Federal Reserve Gives Bank Holding Companies New Services to Offer

Article excerpt

WASHINGTON (AP) - The Federal Reserve Board is giving bank holding companies the ability to sell, for the first time, a line of new services ranging from tax preparation and other consumer financial planning to the operation of debt collection agencies.

The Fed's decision last week to adopt the new rules was the first expansion in years of the banking regulators' list of non-banking activities that are permissible for bank holding companies.

The new rule means that these companies, through non-bank subsidiaries, may charge for services that before now they were barred from providing, or could only offer without charge.

According to the Fed, there are about 6,300 bank holding copanies that control over 90 percent of the banking assets in the nation.

Bank holding companies are any concerns that own a controlling interest in one or more banks.

""We are pleased with these rules,'' said Richard Whiting, general counsel of the Association of Bank Holding Companies. ""We hope the board's action will signal its willingness in the future to exercise its discretion to permit bank holding companies to offer more new products and services to the public.''

He said the Fed's move would give bank holding companies a broad array of services to offer to their customers for a fee. …


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