For which of the following business activities must a bank holding company obtain prior approval of the Federal Reserve Board?
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A. B. C. D.A
Under the Bank Holding Company Act (BHCA), a bank holding company (BHC) is required to obtain prior approval from the Federal Reserve Board (FRB) before engaging in certain nonbanking activities. The FRB has established regulations to identify and define these activities, which are listed in Regulation Y.
Out of the given options, serving as a safe deposit company does not require prior approval of the FRB. However, the other options may require approval as follows:
A. Operating an auto club service - This activity falls under the category of "selling or servicing automobiles, trucks, and farm implements," which requires prior FRB approval.
B. Serving as a safe deposit company - This activity does not require prior approval of the FRB.
C. Operating as a management consulting firm for financial institutions - This activity falls under the category of "providing management consulting advice and counseling, and performing appraisals and valuation services," which generally does not require prior approval. However, if the consulting services involve material conflicts of interest or raise significant safety and soundness concerns, the FRB may require prior approval.
D. Selling installment loan data processing - This activity falls under the category of "providing data processing, data storage, and data transmission services," which generally does not require prior approval. However, if the data processing involves material conflicts of interest or raises significant safety and soundness concerns, the FRB may require prior approval.
In summary, options A and potentially C and D may require prior approval of the FRB, while option B does not.