Orders Issued under Bank Holding Company Act

Federal Reserve Bulletin, February 1999 | Go to article overview
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Orders Issued under Bank Holding Company Act


Orders Issued Under Section 3 of the Bank Holding Company Act

Cooper Life Sciences, Inc. New York, New York

Greater American Finance Group, Inc. New York, New York

Order Approving the Formation of Bank Holding Companies and Acquisition of a Bank

Cooper Life Sciences, Inc. ("CLS") and its wholly owned subsidiary, Greater American Finance Group, Inc. ("GAFG") (collectively, "Applicants"), have requested the Board's approval under section (3)(a)(1) of the Bank Holding Company Act ("BHC Act") (12 U.S.C. [sections] 1842(a)(1)) to become bank holding companies by acquiring control of up to 100 percent of the voting shares of The Berkshire Bank, New York, New York ("Berkshire").

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (63 Federal Register 43,950 (1998)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 3 of the BHC Act.

Applicants, although previously engaged directly and indirectly in various activities, have no current business operations. CLS has an investment, however, that does not conform to the requirements of section 4 of the BHC Act (12 U.S.C. [sections] 1843), which sets forth the investments and activities that are permissible for bank holding companies. Applicants have committed to conform their current investments to the requirements of the BHC Act within two years of the date of consummation of the proposal, including by divestiture if necessary, in accordance with section 4(a)(2) of the BHC Act (12 U.S.C. [sections] 1843(a)(2)).

In reviewing the proposal under the BHC Act, the Board has considered the financial and managerial resources and future prospects of the companies and bank involved, the convenience and needs of the communities to be served, and certain supervisory factors. The Board has reviewed these factors in light of the facts of record, including supervisory reports of examination assessing the financial and managerial resources of Berkshire, discussions with appropriate federal and state banking supervisors and other appropriate federal agencies, and information provided by Applicants. The Board notes that Applicants would not incur or assume any debt in connection with the proposal, and that Berkshire would remain well capitalized after consummation of the proposal. Based on all the facts of record in this case, the Board concludes that the financial and managerial resources and future prospects of Applicants and Berkshire and other supervisory factors are consistent with approval of the proposal.

In considering the convenience and needs factor, the Board has reviewed the record of Berkshire under the Community Reinvestment Act ("CRA").(1) The Board notes that Applicants intend to continue the CRA program of Berkshire and do not intend to make any material changes in the products and services provided by Berkshire. The Board has evaluated the convenience and needs factor in light of examinations of the CRA performance record of Berkshire by the Federal Deposit Insurance Corporation ("FDIC"), the institution's appropriate federal banking supervisor, and the New York State Banking Department ("NYSBD"). Berkshire received "satisfactory" ratings from the FDIC and the NYSBD at the most recent examinations of its performance under the CRA. Based on all the facts of record, the Board concludes that convenience and needs considerations, including the CRA performance record of the relevant institution, are consistent with approval of the proposal.

As required under the BHC Act, the Board also considered the competitive effects of the proposal. The proposed transaction is a formation of bank holding companies that will control only one bank and, therefore, does not involve competing banking institutions. Accordingly, the Board concludes that the proposal would not have a significantly adverse effect on competition or on the concentration of banking resources in any relevant banking market.

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