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F e d e r a l R e s e r v e Ba n k o f D a l l a s DALLAS, TEXAS 75222 C i r c u l a r No. 75-42 M a r c h 26, 1975 AMENDMENT TO INTERPRETATION OF REGULATION Y TO ALL BANKS, BANK HOLDING COMPANIES, AND OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE DISTRICT: T h e Board of G o v e rn o rs of the Federal R e s e rv e System has amended its in te rp r e ta tio n of Regulation Y, "Bank Holding C om p anies," r e g a r d i n g activ ities closely related to b a n k i n g . T he am endm ent ad ds a Subsection 4 to Section 2 2 5 .1 2 3 (g ), w hich p e rta in s to c o m p ute r ou t put microfilm s e r v i c e s . A copy of the amended in te rp r e ta tio n is p r in t e d on the r e v e r s e of this c i r c u l a r . Sincerely y o u rs, T . W. P la n t F i r s t V ic e P r e s i d e n t This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM BANK HOLDING COMPANIES A M E N D M E N T T O IN T E R P R E T A T IO N O F R E G U L A T IO N Y Subsection 4 is being added to § 225.123(g) to indicate the B oard’s view th a t com puter output microfilm services by themselves are n o t permis sible data processing w ithin the m eaning of § 225.4(a)(8) of the B oard’s R egulation Y (12 C F R 225.4 ( a ) ( 8 ) ) . T he B oard views the offering of com pu ter o u tp u t microfilm services by a bank holding com pany o r a subsidiary of a bank holding com pany to be a permissible activity w ithin the con fines o f § 225.4(a)(8) w hen offered only as an out p u t option fo r d ata otherwise being permissibly processed by the bank holding com pany o r the sub sidiary of th e bank holding com pany and n o t as a separate line o f endeavor. As am ended, §225.123(g) reads as follows: § 225.123 Activities closely related to banking. * * * * * (g) D a ta processing: T he authority o f holding com panies und er § 225.4(a) to engage in data processing activities is intended to perm it holding com panies to process, by m eans of a com puter or otherwise, data for others o f the kinds banks have processed, by one means o r another, in conduct ing their internal operations an d accom m odating their customers. It is not intended to perm it hold ing com panies to engage in autom ated d ata pro cessing activities by developing program s either upon their own initiative or upon request, unless the d ata involved are financially oriented. T he B oard regards as incidental activities necessary to carry on the permissible activities in this area the following: (1) m aking excess com puter tim e avail able to anyone so long as the only involvement by the holding com pany system is furnishing the facility an d necessary operating personnel; (2) sell ing a byproduct of the developm ent of a program fo r a permissible data processing activity; (3 ) furnishing any data processing service u pon re quest of a custom er if such d ata processing ser vice is n o t otherwise reasonably available in the relevant m arket area; an d (4) supplying form at ting fo r com puter ou tp ut microfilm and supplying com puter ou tp ut microfilm only as an output op tion fo r d ata otherwise being permissibly proc essed by the holding com pany system. 3 /7 /7 5
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