The Independent Bankers Association of America asked a federal judge Wednesday to void the merger of Citicorp and Travelers Group.
In a two-page petition filed in U.S. district court here, the IBAA did not specify why it believes the Fed acted illegally when it allowed an insurance underwriter to acquire a banking company. Instead, it invoked provisions of the Bank Holding Company Act that provide for judicial review of Fed decisions.
A Fed spokeswoman declined to comment. A Citigroup spokesman said the financial company is not worried about the suit. "There are good public policy reasons for the Fed to have taken the action it has done," the spokesman said. "We feel confident that the courts will uphold them."
In the past, the IBAA has argued that federal law bars mergers between insurance and banking companies.
It also questioned whether a bank may legally operate a securities underwriting business the size of Traveler's Salomon Smith Barney unit.
The Fed approved creation of the $751 billion-asset company on Sept. 23 and the deal was closed Oct. 8.