September 2, 2003
To: All Member Banks and Others Concerned in the Third Federal Reserve District
Attention: Chief Executive Officer and Chief Compliance Officer
Subject: Anti-Tying Restrictions of Section 106 of the Bank Holding Company Act Amendments of 1970 and Exceptions tothe Anti-Tying Restrictions
The Federal Reserve Board requests public comment on an official interpretation of the anti-tying restrictions in section 106 of the Bank Holding Company Act Amendments of 1970 and related supervisory guidance.
Section 106 generally prohibits a bank from conditioning the availability or price of one product on a requirement that the customer also obtain another product from the bank or an affiliate. The Board’s proposed interpretation of section 106 provides banking organizations and their customers a comprehensive guide to the special anti-tying restrictions applicable to banks under section 106. The related supervisory guidance describes the types of policies and procedures that should help banks ensure and monitor their compliance with section 106.
The Board also proposed to adopt an exception under section 106 for the financial subsidiaries of state nonmember banks. The exception would treat financial subsidiaries of state nonmember banks, like financial subsidiaries of national and state member banks under current law, as an affiliate (and not a subsidiary) of the parent bank for purposes of section 106.
The proposed interpretation, supervisory guidance and financial subsidiary exception will be published in the Federal Register. Comment is requested by September 30, 2003.
Comment on either or both of the proposed Board actions is requested by September 30, 2003. Specific information on how to file a comment is contained in the Federal Register notice published August 29, 2003, a copy of which is attached (608 KB, 35 pages).
For Further Information: Regarding the anti-tying restrictions: Scott G. Alvarez, Associate General Counsel (202-452-3583), Kieran J. Fallon, Senior Counsel (202-452-5270), Mark E. Van Der Weide, Counsel (202-452-2263), or Andrew S. Baer, Counsel (202-452-2246), Legal Division; or Michael G. Martinson, Associate Director (202-452-3640), or Michael J. Schoenfeld, Senior Supervisory Financial Analyst (202-452-2836), Division of Banking Supervision and Regulation; Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, D.C. 20551.
Regarding the exceptions to the anti-tying restrictions: Kieran J. Fallon, Senior Counsel (202-452-5270), Mark E. Van Der Weide, Counsel (202-452-2263), or Andrew S. Baer, Counsel (202-452-2246), Legal Division, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, D.C. 20551.
For users of Telecommunications Device for the Deaf (TDD) only, contact 202-263-4869.