Exam CRCM topic 1 question 272 discussion

The clause in the credit agreement stating that Mills Company cannot obtain additional unsecured credit without the approval of First National Bank could potentially violate the Bank Holding Company Act's anti-tying provisions. Tying arrangements, where one product or service is conditioned on the purchase of another, can violate antitrust laws by restricting competition. In this case, the bank may be leveraging its lending relationship to compel Mills to use its other financial services.