The Board interpreted the statute to allow 25 percent of total revenue to be derived from underwriting and dealing in bank-ineligible securities. In reviewing the revenue limit, the Board was not deciding what level of underwriting and dealing was consistent with safety and soundness or public policy.
If it were, the Board may well have raised the limit to 100 percent, which would have been consistent with the Board’s support of repeal of section 20. I am pleased to report that early indications of the effects of these changes have been favorable. The Board currently has pending three applications to establish a section 20 subsidiary.