[Federal Register Volume 59, Number 120 (Thursday, June 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15271]
[[Page Unknown]]
[Federal Register: June 23, 1994]
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FEDERAL MARITIME COMMISSION
Grupo Financiero Serfin, S.A. de C.V., Mexico City, Mexico;
Application to Engage in Nonbanking Activities
Grupo Financiero Serfin, S.A. de C.V., Mexico City, Mexico
(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(a)(3) of the Board's Regulation Y (12 CFR 225.23(a)(3)) to
engage de novo through its subsidiary, Serfin Funds Transfer, Inc., Los
Angeles, California (Company), in the following activities throughout
the United States:
(1) making cash advances on credit cards to consumers pursuant to
Sec. 225.25(b)(1) of the Board's Regulation Y (12 CFR 225.25(b)(1));
(2) issuing and selling U.S. dollar denominated money orders and
similar payment instruments with a face value of $1,000 or less
pursuant to Sec. 225.25(b)(12) of the Board's Regulation Y (12 CFR
Sec. 225.25(b)(12)) and foreign currency denominated money orders and
similar payment instruments with a face value of the U.S. dollar
equivalent of $1,000 or less;
(3) receiving money for transmission and transmitting the same to a
foreign country;
(4) buying and selling foreign currency at retail and at wholesale
solely to manage its retail inventory of currency;
(5) cashing U.S. dollar payroll checks; and
(6) cashing federal, state, and local government benefit checks.
Section 4(c)(8) of the BHC Act provides that a bank holding company
may, with prior Board approval, engage in any activity which 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.
A particular activity may be found to meet the ``closely related to
banking'' test if it is demonstrated that banks have generally provided
the proposed activity; that banks generally provide services that are
operationally or functionally similar to the proposed activity so as to
equip them particularly well to provide the proposed activity; or that
banks generally provide services that are so integrally related to the
proposed activity as to require their provision in a specialized form.
National Courier Ass'n v. Board of Governors, 516 F.2d 1229, 1237 (D.C.
Cir. 1975). In addition, the Board may consider any other basis that
may demonstrate that the activity has a reasonable or close
relationship to banking or managing or controlling banks. Board
Statement Regarding Regulation Y, 49 FR 806 (1984).
The Board has previously determined by regulation that engaging in
credit card lending, and issuing and selling money orders and similar
consumer-type payment instruments having a face value of less than
$1,000 are closely related to banking and permissible for bank holding
companies under section 4 of the BHC Act. See 12 CFR 225.25(b)(1) and
(b)(12). Additionally, the Board previously has determined by order
that the following activities that Applicant proposes to conduct are
closely related to banking and proper incidents thereto under section 4
of the BHC Act:
(1) issuing and selling foreign currency denominated money orders
and similar payment instruments with a face value of the U.S. dollar
equivalent of $1,000 or less, Midland Bank, PLC, 76 Federal Reserve
Bulletin 860 (1990);
(2) receiving money for transmission and transmitting the same to a
foreign country, Philippines Commercial International Bank, 56 Federal
Reserve Bulletin 861 (1991);
(3) buying and selling foreign currency at retail and at wholesale
solely to manage its retail inventory of currency, Midland Bank, PLC,
76 Federal Reserve Bulletin 860 (1990); and
(4) cashing U.S. dollar payroll checks drawn on unaffiliated banks,
Midland Bank, PLC, 76 Federal Reserve Bulletin 860 (1990).
Applicant has committed that it will conduct these activities in
accordance with the limitations established by regulation and order on
the conduct of such activities.
The Board has not previously determined that cashing federal,
state, and local government benefit checks is permissible under section
4(c)(8) of the BHC Act. Applicant states that this proposed activity is
closely related and a proper incident to banking because the cashing of
government benefit checks is no less fundamental to banking than is the
cashing of payroll checks, which the Board has determined is
permissible under section 4(c)(8) of the BHC Act. Applicant also states
that recipients of such checks should have the same access to check
cashing services as do individuals who cash payroll checks.
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 public
by promoting competition. Applicant also believes that approval of this
application will allow Company to provide a wider range of services and
added convenience to its customers. Applicant believes that the
proposed activities will not result in any unsound banking practices or
other adverse effects.
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 application 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, D.C. 20551, not later than June 13,
1994. Any request for a hearing on this application 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 San Francisco.
Board of Governors of the Federal Reserve System, June 17, 1994.
Jennifer J. Johnson,
Associate Secretary of the Board.
[FR Doc. 94-15271 Filed 6-22-94; 8:45 am]
BILLING CODE 6210-01-F
