Orders issued under bank holding company act

Federal Reserve Bulletin, Nov, 2001 by Robert Dev. Frierson

By order of the Board of Governors, effective September 28, 2001.

(1.) Bancorporation proposes to merge Blackfeet Bank with Native American Interim Bank, National Association, which Bancorporation would establish solely to facilitate the acquisition. The consolidated Bank would operate under Blackfeet Bank's current charter, would be renamed Native American National Bank, and would continue to have its headquarters in Browning.

(2.) 12 U.S.C. [section] 1842(c)(1).

(3.) In this context, the term "depository institution" includes commercial banks, savings banks, and savings associations.

(4.) The deposit and ranking data are as of June 30, 2000, and have been adjusted to reflect mergers and acquisitions consummated since that time.

(5.) 12 U.S.C. [section] 1842(c)(2).

(6.) See 12 U.S.C. [section] 4701 et seq.

(7.) See 12 C.F.R. 24.6(a)(7).

(8.) 12 U.S.C. [section] 1842(c)(2).

(9.) The Board has considered an allegation that the members of the Blackfeet Tribe were misled into providing funds to establish Blackfeet Bank on the basis that the tribe would control the bank, when persons who are not Native Americans allegedly control Blackfeet Bank. Concern also was expressed that the Blackfeet Tribe could not sell its interest in Blackfeet Bank without the consent of a majority of the members of the Blackfeet Tribe, and that the Blackfeet name could not be used in the bank's title after the proposed acquisition because the Blackfeet Tribe would not wholly own the bank. The Board also considered an assertion that the proposed transaction was motivated by the intention of Bancorporation's organizers to manage trust monies that might be owned to the investor tribes by the Bureau of Indian Affairs. The Board has considered these claims to the extent they relate to the specific statutory factors the Board must review in connection with a bank holding company application. The Board previously has noted, and the courts have held, that the Board's limited jurisdiction to review applications and notices under the BHC Act does not authorize it to adjudicate disputes involving an applicant that do not arise under laws it administers and enforces. See Deutsche Bank AG, 85 Federal Reserve Bulletin 509 (1999); see also Western Bancshares, Inc. v. Board of Governors, 480 F. 2d 749 (10th Cir., 1973).

Counsel for the Blackfeet Tribe has confirmed that the Blackfeet Tribe owns 94 percent of the shares of Blackfeet Bank through its governing body. Counsel further has represented that consent of the Blackfeet Tribal government, as controlling shareholder of Blackfeet Bank, is sufficient to authorize the proposed exchange of shares of the bank for shares of Bancorporation and that approval of a majority of tribal members is not required. As noted above, Bancorporation intends to rename the bank as Native American National Bank after consummating the proposed acquisition, and the primary purpose of the proposed acquisition is to enable Blackfeet Bank to expand its lending and community development activities for Native American tribes and their affiliates nationwide.