It wasn’t too long ago that banks were restricted from conducting business outside their home state. But some institutions found a workaround: Bank holding companies offered a way to operate in multiple states, leading Congress to pass the Bank Holding Company Act of 1956. A bank holding company’s primary purpose is to hold stock, or ownership, in a bank. A holding company structure also allows a bank to engage in a broader array of activities. “A bank holding company can invest in any kind of company, so long as it holds less than 5% of voting stock of that company,” says Samantha Kirby, partner and co-chair of the Banking and Consumer Financial Services practice at Goodwin, to Bank Director.