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F ederal r es er v e Bank o f D allas
DALLAS, TE X A S
75222
Circular No. 81-138
July 9, 1981
REGULATION Y
BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL ACT
(Proposed Rulemaking Relating to Travelers Checks)
TO ALL MEMBER BANKS,
BANK HOLDING COMPANIES,
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
The Board of Governors of the Federal Reserve System has issued for
public comment a proposal to add the issuance of travelers checks to the list of
permissible nonbank activities in which bank holding companies may engage.
In the past, the Board has approved such applications on a case-by-case
basis. Following approval of several such cases, the Board is now seeking public
comment on the appropriateness of adding the issuance of travelers checks as a
generally permissible nonbank activity.
Printed on the following pages is the Board's notice, as published in the
Federal Register, inviting comment on this proposal. All responses to the request
for comments regarding this rulemaking study must be in writing and include the
Docket No. R-0361. All comments should be addressed to the Secretary, Board of
Governors of the Federal Reserve System, Washington, D.C. 20551, and received
no later than August 31, 1981.
Questions regarding this proposal may be directed to the Attorney's
Section of this Bank's Holding Company Supervision Department, Ext. 6182.
Sincerely yours,
William H. Wallace
First Vice President
B a n k s a n d o t h e r s ar e e n c o u r a g e d to u s e th e f o llo w in g in c o m in g W A T S n u m b e r s in c o n t a c t in g th is Bank:
1-800-442-7 140 ( in tr a s t a te ) a n d 1-8 00-527 -9 20 0 (i n te r s ta te ). F o r c a lls p l a c e d lo cally , p le a s e u s e 651 plu s th e
e x te n s io n referred to ab ove.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
FEDERAL RESERVE press release
For immediate release
June 18, 1981
The Federal Reserve Board today invited comment on a proposal
to amend its Regulation Y to include the issuance of travelers checks
in the list of nonbanking activities permissible for bank holding
companies.
The Board invited comment by August 31, 1981.
The Board's notice is attached.
Attachment
-0 -
FEDERAL RESERVE SYSTEM
[12 C.F.R. Part 225]
[Regulation Y; Docket No. R-0361]
BANK HOLDING COMPANIES
NONBANKING ACTIVITIES
Issuance of Travelers Checks
Notice of Proposed Rulemaking
AGENCY:
Board of Governors of the Federal Reserve System.
SUMMARY: In the past, the Board has approved applications by bank
holding companies filed pursuant to section 4(c)(8) of the Bank Holding
Company Act, 12 U.S.C. § 1841 et seq., and section 225.4(b)(2) of the
Board's Regulation Y, 12 C.F.R. § 225.4(b)(2), to engage in the issuance
of travelers checks. At this time, the Board will consider a proposed
rule that would amend section 225.4 (a)(13) of its Regulation Y, 12 C.F.R.
§ 225.4(a)13), by adding the issuance of travelers checks to the list
of nonbanking activities permissible for bank holding companies.
DATE:
Comments must by received by August 31, 1981.
ADDRESS: Secretary, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551. All material submitted should include the
docket number R-0361.
FOR FURTHER INFORMATION CONTACT: R. Whiting, Senior Attorney (202/452
3779) or S. Weinberg, Attorney (202/452-3707), Legal Division, or S. Sussan,
Manager, Division of Banking Supervision and Regulation (202/452-2818),
Board of Governors of the Federal Reserve System, Washington, D.C. 20551.
SUPPLEMENTARY INFORMATION:
(1) Proposed Rulemaking. The Board is
inviting comment on whether section 225.4(a)(13) of the Board's Regulation Y
(12 C.F.R. s 225.4(a)(13)) should be amended to add the issuance of
travelers checks to those activities permissible generally for bank
holding companies under section 4(c)(8) of the Bank Holding Company
Act. Section 4(c)(8) of the Bank Holding Company Act states that bank
holding companies lawfully may engage in those activities the Board
has "determined (by order or regulation) to be so closely related to
banking or managing and controlling banks as to be a proper incident
thereto." 12 U.S.C. § 1843(c)(8).
-2 -
In determining whether a proposed nonbanking activity is
"closely related" to banking, the Board generally applies the standards
set forth in National Courier Association v. Board of Governors of the
Federal Reserve System, 516 F.2d 1229 (D.C. Cir. 1975).
In that opinion
the Court held that a proposed nonbanking activity would be considered
"cloSely related" to banking if it met at least one of the following
criteria:
(1)
Banks generally have in
fact provided the proposed services.
(2)
Banks generally provide
services that are operationally or
functionally so similar
to the proposed services as to equip
them particularly well to provide the proposed service.
(3) Banks generally provide services that are so integrally related
to the proposed services as to require their provision in
a specialized form.
On several occasions the Board by order has found the conduct of this
activity by particular bank holding companies to be "closely related"
to banking. Seafirst Corporation ___ Federal Reserve Bulletin ___ (1981)
("Seafirst"); The Chase Manhattan Corporation 66 Federal Reserve Bulletin
983 (1980); First Chicago Corporation 65 Federal Reserve Bulletin 937
(1979); Citicorp 65 Federal Reserve Bulletin 666 (1979); and Republic
of Texas Corporation 62 Federal Reserve Bulletin 630 (1976). Thus,
in the circumstances presented, the Board has concluded that sufficient
evidence exists to warrant a finding that there is a reasonable basis
for the opinion that the issuance of travelers checks by bank holding
companies generally is an activity "closely related" to banking and
now solicits comments as to whether the activity of issuing travelers
checks should be added to section 225.4(a) of Regulation Y.
(2) Submission of Comments. To aid the Board in its consideration
of the proposed rulemaking, interested persons may express their views
on the question whether performance of the proposed activity generally
by an affiliate of a bank holding company, 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. Any request for a hearing on this question should be
accompanied by a statement summarizing the evidence the person requesting
the hearing proposes to submit or to elicit at the hearing and a statement
of the reasons why this matter should not be resolved without a hearing.
-3 -
Any views or requests for a hearing should be submitted in
writing and received by the Secretary, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551, not later than August 31, 1981.
All material submitted should include the docket number R-0361.
Such
information will be made available for inspection and copying upon
request-except as provided in section 261.6(a) of the Board's Rules
Regarding Availability of Information (12 C.F.R. § 261.6(a)).
(4)
Authority. This action is proposed pursuant to the
Board's authority under section 4(c)(8) of the Bank Holding Company
Act (12 U.S.C.
§ 1843(c)(8)).
Section 225.4(a) of the Board's Regulation Y (12 C.F.R. § 225.4(a))
would be amended as follows:
SECTION 225.4 - NONBANKING ACTIVITIES
(a)
Activities closely related to banking or managing and controlling
banks. *** The following activities have been determined
by the Board to be so closely related to banking or managing
and controlling banks as to be a proper incident thereto.
*
*
*
(13) The sale at retail of money orders having a face value
of not more than $1,000 and the issuance and sale of travelers checks
and the sale of U.S. Savings Bonds.
Board of Governors, effective June 18, 1981.
(Signed) James McAfee
James McAfee
Assistant Secretary of the Board
[SEAL]
