For immediate release

The Federal Reserve Board today requested comment on a proposal to apply sections 23A and 23B of the Federal Reserve Act to transactions between a member bank and any subsidiary that engages in activities that are impermissible for the bank itself and that Congress has not previously exempted from coverage by section 23A. Sections 23A and 23B restrict the ability of a member bank to fund an affiliate through direct investment, loans, or other transactions that might expose the member bank to risk. Comment is requested by September 3, 1997. The proposed treatment is largely consistent with the existing treatment of these subsidiaries by the other banking agencies, which have applied sections 23A and 23B in some form to transactions between a bank and such subsidiaries. The Board's notice is attached.

Summary only | Summary and notice (44 KB PDF)

1997 Banking and consumer regulatory policy