Business Divisions from the Perspective of the U.S. Banking System

The Bank Holding Company Act of 1956 ( Act ),\u27 as amended, most recently in 1999 by the Gramm-Leach-Bliley Act ( GLB ) divides all economic activity into five groups. These groups are: 1) banking, 2) activities closely related to and a proper incident to banking; 3) activities of a financial nature; 4) activities complimentary to those of a financial nature; and 5) activities not of a financial nature. This article will explore these five groups of activities separately. The policies behind the divisions will be analyzed and questioned whether they serve the policies behind the Act. This article will also question whether the divisions make good economic sense and whether they are drawn in a logical manner. Finally, this article examines the effects that the divisions have had on the banking industry, in both the United States and abroad, and looks to what they portend for the future