WASHINGTON - In a highly unusual move, Federal Reserve Board Governor John P. LaWare dissented from the central bank's decision to let First Commerce Corp., New Orleans, acquire City Bancorp, New Iberia, La.
Mr. LaWare, in a one-paragraph dissent, objected to the board's decision to require First Commerce to file a new Community Reinvestment Act plan as a condition of its approval.
The board voted last week to require the new CRA plan after Plaisance Development Corp. charged that First Commerce had not lived up to its commitment in a prior deal to provide loan counseling.
"I believe the board should have approved these applications without condition, and should review the compliance with this single commitment under the board's supervisory authority," Mr. LaWare wrote.
Thomas Vartanian, a partner at Fried, Frank, Harris, Shriver & Jacobson, praised Mr. LaWare's dissent, saying the Fed shouldn't restrict banks with satisfactory CRA ratings.
But New York attorney Warren Traiger, who advises many banks on CRA issues, said the Fed would lose its ability to ensure CRA compliance if it didn't attach stipulations to application approvals.
Allen Fishbein, general counsel to the Center for Community Change, said the Fed frequently makes approvals conditional.
The deal made First Commerce the largest commercial bank in Louisiana, with assets of $5.5 billion.
