An American Bankers Association affiliate has asked a federal court for permission to back the Federal Reserve in its legal defense of the Citigroup merger approval.

In a motion filed Dec. 18 but made public Tuesday, the ABA Securities Association asked the U.S. Court of Appeals for the District of Columbia to let it file an amicus brief backing the Fed in a lawsuit brought by the Independent Bankers Association of America.

The IBAA lawsuit filed in October asks a federal judge to nullify the merger of Citicorp and Travelers Group on grounds that the combined entity will exceed securities underwriting limits.

For the past two years the Fed has let holding company affiliates earn up to 25% of their revenue from securities underwriting, but the IBAA argues that the law was never intended to let banking organizations acquire firms the size of Travelers' underwriting units.

-Dean Anason

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