A major loophole was punched through the McFadden Act as banks

Name: A major loophole was punched through the McFadden Act as banks
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Question

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The McFadden Act prohibited commercial banks from expanding across state lines or owning branches in multiple states. To circumvent this restriction, banks formed bank holding companies, which allowed them to own multiple banks in different states, achieving the same effect as branching. This created a major loophole through the McFadden Act.

A Major Loophole Was Punched Through the McFadden Act as Banks