[Federal Register Volume 60, Number 215 (Tuesday, November 7, 1995)]
[Notices]
[Pages 56152-56153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27546]
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FEDERAL RESERVE SYSTEM
U.S. Trust Corporation, New York, New York; Notice to Engage in
Certain Nonbanking Activities
U.S. Trust Corporation, New York, New York (Applicant), has applied
pursuant to Section 4(c)(8) of the Bank Holding Company Act (12 U.S.C.
1843(c)(8)) (BHC Act) and Sec. 225.23 of the Board's Regulation Y (12
CFR 225.23) to permit U.S. Trust Company of New Jersey, Princeton, New
Jersey (Company) to engage in personal, residential mortgage, and small
business lending activities. Company is a trust company operating
pursuant to Sec. 225.25(b)(3) of Regulation Y. Section 225.25(b)(3)
does not permit a company performing trust company functions or
activities to make loans of the kind proposed to be made by Company.
Section 4(c)(8) of the BHC Act provides that a bank holding company
may, with Board approval, engage in any activity that the Board, after
due notice and opportunity for hearing, has determined (by order or
regulation) to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto. This statutory
test requires that two separate tests be met for an activity to be
permissible for a bank holding company. First, the Board must determine
that the activity is, as a general matter, closely related to banking.
Second, the Board must find in a particular case that the performance
of the activity by the applicant bank holding company may reasonably be
expected to produce public benefits that outweigh possible adverse
effects.
Applicant asserts that the proposed lending activities should be
permissible because bank holding companies are authorized to engage
directly in, or to establish subsidiaries to engage in, lending
activities under Sec. 225.25(b)(1) of Regulation Y. Applicant argues
that the restrictions against lending by trust companies are no longer
justified in light of the applicability of the Riegle-Neal Interstate
Banking and Branching Efficiency Act of 1994, Pub. L. No. 103-328, 108
Stat. 2338 (1994). Moreover, Applicant maintains that Company would not
become a ``bank'' for purposes of the BHC Act, because Company is not
an FDIC-insured institution, and it does not accept demand deposits.
See 12 U.S.C. 1841(c)(1).
In order to satisfy the proper incident to banking test, section
4(c)(8) of the BHC Act requires the Board to find that the performance
of the activities by Company can reasonably be expected to produce
benefits to the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh possible adverse
effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices.
Applicant believes that the proposed activities will benefit the
[[Page 56153]]
public by enabling Applicant to provide a broader range of services to
its customers and thereby enhance Applicant's ability to compete among
local lending institutions.
In publishing the proposal for comment, the Board does not take a
position on issues raised by the proposal. Notice of the proposal is
published solely in order to seek the views of interested persons on
the issues presented by the notice and does not represent a
determination by the Board that the proposal meets, or is likely to
meet, the standards of the BHC Act.
Any comments or requests for hearing should be submitted in writing
and received by William W. Wiles, Secretary, Board of Governors of the
Federal Reserve System, Washington, DC 20551, not later than November
21, 1995. Any request for a hearing on this notice must, as required by
Sec. 262.3(e) of the Board's Rules of Procedure (12 CFR 262.3(e)), be
accompanied by a statement of the reasons why a written presentation
would not suffice in lieu of a hearing, identifying specifically any
questions of fact that are in dispute, summarizing the evidence that
would be presented at a hearing, and indicating how the party
commenting would be aggrieved by approval of the proposal.
This application may be inspected at the offices of the Board of
Governors or the Federal Reserve Bank of New York.
Board of Governors of the Federal Reserve System, November 1,
1995.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 95-27546 Filed 11-6-95; 8:45 am]
BILLING CODE 6210-01-F
