T. Rowe Price Associates, a major securities firm with headquarters in Baltimore, has asked state authorities for permission to operate a trust company.
The application for a state charter for a limited trust is aimed at allowing the mutual fund company to offer more services for retirement funds such as IRA and Keogh plans, a growing segment of the mutual fund business.
Company officials have said they are interested only in expanding the firm's services to include trusts and other custodial account services, not in performing such banking functions as making commercial loans or accepting deposits.
Price Associates applied in April to the U.S. comptroller of the currency for a national bank charter and limited trust authority, but its application was frozen by a comptroller's moratorium on granting charters to "non-bank" banks.
In June, the company applied for a state charter, and a ruling is expected by the end of the month. The Maryland banking board, which makes recommendations on such applications, is recommending that the charter be granted.
The moratorium on charters for "non-bank" banks reflected concern about the blurring of lines between securities firms and banks. "We don't really feel this blurs the lines very much," said Henry Hopkins, legal counsel for the T. Rowe Price mutual funds division. "Other groups have really tried to get into banking," he said, whereas Price is seeking more limited authority.
Providing trust services "is certainly the trend in the mutual fund industry," he said. J. W. Seligman of New York; Vanguard & Wellington Management of Philadelphia, and Kemper of Chicago are among the mutual fund companies that have trust charters.