BANKING & FINANCE - April 20, 1995

Fed Broadens Banks’ Powers to Offer Discounts: The Federal Reserve Board approved a rule that will allow banks to offer customers discounts based on combined balances in various products, including stocks. For example, customers could be offered free checking if they maintained a minimum balance by combining balances in products such as savings, checking and money market accounts, stocks at a brokerage affiliate, and mutual funds. The rule is an exception to anti-tying regulations that generally prohibit banks from tying a product or service to another product or service offered by the bank. Previously, the exemption had been only for traditional bank products such as loans, deposits or trust services. With the Fed’s latest action, other products such as stocks can be used.