WASHINGTON — Bank holding companies will be able to sell for the first time a handful of services ranging from consumer financial and tax counseling to debt collection and credit checks, under rules adopted Wednesday by the Federal Reserve Board of Governors.
The Fed's decision is the first extension in years of the banking regulators' list of permissible non-banking activities for bank holding companies. It means that these companies, through non-bank subsidiaries, may charge for services that before now they were barred from providing or could only offer free.
A bank holding company is any company that owns a controlling interest in one or more banks.
The American Bankers Assn. applauded the decision but said the Fed did not go far enough. "Until the commercial banking industry is brought to full equality with its non-bank competitors, we're prevented from providing the full array of services our customers need," said Edward Yingling, ABA executive director for government relations.
In a separate action, the Fed clarified existing law on the types of insurance that bank holding companies can sell. In general, the insurance they are permitted to offer must be related to bank-generated loans.