WASHINGTON -- Buy a burger at McDonald's, and you can get a recently released movie on videotape at a sharply reduced price. Purchase two boxes of cereal at the grocery store, and you can save money on a half-gallon of milk.
But put your money in a bankrun mutual fund, and you won't get a discount on your checking account or home mortgage.
The Federal Reserve's Regulation Y prevents banks in most situations from requiring customers to buy one product in order to get a discount on another. But the central bank is in the midst of altering its anti-tying rules.
This summer, the Fed let banks give discounts on brokerage services to customers who hold traditional banking products, such as checking accounts or home loans. Banks may not, however, do the reverse and give discounts on traditional products to their brokerage customers.
The Fed also proposed, in July, to let holding companies and nonbank affiliates discount a product on condition that a customer obtain another product from one of the institution's nonbank affiliates. The plan would not affect any bank product.
For example, if a customer held shares in a mutual fund, the institution could offer him a discount on brokerage services.
A third easing of the rules, proposed last month, would permit banks to offer a new type of reduced-fee account.
Customers would become eligible if they maintained a minimum balance in a host of instruments that the bank and its affiliates offer. These could vary from checking accounts to mutual funds.
Currently, a bank only can link traditional products, such as checking accounts and home mortgages.
Comments are due on this plan Dec. 9. Comments have already been filed on the rule covering tying of nonbank services. Several bankers asked the Fed to go even further and repeal the ban on tying.
"We would suggest as an alternative to further complicating an already complex regulation that the board actually consider its repeal," wrote George A. Schaefer Jr., president of Cincinnati-based Fifth Third Bancorp.
"[A]nti-tying restrictions, other than those strictly required by statute, should be eliminated so that bank holding companies and their subsidiaries can more effectively compete with nonregulated competitors," said Randall H. McFarlane, government relations director for the Savings and Community Bankers of America.
Other bankers didn't go quite as far. Still, many did ask the Fed to ease the rule more than proposed.
Charles L. Terribile, senior counsel at First Fidelity Bancorp., Lawrenceville, N.J., asked the central bank to apply the proposal to services offered by both banks and their nonbanking subsidiaries.
He argued that banks should be able to offer discounts on non-traditional products, such as credit insurance, when a customer uses a traditional service, such as a checking account. This would broaden the Fed's July rule.
Most of the 34 comments said the second proposal -- the one dealing with nonbanking services -- would let bank affiliates market their products more efficiently.
American Bankers Association senior government affairs counsel Sarah A. Miller said other industries make it a practice to offer customers volume discounts.
"The exception, if granted, will do nothing more than recognize that, under certain circumstances, it makes good business sense to do the same," Ms. Miller wrote.
Chemical Bank senior vice president Gregory S. Meredith said the Fed should adopt the proposal because Congress never intended to restrict nonbank subsidiaries.
But the Independent Bankers Association of America asked the Fed to hold the line and reject the proposal.
