DEFINITION of ‘Grandfathered Activities’
Non-bank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United States, but which were acquired or engaged in before a particular date and are therefore subject to the older rules. Such activities may be continued under the “grandfather” clauses of the Bank Holding Company Act and the International Banking Act of 1978.
BREAKING DOWN ‘Grandfathered Activities’
Any law can have a grandfather clause that allows the old rule to apply to existing situations and the new rule applies to all futures situations. To grandfather is to grant such an exemption.