Hoping for more say about the direction of the payments industry, three more banking companies have taken ownership stakes in The Clearing House Payments Co. LLC.
The New York company already had 19 owners. The addition of the new ones, announced Thursday, was the first significant change in its lineup since a major corporate restructuring in July 2004.
The new owners are the $14.5 billion-asset City National Corp. of Beverly Hills, Calif.; First-Citizens Bank and Trust Co., a unit of the $14 billion-asset First Citizens BancShares Inc. of Raleigh, N.C.; and the $1.5 trillion-asset UBS AG of Zurich.
Richard Shier, an executive vice president at City National and its head of operations and product, said the investment will provide "an opportunity to have a voice in how payment clearing would develop over time."
He said the company also plans to join The Clearing House's SVPCO Image Payments Network for clearing checks using digital images, probably in the first quarter. It is also considering using The Clearing House's wire transfer and automated clearing house systems; that decision will be made in six to 24 months, Mr. Shier said.
First-Citizens' also sees the deal as a way to guide payments policy, said Denton Lee, its manager of central bank operations. "We believe that The Clearing House and SVPCO are going to be leaders in the check image exchange environment, and we're excited at the opportunity to be a part of that," he wrote in an e-mail.
As for UBS, "we do believe The Clearing House is a very important industry organization, and that's the reason why we took an equity stake," said Peter Casey, a spokesman.
Jeffrey Neubert, the president and chief executive of The Clearing House, said UBS uses it for international wire transfers and City National uses it to clear checks in California.
He said he expects all three of the new owners to increase their use of The Clearing House's payment systems. "If I were in these institutions, I would not make an investment in The Clearing House if I were not committed to using its products and services," he said.
The other owners are ABN Amro Bank, Bank of America, Bank of New York, Bank of Tokyo-Mitsubishi (jointly with the affiliated Union Bank of California), BB&T, Citibank, Citizens Bank of Rhode Island, Comerica Bank, Deutsche Bank, HSBC Bank, JPMorgan Chase Bank, KeyBank, M&T Bank, National City Bank, PNC Bank, SunTrust Bank, U.S. Bank, Wachovia Bank, and Wells Fargo Bank.
Mr. Neubert said The Clearing House is not actively seeking new owners. The roster of owners sometimes fluctuates because of bank mergers, he said; for example, it shrank by one last year when JPMorgan Chase & Co. acquired Bank One Corp.
"There's a delicate balance between inclusivity and exclusivity," Mr. Neubert said. More owners means more clearing volume and better representation during discussion of industry issues but more challenges in governance, he said.
Last July, The Clearing House reorganized its six payment units, which were separately owned and managed. They include its check-imaging unit, SVPCO (formerly Small Value Payments Co.); its ACH network, Electronic Payments Network; and its wire transfer unit, Clearing House Interbank Payments System.
Executives said then that the goal was to streamline governance and promote a broader view of payment systems in an age of convergence.
At the time, several banking companies that owned stakes in Clearing House subsidiaries bought into the parent organization. Its ownership then rose from 11 to 19.
Beth Robertson, a senior analyst at TowerGroup of Needham, Mass., a market research unit of MasterCard International, said such groups can be effective in directing changes in the market. They are especially valuable now, when the banking industry is making a major transition to electronic payment systems, she said.
Because of the sheer volume of payments that they handle, these big banks "are able to effect significant changes in payments activity, if they so choose," Ms. Robertson said. By working as a group they can "establish a better, high-level strategic perspective as payments evolve."
