(a) Lending, exchanging, transferring,
investing for others, or safeguarding money or securities.
(b) Insuring, guaranteeing, or indemnifying against loss,
harm, damage, illness, disability, or death, or providing and issuing
annuities, and acting as principal, agent, or broker for purposes
of the foregoing, in any state.
(c) Providing financial,
investment, or economic advisory services, including advising an investment
company (as defined in section 3 of the Investment Company Act of
1940).
(d) Issuing or selling instruments representing
interests in pools of assets permissible for a bank to hold directly.
(e) Underwriting, dealing in, or making a market
in securities.
(f) Engaging in any activity that
the Board has determined to be so closely related to banking or managing
or controlling banks as to be a proper incident thereto, which include—
(1) Extending
credit and servicing loans. Making, acquiring, brokering, or
servicing loans or other extensions of credit (including factoring,
issuing letters of credit and accepting drafts) for the company’s
account or for the account of others.
(2) Activities
related to extending credit. Any activity usual in connection
with making, acquiring, brokering or servicing loans or other extensions
of credit, including the following activities:
(i) Real estate and personal property appraising. Performing appraisals
of real estate and tangible and intangible personal property, including
securities.
(ii) Arranging commercial real estate equity financing. Acting as intermediary for the financing of commercial or industrial
income-producing real estate by arranging for the transfer of the
title, control, and risk of such a real estate project to one or more
investors.
(iii) Check-guaranty services. Authorizing a
subscribing merchant to accept personal checks tendered by the merchant’s
customers in payment for goods and services, and purchasing from the
merchant validly authorized checks that are subsequently dishonored.
(iv) Collection agency services. Collecting
overdue accounts receivable, either retail or commercial.
(v) Credit bureau services. Maintaining information related to the
credit history of consumers and providing the information to a credit
grantor who is considering a borrower’s application for credit or
who has extended credit to the borrower.
(vi)
Asset
management, servicing, and collection activities. Engaging under
contract with a third party in asset management, servicing, and collection
1 of assets of a type that an insured depository institution
may originate and own.
(vii) Acquiring debt in default. Acquiring
debt that is in default at the time of acquisition.
(viii)
Real
estate settlement servicing. Providing real estate settlement
services.
2(3) Leasing personal or real property. Leasing personal or real
property or acting as agent, broker, or adviser in leasing such property
if:
(i) The lease is on a nonoperating basis;
3(ii) The initial term of the lease is
at least 90 days; and
(iii) In the case of leases involving real property:
(A) At the inception
of the initial lease, the effect of the transaction will yield a return
that will compensate the lessor for not less than the lessor’s full
investment in the property plus the estimated total cost of financing
the property over the term of the lease from rental payments, estimated
tax benefits, and the estimated residual value of the property at
the expiration of the initial lease; and
(B) The estimated residual value of property
for purposes of paragraph (f)(3)(iii)(A) of this section shall not
exceed 25 percent of the acquisition cost of the property to the lessor.
(4) Operating nonbank depository institutions.
(i) Industrial
banking. Owning, controlling, or operating an industrial bank,
Morris Plan bank, or industrial loan company that is not a bank for
purposes of the BHC Act.
(ii) Operating
savings associations. Owning, controlling, or operating a savings
association.
(5) Trust company functions. Performing
functions or activities that may be performed by a trust company (including
activities of a fiduciary, agency, or custodial nature), in the manner
authorized by federal or state law that is not a bank for purposes
of section 2(c) of the Bank Holding Company Act.
(6) Financial
and investment advisory activities. Acting as investment or financial
advisor to any person, including (without, in any way, limiting the
foregoing):
(i) Serving as investment adviser (as
defined in section 2(a)(20) of the Investment Company Act of 1940,
15 U.S.C. 80a-2(a)(20)), to an investment company registered under
that act, including sponsoring, organizing, and managing a closed-end
investment company;
(ii) Furnishing general economic information and advice, general
economic statistical forecasting services, and industry studies;
(iii) Providing advice
in connection with mergers, acquisitions, divestitures, investments,
joint ventures, leveraged buyouts, recapitalizations, capital structurings,
financing transactions and similar transactions, and conducting financial
feasibility studies;
4(iv) Providing information, statistical forecasting, and advice with
respect to any transaction in foreign exchange, swaps, and similar
transactions, commodities, and any forward contract, option, future,
option on a future, and similar instruments;
(v) Providing educational courses, and
instructional materials to consumers on individual financial management
matters; and
(vi)
Providing tax-planning and tax-preparation services to any person.
(7) Agency transactional services for customer investments.
(i) Securities
brokerage. Providing securities brokerage services (including
securities clearing and/or securities execution services on an exchange),
whether alone or in combination with investment advisory services,
and incidental activities (including related securities credit activities
and custodial services).
(ii) Riskless
principal transactions. Buying and selling in the secondary market
all types of securities on the order of customers as a “riskless principal”
to the extent of engaging in a transaction in which the company, after
receiving an order to buy (or sell) a security from a customer, purchases
(or sells) the security for its own account to offset a contemporaneous
sale to (or purchase from) the customer.
(iii) Private
placement services. Acting as agent for the private placement
of securities in accordance with the requirements of the Securities
Act of 1933 (1933 Act) and the rules of the Securities and Exchange
Commission.
(iv) Futures commission merchant. Acting as
a futures commission merchant for unaffiliated persons in the execution,
clearance, or execution and clearance of any futures contract and
option on a futures contract.
(v) Other
transactional services. Providing to customers as agent transactional
services with respect to swaps and similar transactions, any transaction
described in paragraph (f)(8) of this appendix, any transaction that
is permissible for a state member bank, and any other transaction
involving a forward contract, option, futures, option on a futures
or similar contract (whether traded on an exchange or not) relating
to a commodity that is traded on an exchange.
(8) Investment transactions as principal.
(i) Underwriting and dealing in government obligations
and money market instruments. Underwriting and dealing in obligations
of the United States, general obligations of states and their political
subdivisions, and other obligations that state member banks of the
Federal Reserve System may be authorized to underwrite and deal in
under 12 U.S.C. 24 and 335, including banker’s acceptances and certificates
of deposit.
(ii) Investing and trading activities. Engaging
as principal in:
(A) Foreign exchange;
(B) Forward contracts, options, futures, options
on futures, swaps, and similar contracts, whether traded on exchanges
or not, based on any rate,
price, financial asset (including gold, silver,
platinum, palladium, copper, or any other metal), nonfinancial asset,
or group of assets, other than a bank-ineligible security,
5 if—(1) A state member bank is authorized
to invest in the asset underlying the contract;
(2) The contract requires cash settlement;
(3) The contract
allows for assignment, termination, or offset prior to delivery or
expiration, and the company—
(i) Makes every reasonable effort to avoid taking or making
delivery of the asset underlying the contract; or
(ii) Receives and instantaneously
transfers title to the underlying asset, by operation of contract
and without taking or making physical delivery of the asset; or
(4)
The contract does not allow for assignment, termination, or offset
prior to delivery or expiration and is based on an asset for which
futures contracts or options on futures contracts have been approved
for trading on a U.S. contract market by the Commodity Futures Trading
Commission, and the company—
(i) Makes every reasonable effort to avoid taking or making
delivery of the asset underlying the contract; or
(ii) Receives and instantaneously
transfers title to the underlying asset, by operation of contract
and without taking or making physical delivery of the asset.
(C) Forward
contracts, options,
6 futures, options on futures, swaps, and similar contracts,
whether traded on exchanges or not, based on an index of a rate, a
price, or the value of any financial asset, nonfinancial asset, or
group of assets, if the contract requires cash settlement.
(iii) Buying and selling bullion, and related activities. Buying, selling and storing bars, rounds, bullion, and coins of
gold, silver, platinum, palladium, copper, and any other metal for
the company’s own account and the account of others, and providing
incidental services such as arranging for storage, safe custody, assaying,
and shipment.
(9) Management consulting and counseling
activities.
(i) Management
consulting.
(A) Providing management consulting advice:
7(1) On any matter to unaffiliated
depository institutions, including commercial banks, savings and loan
associations, savings banks, credit unions, industrial banks, Morris
Plan banks, cooperative banks, industrial loan companies, trust companies,
and branches or agencies of foreign banks;
(2) On any financial, economic, accounting,
or audit matter to any other company.
(B) Revenues derived from, or assets related
to, a company’s management consulting activities under this subparagraph
will not be considered to be financial if the company:
(1) Owns or controls, directly or
indirectly, more than 5 percent of the voting securities of the client
institution; or
(2) Allows a management official, as defined in 12 CFR 212.2(h), of
the company or any of its affiliates to serve as a management official
of the client institution, except where such interlocking relationship
is permitted pursuant to an exemption permitted by the Board.
(C) Up to 30 percent of a
nonbank company’s assets or revenues related to management consulting
services provided to customers not described in paragraph (f)(9)(i)(A)(1) or regarding matters not described in paragraph (f)(9)(i)(A)(2) of this appendix will be included in the company’s financial
assets or revenues.
(ii) Employee
benefits consulting services. Providing consulting services to
employee benefit, compensation and insurance plans, including designing
plans, assisting in the implementation of plans, providing administrative
services to plans, and developing employee communication programs
for plans.
(iii) Career counseling services. Providing career
counseling services to:
(A) A financial organization
8 and individuals currently employed by, or recently displaced
from, a financial organization;
(B) Individuals who are seeking employment
at a financial organization; and
(C) Individuals who are currently employed
in or who seek positions in the finance, accounting, and audit departments
of any company.
(10) Support
services.
(i) Courier
services. Providing courier services for:
(A) Checks, commercial
papers, documents, and written instruments (excluding currency or
bearer-type negotiable instruments) that are exchanged among banks
and financial institutions; and
(B) Audit and accounting media of a banking
or financial nature and other business records and documents used
in processing such media.
9(ii) Printing and selling MICR-encoded
items. Printing and selling checks and related documents, including
corporate image checks, cash tickets, voucher checks, deposit slips,
savings withdrawal packages, and other forms that require Magnetic
Ink Character Recognition (MICR) encoding.
(11) Insurance agency and underwriting.
(i) Credit insurance. Acting as principal,
agent, or broker for insurance (including home mortgage redemption
insurance) that is:
(A) Directly related to an extension of credit
by the company or any of its subsidiaries; and
(B) Limited to ensuring the repayment of the
outstanding balance due on the extension of credit
10 in the event of the
death, disability, or involuntary unemployment of the debtor.
(ii)
Finance company subsidiary. Acting as agent
or broker for insurance directly related to an extension of credit
by a finance company
11 that is a subsidiary
of a company, if:
(A) The insurance is limited to ensuring repayment
of the outstanding balance on such extension of credit in the event
of loss or damage to any property used as collateral for the extension
of credit; and
(B) The extension
of credit is not more than $10,000, or $25,000 if it is to finance
the purchase of a residential manufactured home
12 and the credit is secured by the home; and
(C) The applicant commits
to notify borrowers in writing that:
(1) They are not required to purchase such insurance from
the applicant;
(2) Such insurance does not insure any interest of the borrower in
the collateral; and
(3) The applicant will accept more comprehensive property insurance
in place of such single-interest insurance.
(iii) Insurance in small towns. Engaging in any
insurance agency activity in a place where the company or a subsidiary
has a lending office and that:
(A) Has a population not exceeding
5,000 (as shown in the preceding decennial census); or
(B) Has inadequate insurance
agency facilities, as determined by the Board, after notice and opportunity
for hearing.
(iv)
Insurance-agency
activities conducted on May 1, 1982. Engaging in any specific
insurance-agency activity
13 if the company, or subsidiary conducting the specific activity,
conducted such activity on May 1, 1982, or received Board approval
to conduct such activity on or before May 1, 1982.
14 Revenues derived from, or
assets related to, a company’s specific insurance agency activity
under this clause will be considered financial only if the company:
(A) Engages in such specific insurance agency activity only at locations:
(1) In the state in which the company
has its principal place of business (as defined in 12 U.S.C. 1842(d));
(2) In any state
or states immediately adjacent to such state; and
(3) In any state in which the specific
insurance-agency activity was conducted (or was approved to be conducted)
by such company or subsidiary thereof or by any other subsidiary of
such company on May 1, 1982; and
(B) Provides other insurance coverages that
may become available after May 1, 1982, so long as those coverages
insure against the types of risks as (or are otherwise functionally
equivalent to) coverages sold or approved to be sold on May 1, 1982,
by the company or subsidiary.
(v) Supervision
of retail insurance agents. Supervising on behalf of insurance
underwriters the activities of retail insurance agents who sell:
(A) Fidelity insurance and property and casualty insurance on the
real and personal property used in the operations of the company or
its subsidiaries; and
(B) Group insurance that protects the employees of the company or
its subsidiaries.
(vi) Small
companies. Engaging in any insurance-agency activity if the company
has total consolidated assets of $50 million or less. Revenues derived
from, or assets related to, a company’s insurance-agency activities
under this paragraph will be considered financial only if the company
does not engage in the sale of life insurance or annuities except
as provided in paragraphs (f)(11) (i) and (iii) of this appendix,
and does not continue to engage in insurance-agency activities pursuant
to this provision more than 90 days after the end of the quarterly
reporting period in which total assets of the company and its subsidiaries
exceed $50 million.
(vii) Insurance-agency activities conducted
before 1971. Engaging in any insurance-agency activity performed
at any location in the United States directly or indirectly by a company
that was engaged in insurance-agency activities prior to January 1,
1971, as a consequence of approval by the Board prior to January 1,
1971.
(12) Community development activities.
(i) Financing and investment activities. Making
equity and debt investments in corporations or projects designed primarily
to promote community welfare, such as the economic rehabilitation
and development of low-income areas by providing housing, services,
or jobs for residents.
(ii) Advisory activities. Providing
advisory and related services for programs designed primarily to promote
community welfare.
(13) Money orders,
savings bonds, and traveler’s checks. The issuance and sale at
retail of money orders and similar consumer-type payment instruments;
the sale of U.S. savings bonds; and the issuance and sale of traveler’s
checks.
(14) Data processing.
(i) Providing data processing,
data storage and data transmission services, facilities (including
data processing, data storage and data transmission hardware, software,
documentation, or operating personnel), databases, advice, and access
to such services, facilities, or data-bases by any technological means,
if the data to be processed, stored or furnished are financial, banking
or economic.
(ii)
Up to 30 percent of a nonbank company’s assets or revenues related
to providing general purpose hardware in connection with providing
data processing products or services described in paragraph (f)(14)(i)
of this appendix will be included in the company’s financial assets
or revenues.
(15) Administrative services. Providing
administrative and other services to mutual funds.
(16) Securities
exchange. Owning shares of a securities exchange.
(17) Certification authority. Acting as a certification authority
for digital signatures and authenticating the identity of persons
conducting financial and nonfinancial transactions.
(18) Employment
histories. Providing employment histories to third parties for
use in making credit decisions and to depository institutions and
their affiliates for use in the ordinary course of business.
(19) Check cashing and wire transmission. Check cashing and wire
transmission services.
(20) Services offered in connection with
banking services. In connection with offering banking services,
providing notary public services, selling postage stamps and postage-paid
envelopes, providing vehicle registration services, and selling public
transportation tickets and tokens.
(21) Real estate
title abstracting.
(g) Engaging,
in the United States, in any activity that a bank holding company
may engage in outside of the United States; and the Board has determined,
under regulations prescribed or interpretations issued pursuant to
section 4(c)(13) of the BHC Act (12 U.S.C. 1843(c)(13)) to be usual
in connection with the transaction of banking or other financial operations
abroad. Those activities include—
(h) Directly, or indirectly acquiring or controlling, whether as
principal, on behalf of 1 or more entities, or otherwise, shares,
assets, or ownership interests (including debt or equity securities,
partnership interests, trust certificates, or other instruments representing
ownership) of a company or other entity, whether or not constituting
control of such company or entity, engaged in any activity not financial
in nature as defined in this appendix if:
(i) Directly or indirectly acquiring or
controlling, whether as principal, on behalf of 1 or more entities,
or otherwise, shares, assets, or ownership interests (including debt
or equity securities, partnership interests, trust certificates or
other instruments representing ownership) of a company or other entity,
whether or not constituting control of such company or entity, engaged
in any activity not financial in nature as defined in this appendix
if—
(j) Lending, exchanging,
transferring, investing for others, or safeguarding financial assets
other than money or securities.
(k) Providing
any device or other instrumentality for transferring money or other
financial assets.
