Bank Holding Company/Change in Control - 1998 Letters
December 18, 1998
To BankAmerica Corporation (formerly NationsBank Corporation) regarding its proposed purchase of additional nonvoting, nonconvertible securities of Commonwealth National Bank. Based on unique ownership structure and purpose of Commonwealth, as well as commitments made by NationsBank in its initial investment in Commonwealth in 1993, the Board's General Counsel was of the opinion that BankAmerica would not control Commonwealth for purposes of the Bank Holding Company Act as a result of the additional investment.
September 3, 1998
To a bank holding company, stating that training seminars conducted through a joint venture would be within the scope of activities related to extending credit under section 225.28(b)(2) of Regulation Y (12 CFR 225.28(b)(2)). The training seminars would be provided to officers and employees of banks and consumer lending institutions, and would cover the business and legal aspects consumer lending, such as loan customer solicitation, loan processing and documentation, credit insurance products, loan servicing, and specialty lending.
August 19, 1998
To Mr. Harold Reichwald, giving the opinion that Imperial Bancorp (Imperial) would not control Imperial Financial Group (IFG) for purposes of the Bank Holding Company Act after a spin-off transaction. IFG is a newly formed subsidiary of a subsidiary bank of Imperial. In the spin-off, the subsidiary bank will contribute to IFG certain of its financial subsidiaries and products, then will transfer all outstanding Class A shares of IFG to Imperial, which will distribute all those shares to the holders of Imperial common stock on a pro rata basis. Neither Imperial nor its subsidiaries will own any stock of IFG following the spin-off, but certain employee benefit plans will own approximately 6.6 percent of the Class A shares of IFG. Imperial has committed that the benefit plans will divest of the IFG shares within 6 months of the spin-off. Imperial and IFG will also have four interlocking directors or officers, but these individuals have made commitments designed to ensure that IFG remains independent from Imperial.
July 8, 1998
To Mr. James A. Sheriff, concerning whether various services proposed to be provided by a wholly-owned subsidiary of a bank holding company to unaffiliated financial institutions (deposit servicing, loan application processing, loan processing and servicing, telephone call center, and various reports based on data processed) are permissible nonbanking activities under section 225.28(b) of Regulation Y (12 C.F.R. 225.28(b)); in particular, permissible data processing and transmission activities under section 225.28(b)(14) (12 C.F.R. 225.28(b)(14)), permissible loan servicing and related activities under sections 225.28(b)(1) and (2) (12 C.F.R. 225.28(b)(1), (b)(2)) , or permissible incidental activities under section 225.21(a)(2) (12 C.F.R. 225.21(a)(2)) of Regulation Y.
June 30, 1998
To FirstMerit Corporation and its principal operating subsidiary, FirstMerit Bank, N.A., interpreting an exemption granted on May 23, 1996, to National City Corporation from the antitying provisions of BHCA 106 (12 U.S.C. 1972), to permit FirstMerit Bank to offer reduced-rate loans to automobile, marine craft, or recreational vehicle dealerships, based on the amount of retail paper financing sold to FirstMerit Bank or an affiliate or originated by the dealership on behalf of FirstMerit Bank or an affiliate.
June 29, 1998
To Mr. Robert Tortoriello, concerning the permissibility of a "qualified savings bank" to operate a subsidiary the sells insurance and fixed and variable annuities under section 3(f)(2) of the Bank Holding Company Act, 12 USC § 1842(f)(2).
May 15, 1998
To Ms. Caroline Powell, stating that staff would not object to a proposed dual employee arrangement between SouthTrust Corporation's subsidiary, SouthTrust Securities, Inc and affiliated insurance agencies to market and sell life insurance products and annuities on behalf of SouthTrust Bank, N.A. and SouthTrust Insurance Agency, under certain limits pursuant to 12 U.S.C. 1843(8)(D) and pursuant to the terms set forth in the April 10, 1997 to Ms. Caroline Lewis from the Board's General Counsel.
April 10, 1998
To Mr. Ralph Nader, concerning meetings between Chairman Greenspan and representatives of the Travelers Group and Citicorp prior to submission of an application under the Bank Holding Company Act, and discussing the Board's ex parte procedures for such applications.
March 20, 1998
To Mr. John A. Cooney, allowing an executive officer of U.S. Bancorp to serve on the boards of directors of mutual funds (First American Funds) that are advised by a national bank subsidiary of U.S. Bancorp. Although section 32 of the Glass Steagall Act (12 USC 78) prohibits director interlocks between a member bank and a company engaged in securities activities, the Board has found that limited director interlocks are permissible between a bank holding company and a mutual fund.
March 20, 1998
To Mr. John Muller, concerning the commitment by Transamerica Retail Financial Services Corporation to bring its ownership of Whirlpool Financial National Bank into conformance with section 20 of the Glass-Steagall Act (12 USC 337). Transamerica engages in securities activities as defined by Glass-Steagall, and thus may not own a national bank. Staff is of the opinion that Transamerica may satisfy its commitment by converting Whirlpool's national bank charter to a federal savings bank charter and terminating its membership in the Federal Reserve System.
January 7, 1998
To Affiliated Community Bancorp (ACB) regarding relief from commitment made in the acquisition of a "qualified savings bank" and a federally chartered savings bank. ACB had committed that the qualified savings bank would discontinue the sale of savings bank life insurance (SBLI) within two years. ACB is relieved of this commitment because staff believes that SBLI activities that are conducted directly by a bank pursuant to state law are otherwise authorized pursuant to the Bank Holding Company Act, 12 U.S.C. 1842(f)(4).