Orders issued under Bank Holding Company Act - Legal Developments - Allied Irish Banks P.L.C. to acquire share of M&T's subsidiary banks

Federal Reserve Bulletin,  May, 2003  by Robert DeV. Frierson

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(6.) 12 U.S.C. [section] 1842(c)(1)(A) & (B); 12 U.S.C. [section] 1828(c)(5)(A) & (B).

(7.) The Dallas banking market is defined as Dallas and Rockwall Counties, Denton and Lewisville in Denton County, McKinney and Plano in Collin County, Forney and Terrell in Kaufman County, Midlothian, Waxahachie and Ferris in Ellis County, and Grapevine and Arlington in Tarrant County, all in Texas.

(8.) Market share data are as of June 30, 2002, and are based on calculations in which the deposits of thrift institutions are included at 50 percent. See First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991).

(9.) Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), the HHI for the Dallas banking market would not increase and would remain moderately concentrated at 1,262 points. 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.

(10.) The commenters alleged, among other things, that SouthTrust Bank and its wholly owned subsidiary, SouthTrust Mortgage Corporation ("SouthTrust Mortgage"), engaged in disparate treatment of minority and nonminority individuals in mortgage lending by citing data submitted under the Home Mortgage Disclosure Act, 12 U.S.C. [section] 2801 et seq. ("HMDA").

(11.) Commenters requested that SouthTrust Bank develop relationships with community development credit unions and other community organizations and enter into commitments with specific community organizations. Neither the CRA nor the federal banking agencies' CRA regulations require depository institutions to make pledges or enter into agreements with any organization. Instead, the Board focuses on the existing record of an applicant and the programs that the applicant has in place to meet the credit needs of the communities it serves. See Fifth Third Bancorp, 80 Federal Reserve Bulletin 838 (1994).

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

(13.) Examiners took into account the home mortgage originations and purchases of SouthTrust Bank and SouthTrust Mortgage in evaluating the performance of SouthTrust Bank.

(14.) In addition to the bankwide ratings, examiners also assigned overall ratings and separate ratings under the lending, investment and service tests for SouthTrust Bank's performance in six states, five multistate Metropolitan Statistical Areas ("MSAs"), and six other MSAs that are part of the bank' s assessment areas.

(15.) SouthTrust represented that since its most recent performance evaluation, it has increased the amount of its qualified investments for community development purposes by an additional $90 million.

(16.) CDFI investments are investments by depository institutions in private-sector financial intermediaries, including credit unions, that have community development as their primary purpose. One commenter criticized the bank's commitment to community development in Alabama outside the Birmingham MSA. The Board notes that SouthTrust Bank received an "outstanding" rating under the investment test in Alabama, which included a review of the bank's assessment areas outside Birmingham.