To the Chief Executive Officers of All State Member Banks in the Second Federal Reserve District:
In a press release dated January 19, 2001, the Federal Reserve Board and the Secretary of the Treasury announced the adoption of a final rule (pdf - 54kb) establishing the alternative criteria that the second 50 largest insured banks may satisfy to control a financial subsidiary under the Gramm-Leach-Bliley Act.
Our Circular No. 11235, dated March 27, 2000, announced an interim rule regarding the requirements to control a financial subsidiary under the Act. The interim rule indicated that if the bank is one of the second 50 largest insured banks, it may control a financial subsidiary if it meets either (a) a certain debt rating requirement or (b) alternative criteria that the Board and the Treasury would establish in the future. Under the final rule now established, a bank meets the alternative criteria if it has a current long-term issuer credit rating from a nationally recognized statistical rating organization that is within the three highest investment-grade categories used by the rating organization. This rule will become effective March 5, 2001.
Questions on this matter may be directed, at this Bank, to James E. Beit, Bank Supervision Officer.