Interim Rule Permitting Qualifying State Member Banks To Establish Financial Subsidiaries - Brief Article

Federal Reserve Bulletin, May, 2000

The Federal Reserve Board on March 10, 2000, announced the approval of an interim rule permitting qualifying state member banks to establish financial subsidiaries and thereby engage in activities that have been determined to be financial in nature or incidental to financial activities. The interim rule establishes a streamlined notice procedure for state member banks that wish to acquire control of, or an interest in, a financial subsidiary. The Board's rule parallels that adopted by the Comptroller of the Currency for financial subsidiaries of national banks.

The interim rule is effective on March 11, 2000, the effective date of Title I of the Gramm-Leach-Bliley Act. Comments will be accepted on the interim rule until May 12, 2000. The Board will revise the interim rule as appropriate after reviewing the comments.