Magazine article American Banker

Bank Units May Get to Make Offerings Barred to Parents

Magazine article American Banker

Bank Units May Get to Make Offerings Barred to Parents

Article excerpt

WASHINGTON -- In a broad plan to cut .regulatory burdens, the Comptroller's office said MOnday it may allow a bank's subsidiaries to offer products and services prohibited for the parent.

The proposed change, if adopted, could pave the way for national banks to underwrite securities through a subsidiary rather than through a holding company unit.

"The ability for operating subsidiaries to engage in activities that the bank cannot engage in would provide much more flexibility and opportunity to experiment," said Richard M. Whiting, general counsel at the Bankers Roundtable. "This would allow national banks to respond to changes in the technological and competitive environment with a little bit. more alacrity."

The public has 60 days to comment on the proposal.

To cut down on paperwork, branch applications for automated teller machines connected to a network would no longer be required.

Applications for corporate activities such as opening new branches, conducting trust activities, reorganizations, and some operating subsidiary activities, would be deemed approved if the bank does not hear from the agency within 30 days. This assumed approval would apply only to healthy banks with passing Community Reinvestment Act grades.

Routine banking activities by subsidiaries, would merely require after-the-fact notice rather than the current advance approval, The Comptroller's office also proposed allowing banks to reduce their ownership stake in a subsidiary to a simple majority from 80%. …

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