Gerald P. Hurst, Esq.
Associate General Counsel
NationsBank Corporation
NationsBank Corporate Center
NC1-007-20-1
Charlotte, N.C. 28255

Dear Mr. Hurst:

This is in response to your letters regarding a proposed arrangement between NationsCredit Corporation ("NationsCredit"), a wholly owned finance company subsidiary of NationsBank Corporation, Charlotte, North Carolina ("NationsBank"), and the American Travel Motor Club, Inc. ("Club"). Under this arrangement, NationsCredit would make available to its customers promotional materials, including membership applications, for the Club.¹

You have stated that the activities of NationsCredit would be limited solely to (i) making Club brochures and applications available to NationsCredit customers at NationsCredit offices,² and (ii) selling customer lists to the Club. NationsCredit employees would not solicit customers in any manner with respect to membership in the Club, and NationsCredit would engage in no other marketing activities for the Club. NationsCredit employees would, however, be available to answer questions regarding the Club upon the request of a customer. You have indicated that, in responding to these questions, NationsCredit employees would restrict themselves to discussing information contained in the Club's brochures. NationsCredit proposes to receive a referral fee from the Club, but NationsCredit employees would receive no compensation from the Club or NationsCredit.

NationsCredit also does not propose to accept applications for Club membership or handle administrative functions for the Club. For example, NationsCredit would refer all persons who wish to enroll in the Club, or who have questions that can not be addressed by reference to the Club's brochure, to the Club. Furthermore, NationsCredit would have no power to bind the Club to contracts or agreements with customers, or to alter the terms of Club memberships. You also have indicated that all promotional materials made available by NationsCredit, and all other promotional materials for the Club that refer to NationsCredit, will state that there is no affiliation between NationsCredit and the Club. Finally, NationsCredit would not require the purchase of Club membership, nor that any Club membership fee be financed, as a condition to obtaining a loan from NationsCredit.³

Based on all the facts and representations contained in your letters, including those discussed above, it does not appear that NationsBank or NationsCredit would be engaged in a nonbanking activity for purposes of the Bank Holding Company Act or the Board's Regulation Y under this arrangement with the Club. This opinion is based expressly on the facts and circumstances as they have been described in your letters, and any change in these facts or circumstances may result in a different opinion and should be communicated to the Federal Reserve Bank of Richmond and Board staff. This opinion does not authorize any other transaction.

Sincerely, yours

(signed) Scott G. Alvarez

Scott G. Alvarez

cc: Federal Reserve Bank of Richmond

Footnotes 1. The Club provides automobile-related services, including travel routing assistance, road maps, emergency road service, and auto theft and accident assistance to its members. You have represented that the services offered by the Club are not considered insurance services in any state where Club memberships would be made available. Return to text 2. Club materials may be displayed on employee desks and in brochure racks. Return to text 3. At a customer's request, however, the Club's membership fee may be financed by or paid from the proceeds of a NationsCredit loan. In such circumstances, NationsCredit would ensure that the membership fee is properly disclosed in the loan documentation, as required by the Board's Regulation Z. Return to text