Orders issued under Bank Holding Company Act

Federal Reserve Bulletin,  Summer, 2004  by Robert DeV. Frierson

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(9.) Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), a market is considered moderately concentrated if the post-merger HHI is between 1000 and 1800 and highly concentrated if the post-merger HHI is more than 1800. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Department of Justice has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effects of limited-purpose lenders and other nondepository financial institutions.

(10.) The effects of the proposal on the concentration of banking resources in these markets are described in appendix B.

(11.) A commenter alleged that the compensation under severance agreements for Provident's senior management is excessive. The Board notes that the severance agreements have been disclosed to shareholders and that National City will remain well capitalized on consummation of the proposal.

(12.) A commenter also expressed concern that Provident restated its earnings for the years 1997 through 2002. The Board monitored the restatement by Provident and has consulted with the Securities and Exchange Commission regarding this matter.

(13.) One commenter criticized National City for lobbying against state and local efforts to enact and enforce anti-predatory lending laws and ordinances. Two commenters expressed concern that the proposal might result in a loss of jobs. The Board notes that the commenters do not allege and have provided no evidence that National City engaged in any illegal activity or other action that has affected, or may reasonably be expected to affect, the safety and soundness of the institutions involved in this proposal or other factors that the Board must consider under the BHC Act.

(14). 12 U.S.C. [section] 2901 et seq.

(15.) 12 U.S.C. [section] 2801 et seq.

(16.) See Interagency Questions and Answers Regarding Community Reinvestment, 66 Federal Register 36,620 and 36,639 (2001).

(17.) Both ratings are as of February 22, 2000.

(18.) Appendix C lists the most recent CRA ratings of National City's bank subsidiaries, including the recently acquired Allegiant Bank, St. Louis, Missouri.

(19.) In evaluating the records of performance under the CRA of NC Bank and NC Indiana, examiners considered home mortgage loans by certain affiliates in the banks' assessment areas. The loans reviewed by examiners included loans reported by National City Mortgage Corporation, Miamisburg, Ohio ("NC Mortgage") (a subsidiary of NC Indiana); National City Mortgage Services, Kalamazoo, Michigan ("NC Mortgage Services") (a subsidiary of National City Bank of Michigan/Illinois, Bannockburn, Illinois); and other bank and non-bank affiliates of NC Bank.

(20.) Two commenters asserted that First Franklin's market share is disproportionately concentrated in LMI and predominantly minority areas in Ohio and that the National City Lenders have ignored these areas. Another commenter asserted that, in 2002, First Franklin originated a higher volume and a larger percentage of its HMDA-reportable loans to African-American or Hispanic borrowers than NC Bank. The commenter compared 2002 HMDA data reported by First Franklin and NC Bank in the Metropolitan Statistical Areas ("MSAs")of Cincinnati, Columbus, and Dayton, but did not include HMDA data reported by other National City lending subsidiaries in those areas.