Deposit Conditional Field Bulletin For Free

The Federal Reserve regulates state-chartered member banks, bank holding companies, foreign branches of U.S. national and state member banks, Edge Act Corporations, and state-chartered U.S. branches and agencies of foreign banks.

Section 106 of the Bank Holding Company Act Amendments of 1970 generally prohibits a bank from tying the availability or price of a product or service to the purchase by a customer of another product or service offered by the bank or its affiliates.

It is a conditional sales agreement reached between a seller and a buyer, once this agreement is in place, the buyer is mandated to purchase a different and additional product from the seller. A tying arrangement can be used for products, services, leases, franchises and some other exchanges.

Congress enacted the anti-tying provisions to keep banks from using bank credit and other services to coerce customers and reduce competition.

The purpose of anti-tying regulations are ?to prohibit anticompetitive practices which require bank customers to accept or provide some other service or product or refrain from dealing with other parties in order to obtain the bank product or service they desire.? S. Rep. No. 91-1084, reprinted in 1970, U.S.C.C.A.N.

A tying arrangement may be found to be per se illegal under the general antitrust laws without any showing of anti-competitive effects in the market for the other product if the seller has sufficiently strong economic power in the market for the desired product.

Congress enacted the anti-tying provisions to keep banks from using bank credit and other services to coerce customers and reduce competition.