---
kind: "section"
citation: "12 C.F.R. § 225.141"
title: "12"
number: "225.141"
heading: "Operations subsidiaries of a bank holding company."
url: "https://uscodex.org/cfr/12/225.141"
---

# §225.141. Operations subsidiaries of a bank holding company.


In orders approving the retention by a bank holding company of a 4(c)(8) subsidiary, the Board has stated that it would permit, without any specific regulatory approval, the formation of a wholly owned subsidiary of an approved 4(c)(8) company to engage in activities that such a company could itself engage in directly through a division or department. (Northwestern Financial Corporation, 65 Federal Reserve Bulletin 566 (1979).) Section 4(a)(2) of the Act provides generally that a bank holding company may engage directly in the business of managing and controlling banks and permissible nonbank activities, and in furnishing services directly to its subsidiaries. Even though section 4 of the Act generally prohibits the acquisition of shares of nonbanking organizations, the Board does not believe that such prohibition should apply to the formation by a holding company of a wholly-owned subsidiary to engage in activities that it could engage in directly. Accordingly, as a general matter, the Board will permit without any regulatory approval a bank holding company to form a wholly-owned subsidiary to perform servicing activities for subsidiaries that the holding company itself could perform directly or through a department or a division under [section 4(a)(2)](/cfr/12/4.md?p=a-2) of the Act. The Board believes that permitting this type of subsidiary is not inconsistent with the nonbanking prohibitions of section 4 of the Act, and is consistent with the authority in section 4(c)(1)(C) of the Act, which permits a bank holding company, without regulatory approval, to form a subsidiary to perform services for its banking subsidiaries. The Board notes, however, that a servicing subsidiary established by a bank holding company in reliance on this interpretation will be an affiliate of the subsidiary bank of the holding company for the purposes of the lending restrictions of [section 23A](/cfr/12/23A.md) of the Federal Reserve Act. ([12 U.S.C. 371c](/usc/12/371c.md))


## Notes

### Amendments

[45 FR 54326, July 15, 1980]

### Source

Source: Reg. Y, 66 FR 415, Jan. 3, 2001, unless otherwise noted.

### Authority

Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1, 1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310, 3331-3351, 3354, 3906, 3907, and 3909; 15 U.S.C. 1681s, 1681w, 6801 and 6805.

### Source

Source: Reg. Y, 49 FR 818, Jan. 5, 1984, unless otherwise noted.

### Amendments

[45 FR 54326, July 15, 1980]