N.Y. Fed Stirs Up a Bureaucratic Nightmare

By Fein, Melanie L. | American Banker, June 6, 1995 | Go to article overview

N.Y. Fed Stirs Up a Bureaucratic Nightmare


Fein, Melanie L., American Banker


Though it hasn't been enforced, there's a law on the books that requires banks to report on hundreds of service arrangements with third-party service providers. Recently, however, the Federal Reserve Bank of New York stepped up its efforts to get state member banks to comply with the law's rigorous reporting requirements.

Melanie Fein, a law partner with Arnold & Porter in Washington, argues that the New York Fed's action could open up a Pandora's Plox for banks. Ms. Fein, who has numerous banking clients, urges that Congress repeal the law when considering regulatory reform legislation later this year.

A little-known dinosaur of bank regulation is about to come to life and wreak havoc on the industry.

it could be particularly onerous to banks actively involved in the mutual fund business that rely heavily on third-party service providers such as fund custodians, investment advisers, transfer agents, distributors, administrators, and the like. The measure would also apply to banks which are themselves providers of such services.

Section 7(c) of the bank Service Corporation Act requires banks and their affiliates to notify their federal banking regulator within 30 days after entering into a contract with a service provider.

The law further provides that such services shall be subject to regulation and examination by the appropriate federal banking agency to the same extent as if such services were being performed by the bank itself. Section 7(c) literally requires banks and their affiliates to report on hundreds of service arrangements with third-party service providers.

Banks generally have not filed such reports with banking regulators in the past, however, and the provision appears to have been largely ignored by the federal banking regulators as well.

Until now.

On March 29 the Federal Reserve Bank of New York announced that the provision's long liberation is over. It sent a notice to the chief executive officers of all state member banks in the second Federal Reserve district reminding them of the reporting requirement and requesting such banks to provide a listing of all current arrangements with third-party service providers. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

N.Y. Fed Stirs Up a Bureaucratic Nightmare
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.