On the eve of a vote on the financial services reform bill, a federal court threw out a related case brought against the Federal Reserve Board over its approval of last year's merger between Travelers Group and Citicorp.

The U.S. Court of Appeals for the District of Columbia Circuit upheld the Fed's approval of the creation of Citigroup Inc. In a suit filed in October 1998 the Independent Community Bankers of America had argued that Citigroup was unfairly using a grace period granted as part of the merger approval to get a leg up on other banking companies.

The trade group will not appeal, said Karen M. Thomas, the ICBA's director of regulator affairs. "Especially when the President signs the bill, there is no point in pursuing it any further."

-- Katharine Fraser

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