12 U.S.C. § 1864: Permissible bank service…

Summary

A bank service company can do any of the services allowed here for anyone, but it must not take deposits. Usually the company must do its work only in the same State where its bank shareholders or members are located, and all insured bank shareholders or members must be in that same State, unless the rules below or the Federal Reserve Board give prior approval under section 1865(b). If a State-chartered bank or savings association owns part of the company, the company may only do the services that the State bank could do under that State’s law, and only at places in that State where that bank could do them. If a national bank or Federal savings association owns part, the company may only do the services the national bank can do under federal law, and only at locations in the State where that bank could be authorized. If both State and national banks are owners, the company may do only services every owner is allowed to do under the applicable federal or state law, and only in States where each owner is authorized to perform them. Notwithstanding other limits (except any Federal or State branching laws that apply), the company may also perform anywhere any non-deposit service the Board had allowed a bank holding company under section 1843(c)(8) as of the day before November 12, 1999.

Title 12, §1864

Banks and Banking, Source: USLM XML via OLRC

(a)Services permissible other than taking deposits

A bank service company may provide to any person any service authorized by this section, except that a bank service company shall not take deposits.

(b)Services to be performed in State where shareholders or members are located

Except as permissible under subsection (c), (d), or (e) or with the prior approval of the Board under section 1865(b) of this title in accordance with subsection (f) of this section— (1)

(2)all insured bank shareholders or members of a bank service company shall be located in the same State.

(c)Performance where State bank or savings association is shareholder or member

A bank service company in which a State bank or State savings association is a shareholder or member shall perform only those services that such State bank or State savings association shareholder or member is authorized to perform under the law of the State in which such State bank or State savings association operates and shall perform such services only at locations in the State in which such State bank or State savings association shareholder or member could be authorized to perform such services.

(d)Performance where national bank or Federal savings association is shareholder or member

A bank service company in which a national bank or Federal savings association is a shareholder or member shall perform only those services that such national bank or Federal savings association shareholder or member is authorized to perform under the law of the United States and shall perform such services only at locations in the State at which such national bank or Federal savings association shareholder or member could be authorized to perform such services.

(e)Performance where State bank and national bank are shareholders or members

A bank service company may perform—

(1)only those services that each depository institution shareholder or member is otherwise authorized to perform under any applicable Federal or State law; and

(2)such services only at locations in a State in which each such shareholder or member is authorized to perform such services.

(f)Geographic location

Notwithstanding the other provisions of this section or any other provision of law, other than the provisions of Federal and State branching law regulating the geographic location of banks or savings associations to the extent that those laws are applicable to an activity authorized by this subsection, a bank service company may perform at any geographic location any service, other than deposit taking, that the Board has determined, by regulation, to be permissible for a bank holding company under section 1843(c)(8) of this title as of the day before November 12, 1999.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2006—Subsec. (b). Pub. L. 109–351, § 602(b)(3)(A), inserted “as permissible under subsection (c), (d), or (e) or” after “Except” in introductory provisions. Subsec. (c). Pub. L. 109–351, § 602(b)(3)(B), inserted “or State savings association” after “State bank” wherever appearing. Subsec. (d). Pub. L. 109–351, § 602(b)(3)(C), inserted “or Federal savings association” after “national bank” wherever appearing. Subsec. (e). Pub. L. 109–351, § 602(b)(3)(D), inserted heading and amended text generally. Prior to amendment, text read as follows: “A bank service company that has both national bank and State bank shareholders or members shall perform only those services that may lawfully be performed by both any shareholder or member of the company which is a national bank under the law of the United States and any shareholder or member of the company which is a State bank under the law of the State in which any such State bank operate and shall perform such services only at locations in the State at which both its State bank and national bank shareholders or members could be authorized to perform such services.” Subsec. (f). Pub. L. 109–351, § 602(b)(3)(E), inserted “or savings associations” after “location of banks”. 1999—Subsec. (f). Pub. L. 106–102 inserted before period at end “as of the day before November 12, 1999”. 1996—Pub. L. 104–208, § 2613(e)(5), substituted “company” for “corporation” in section catchline. Subsec. (a). Pub. L. 104–208, § 2613(e)(1), substituted “company” for “corporation” in two places. Subsec. (b). Pub. L. 104–208, § 2613(e)(1), (2), inserted “or members” after “shareholders” wherever appearing in text and substituted “company” for “corporation” in two places. Subsecs. (c), (d). Pub. L. 104–208, § 2613(e)(1), (3), inserted “or member” after “shareholder” wherever appearing and substituted “company” for “corporation”. Subsec. (e). Pub. L. 104–208, § 2613(e)(1), (4), substituted “company” for “corporation”, “any shareholder or member of the company which is a national bank” for “its national bank shareholder or shareholders”, “any shareholder or member of the company which is a State bank” for “its State bank shareholder or shareholders”, and “any such State bank” for “such State bank or banks”, and inserted “or members” after “national bank and State bank shareholders” and after “State bank and national bank shareholders”. Subsec. (f). Pub. L. 104–208, § 2613(e)(1), substituted “company” for “corporation”. 1983—Subsecs. (d), (e). Pub. L. 97–457 substituted “under the law of the United States” for “under this chapter”. 1982—Pub. L. 97–320 substituted provisions relating to bank service corporation activities for other persons for provisions which read: “No bank service corporation may engage in any activity other than the performance of bank services for banks.”

Statutory Notes and Related Subsidiaries

Effective Date

of 1999 AmendmentAmendment by Pub. L. 106–102 effective 120 days after Nov. 12, 1999, see section 161 of Pub. L. 106–102, set out as a note under section 24 of this title.

§1864 Permissible Bank Service Company Activities for Other Persons