Introduction to Nonbank Activities

Permitted by Order on an Individual Basis1

50. Engaging in personal property leasing transactions that allow a
bank holding company to rely for its compensation on an estimated
residual value of leased personal property to up to 100 percent
of the acquisition cost of the leased property

51. Providing financial advice to the Japanese national and municipal
governments and their agencies such as with respect to the issuance
of their securities in the United States

52. Engaging in the purchase and sale of platinum coins issued by the Canadian and Australian governments as legal tender

63. Trading for a company's own account in futures, options, and options on futures based on U.S. government securities and certain money market instruments

64. Acting as a conduit in securities borrowing and lending

1. In approving these activities, the Board did so without expanding the list of permissible activities under section 225.25(b) of Regulation Y.

2. This nonbanking activity was included by the Board within the list of permissible nonbanking activities in section 225.25(b)(22) of Regulation Y, effective December 15, 1986. 3. This nonbanking activity was included by the Board within the list of permissible nonbanking activities in section 225.25(b)(20) of Regulation Y, effective December 15, 1986. 4. This activity was included on the list of permissible

nonbanking activities of Regulation Y, section 225.25(bx(9). effective October 10, 1989.

5. This nonbanking activity was included by the Board within the list of permissible nonbanking activities in section 225.25(b)(21) of Regulation Y, effective December 15, 1986. 6. Added to Regulation Y, effective October 3, 1986. 7. On February 4, 1983, the Board's order was vacated (refer to 1988 FRB 256, 1987 FRB 815).

8. Incorporated into section 225.25(b) of Regulation Y by the Board on April 22, 1992.

65.

66.

67.

68.

69.

70.

Activities permitted by order

Acting as administrator to mutual funds. (1993)

"Clearing only" activities as a futures commission merchant. (1993)

Acting as a futures commission merchant in executing and clearing, and clearing without executing, futures and options on futures on nonfinancial commodities. (1993)

Acting as a dealer-manager in soliciting tender offers. (1993)

Providing electronic benefit transfer services, stored value card services, and electronic data interchange services. (1993)

Providing career counseling services for financial organizations or individuals seeking financiallyrelated positions. (1993)

Pursuant to Rules X and XI of the Rules of the U.S. House of Representatives, and our
continuing oversight of securities and exchanges, we are investigating the facts and
circumstances surrounding the proposed merger between the Dreyfus Corporation (Dreyfus)
and Mellon Bank Corporation (MBC) whereby Dreyfus will be acquired by Mellon Bank, N.A.
(Mellon Bank) as a separate operating subsidiary.

In connection with the Subcommittee hearings today and tomorrow on this matter, serious concerns have been raised regarding the adequacy of the protections that the banking laws afford customers who purchase securities or investment advice in banks. Accordingly, I am transmitting the enclosed 55-page draft table comparison of the regulation of broker-dealers and investment advisers under the federal securities laws versus under the federal banking laws. The table summarizes the principal relevant statutes, regulations, and guidelines administered by the Securities and Exchange Commission and by the federal banking agencies. The Subcommittee will be keeping the hearing record open for 30 days to accommodate our request that you carefully review this document and submit any corrections you deem necessary to make this table accurate and complete.

If you have any questions about this request, please contact Consuela M. Washington of the staff at (202) 225-3147. Thank you for your cooperation and assistance with the work of the Subcommittee.

This is with reference to the Subcommittee's letter of March 2, 1994 asking you to review our draft table comparing the regulation of broker-dealers and investment advisers under the federal securities laws and under the federal banking laws. The table does not include all the federal securities laws and rules, nor does it address the regulation of banks as transfer agents, municipal, or government securities dealers. This is consistent with the scope of the Subcommittee's inquiry as well as the table's stated scope.

At the request of the Office of the Comptroller of the Currency, we are extending the deadline for your responses to the close of business on Friday, April 8, 1994, at which time we will be closing the hearing record and taking the steps to go to prompt printing. It would be helpful if the recipients of the March 2 letter would meet and discuss (and where possible coordinate) your responses. In any event, your transmittal letters for your corrections should indicate the name and phone number of a contact person on your staff, in the event that we have questions about your submission.

The Subcommittee greatly appreciates your cooperation and assistance with our work. We firmly believe that these issues are of vital importance to the protection of the public.

Pursuant to Rules X and XI of the Rules of the U.S. House of
Representatives, and our continuing oversight of securities and
exchanges, we are investigating the facts and circumstances
surrounding the proposed merger between the Dreyfus Corporation
(Dreyfus) and Mellon Bank Corporation (MBC) whereby Dreyfus will
be acquired by Mellon Bank, N.A. (Mellon Bank) as a separate
operating subsidiary.

As a starting point, we have reviewed the copy of the Notice
of the transaction and supporting documentation that was
delivered by MBC to the Committee on Energy and Commerce on
January 3, 1994, as well as the responses of MBC and Dreyfus, the
Securities and Exchange Commission (SEC), and the Comptroller of
the Currency (OCC), responding to the December 20, 1993 Gonzalez-
Dingell letter. In order to assist the Subcommittee in its
investigation and in preparation for upcoming hearings, your
cooperation is requested in providing the following responses,
information, and documents by the close of business on Friday,
February 25, 1994.

1.

Mellon's Legal Memorandum argues that approval of its
Notice "would be fully consistent with existing
regulatory precedent" and that failure to approve the
Notice, even if the activities are deemed to be
illegal, would place national banks "at a serious
competitive disadvantage." The Memorandum states at
page 44 that "the Federal Deposit Insurance Corporation
has issued a ruling (to the Wilmington Trust Co.] on
mutual funds that goes well beyond what is proposed
here. The FDIC ruling permits a subsidiary of a non-
member bank to advise, administer, sponsor and even
distribute mutual funds." Please provide the
Subcommittee with a copy of that opinion letter.

How