Top Court Backs Out-of-State Banks ATMs
WASHINGTON The Supreme Court on Monday affirmed the right of national banks to operate automatic teller machines in states where they do not have a branch.The high court declined to hear an appeal by the Iowa superintendent of banking, who challenged a September 1999 decision by the U.S. Court of Appeals for the Eighth Circuit. The latter court ruled that the National Bank Act preempts an Iowa law prohibiting banks with no branches in the state from operating ATMs there.
We think the Eighth Circuit decision was excellent, and we are pleased it will stand, said Julie L. Williams, chief counsel for the Office of the Comptroller of the Currency. The agency filed a friend of the court brief in the case on behalf of Bank One of Utah, which challenged the Iowa law after it was forced to pull 24 ATMs out of the state in 1997.
Bank Ones battle with the state is not finished. In a separate case pending at the same federal appeals court, the bank is challenging the states requirement that all ATMs give universal, nondiscriminatory access to all cardholders. The law amounts to a ban on banks surcharging noncustomers who use their ATMs.
Fed Approves New England Banks Merger
WASHINGTON The Federal Reserve Board on Monday approved the acquisition by Peoples Heritage Financial Group Inc. in Portland, Maine, of Banknorth Group Inc. in Burlington, Vt. The deal would increase Peoples assets 33%, to $18.5 billion.The Feds approval is contingent on Peoples divesting a branch in Wolfeboro, N.H., which controls $28.1 million of deposits. The central bank found that the acquisition would create an anti-competitive concentration of deposits in that market.
In the same order, the Fed approved Peoples acquisition of Stratevest Group, a trust company in Barre, Vt.
Securities Group: Reform Law Being Abused
WASHINGTON The Securities Industry Association is protesting the way regulators are enforcing the merchant banking provisions of the Gramm-Leach-Bliley Act.In a four-page letter to the Federal Reserve Board and the Treasury Department released Monday, the group argued that the interim rule extends well beyond the authority granted by Congress.
The interim rule limits to $6 billion the amount a financial holding company may invest in merchant banking activities, and it requires that they be sold within 10 years. A separate proposal would require the bank to deduct 50% of the amount of each investment from its Tier 1 capital.
The investment limits will not achieve the intended purpose of limiting potential risk, and the capital charge is inconsistent with industry practice, wrote SIA vice president and general counsel Stuart J. Kaswell.
Rob Garver
