FROM THE OFFICE OF PUBLIC AFFAIRS

The Federal Reserve issued a Notice of Proposed Rulemaking today that would allow financial holding companies to act as "finders" under new financial activity authority provided by the Financial Modernization Act. The Federal Reserve and the Department of the Treasury are coordinating on the determination of new activities permissible for financial holding companies and financial subsidiaries.

The proposed rule, if adopted, would parallel rulings of the Office of the Comptroller of the Currency that allows national banks to conduct finder activities. Activities approved for national banks are automatically permissible for financial subsidiaries of national banks and, to the extent permissible under state law, for financial subsidiaries of state banks. The Department of Treasury, therefore, will not be proposing a similar rulemaking for financial subsidiaries pursuant to its authority.