[Code of Federal Regulations]
[Title 12, Volume 2, Parts 200 to 219]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR208.72]

[Page 199-200]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL RESERVE SYSTEM (REGULATION H)--Table of Contents
 
         Subpart G--Financial Subsidiaries of State Member Banks
 
Sec. 208.72  What activities may a financial subsidiary conduct?

    (a) Authorized activities. A financial subsidiary may engage in only 
the following activities:
    (1) Any activity listed in Sec. 225.86 of the Board's Regulation Y 
(12 CFR 225.86);
    (2) Any activity that has been determined to be financial in nature 
or incidental to a financial activity by the Secretary of the Treasury, 
in consultation with the Board, pursuant to Section 5136A(b) of the 
Revised Statutes of the United States (12 U.S.C. 24a(b)); and

[[Page 200]]

    (3) Any activity that the state member bank is permitted to engage 
in directly (subject to the same terms and conditions that govern the 
conduct of the activity by the state member bank).
    (b) Impermissible activities. Notwithstanding paragraph (a) of this 
section, a financial subsidiary may not engage as principal in the 
following activities:
    (1) Insuring, guaranteeing, or indemnifying against loss, harm, 
damage, illness, disability or death (except to the extent permitted 
under applicable state law and sections 302 or 303(c) of the Gramm-
Leach-Bliley Act (Pub. L. 106-102, 113 Stat. 1407-1409, 15 U.S.C. 6712 
or 6713(c)), or providing or issuing annuities the income of which is 
subject to tax treatment under section 72 of the Internal Revenue Code 
(26 U.S.C. 72);
    (2) Real estate development or real estate investment, unless 
otherwise expressly authorized by applicable state and Federal law; and
    (3) Any activity permitted for financial holding companies by 
section 4(k)(4)(H) or (I) of the Bank Holding Company Act (12 U.S.C. 
1843(k)(4)(H) and (I)).