WASHINGTON -- The Federal Reserve Board last week overrode the objections of the North Dakota Banking Board and approved a bank holding company acquisition.
The Fed ruled Dec. 23 that First Bank Systems Inc., Minneapolis, can assume Metropolitan Financial Corp., Minneapolis, and its North Dakota thrift.
The central bank said a federal law that gives states the right to prevent out-of-state institutions from acquiring local banks does not apply.
"The Douglas Amendment applies only to the interstate acquisition of an additional bank, and, by its terms, does not apply to the acquisition of savings associations," the Fed said.
The Fed also rejected the state banking board's argument that North Dakota law bars the transaction. It said the North Dakota attorney general already has concluded that the banking board must follow the holding company act. That act distinguishes between banks and thrifts, the Fed said.
The central bank dismissed North Dakota's request for a hearing on whether FBS Inc. plans to operate the thrift as a de facto commercial bank, saying the board has not raised any factual disputes.
The merger also will not adversely effect competition in North Dakota or Minnesota, the Fed said. And, the Community Redevelopment Act records of both institutions justify allowing the acquisition to proceed, the central bank found.
The institutions have three months to complete the merger.
