Orders Issued Under Sections 3 and 4 of the Bank Holding Company Act

Federal Reserve Bulletin, Nov, 1998 by Robert Dev. Frierson

Several private organizations supported the proposal based on the records of Banc One and First Chicago of supporting small businesses and micro-enterprises, particularly small businesses owned by women and minorities, both directly and through nonprofit financial intermediaries. In addition, comments from owners of small businesses stated that Banc One had offered credit and technical assistance when other financial institutions were unwilling to do so.

Approximately 150 commenters opposed the proposal or requested that the Board approve the merger subject to conditions suggested by the commenter.(34) These commenters either expressed general concerns regarding the effects of large merger proposals on the convenience and needs of the communities to be served or expressed specific concerns about the CRA performance records of Banc One and First Chicago.(35)

A number of the commenters opposed to the merger proposal contended that Banc One and First Chicago have inadequate records of performance under the CRA, particularly in serving the banking and credit needs of LMI and minority individuals and of census tracts with predominantly LMI and minority populations.(36) Some commenters questioned First Chicago's and Banc One's compliance with the Equal Credit Opportunity Act (15 U.S.C. [sections] 1691 et seq.) and the Fair Housing Act (42 U.S.C. [sections] 3601 et seq.) (collectively, "fair lending laws") and criticized the lending and credit referral practices of Banc One's banking and nonbanking subsidiaries, including Banc One Mortgage Corporation ("BOMC") and Banc One Financial Services ("BOFS").(37) A number of commenters also criticized the lending records of Banc One and First Chicago, as reported under the Home Mortgage Disclosure Act (12 U.S.C. [sections] 2801 et seq.) ("HMDA").

Several commenters criticized the branch closing records of First Chicago and Banc One and expressed concerns about the plans of New Bank One to close certain branches.(38) Particular concern was expressed that branch closings would reduce the availability of banking services to individuals in LMI and minority neighborhoods and elderly individuals.

A number of commenters expressed concern about New Bank One's CRA plans and Banc One's refusal to enter into community reinvestment agreements similar to the agreements entered into by First Chicago in Detroit and Chicago. Some commenters contended that Banc One has not cooperated with community groups or has negotiated with community groups in bad faith. Several commenters who commended First Chicago's CRA performance because it made specific CRA agreements contended that the Board should require Banc One to enter into similar agreements covering the communities in which Banc One currently operates and should monitor and enforce New Bank One's compliance with commitments made by First Chicago.

Some commenters also expressed concern that the merger would result in the loss of local control over lending decisions, decreased levels of service, and higher banking and credit-related fees. Other commenters were concerned that the relocation of Banc One's headquarters from Columbus, Ohio, to Chicago, Illinois, would adversely affect Banc One's commitment to meeting the convenience and needs of Columbus and other Ohio communities. In addition, commenters contended that the proposal would adversely affect local communities through job losses and reduced levels of charitable contributions.(39)