Dictionary of Banking Terms: service corporation
service corporation
subsidiary of one or more banks or thrift institutions that performs services other than deposit taking for its owners and outside customers. These may be services the owners cannot perform directly, or services a bank is forbidden by regulation from performing directly. These latter include permissible nonbank activities that bank holding companies may engage in through separate subsidiary companies. The Garn-St Germain Depository Institutions Act allowed bank service corporations to engage in these bank related activities and savings and loan service corporations to directly invest in real estate development.
