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1deficiencies are corrected, the relevant agency may impose limits or conditions on the activities of the company or bank, and the 2company or bank may not engage in, or acquire a company engaged in, the types of expanded activities only permissible for a 3financial holding company or financial subsidiary without prior approval of the relevant agency.4In addition, a financial holding company generally may not engage in a new financial activity authorized by the GLB Act, or acquire a 5company engaged in such a new activity, if any of its insured depository institutions receives a CRA rating of less than “Satisfactory.” 6A national bank’s financial subsidiary generally may not engage in a new financial activity authorized by the GLB Act, or acquire a 7company engaged in such a new financial activity, if the national bank or any of its insured depository institution affiliates received a 8CRA rating of less than “Satisfactory.” The CRA and its implementing regulations require the agencies to assess a bank’s record of 9meeting the credit needs of the communities in which they do business, including low- and moderate-income neighborhoods. At 10December 31, 2023, PNC Bank had a rating of “Outstanding” with respect to CRA. On October 24, 2023, the federal banking 11agencies issued a final rule to amend the regulations implementing the CRA. The rule significantly expands the number of areas in 12which a bank is evaluated, materially changes the tests used to evaluate the bank in those areas and expands the data a bank must 13collect and report. The final rule takes effect April 1, 2024, but the majority of its operative provisions are effective January 1, 2026, 14with the data reporting requirements effective January 1, 2027. We expect the rule will increase PNC Bank’s obligations and 15compliance costs necessary to achieve a “Satisfactory” or “Outstanding” rating under the CRA.16Volcker Rule. The Volcker Rule and its implementing regulations prohibit banking entities from engaging in short-term trading as 17principal and having certain ownership interests in and relationships with hedge funds, private equity funds, and certain other private 18funds (together, “covered funds”), unless an exemption or exception applies. For example, the exemptions under the Volcker Rule 19allow banking entities to trade as principal for securities underwriting, market making and risk-mitigating hedging purposes, subject to 20a variety of conditions. PNC and PNC Bank are subject to simplified and tailored compliance program requirements because each 21entity has trading assets and liabilities of less than $20 billion.22Other Federal Reserve and OCC Regulation and Supervision. The federal banking agencies possess broad powers to take corrective 23action as deemed appropriate based on the actions, operations or risk management programs of a BHC, an insured depository 24institution or their subsidiaries. The Federal Reserve and the OCC have the ability to take enforcement action against PNC and PNC 25Bank, respectively, to prevent and remedy acts and practices that the agencies determine to be unfair or deceptive. A finding that we 26have engaged in a deceptive act or practice may have collateral consequences on our ability to rely on certain exemptions in, or take 27advantage of certain provisions of, the securities laws absent a government waiver of such restrictions.28Moreover, less than satisfactory examination ratings, lower capital or liquidity ratios than peer group institutions, or regulatory 29concerns regarding management, controls, assets, operations or other factors can all potentially result in practical limitations on the 30ability of a bank or BHC to engage in new activities, grow, acquire new businesses, make capital distributions or continue to conduct 31existing activities. Furthermore, the OCC has established certain heightened risk management and governance standards for large 32banks, including PNC Bank. The guidelines, among other things, establish minimum standards for the design and implementation of a 33risk governance framework, describe the appropriate risk management roles and responsibilities of front line units, independent risk 34management, internal audit, and the board of directors, and provide that a covered bank should have a comprehensive written 35statement that articulates its risk appetite and serves as a basis for the framework. If the OCC determines that a covered national bank 36is not in compliance with these or other enforceable guidelines (including guidelines relating to information security standards), the 37OCC may require the bank to submit a corrective action plan and may initiate enforcement action against the bank if an acceptable 38plan is not submitted or the bank fails to comply with an approved plan.39Sections 23A and 23B of the Federal Reserve Act and the Federal Reserve’s implementing regulation, Regulation W, place 40quantitative and qualitative restrictions on covered transactions between a bank and its affiliates (for example between PNC Bank, on 41the one hand, and The PNC Financial Services Group, Inc. and its non-bank subsidiaries, on the other hand). In general, Section 23A 42and Regulation W limit the total amount of covered transactions between a bank and any single affiliate to 10% of the bank’s capital 43stock and surplus, limit the total amount of covered transactions between a bank and all its affiliates to 20% of the bank’s capital stock 44and surplus, prohibit a bank from purchasing low-quality assets from an affiliate and require certain covered transactions to be secured 45with prescribed amounts of collateral. Covered transactions include, among other things, extensions of credit, guarantees and 46purchases of assets. Section 23B generally requires that transactions between a bank and its affiliates be on terms that are at least as 47favorable to the bank as the terms that would apply in comparable transactions between the bank and a third party. Dodd-Frank 48amended Section 23A of the Federal Reserve Act to include as a covered transaction the credit exposure of a bank to an affiliate 49arising from a derivative transaction with the affiliate. The Federal Reserve has yet to propose rules to implement these revisions.50The Federal Reserve Act and Federal Reserve regulations also place quantitative limitations and conditions on extensions of credit by 51a bank to its executive officers, directors, or principal shareholders and their related interests (including any company controlled by 52such persons). Generally, extensions of credit by a bank to such individuals, companies and related interests must comply with certain 53individual and aggregate lending limits, as well as procedural and qualitative requirements. As a result of the amount of PNC common 54stock held by its advised mutual funds and other accounts, the Vanguard Group is considered a principal shareholder of PNC Bank for 55 568    The PNC Financial Services Group, Inc. – 2023 Form 10-K