Full text of Federal Reserve Bank of New York Circulars : 6839. Proposal to Permit Bank Holding Companies to Engage in Armored-Car and Courier Services

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FEDERAL RESERVE BANK
OF N E W YORK

C ircu la r N o. 683 9
N ovem b er 15, 1971

Proposal to Permit Bank Holding Companies to Engage
in A rm ored-C ar and Courier Services

To A l l B a n k s , and Others C on cer n ed ,
in the S e c o n d F e d e r a l R e s e r v e D is tr ic t :

Following is the text of a statement issued November 10 by the Board of Governors of
the Federal Reserve System:
The Board of Governors of the Federal Reserve System today ordered a hearing to
consider the issues involved in bank holding companies engaging in armored car or courier
services.
The hearing will be held on December 10, 1971 in the Board Room of the Federal
Reserve building at 20th Street and Constitution Avenue in Washington. All written com ­
ments on the proposal should be received by the Board by December 31, 1971.
This matter is part of a series of proposals the Board has made concerning activi­
ties regarded as closely related to banking under the 1970 amendments to the Bank Hold­
ing Company Act and thus perm issible 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 text of the notice regarding the proposed amendment to Regulation Y is printed on
the reverse side of this circular. Written comments on the proposed amendment should be
submitted by December 31 and may be sent to our Bank Applications Department.




Alfred Hayes,
President.

(Over)

(R e g . Y)
B A N K H O L D I N G C O M P A N IE S
Inte rests in Nonbanking A c t iv it i e s

The Board of Governors proposes to
permit bank holding companies, subject to
established regulatory procedures, to en­
gage in providing armored car and courier
services, following a determination by the
Board that such activities are "so closely
related to banking or managing or control­
ling banks as to be a proper incident thereto"
within the meaning of section 4(c)(8) of the
Bank Holding Company Act.
The Board understands that arm ored car
service involves the use of armed personnel,
specially designed armored vehicles, and
elaborate security m easures. The service is
intended prim arily for the transportation of
items of great value whose misplacement or
theft would result in great econom ic loss.
Major items requiring such precautions are
cash and other instruments that may be ne­
gotiated without additional indorsement —
that is, bearer-type negotiable instruments.
The Board understands that courier (or
messenger) service involves the transporta­
tion of important items having critical time
schedules. The items involved are generally
not bearer-type negotiable instruments and,
accordingly, require only the ordinary se ­
curity m easures accorded any confidential
business papers. Among the most common
documents and related items carried by
m essenger services are checks, drafts,
money orders, travelers checks, com m ercial
papers, written instruments, and data p ro ­
cessing material.
To implement the B oard's proposal,
§ 222.4(a) of Regulation Y would be amended
by adding subparagraph (11), to read as
follows:
§ 222.4 Nonbanking activities.
(a) Activities clo s e ly 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 controlling banks as to be a
proper incident thereto:
* * *

(11)
perform ing or carrying on armored
car or courier services.
A hearing on this matter will be con­
ducted by available members of the Board in
the Board Room of its building at 20th Street
and Constitution Avenue, Washington, D.C.,
on Friday, December 10, 1971, beginning at
10 o'clock a.m. Interested persons are in­
vited to participate, but they need not par­
ticipate by presenting material orally at the
hearing to have their views considered.
Among the issues that will be explored
at the hearing are the questions of the extent
to which and by what measure a bank holding
company should be limited in the armored
car or courier service it perform s for p er­
sons other than itself, its subsidiaries, c o r ­
respondents of its subsidiary banks, or other
financial institutions.
All views expressed in written comments
on the proposal that are received before
December 31, 1971, will be given considera­
tion. Such material will be made available
for inspection and copying upon request, ex­
cept as provided in § 261.6(a) of the Board's
Rules Regarding Availability of Information.
Persons interested in participating in the
hearing by presenting material orally should
inform the Secretary of the Board in writing
not later than November 29, 1971. Each p er­
son admitted as a party to the proceeding
will be given up to 30 minutes to present
his views.