What is the name of the U.S. law that prohibited banks from owning non-financial companies?

The Bank Holding Company Act prohibited bank holding companies from owning non-financial companies, subject to defined exceptions.

Congress passed the Bank Holding Company Act in 1956 to regulate companies that controlled banks and to prevent banking groups from expanding broadly into commercial and industrial businesses. The law placed bank holding companies under Federal Reserve supervision and generally required them to divest nonbanking interests.

The restriction was aimed at separating deposit-taking banking from ordinary commerce. A company that owned banks could not freely use its banking structure to build a retail, manufacturing or other industrial conglomerate. The act also governed acquisitions, expansion across state lines and the activities that holding companies could conduct.

The wording is sometimes oversimplified: the law did not ban every bank-related company from owning every non-financial business, and it allowed activities considered closely related to banking. Later amendments changed the framework, especially the 1970 amendments and the Gramm–Leach–Bliley Act of 1999. Glass–Steagall is a different law, chiefly associated with separating commercial and investment banking.