We use cookies to improve security, personalize the user experience,
enhance our marketing activities (including cooperating with our marketing partners) and for other
business use.
Click "here" to read our Cookie Policy.
By clicking "Accept" you agree to the use of cookies. Read less
Understanding Permissible Nonbank Activities and Their Implications
Definition & Meaning
Permissible nonbank activities are those business operations that a bank holding company can engage in, which do not fall under traditional retail banking. These activities are closely related to banking and are allowed by the Federal Reserve. Bank holding companies can conduct these activities directly or through their subsidiaries. Examples include insurance services, secondary mortgage market operations, and investment banking.
Table of content
Legal Use & context
This term is commonly used in the context of banking regulations and financial services law. It is relevant to bank holding companies and their compliance with federal regulations. Users may encounter this term when exploring business opportunities or when managing legal forms related to banking operations. Understanding permissible nonbank activities can help companies navigate the legal landscape effectively.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
For instance, a bank holding company may offer insurance products through a subsidiary. This allows them to diversify their services while remaining compliant with banking regulations. Another example is a bank holding company that participates in the secondary market for mortgages, facilitating home loans without directly engaging in retail banking.
Comparison with related terms
Term
Definition
Difference
Retail Banking
Services provided directly to consumers, such as checking and savings accounts.
Permissible nonbank activities do not involve direct consumer banking services.
Investment Banking
Services related to underwriting, issuing, and selling securities.
Investment banking can be a permissible nonbank activity, but it is distinct from retail banking.
Common misunderstandings
What to do if this term applies to you
If you are involved with a bank holding company and are considering engaging in permissible nonbank activities, it is crucial to consult with a legal professional to ensure compliance with all applicable regulations. Additionally, you can explore US Legal Forms for templates that may assist you in managing the necessary documentation.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.