[Federal Register Volume 59, Number 107 (Monday, June 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13642]


[[Page Unknown]]

[Federal Register: June 6, 1994]


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FEDERAL RESERVE SYSTEM
 

Citicorp, New York, New York; Request for an Exemption from Tying 
Provisions

    Citicorp, New York, New York (Citicorp), has requested, pursuant to 
section 106(b) of the Bank Holding Company Act Amendments of 1970 (12 
U.S.C. Sec.  1971 et seq.) (Section 106(b)), that the Board grant an 
exemption to permit any subsidiary of Citicorp to vary the 
consideration charged for mortgage loans based upon the condition or 
requirement that the customer obtain a loan, discount, deposit, or 
trust service from an affiliate.
    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 banking 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.
    Citicorp contends that its request is consistent with the purposes 
of Section 106(b) because it is not anticompetitive. Citicorp argues 
that the market for mortgage loans is national in scope and highly 
competitive. In this regard, Citicorp asserts that it does not have 
sufficient market power in any relevant market to restrain competition 
and that the highly competitive mortgage lending market prevents any 
mortgage lender from having sufficient market power to restrain 
competition in the market or force a consumer to purchase a product on 
uncompetitive terms.
    Further, Citicorp argues that its proposal is not anticompetitive 
because customers would not be required either directly or indirectly 
to accept one product in order to obtain another product. In this 
regard, Citicorp states that all products would be available separately 
at separate prices and the prices of products would be kept competitive 
through normal market forces. Citicorp also claims that customers would 
be free to choose to purchase combined or separate services from 
Citicorp affiliates or from competitors. Finally, Citicorp contends 
that the proposal would promote competition and provide public benefits 
in the form of reduced costs and better service.
    Notice of Citicorp'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 
July 5, 1994.

    Board of Governors of the Federal Reserve System, May 31, 1994.
Jennifer J. Johnson
Associate Secretary of the Board
[FR Doc. 94-13642 Filed 6-3-94; 8:45 am]
BILLING CODE 6210-01-F