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F

ederal

Reserve Ba n k
DALLAS. T E X A S

of

Dallas

75222

C ir c u la r No. 78-23
F e b r u a r y 27, 1978

REGULATION Y —BANK HOLDING COMPANIES
Notice of P ro p o se d Rulem aking R elating to the Sale a t Retail
Of Money O r d e r s a n d S im ilar I n s tr u m e n ts , T r a v e l e r s C h e c k s ,
U . S . S a v in g s B o n d s, a n d C o n su m e r Financial M anagement C o u rs e s

TO ALL MEMBER BANKS,
BANK HOLDING COMPANIES,
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
T h e B oard of G o v e rn o rs of th e F ederal R e s e rv e System h a s is su e d for
p u b lic comment, a p r o p o s e d a m end m ent to its R egulation Y th a t would p e rm it b a n k
holding com panies a n d th e i r n o n b a n k s u b s i d i a r i e s to s e ll , a t re ta il, money o r d e r s
a n d sim ilar in s tr u m e n ts , t r a v e l e r s c h e c k s , U .S . S a v in g s B o n d s, a n d c o n s u m e r o rie n te d financial m anagem ent c o u r s e s . T h e B oard invited p u b lic comment on the
p ro p o sa l in connection w ith a n a p p lic a tio n by C itic o rp , a New Y ork b a n k holding
co m p a n y , to e n g a g e in su ch a c tiv itie s in Utah.
T h e B oard h a s o u ts ta n d in g a p ro p o sa l to p e rm it b a n k hold in g com panies to
add to th e i r p e r m is s i b le a c t iv itie s th e is s u a n c e a t w h o le sa le of money o r d e r s a n d sim i­
lar in s tru m e n ts for sale to c o n s u m e r s b y o t h e r s .
S p e c ific a lly , th e B oard is a s k in g fo r com ments on w h e t h e r the p ro p o s e d
a c tiv itie s a r e c lo se ly r e la te d to b a n k in g , a n d w h e t h e r th ey would p r o d u c e p u b lic
b e n efits o u tw e ig h in g a n y p o s s ib le a d v e r s e effects if e n g a g e d in by C itic o rp o r by
b a n k holding com panies in g e n e r a l .
P r in te d on the e n clo se d p a g e s is the te x t of the B o a r d 's p ro p o sa l a s s u b ­
mitted to th e FEDERAL REGISTER. Any v ie w s o r r e q u e s t s for h e a r i n g s shou ld be s u b ­
mitted in w ritin g a n d r e c e iv e d by th e S e c r e t a r y , Board of G o v e rn o rs of th e Federal
R e s e rv e S y stem , W ashington, D .C . 20551, not la te r than March 14, 1978. All m a te r­
ials su b m itted sh o u ld in c lu d e the d o c k et n u m b e r R-0145.
S in c e r e ly y o u r s ,
R o b ert H . Boykin
F irst Vice President

Enclosure

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

E x tra c t From
FEDERAL REGISTER,
VOL. 43, NO. 37,
T h u r s d a y , F e b r u a r y 23, 1978
p p . 7440 - 7441

[6210 - 01 ]
FEDERAL RESERVE SYSTEM
[1 2 CFR P a r t 2 2 5 ]

[R e g . Y ; D o c k e t N o. R -0 1 4 5 ]
N O N B A N K IN G ACTIVITIES
A p p lic a tio n to E n g a g e in th e S a lo o f M o n o y
O rd o ra a n d S im ilar In s tru m e n ts , T r a v e le rs
C h e c k s , U.S. S a v in g s B o n d i, a n d C o n su m e r
F in a n c ia l M a n a g e m e n t C o u rs e s , a n d o f P o s­
s ib le R u le m a k in g W ith R e s p e c t T h e re to

AGENCY: Board of Governors of the
Federal Reserve System.
ACTION: Notice of application and
proposed rule.
SUMMARY: In conjunction with its
consideration of an application by Ci­
ticorp, New York, N.Y., th e Board may
consider a proposed rule that would
permit bank holding companies to
engage, directly or indirectly, in the
sale of money orders and similar in­
struments, travelers checks, U.S. Sav­
ings Bonds, and consumer-oriented fi­
nancial management courses and in­
structional material, subject to Board
approval of specific proposals.
DATE: Comments must be received by
March 14, 1978.
ADDRESS: Secretary, Board of Gov­
ernors of the Federal Reserve System,
W ashington, D.C. 20551. All material
submitted should include the docket
number R-0145.
FOR FURTHER
CONTACT:

INFORMATION

Robert E. Mannion, Associate G en­
eral Counsel, 202-452-3274, or James
McAfee, Senior Attorney, 202-452­
3707, Legal Division, Board of Gov­
ernors of the Federal Reserve
System , W ashington, D.C. 20551.
SUPPLEMENTARY INFORMATION:
(1) Notice of application. Citicorp has
applied pursuant to section 4(c)(8) of
th e Bank Holding Company Act (12
U.S.C. 1843(c)(8)) and 225.4(bX2) of
th e Board’s Regulation Y (12 CFR
225.4(b)(2)) for permission to engage
in th e sale of money orders and simi­
lar instruments, travelers checks, U.S.
savings bonds, and consumer-oriented
financial management courses and in­
structional material. These activities,
which th e Board has not previously
found to be closely related to banking,
would be performed by Citicorp

Person-to-Person Financial Centers,
subsidiaries of Nationwide Financial
Services Corp. (a subsidiary of Citi­
corp) at eight existing offices in Utah.
Notice of th e application was pub­
lished November 10, 1977, in the
Ogden Standard-Examiner, T he Dally
Herald, and The Salt Lake Tribune,
newspapers circulated in Ogden,
Provo, and Salt Lake City, Utah, re­
spectively, and the application may be
inspected at the offices of th e Board
of Governors or at th e Federal R e­
sen-e Bank of New York.
(2) Possible rulemaking. In connec­
tion with its consideration of Citi­
corp’s application, the Board, al­
though not required to do so, may also
consider whether S 225.4(a) of the
Board’s Regulation Y (12 CFR
225.4(a)) should be amended to add
th e activities proposed by Citicorp to
those permissible generally for bank
holding companies under section
4(c)(8) of the Bank Holding Company
Act. A proposed text of such an
amendment, th e chief effect of which
would be to permit bank holding com­
panies to engage de novo in these ac­
tivities in normal cases upon 45-days’
notice to the public and to the appro­
priate Federal Reserve Bank, is set
forth at th e end of this notice.
(3) Submission of comments, to aid
the Board in its consideration both of
Citicorp’s application and related rule­
making, interested persons may ex­
press their views on th e questions
whether th e proposed activities, or
any of them , are “so closely related to
banking or managing or controlling
banks as to be a proper incident there­
to,” and whether consummation of Ci­
ticorp’s proposal, or whether perfor­
mance of th e proposed activities gen­
erally by an affiliate of a bank holding
company, can “reasonably be expected
to produce benefits to th e public, such
as greater convenience, increase com­
petition, or gains in efficiency, that
outweigh possible adverse effects, such
as under concentration of resources,
decreased or unfair competition, con­
flicts of interests, or unsound banking
practices.” Any request for a hearing
on these questions should be accompa­
nied by a statem ent summarizing the
evidence th e person requesting the
hearing proposes to submit or to elicit
at the hearing and a statem ent of the
reasons why this m atter should not be
resolved w ithout a hearing.
Any views or requests for a hearing
should be submitted in writing and re­
ceived by th e Secretary, Board of Gov­
ernors of the Federal Reserve System,
Washington, D.C. 20551, not later
than March 14, 1978. All material sub­
m itted should include th e docket
number R-0145. Such information will
be made available for inspection and
copying upon request except as pro­
vided in § 261.6(a) of th e Board’s Rules
Regarding Availability of Information
(12 CFR 261.6(a)).

(4) Authority. This action is pro­
posed pursuant to the Board’s author­
ity under section 4(c)(8) of the Bank
Holding Company Act (12 U.S.C.
1843(c)(8)).
Section 225.4(a)(5)(iv) of the Board’s
Regulation Y (12 CFR 225.4(a)(5)Civ)>
would be amended and section 225.4 of
the Board’s Regulation Y (12 CFR
225.4(a)) would also be amended by
adding the following new paragraph
(13)
immediately
following
§ 225.4(a)(12):
§ 225.4

Nonbanking activities.

Activities closely related to bank­
ing or managing or controlling banks.
• • • The following activities have
(a)

been determined by th e Board to be
closely related to banking or managing
or controlling banks as to be a proper
incident thereto:
«
•
•
•
•
(5) Acting as investm ent or financial
adviser to the extent of • * •
(iv) Furnishing general economic in­
formation and advice, consumer-ori­
ented financial management courses
and instructional material, general
economic statistical forecasting ser­
vices and industry studies: •
•
•
•
•
•
(13) th e sale at retail of money
orders and other variable denominated
Instruments, travelers checks, and U.S.
savings bonds.
Board of Governors of the Federal
Reserve System , February 15,1978.
G r i f f i t h L. G a r w o o d ,

Deputy Secretary of the Board.

[FR Doc. 78-4820 Piled 2-22-78; 8:45 am]

■ T h i s is t o b e c o n tr a s t e d w ith " m a n a g e ­
m e n t c o n s u ltin g ” w h ic h t h e B o a rd v iew s a s
In c lu d in g , b u t n o t lim ite d to , t h e p ro v is io n
o f a n a ly s is o r a d v ic e a s t o a f i r m ’s (i) p u r ­
c h a s in g o p e r a tio n s , s u c h a s I n v e n to ry c o n ­
tr o l, s o u r c e s o f s u p p ly , a n d c o s t m in im iz a ­
tio n s u b je c t t o c o n s tr a in ts ; (ii) p r o d u c tio n
o p e r a tio n s , s u c h a s q u a lity c o n tr o l, w o rk
m e a s u r e m e n t, p r o d u c t m e th o d s , s c h e d u lin g
s h if ts , tim e a n d m o tio n s tu d ie s , a n d s a f e ty
s ta n d a r d s ; (ill) m a r k e tin g o p e r a tio n s , s u c h
a s m a r k e t te s tin g , a d v e r tis in g p r o g ra m s ,
m a r k e t d e v e lo p m e n t, p a c k a g in g , a n d b r a n d
d e v e lo p m e n t; (iv ) p la n n in g o p e r a tio n s , s u c h
a s d e m a n d a n d c o s t p r o je c tio n s , p l a n t lo c a ­
tio n , p r o g r a m p la n n in g , c o r p o r a te a c q u is i­
t i o n s a n d m e r g e rs a n d d e te r m in a tio n o f
lo n g - te rm a n d s h o r t- te r m g o als; (v) p e r s o n ­
n e l o p e r a tio n s , s u c h a s r e c r u itm e n t, t r a i n ­
in g . in c e n tiv e p r o g ra m s , e m p lo y e e c o m p e n ­
s a tio n , a n c f m a n a g e m e n t- p e r s o n n e l r e l a ­
tio n s ; (v i) i n t e r n a l o p e r a tio n s , s u c h a s ta x e s ,
c o r p o r a te o r g a n iz a tio n , b u d g e tin g s y s te m s ,
b u d g e t c o n tr o l, d a t a p ro c e s s in g s y s te m s
e v a lu a tio n , a n d e f fic ie n c y e v a lu a tio n ; o r
(v ti) r e s e a r c h o p e r a tio n s , s u c h a s p r o d u c t
d e v e lo p m e n t, b a s ic r e s e a r c h , a n d p r o d u c t
d e s ig n a n d in n o v a tio n . T h e B o a rd h a s d e te r ­
m in e d t h a t " m a n a g e m e n t c o n s u ltin g ” is n o t
a n a c tiv ity t h a t is so c lo s e ly r e la te d to b a n k ­
in g o r n m n n g i n g o r c o n tr o llin g b a n k s a s t o
b e a p r o p e r In c id e n t t h e r e t o .