Orders issued under Bank Holding Company Act - Legal Developments - acquisition of RBC Centura Bank by Royal Bank of Canada

Federal Reserve Bulletin, August, 2002 by Robert DeV. Frierson

The record indicates that Bank has sound performance in a number of areas under the CRA. The record also indicates that there are opportunities for improvement in Bank's overall satisfactory CRA record, and the Board expects Bank to pursue those opportunities and to take the steps it has proposed to improve Tucker's CRA performance. Based on all the facts of record, and for the reasons discussed above, the Board concludes that considerations relating to the convenience and needs of the communities to be served, including the CRA performance records of the institutions involved, are consistent with approval of the proposal. (31)

Public Benefits

As part of its evaluation of the public interest factors, the Board also has reviewed carefully the other public benefits and possible adverse effects of the proposal. (32) The record indicates that consummation of the proposal would result in benefits to consumers and businesses currently served by Tucker. The Board notes that the merger would improve Tucker's financial position and future business prospects and enhance its ability to serve the needs of the public. Tucker's individual and business customers would have access to Bank's greater capital resources and expanded lines of products and services. The Board notes that there are also public benefits to be derived from allowing capital markets to operate so that bank holding companies can make potentially profitable investments in nonbanking companies and from permitting banking organizations to allocate their resources in the manner they consider to be most efficient when such investments and actions are consistent, as in this case, with the relevant considerations under the BHC Act. (33)

Based on the foregoing and all the facts of record, the Board has determined that consummation of the proposal can reasonably be expected to produce public benefits that would outweigh any likely adverse effects under the standard of review set forth in section 4(j)(2) of the BHC Act. In addition, as noted above, Bank also has applied under section 9 of the FRA to establish branches at the former sites of Tucker's branches in Georgia. The Board has considered the factors it is required to consider when reviewing an application under section 9 of the FRA and, for the reasons discussed in this order, finds those factors to be consistent with approval. (34)

Conclusion

Based on the foregoing, the Board has determined that the proposal should be, and hereby is, approved. The Board's approval is specifically conditioned on compliance by RBC and Bank with all the commitments made in connection with the applications. The Board's determination also is subject to all the conditions in Regulation Y, including those in sections 225.7 and 225.25(c) (12 C.F.R. 225.7 and 225.25(c)), and to the Board's authority to require such modification or termination of the activities of a holding company or any of its subsidiaries as the Board finds necessary to ensure compliance with, or to prevent evasion of, the provisions and purposes of the BHC Act and the Board's regulations and orders issued thereunder. The commitments and conditions relied on by the Board in reaching this decision shall be deemed to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be enforced in proceedings under applicable law.