FROM THE OFFICE OF PUBLIC AFFAIRS

The U.S. Treasury Department announced on Monday an interim final rule for national banks to request the Treasury Secretary to designate activities as new financial activities.

The Financial Modernization Act authorizes financial holding companies and financial subsidiaries of national banks to engage in activities that are financial in nature or incidental to financial activities. The Act also authorizes the Secretary of the Treasury and the Federal Reserve Board (for national banks and financial holding companies, respectively) to designate, in consultation with one another, additional activities as financial in nature or incidental to a financial activity.

The interim final rule outlines the procedures by which the Treasury Secretary designates an activity as financial in nature. The rule explains the consultation process with the Federal Reserve Board and indicates that the Secretary may request public comment on whether an activity should be considered financial in nature or incidental to a financial activity.