Opinion ID: 442857
Heading Depth: 1
Heading Rank: 2

Heading: closely related to banking

Text: 25 This appeal requires us, then, to decide whether the Board of Governors acted arbitrarily or capriciously--either because no substantial evidence existed to support its factual premises, or in any other respect--when it concluded, based on the record of the proceedings before it, that the new activities Citicorp proposed were closely related to banking. The test which the Board applied was that developed by this court in National Courier, supra, 516 F.2d at 1237: 26 As to what kinds of connections may qualify [as closely related to banking], at least the following seem to us within the statutory intent: 27 1. Banks generally have in fact provided the proposed services. 28 2. Banks generally provide services that are operationally or functionally so similar to the proposed services as to equip them particularly well to provide the proposed service. 29 3. Banks generally provide services that are so integrally related to the proposed services as to require their provision in a specialized form. 30 See, e.g., Citicorp Order, 68 Fed.Res.Bull. at 506 n. 3; Regulation Y Order, 47 Fed.Reg. 37,368 n. 1. These criteria are disjunctive rather than cumulative, see National Courier, supra, 516 F.2d at 1237-38, and not exclusive, see 49 Fed.Reg. 806 (1984); SIA, supra, 104 S.Ct. at 3006 n. 5.The Data Test 31 Petitioners do not contend that the National Courier criteria are in themselves erroneous (they have subsequently been approved by the Supreme Court, see SIA, supra, 104 S.Ct. at 3006 n. 5), but they do contend, preliminarily, that the Board erroneously applied them to the kinds of data involved in the proposed services, rather than to the services themselves. 32 The depth of confusion that surrounds this argument is suggested by the fact that the Board's brief denies that a data test was applied, Respondent's Brief at 27-33, while the briefs of intervenors supporting the Board acknowledge that, at least as to the Regulation Y order, it was applied but assert that its application was lawful, Citicorp Brief at 27-32; CBCHA Brief at 27-32. We must address the Board's contention first. 33 The Board is quite correct that the Citicorp order specifically examined each of the eight categories of data processing the applicant proposed to provide. But some of those categories were only described with reference to (1) the data processing technology employed and (2) the nature of the data to be provided or processed, and the Board clearly held that the former is not determinative of whether [the] activity is permissible, Citicorp Order, 68 Fed.Res.Bull. at 507. The conclusion is therefore inescapable that, even in the Citicorp order, a data test was employed. With regard to timesharing services, for example, the applicant proposed to provide data processing and transmission services for financial and non-financial institutions wherein the data being processed and transmitted are financial, banking or economic related. J.A. C-54. The Board approved this, with the one change (which will be discussed further in another portion of this opinion) that economic related was altered to economic. Citicorp Order, 68 Fed.Res.Bull. at 507 n. 8. It is true that the application further provided some examples of the specific data processing uses to which the requested authority would be put: 34 Such packaged financial systems permit customers at various locations to obtain the benefit of Citicorp's financial information systems and financial analysis expertise with respect to such applications associated with banking as financial modeling, loan analysis, accounting and bookkeeping, budget and profitability analysis, portfolio record-keeping and analysis, foreign exchange exposure, general ledger, bond analysis, international trade settlement, and economic forecasting. 35 J.A. C-54 to C-55. The Board's opinion discussed several of these examples, 7 concluding that they in fact represented services provided by banks or were so similar to such services that banking organizations are particularly well equipped to provide them. But that can only be understood as an attempted demonstration that its data test is as successful in concrete application as it is in theory. 36 It is even clearer that the Regulation Y order employs a data test. No more is needed to establish this than the text of the new regulation which the order adopted. Permissible activities of bank holding companies now include: 37 Providing to others data processing and data transmission services, facilities (including data processing and data transmission hardware, software, documentation or operating personnel), data bases, or access to such services, facilities, or data bases by any technological means, if: 38 (i) The data to be processed or furnished are financial, banking, or economic, and the services are provided pursuant to a written agreement so describing and limiting the services; 39 (ii) The facilities are designed, marketed, and operated for the processing and transmission of financial, banking, or economic data; and 40 (iii) The hardware provided in connection therewith is offered only in conjunction with software designed and marketed for the processing and transmission of financial, banking, or economic data, and where the general purpose hardware does not constitute more than 30 percent of the cost of any packaged offering. 41 12 C.F.R. Sec. 225.25(b)(7). The Regulation Y order states that the amendment it adopts will make it permissible for bank holding companies to engage in the data processing and transmission services the Board has approved by order in the [Citicorp] case. Regulation Y Order, 47 Fed.Reg. 37,369. But as the footnote accompanying that statement shows, this is a reference to the eight broad technological categories of service (e.g., timesharing) rather than to the particular uses within those categories (e.g., budgeting, bookkeeping, accounting) which petitioners complain a data test avoids. And when the Regulation Y order incorporates by reference [t]he Board's findings on the permissibility of the services involved ... set forth in detail in the Board's [Citicorp] order, id., that incorporation, like the original findings themselves, must be for the purpose of exemplifying that in concrete application the data test will produce services closely related to banking. 42 As the insignificant nature of the textual changes in the portion of Regulation Y dealing with the current issue indicates, the present amendment does not fundamentally alter the approach of that regulation to data processing services. With regard to the data test point it is significant, we think, that the Board's staff recommendation proposing what in substance became the 1971 Regulation Y described its approach as follows: 43 In our view, the real issue is what kind of data should banking organizations be permitted to process. The technology employed is not the subject of the Act. 44 .... 45 Accordingly, we recommend that the Board shift the emphasis of its proposal from the method of processing data to the kind of data being processed. Under this recommendation, bank holding companies would be permitted to process banking, financial, or other economic data, regardless of the tool used in the processing. 46 Legal Division Memo to Board of Governors (June 7, 1971), Applicant's Exhibit M-2 at 6. While this is the staff's description rather than the Board's we think it an accurate representation of what the Board did in 1971 and perpetuated in the present orders. 47 The Board's brief suggests that the exclusiveness and allegedly impermissible generality of the data test are avoided by the fact that 48 [b]efore any holding company may engage in data processing services, it must file an application with the Board and receive a Board order determining that the 'public benefits' test of section 4(c)(8) [of the Act] has been satisfied. 12 C.F.R. Sec. 225.4(a), (b). Since data processing activities for a particular company are subject to Board approval upon specific application, the Board will have the opportunity to ensure that no bank holding company's activities exceed the statutory standard. 49 Respondent's Brief at 32. It is indeed true, as noted in the Regulation Y Order, 47 Fed.Reg. 37,371, that the Board makes the separate public benefits determination required under the Act 8 by examining individual applications rather than by regulation. 9 But it would be unlawful, in the course of that case-by-case examination for that separate purpose, to deny an applicant the closely related qualification which the regulation generally confers. Such action would require amendment of the regulation--so that the limitation upon the data test which the Board's brief puts forward amounts to no more than the possibility that the rule can be amended to forbid what it now impermissibly (according to petitioners) permits. Reliance upon such a possibility would validate every invalid rule. 50 We must confront, therefore, the stark question whether the data test, as the determinant of whether data processing services are closely related to banking, is arbitrary or capricious. We think not. It would of course be preferable, from the point of view of accuracy alone, to make every closely related determination on a more narrow, specific, case-by-case basis--to ask, as petitioners would have the Board do, whether data processing for budget analysis, for bookkeeping, and for accounting each separately qualifies for the exemption. Indeed, it would be even more accurate to get even more specific, and to ask whether budget analysis for manufacturing entities, budget analysis for retail sales entities, and budget analysis for personal service entities each separately qualifies. But the whole point of rulemaking as opposed to adjudication (or of statutory law as opposed to case-by-case common law development) is to incur a small possibility of inaccuracy in exchange for a large increase in efficiency and predictability. What the present controversy comes down to is simply whether there is reasonable assurance that the activities embraced within the data test--not all of which have been individually examined or even yet foreseen--will be closely related to banking under one or more of the broad National Courier tests. We think that there is. 51 As a theoretical matter, to begin with, the test is appealing. The record of this proceeding amply demonstrates, if any demonstration is needed, that banks regularly develop and process for their customers large amounts of banking, financial and economic data, and that they do so (and will presumably continue to do so) through the most advanced technological means. Once that is acknowledged, it is difficult to envision how any provision of data processing services dealing with data of that particular type would not meet at least the second of the National Courier tests: 52 Banks generally provide services that are operationally or functionally so similar to the proposed services as to equip them particularly well to provide the proposed service. 53 National Courier, supra, 516 F.2d at 1237. Perhaps it may not be in the public interest for them to provide one or another of such services, for anticompetitive or other reasons. But that relates to the public benefits determination, which is made case-by-case rather than in the amended Regulation Y, and whose resolution in the Citicorp order is not under challenge on this appeal. 54 In addition to its theoretical reasonableness, there is the fact that the Board, in the course of this proceeding, considered specific applications of the principle to various specific data processing uses proposed by Citicorp--finding all of them to be within one of the National Courier criteria, and many to be within the most rudimentary criterion that [b]anks generally have in fact provided the proposed services, id. We find adequate support in the record for those conclusions. 10 55 It is significant that petitioners have not proposed any alternative to the data test, evidently demanding instead that each new data processing technology, and even each new use of data processing (such as budgeting, financial modeling, accounting) be separately examined and approved for its closely relatedness. In a field such as data processing, this will not do; the predictability of a rulemaking approach to the issue is vital. As the ALJ in the present proceeding found: 56 In view of rapid technological evolution, it is virtually impossible for any firm to predict the data processing services which will be available or offered in the coming years. 57 Recommended Decision at 10, J.A. B-81. And as the Comptroller of the Currency noted in a rulemaking proceeding dealing with the data processing activities of national banks: 58 In addition to being difficult to draft, acceptable specific lists or examples of permissible activities would be very difficult to keep current. This difficulty is due to the rapidly changing nature of the data processing field. The current rate of change virtually ensures that any acceptable list would quickly be rendered obsolete. Thus, any acceptable list or set of examples would require repeated updating. Perhaps more significantly, such a list may discourage the development by national banks of new data processing services which, although part of the business of banking, are not on a list of permitted activities or similar in nature to those in a set of examples of permitted activities. 59 Data Processing by National Banks, 47 Fed.Reg. 46,526, 46,529 (1982). We think these considerations amply justify the approach the Board has taken, an approach to which the petitioners have suggested no feasible alternative. Economic Data 60 We turn next to an objection of petitioners that relates not to the data test as such, but to the types of data which the data test embraces. 61 The previous version of Regulation Y permitted bank holding companies to engage in storing and processing other banking, financial, or related economic data, such as performing payroll, accounts receivable or payable or billing services. 12 C.F.R. Sec. 225.4(a)(8)(ii) (1972) (emphasis added). In the combined adjudication-rulemaking here at issue, the ALJ's Recommended Decision accepted Citicorp's proposal that this be expanded to include the processing and transmission of banking, financial and economic related data. Recommended Decision at 49, J.A. B-120 (emphasis added). The Board rejected that recommendation, agreeing with petitioners here that economic related data was too broad a category and includes data that are not closely related to banking. Regulation Y Order, 47 Fed.Reg. 37,369; Citicorp Order, 68 Fed.Res.Bull. at 507 n. 8. It adopted, however, an expansion of the previous language to banking, financial and economic [as opposed to economic-related ] data, and permitted Citicorp to engage in such activities. Id. This expansion of prior authority was based upon its conclusion that the record in this proceeding supports a finding that banks process economic data. Regulation Y Order, 47 Fed.Reg. 37,369. See also Citicorp Order, 68 Fed.Res.Bull. at 507 n. 8 ([t]he record supports a finding that banks engage in the processing and transmission of economic data). 62 We agree. The testimony amply establishes the proposition that banks have long served their customers by developing and making available information regarding the national and international economy, including economic projections useful for investment decisions. The existing Regulation Y itself permitted the provision of general economic information and advice, general economic statistical forecasting services and industry studies. 12 C.F.R. Sec. 225.4(a)(5)(iv) (1982). The current amendment of Regulation Y, which merely enables banks to make such information available in a new and more useful fashion, thus clearly meets the second of the National Courier criteria, and perhaps the first as well. Petitioners complain that [n]owhere in the record has there been any demonstration that banks have historically provided economic services even approaching the sophistication, scale and business mode approved by the Board in its Orders. Petitioners' Brief at 42. Perhaps so, but that is progress. It is not the purpose of the Bank Holding Company Act restrictions to confine banks to the same level, or crudeness, or technological simplicity of services previously provided--but merely to services of a closely related nature. 63 We also reject petitioners' complaint that the Board has not defined economic data. Petitioners' Brief at 35-36. In the context of these orders the meaning of the term is clear enough. It includes, as petitioners fear, agricultural matters, retail sales matters, housing matters, corporate profit matters and anything 'of value in banking and financial decisions.'  Id. at 36 (quoting Citicorp Reply Brief before the Board at 13 & n. 17). Timesharing Services 64 Until the 1970s, data processing was performed in the batch mode, that is, the application of a computer program was applied to data recorded (keypunched) on small cards, which were physically delivered to the computer. Batch processing requires expensive data pick-up and delivery, often involves lengthy overall turnaround time, and permits only one job to be performed at a time. Technological advances now enable data to be transmitted electronically, typically over a telephone line, to and from the central processing unit and the user's terminal. That capability plus other technological advances permit timesharing--the simultaneous use of a computer by many users, each of whom can interact with the computer, i.e., ask yes-no questions and receive immediate responses. The ALJ found timesharing particularly well suited to economic, financial, and banking operations. Recommended Decision at 9, J.A. B-80. 65 Timesharing was approved in both the Citicorp and the Regulation Y Orders, 68 Fed.Res.Bull. at 507; 47 Fed.Reg. 37,369. Of course one of petitioners' objections to this action is that the approval of this new service on the basis of the data test was impermissible; we have addressed that in a more general context above. Petitioners also claim, however, that timesharing, particularly when combined with customer use (which the orders permit) of applications software for such functions as modeling, forecasting and statistical analysis residing on holding company computers (as opposed to requiring customer creation and use of their own applications software) enables customers to use bank computer systems for open-ended and general, non-financial services, Petitioners' Brief at 28, such as race track handicapping or employee evaluation, id. at 27. 66 This objection is unfounded. To begin with, the Act places a limitation upon the services that bank holding companies can offer, not upon the uses to which others choose to put them. If the services proposed here were so well adapted to such uses unrelated to banking as employee evaluation that it could reasonably be thought that the services were offered for that purpose it would be one thing; but these services are no more invalidated by the mere possibility of such use, unknown even to the holding company itself, Petitioners' Brief at 29, than was the service which we approved in National Courier invalidated by the obvious possibility that a customer might include some nonfinancial material in the courier packages. And such a possibility (at most) is all that petitioners established. They brought forward not a single instance of actual use of such services for such purposes. Even their theoretical horrible was refuted by testimony asserting that it would be prohibitively expensive to use financial programs for such nonfinancial purposes. Nov. 17, 1981 Tr. at 1178-79, 1214-15. 67 Moreover, as undocumented and as unrealistic as the petitioners' fears on this score appear to be, the Board nonetheless included provisions in its orders to calm this concern. In the Citicorp order the Board required that all proposed data processing services provided by Citicorp to others outside the holding company for banking, financial and economic data must be provided pursuant to a written agreement so describing and limiting the services. Citicorp Order, 68 Fed.Res.Bull. at 507. The approval conferred by the amended Regulation Y applies only when the data to be processed or furnished are financial, banking, or economic, and the services are provided pursuant to a written agreement so describing and limiting the services. 12 C.F.R. Sec. 225.25(b)(7)(i). These agreements will be subject to scrutiny in connection with the Board's case-by-case public benefits determination. In addition, the amended Regulation Y specifically requires that the offered facilities (by which the Board means data processing and transmission hardware, systems software, documentation and operating personnel, Citicorp Order, 68 Fed.Res.Bull. at 507 n. 12) be designed, marketed, and operated for the processing and transmission of financial, banking, or economic data, 12 C.F.R. Sec. 225.25(b)(7)(ii), and the Citicorp order makes it clear that this imposes the obligation to take the technical steps necessary to ensure this result. 68 Fed.Res.Bull. at 508. It is unthinkable that any more should be required. Hardware 68 In both the Citicorp order and the Regulation Y order, the Board approved bank holding company provision of data processing hardware to their customers. Hardware is the equipment used in data processing systems, such as the mainframe computer, terminals, printers, memory devices, and the like. Software is the coded instructions which control the way data is processed, for example, individual programs. See Recommended Decision at 6-7, J.A. B-77 to B-78. For present purposes, data processing hardware provided by bank holding companies can be divided into two types, which were approved subject to different conditions and must be discussed separately. 69 Specialized hardware is specifically designed to provide a permissible data processing or transmission service[ ], and is not likely to be used, to any significant extent, for nonfinancial purposes. Citicorp Order, 68 Fed.Res.Bull. at 508 n. 14. The prime example is the automated teller machine (ATM), which is designed to execute banking transactions and has special security features appropriate to that purpose. The Board found that such hardware, when offered only in conjunction with software designed and marketed for the processing and transmission of financial, banking, or economic data, 12 C.F.R. Sec. 225.25(b)(7)(iii), meets the third National Courier test. Citicorp Order, 68 Fed.Res.Bull. at 508 & n. 14, 509; Regulation Y Order, 47 Fed.Reg. 37,370. As noted earlier, that test reads as follows: 70 Banks generally provide services that are so integrally related to the proposed services as to require their provision in a specialized form. 71 516 F.2d at 1237. Petitioners make several attacks upon this finding, none of which seems to us well taken. 72 First, they assert that the third National Courier test could not conceivably apply because by its terms it pertains to services, which the provision of computer hardware is not. Petitioners' Brief at 54. But surely National Courier is not to be interpreted in that fashion. Since the case dealt with services (courier services) it framed all its tests in those terms. But the object of the tests was to determine what are, within the words of the Act, activities ... closely related to banking, 12 U.S.C. Sec. 1843(c)(8) (emphasis added), and they are obviously meant to apply, mutatis mutandis, to all activities, including not just services but also sale of material and equipment. It cannot seriously be thought that a bank holding company's sale of checkbooks stands in a less favored position, under National Courier than its provision of courier services. 73 Next, petitioners argue that the third National Courier test is not met because it requires that the new services (or, as we have said, other activities) be integrally related to traditional bank services such as check collection, credit extension and deposit gathering. Petitioners' Brief at 53. As far as we can determine, this limitation has been created out of whole cloth. It does not appear in National Courier, which only requires that the integrally related services be services that banks generally provide. If one were to hang upon this phraseology, the issue would presumably come down to whether the relevant integrally related services are data processing services in general (which banks now do generally provide) or the new types of data processing services authorized by these orders (at least the most futuristic of which banks now do not generally provide). Or it might be argued, as intervenor Citicorp does, Citicorp Brief at 61, that services which banks generally provide really means, as shown by language elsewhere in the National Courier opinion, 11 services which banks are authorized to provide. 74 But at this point it begins to become foolish to devote one's analytic energy to a parsing of the National Courier tests as though they were the statute itself, instead of referring to the underlying intent of the closely related requirement of which National Courier is, and only purports to be, a partial elaboration. That is to say, surely one of the most significant elements of the National Courier criterion is its prologue. After noting that the 1970 amendments to the Bank Holding Company Act (which slightly altered the text of the closely related provision and added the public benefits requirement) mean that the closely related test no longer bears the full load, and may now be thought of as setting off as forbidden to banks those activities which are so clearly of a purely commercial nature that the predominantly adverse effects of a bank's engaging in them may be presumed, 516 F.2d at 1237, we continued: 75 Against this background, and reminding ourselves that the matter is one expressly committed by the statute to the Board, we think we owe considerable deference to the Board's judgment that a particular activity is closely related to banking. Rather than define that term with any precision, therefore, we simply require that the Board go about making its closely related decision in a reasoned fashion consistent with the legislative intent. 76 The Board must, we think, articulate the ways in which banking activities and the proposed activities are assertedly connected, and must determine, not arbitrarily or capriciously, that the connections are close. As to what kinds of connections may qualify, at least the following seem to us within the statutory intent.... 77 Id. (emphasis added). 78 Whether or not the provision of specialized computer hardware comes within the third National Courier test, we think the Board came to its decision in a reasoned fashion consistent with the legislative intent, and that that decision is not arbitrary or capricious. The Board noted, with adequate record support, that customers do not buy software and hardware but data processing. Citicorp Order, 68 Fed.Res.Bull. at 508-09; Regulation Y Order, 47 Fed.Reg. 37,370. Moreover, the Recommended Decision which the Board adopted discussed the impact of large scale integrated (LSI) circuits upon data processing technology, which now permit simple software functions, and in the future will permit more complex software functions, to be built into the hardware; and enable some of the computing function to be removed from the central computer and located in a customized micro-processor or minicomputer located at the point of use. Recommended Decision at 7-8, J.A. B-78 to B-79. This is the way some data processing is conducted now, and much more will be conducted in the future. Finally, the Recommended Decision also noted, with adequate record support, that a software producer marketing a package of software plus hardware is able to get a manufacturer's discount on the hardware, and is thus able to provide the full service to the purchaser at a more competitive price. Recommended Decision at 8, J.A. B-79. On the basis of these factors the Board concluded that the activity of providing software without the corresponding authority to provide related hardware is of questionable economic feasibility. Citicorp Order, 68 Fed.Res.Bull. at 508 (footnote omitted). It is not the economic infeasibility in itself that impresses us, but the underlying cause of that infeasibility, recognized by the Board--that in both market contemplation and technological reality the service in question is a unitary one. The issue boils down, as Citicorp suggests, Citicorp Brief at 58, to almost a tautology. In effect, to authorize the provision of banking, financial and economic data processing is to authorize the provision of banking, financial and economic hardware and software. Whether it be considered integrally related to the authorized service or, perhaps more realistically, simply part of it, the provision of specialized hardware is reasonably included. 79 General purpose hardware is, as the name would suggest, hardware that is designed to perform data processing functions in addition to banking, financial and economic. The Board approved bank holding company provision of this hardware, subject to the same condition that it be offered only in conjunction with banking, financial or economic data software, and subject to the additional condition that it not constitute more than 30 percent of the cost of any packaged offering. 12 C.F.R. Sec. 225.25(b)(7)(iii). 12 The Board acknowledged that the sale of general purpose hardware is not itself an activity that is closely related to banking, but found that with the limitations the Board imposed it would be permissible as incidental to the provision of permissible data processing services, Citicorp Order, 68 Fed.Res.Bull. at 508; see also Regulation Y Order, 47 Fed.Reg. 37,370. 80 The notion of permissibility of any incidental activities that are necessary to carry on activities closely related to banking has been embodied in Regulation Y since 1971. 12 C.F.R. Sec. 225.21(a)(2). We approved it in National Courier, noting that [i]n enumerating the activities that could be carried on, [Congress] certainly could not have meant to forbid engagement in such other 'incidental' activities as were reasonably necessary to carrying out those that were enumerated. 516 F.2d at 1240. We disapproved its application to bank courier handling of nonfinancial materials for the following reason: 81 The justification for the 'incidental' courier services ... is not, as far as we can tell, that the carriage of non-financially related material is in any way necessary to the successful operation of the courier service affiliates. Rather, it is that the provision of such service would serve 'the convenience of the public.' 82 Id. (footnote omitted). Here, by contrast, the Board's justification was precisely that the provision of banking, financial and economic data processing services could not be successful unless they were offered in conjunction with the necessary hardware. Even where the hardware itself was not required to be specialized or to contain any software--so that the hardware could not be regarded as in itself the provision of banking, financial or economic data processing--the nature of the data processing market was such, the Board found, that hardware and software were a single package. The provision of data processing software in isolation, even where no specialized or software-inclusive hardware was required, was of questionable economic feasibility. Citicorp Order, 68 Fed.Res.Bull. at 508, referred to in Regulation Y Order, 47 Fed.Reg. 37,370. There was record evidence to support this conclusion, and, as the excerpt from National Courier above suggests, the conclusion is sufficient to support the Board's action. Indeed, the Fifth Circuit Court of Appeals has permitted an even lesser connection to sustain bank holding company provision of liability insurance as incidental to the closely-related-to-banking activity of providing property damage insurance for the collateral in bank loans. Alabama Association of Insurance Agents, supra. While that court found evidence to sustain the proposition that, from the consumer's point of view, packaged property damage and liability policies are more desirable than the same policies separately sold, 533 F.2d at 245, it did not make the further finding that the sale of the one had been shown to be of questionable economic feasibility without the sale of the other. In that respect, Alabama Association goes further than we were prepared to go in National Courier, though there was, it must be acknowledged, the added factor that liability insurance in itself to some degree increased the security of the banks' loans. In any case, we think that the reasoning of both National Courier and Alabama Association supports the proposition that the economic necessity of offering a service that is not closely related to banking in order to sell another service that is, justifies the provision of the one as incidental to the other. 83 There is an obvious limitation upon this principle: At some point the tail begins to wag the dog. If it should be found, for example, that data processing services cannot be sold in an economically feasible manner without manufacturing data processing hardware; and if the banks' profits from the latter should exceed their profits from the former; surely the provision of data processing services would be incidental to hardware manufacture rather than vice-versa. But the Board has adequately taken that limitation into account, by specifying, as described above, that the cost of the hardware (including both specialized and general purpose hardware) cannot exceed 30 percent of the cost of the package. The Board derived this figure by noting from the record that hardware costs for the data processing industry as a whole represent about 25 percent of total costs, Citicorp Order, 68 Fed.Res.Bull. at 509,--so that a package in which hardware accounted for about that percentage of the cost could reasonably be considered primarily a sale of data processing rather than a sale of processing hardware. We think that a reasonable way to proceed, and we cannot say that an element of a permissible service which constitutes less than one-third the cost of that service is not incidental.