Nonbank Bank

Nonbank Bank

An institution that provides most banking services without belonging to the Federal Reserve System or receiving a state charter. Nonbank banks do not offer checking accounts per se, but offer credit cards, loans and savings accounts. They developed to circumvent regulations preventing banks from operating in multiple states. They became unnecessary after the passage of the Riegle-Neal Act, which deregulated banks.
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There are some worrying signals in the June 2018 Annual Economic Report of the Bank of International Commerce, which points out that outstanding stock of dollar credit to the nonbank bank borrowers in emerging markets has almost doubled since 2008 and currently stands at a staggering $3.6 trillion.
In 1987, in the Competitive Equality Banking Act (CEBA), the Congress closed the nonbank bank loophole.
Because reform of the nonbank bank provisions raises fundamental questions regarding the mixing of banking and commerce, the Board believes that reform of the provisions governing nonbank banks should be considered within the framework of broad financial modernization rather than in the context of efforts to reduce regulatory burden.
These banks, known as nonbank banks, did not fit the Act's definition of a bank but did offer most banking services.
Nonbank Banks. Section 4(f) of the BHC Act was amended by section 107 of the GLB Act.
Differences in average ROA and ROE for states in the 1980s were influenced by at least two special factors: extraordinarily large provisions taken by large regional and money center banks to cover anticipated losses from loans to LDCs, and the proliferation of generally high-profit credit card banks, other limited purpose banks, and the so-called nonbank banks in states permitting these institutions.
Average state profitability ratios were also affected in the 1980s and 1990s by the existence of credit card banks and other limited purpose banks and nonbank banks. Unlike full-service commercial banks, limited purpose and nonbank banks specialize in a particular banking product - such as credit cards - and do not offer a full range of commercial banking services.
The issue will be widely debated, but commercial companies already own thrifts and nonbank banks. Thus the traditional barriers are already partially breached.
Two sections of the bill would eliminate limitations that have been applied to nonbank banks. Section 223 would allow nonbank banks, and FDIC-insured credit card banks, to offer business credit cards, even when these business loans are funded by insured demand deposits.
Two provisions of the draft bill would eliminate limitations that have been applied to nonbank banks. Section 221 would allow nonbank banks to offer business credit cards, even when these business loans are funded by insured demand deposits.
(6.)The Board has determined that nonbank banks such as corporate central credit unions and bankers banks may have access to the discount window if they voluntarily maintain reserves.
I assume that is one of the reasons why so many securities firms own nonbank banks in the United States and own banks in foreign countries.