District Circular Letters

August 30, 2001

BANKING SUPERVISION AND REGULATION:
REGULATION H - FINAL AMENDMENT

To State Member Banks,
Bank Holding Companies,
and Others Concerned,
in the Twelfth Federal Reserve District

State Member Banks and Financial Subsidiaries (R-1064)

The Federal Reserve Board has approved a final rule relating to financial subsidiaries of state member banks.

The Gramm-Leach-Blilely Act permits qualifying state member banks to establish financial subsidiaries and thereby engage in certain activities that have been determined to be financial in nature or incidental to financial activities.

The final rule is substantially similar to the interim rule that the Board adopted last year and issued for comment (Please see our letter dated March 29, 2000). The rule continues to allow qualifying state member banks to use a streamlined notice procedure to establish a financial subsidiary. The final rule will become effective September 17, 2001.

Additional Information

All circulars and documents are available on the Internet through the Federal Reserve Bank of San Francisco's Internet site, at http://www.frbsf.org/banking/letters. Paper copies of the Board's notice (Docket R-1064) are available from our Corporate Services Department. To request copies to be sent by mail, please call (415) 974-2060.

For additional information about the final rule, please contact our Banking Supervision and Regulation Department at (415) 974-3007.

FEDERAL RESERVE BANK OF SAN FRANCISCO