A guarantor has a cause of action on the underlying contract. Banks cannot be guarantors. They cannot assert the defenses of a buyer, e.g. to defective merchandise, or a lessor, e.g., to breach of warranty of habitability. However, banks may provide those travel services which are related to banking. They may sell traveler's cheques, exchange foreign currency, make travel loans, issue letters of credit, etc.
Banks are in the business of assessing creditworthiness.
Both lending and leasing involve a review of borrower's or lessor's creditworthiness. As a result of the profusion of new financial instruments and services throughout the 1970s and 1980s, the Federal Reserve was having a hard time keeping track of and regulating and supervising banking activities. The Act repeals provisions of the Glass-Steagall Act and facilitates affiliations between banks, securities firms, and insurance companies. FHCs may engage in a broad array of financially related activities, including securities underwriting and dealing, insurance agency and underwriting activities, and merchant banking activities. Generally, an FHC does not need Federal Reserve Board approval prior to engaging in, or acquiring a company engaged in financial in nature activities.