Financial services other than deposit taking and lending, approved by the Federal Reserve Board as permissible activities for bank holding companies and financial holding companies. The list of nonbank activities was significantly broadened by the Gramm-Leach-Bliley Act of 1999. In general, financial holding companies may enter into almost any activity considered "financial" in nature, except those activities the act specifically excludes, such as insurance underwriting and real estate development. The Federal Reserve can approve certain nonbanking activities of financial holding companies regarded as complementary to banking, on a case-by-case basis, after consultation with the Treasury Department.
The Federal Reserve Board also approves nonbanking activities of bank holding companies on a case-by-case basis, following guidelines in Federal Reserve Regulation Y , and the Fed's assessment of the expected public benefits, and the likely impact on regulated financial institutions. Examples of approved nonbank activities are operating a consumer finance company, selling mutual funds, equipment leasing, and securities underwriting.
