Orders issued under Bank Holding Company Act - Legal Developments - Mizuho Financial Group

Federal Reserve Bulletin, April, 2003 by Robert deV. Frierson

(13.) The commenter cited news reports about the level of Mizuho Holdings' lending in Japan, particularly its small business lending, and asserted that these reports should cause the Board to closely scrutinize its record of lending under the CRA. The Board does not consider the non-U.S, lending performance of an applicant when considering the convenience and needs factor under section 3 of the BHC Act. However, the Board has carefully considered the entire record of lending of Mizuho Holdings' subsidiary depository institutions in the United States in considering the convenience and needs factor. The commenter also voiced a concern about the manner in which Mizuho Holdings' predecessor institutions reacted to the terrorist attacks on September 11, 2001. This concern is outside the limited statutory factors the Board is authorized to consider when reviewing an application under the BHC Act. See Western Bancshares, Inc. v. Board of Governors, 480 F.2d 749 (10th Cir. 1973).

(14.) 12 U.S.C. [section] 1842(c)(3)(B). Under Regulation Y, the Board uses the standards enumerated in Regulation K to determine whether a foreign .bank that has applied under section 3 of the BHC Act is subject to consolidated home country supervision. See 12 C.F.R. 225.13(a)(4). Regulation K provides that a foreign bank will be considered to be subject to comprehensive supervision or regulation on a consolidated basis if the Board determines that the bank is supervised or regulated in such a manner that its home country supervisor receives sufficient information on the worldwide operations of the bank, including its relationship to any affiliates, to assess the bank's overall financial condition and its compliance with law and regulation. See 12 C.F.R. 211.24(c)(1).

(15.) Mizuho Corporate Bank resulted from the merger of The Fuji Bank, Ltd.; The Industrial Bank of Japan, Ltd.; and The Dai-Ichi Kangyo Bank, Ltd. See Mizuho Holdings, Inc., 86 Federal Reserve Bulletin 776 (2000).

(16.) See 12 U.S.C. [section] 1842(c)(3)(A).

(17.) See 12 U.S.C. [section] 1843(j)(2)(A).

(18.) See, e.g., Banc One Corporation, 84 Federal Reserve Bulletin 553 (1998), and First Union Corporation, 84 Federal Reserve Bulletin 489 (1998).

(19.) The commenter requested a heating in connection with the proposal. Section 3 of the BHC Act does not require the Board to hold a public heating on an application unless the appropriate supervisory authority for any of the banks to be acquired makes a timely written recommendation of denial of the application. The Board has not received such a recommendation from the appropriate supervisory authority. The Board's regulations provide for a heating under section 4 of the BHC Act if there are disputed issues of material fact that cannot be resolved in some other manner. See 12 C.F.R. 225.25(a)(2). Under its rules, the Board also may, in its discretion, hold a public meeting or heating on an application to acquire a bank if a meeting or hearing is necessary or appropriate to clarify factual issues related to the application and to provide an opportunity for testimony. 12 C.F.R. 225.16(e).