Orders Issued under Bank Holding Company Act

By Frierson, Robert Dev. | Federal Reserve Bulletin, January 2001 | Go to article overview

Orders Issued under Bank Holding Company Act


Frierson, Robert Dev., Federal Reserve Bulletin


Orders Issued Under Section 4 of the Bank Holding Company Act

Queens County Bancorp, Inc. Flushing, New York

Order Approving Notice to Acquire a Savings Association and to Engage in Nonbanking Activities

Queens County Bancorp, Inc. ("Bancorp"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under sections 4(c)(8) and 4(j) of the BHC Act (12 U.S.C. [subsections] 1843(c)(8) and 1843(j)) and section 225.24 of the Board's Regulation Y to acquire all the voting shares of Haven Bancorp, Inc., Westbury, New York ("Haven"), and thereby indirectly acquire its subsidiary savings association, CFS Bank, Woodhaven, New York, ("CFS Bank").(1) Bancorp also has requested the Board's approval to acquire indirectly CFS Investments, Inc. ("CFS Investments") and thereby engage in providing securities brokerage services, and Columbia Preferred Capital Corporation ("CPCC") and thereby engage in extending credit and servicing loans and activities related to extending credit.

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (65 Federal Register 50,992 (2000)). The time for filing comments has expired, and the Board has considered the notice and all comments received in light of the factors set forth in section 4 of the BHC Act.

Bancorp, with total consolidated assets of $2 billion, operates a single subsidiary bank, QCSB, which is the 50th largest depository institution in New York State, controlling deposits of $1 billion, representing less than 1 percent of total deposits in insured depository institutions in the state ("state deposits").(2) Haven's subsidiary savings association, CFS Bank, is the 35th largest depository institution in the state, controlling deposits of $2.1 billion, representing less than 1 percent of state deposits. On consummation of the proposal, Bancorp would become the 22nd largest depository organization in New York State, controlling deposits of $3 billion.

The Board has previously determined by regulation that the operation of a savings association by a bank holding company is closely related to banking for purposes of section 4(c)(8) of the BHC Act.(3) The Board has also determined that securities brokerage activities, extending credit and servicing loans, and activities related to extending credit, are closely related to banking.(4) Bancorp has committed to conform the activities of CFS Bank and Haven to, and conduct those activities in accordance with, the requirements of section 4(c)(8) of the BHC Act and Regulation Y.

In reviewing the proposal, the Board is required by section 4(j)(2)(A) of the BHC Act to determine that the acquisition of Haven by Bancorp "can reasonably be expected to produce benefits to the public ... that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices."(5) As part of its evaluation of the public interest factors, the Board reviews the financial and managerial resources of the companies involved.(6)

Financial and Managerial Considerations

The Board has carefully reviewed the financial and managerial resources of Bancorp and Haven and their respective subsidiaries and the effect the transaction would have on such resources in light of all the facts of record. The Board has considered, among other things, confidential reports of examination and other supervisory information received from the primary federal supervisors of the organizations. The Board also has considered publicly available financial and other information on the organizations and their subsidiaries, and all the information submitted on the financial and managerial aspects of the proposal by Bancorp. Based on all the facts of record, the Board concludes that the financial and managerial resources of the organizations involved are consistent with approval. …

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