The Federal Reserve Board has raised the asset-size threshold at which bank holding companies must have their financial statements audited.

The Fed will now require the audits only for holding companies with assets of $500 million or more. The limit has been $150 million.

The change, published in the March 6 Federal Register, is included in several burden-reducing amendments to the FR Y-6, the central bank's primary source of financial data on individual banks.

The Fed also eliminated the requirement that holding companies submit consolidated and parent company financial statements, and it axed a rule forcing nonbank subsidiaries to submit financial statements. Also eliminated was a requirement that holding companies report information about insider loans and changes in investment strategies.

However, holding companies still must make available their annual reports and their Securities and Exchanges Commission reports of financial condition.

* * *

Fed Vice Chairman Alan S. Blinder dissented from a recent central bank order permitting National City's MoneyCenter ATM network to merge with Electronic Payment Service's MAC network. (See related article on page 16.)

"My dissent is based on a matter of law, not economics," Mr. Blinder said.

"The reduction of competition that will result from this proposed acquisition is modest, and thus not very troubling on strictly economic grounds, " he said, but the law requires the board to find that the benefits of the merger outweigh any negatives. "The application, per se, demonstrates no such benefit to the public," Mr. Blinder said.

He said he would have supported the merger if MAC had agreed to "a few pro-competitive" changes, such as eliminating a requirement that all members of a holding company also be members of the network.

The rest of the Fed, however, voted to approve the deal. The majority wrote that MAC allows member banks to affiliate with more than one ATM network. And, it said the proposal "is not likely to result in any significant unfair competition, conflicts of interest, unsound banking practices, or other adverse effects."

The Fed majority also wrote that the public will benefit from the merger because the MAC network can offer a broader range of electronic services.

The majority rejected a request by several protesters for a hearing, saying they had raised no material questions that couldn't be addressed in written filings.

* * *

The Federal Reserve Board last week gave three banks permission to expand.

Carbon County Holding Co., Englewood, Colo., won permission from the central bank to acquire Hanifen, Imhoff Management Co. in Denver, a group that provides investment advice and administrative services to mutual funds.

The central bank also approved an emergency application from First Interstate Bank, Los Angeles, to acquire First Trust Bank, Ontario, Calif.

The Fed said it decided to approve the merger without the normal comment period after the California State Banking Department informed it that First Trust was near failure.

Finally, the Fed gave Investors Banking Corp., Salem, Ore., permission to acquire up to 88% of the voting shares of BKLA Bancorp and its subsidiary Bank of Los Angeles, both of West Hollywood.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.