Section 106 of the Bank Holding Company Act Amendments of 1970 prohibits commercial banks from imposing certain types of tying arrangements on their customers, a practice known as “tying.”  Tying includes conditioning the availability or terms of loans or other credit products on the purchase of certain other products and services.  It is legal for banks to tie credit and traditional banking products, such as cash management, but it is not legal for banks to tie credit and debt underwriting from the bank or from the bank’s investment affiliate.  For example, a bank would violate Section 106 if the bank informs a customer seeking a liquidity facility from the bank that the bank will provide the liquidity facility only if the customer commits to hire the bank’s securities affiliate to underwrite an upcoming bond offering for the customer.  Section 106, however, does not prohibit a customer from deciding on its own to award some of its business to a bank or an affiliate as a reward for the bank previously providing credit or other business to the customer.  So too, if a bank provides a reduced rate on a liquidity facility because of an illegal tie in with an underwriting, that may also constitute an underpricing of credit (i.e., an extension of credit below market rates). The underpricing could violate Section 23B of the Federal Reserve Act of 1913 which generally requires that certain transactions between a bank and its affiliates occur on market terms and applies to any transaction by a bank with a third party if an affiliate has a financial interest in the third party or if an affiliate is a participant in the transaction.