Related Organizations

Bank Service Company [12 USC 1862]

A bank service company is a corporation or an LLC organized to provide services authorized by the Bank Service Company Act. If the bank service company is a corporation, one or more insured banks own its capital stock. If it is an LLC, its members are one or more insured banks. All shareholders or members must be located in the same state, unless the FRB approves an exception. A bank may not invest more than 10 percent of its capital and surplus in any single bank service company. The bank’s total investment in all bank service companies may not exceed 5 percent of the bank’s total assets.

A bank service company may perform any activity that is permissible for all of its shareholder or member banks to perform directly, except that it may not take deposits. (See 12 CFR 5.35 and the Comptroller’s Licensing Manual, "Investment in Subsidiaries and Equities" for additional information.)

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