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Federal reserve bank of DALLAS, TEXAS Dallas 75222 Circular No. 71-218 September 13, 1971 PROPOSED AMENDMENT TO REGULATION Y (Property Management Services) To All Banks and Others Concerned in the Eleventh Federal Reserve District: The Board of Governors of the Federal Reserve System on September 7, 1971# proposed an amendment to Regulation Y (Bank Holding Companies) to permit bank holding companies to perform property management services. Enclosed are copies of the Board's press release and the proposed amendment. Interested parties who wish to comment on the proposal should submit their views in writing to the Secretary, Board of Governors of the Federal Reserve System, Washington, D. C., to reach the Board not later than October 8, 1971. Yours very truly, P. E. Coldwell, President Enclosures This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) ______ F E D E R A L press RESERVE release For immediate release September 7, 1971 The Board of Governors of the Federal Reserve System proposed today to permit bank holding companies to perform property management services. Comments on the proposal should be submitted to the Board by October 8. This proposal is part of a series the Board has made concerning activities regarded as closely related to banking under the 1970 amend ments to the Bank Holding Company Act and thus permissible activities for bank holding companies, subject to Board approval in individual cases. Under section 4(c)8 of the Act, the Board may permit bank holding companies to engage in activities that are "so closely related to banking or managing or controlling banks as to be a proper incident thereto." The Board’s proposal would define property management to encom pass farm management, the management of office buildings and other business or industrial properties, the management of residences ranging from single family dwellings to high-rise apartment buildings, and the management of the air rights or the oil and mineral rights of a particular parcel of land. A copy of the proposal is attached. -0- FEDERAL RESERVE SYSTEM [12 CFR Part 222] [Reg. Y] BANK HOLDING COMPANIES Interests in Nonbanking Activities The Board of Governors proposes to permit bank holding companies, subject to established regulatory procedures, to engage in property management following a determination by the Board that such activity is "so closely related to banking or managing or controlling banks as to be a proper incident thereto" within the meaning of section 4(c)(8) of the Bank Holding Company Act. Property management encompasses farm management, the manage ment of office buildings and other business or industrial properties, the management of residences ranging from single-family dwellings to high-rise apartment buildings, and the management of the air rights above, or the oil and mineral rights below, a particular parcel of land. Property management does not, in the Board's judgment, include activities such as the buying and selling of property or the development of real estate. Although serving as an intermediary in bringing lessor and lessee together does not itself constitute property management, serving in that capacity might nonetheless fall within the permissible scope of incidental activities necessary to carry on functions that are regarded by the Board as property management. To implement the Board's proposal, § 222.4(a) would be amended by adding subparagraph (10), to read as follows: - 2 - § 222.4 Nonbanking activities. (a) Activities closely related to banking or managing: or controlling banks. * * * The following activities have been determined by the Board to be so closely related to banking or managing or control ling banks as to be a proper incident thereto: * * * (10) performing property management services. * * * * * To aid in the consideration by the Board of this matter, interested persons are invited to submit relevant data, views, or argu ments. In accordance with the provisions of section 4(c)(8) of the Act, interested persons are also given opportunity to request a hearing on this matter. Any comments or requests for hearing should be submitted in writing to the Secretary, Board of Governors of the Federal Reserve System, Washington, D. C. 20551, to be received not later than October 8, 1971. Such material will be made available for inspection and copying upon request, except as provided in § 261.6(a) of the Board's Rules Regarding Availability of Information. By order of the Board of Governors, September 7, 1971. (Signed) Tynan Smith Tynan Smith Secretary [SEAL]
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