Membership of State Banking Institutions in the Federal Reserve System: Financial Subsidiaries

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The Board has adopted a final rule implementing the financial subsidiary provisions of the Gramm-Leach-Bliley Act for state member banks. The Gramm-Leach-Bliley Act authorizes state member banks that comply with the requirements of the rule to control, or hold an interest in, a financial subsidiary which may conduct certain financial activities that are not permissible for the parent bank to conduct directly. The final rule is substantially similar to the interim rule that the Board adopted in March 2000.