dealing and market making; sponsoring mutual funds and investment companies (subject to
regulatory requirements, including restrictions set forth in the Volcker Rule, described under the heading "The Dodd-Frank Wall
Street Reform and Consumer Protection Act and Other Recent Legislative and Regulatory Developments" below); insurance
underwriting and agency; merchant banking; and activities that the FRB has determined to be financial in nature or incidental or
complementary to a financial activity, provided that it does not pose a substantial risk to the safety or soundness of the depository
institution or the financial system generally. A bank holding company that is not also a financial holding company is limited to
engaging in banking and other activities previously determined by the FRB to be closely related to banking.
Comerica Bank is chartered by the State of Texas and at the state level is supervised and regulated by the Texas Department
of Banking under the Texas Finance Code. Comerica Bank has elected to be a member of the Federal Reserve System under the
Federal Reserve Act and, consequently, is supervised and regulated by the Federal Reserve Bank of Dallas. Comerica Bank &
Trust, National Association is chartered under federal law and is subject to supervision and regulation by the Office of the
Comptroller of the Currency (“OCC”) under the National Bank Act. Comerica Bank & Trust, National Association, by virtue of
being a national bank, is also a member of the Federal Reserve System. The deposits of Comerica Bank and Comerica Bank &
Trust, National Association are insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (“FDIC”) to
the extent provided by law. Certain transactions executed by Comerica Bank are also subject to regulation by the U.S. Commodity
Futures Trading Commission. In Canada, Comerica Bank is supervised by the Office of the Superintendent of Financial Institutions
and in Mexico, by the Banco de México.
The FRB supervises non-banking activities conducted by companies directly and indirectly owned by Comerica. In
addition, Comerica's non-banking subsidiaries are subject to supervision and regulation by various state, federal and self-regulatory
agencies, including, but not limited to, the Financial Industry Regulatory Authority (in the case of Comerica Securities, Inc.), the
Office of Financial and Insurance Regulation of the State of Michigan (in the case of Comerica Securities, Inc. and Comerica
Insurance Services, Inc.), and the Securities and Exchange Commission (“SEC”) (in the case of Comerica Securities, Inc. and
World Asset Management, Inc.).
Described below are material elements of selected laws and regulations applicable to Comerica and its subsidiaries. The
descriptions are not intended to be complete and are qualified in their entirety by reference to the full text of the statutes and
regulations described. Changes in applicable law or regulation, and in their application by regulatory agencies, cannot be predicted,
but they may have a material effect on the business of Comerica and its subsidiaries.