For immediate release

The Federal Reserve Board today approved an interim rule defining three categories of activities listed in section 4(k)(5) of the Bank Holding Company Act as financial in nature or incidental to a financial activity. The interim rule also establishes a mechanism through which financial holding companies or other interested parties may request that the Board find, by order, that particular specific activities fall within one of the three categories. The categories in section 4(k)(5), added to the Bank Holding Company by the Gramm-Leach-Bliley Act, are: Lending, exchanging, transferring, investing for others, or safeguarding financial assets other than money or securities; Providing any device or other instrumentality for transferring money or other financial assets, and Arranging, effecting or facilitating financial transactions for the account of third parties. The Board is soliciting comment on the mechanism set out in the interim rule for requesting a Board finding and on what activities, if any, should be found by rule to fall within one of the three categories. The Board plans to issue a joint notice with the Secretary of the Treasury, who is promulgating a similar interim rule implementing section 5136A(b)(3) of the Revised Statutes, which parallels section 4(k)(5). The interim rule will become effective on January 2, 2001, and will be published shortly in the Federal Register.

2000 Banking and consumer regulatory policy