[Federal Register Volume 59, Number 38 (Friday, February 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4287]


[[Page Unknown]]

[Federal Register: February 25, 1994]


-----------------------------------------------------------------------


FEDERAL RESERVE SYSTEM
 

Fleet Financial Group, Inc., Providence, Rhode Island; Request 
for an Exemption From Tying Provisions

    Fleet Financial Group, Inc., Providence, Rhode Island (Fleet), has 
requested, pursuant to section 106(b) of the Bank Holding Company Act 
Amendments of 1970 (12 U.S.C. 1971 et seq.) (Section 106(b)), that the 
Board grant exemptions to permit Fleet's subsidiary banks (Fleet Banks) 
to vary the consideration charged for a deposit account based, in part, 
on:
    (1) A customer's balance on a credit card issued or assumed by 
Fleet Bank of New York, Albany, New York (Fleet-NY);\1\ and
---------------------------------------------------------------------------

    \1\ Fleet has announced its plan to consolidate the credit card 
operations of the Fleet Banks into Fleet Bank-NY.
---------------------------------------------------------------------------

    (2) A customer's investment/securities balance maintained at 
Fleet's subsidiary, Fleet Brokerage Securities, Inc., Providence, Rhode 
Island (Fleet Brokerage).\2\
---------------------------------------------------------------------------

    \2\ In determining the consideration charged for the deposit 
account, a Fleet Bank also will consider traditional bank products 
purchased from that bank and a customer's balance in an unaffiliated 
open-end mutual fund advised by Fleet Investment Advisors, 
Providence, Rhode Island.
---------------------------------------------------------------------------

All products offered as part of these arrangements will be separately 
available to customers at market prices.
    Section 106(b) permits a bank to fix or vary the consideration for 
extending credit or furnishing services on condition or requirement 
that a customer also obtain a traditional bank product (loan, discount, 
deposit or trust service) from that bank. However, Section 106(b) 
prohibits a bank from engaging in these same activities on condition 
that the customer obtain any additional credit or services from any 
affiliate. The Board may, by regulation or order, grant exceptions that 
are not contrary to the purposes of the section.
    The Fleet Banks currently offer customers a deposit service, the 
Fleet One Account, for which the monthly fee is waived if a depositor 
maintains a minimum balance in certain products offered by the bank. 
Fleet proposes that the Fleet Banks be permitted to take into account a 
customer's credit card balance at Fleet Bank-NY and the investment/
securities balance at Fleet Brokerage in calculating the required 
minimum balance.
    Fleet argues that no anticompetitive effects would result from this 
proposal because no Fleet Bank possesses sufficient market power in any 
relevant banking market to force a customer to purchase any other 
product or service. In addition, other significant financial 
institutions compete aggressively with the Fleet Banks in these markets 
and no Fleet Bank has the power to exercise a dominant influence over 
any market.
    Fleet also argues that the proposal will promote competition and 
will not limit the availability of products to consumers because the 
deposit service offered by the Fleet Banks, as well as the credit cards 
offered by Fleet Bank-NY and the brokerage services offered by Fleet 
Brokerage, will be separately available to customers at market prices. 
In this regard, Fleet contends that both the market for credit cards 
and the market for retail brokerage services are national in scope and 
very competitive.
    Notice of Fleet's request is published solely in order to seek the 
views of interested persons on the issues presented by the request and 
does not represent a determination by the Board that the request meets 
or is likely to meet the standards of Section 106(b). The request may 
be inspected at the offices of the Board of Governors.
    Any comments or requests for hearing should be submitted in writing 
and received by William W. Wiles, Secretary of the Board of Governors 
of the Federal Reserve System, Washington, DC 20551, not later than 
March 25, 1994.

    Board of Governors of the Federal Reserve System, February 18, 
1994.
Jennifer J. Johnson,
Associate Secretary of the Board.
[FR Doc. 94-4287 Filed 2-24-94; 8:45 am]
BILLING CODE 6210-01-P