[Federal Register Volume 59, Number 120 (Thursday, June 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15271]


[[Page Unknown]]

[Federal Register: June 23, 1994]


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FEDERAL MARITIME COMMISSION
 

Grupo Financiero Serfin, S.A. de C.V., Mexico City, Mexico; 
Application to Engage in Nonbanking Activities

    Grupo Financiero Serfin, S.A. de C.V., Mexico City, Mexico 
(Applicant), has applied pursuant to section 4(c)(8) of the Bank 
Holding Company Act (12 U.S.C. 1843(c)(8)) (BHC Act) and Sec.  
225.23(a)(3) of the Board's Regulation Y (12 CFR 225.23(a)(3)) to 
engage de novo through its subsidiary, Serfin Funds Transfer, Inc., Los 
Angeles, California (Company), in the following activities throughout 
the United States:
    (1) making cash advances on credit cards to consumers pursuant to 
Sec.  225.25(b)(1) of the Board's Regulation Y (12 CFR 225.25(b)(1));
    (2) issuing and selling U.S. dollar denominated money orders and 
similar payment instruments with a face value of $1,000 or less 
pursuant to Sec.  225.25(b)(12) of the Board's Regulation Y (12 CFR 
Sec.  225.25(b)(12)) and foreign currency denominated money orders and 
similar payment instruments with a face value of the U.S. dollar 
equivalent of $1,000 or less;
    (3) receiving money for transmission and transmitting the same to a 
foreign country;
    (4) buying and selling foreign currency at retail and at wholesale 
solely to manage its retail inventory of currency;
    (5) cashing U.S. dollar payroll checks; and
    (6) cashing federal, state, and local government benefit checks.
    Section 4(c)(8) of the BHC Act provides that a bank holding company 
may, with prior Board approval, engage in any activity which the Board, 
after due notice and opportunity for hearing, has determined (by order 
or regulation) to be so closely related to banking or managing or 
controlling banks as to be a proper incident thereto. This statutory 
test requires that two separate tests be met for an activity to be 
permissible for a bank holding company. First, the Board must determine 
that the activity is, as a general matter, closely related to banking. 
Second, the Board must find in a particular case that the performance 
of the activity by the applicant bank holding company may reasonably be 
expected to produce public benefits that outweigh possible adverse 
effects.
    A particular activity may be found to meet the ``closely related to 
banking'' test if it is demonstrated that banks have generally provided 
the proposed activity; that banks generally provide services that are 
operationally or functionally similar to the proposed activity so as to 
equip them particularly well to provide the proposed activity; or that 
banks generally provide services that are so integrally related to the 
proposed activity as to require their provision in a specialized form. 
National Courier Ass'n v. Board of Governors, 516 F.2d 1229, 1237 (D.C. 
Cir. 1975). In addition, the Board may consider any other basis that 
may demonstrate that the activity has a reasonable or close 
relationship to banking or managing or controlling banks. Board 
Statement Regarding Regulation Y, 49 FR 806 (1984).
    The Board has previously determined by regulation that engaging in 
credit card lending, and issuing and selling money orders and similar 
consumer-type payment instruments having a face value of less than 
$1,000 are closely related to banking and permissible for bank holding 
companies under section 4 of the BHC Act. See 12 CFR 225.25(b)(1) and 
(b)(12). Additionally, the Board previously has determined by order 
that the following activities that Applicant proposes to conduct are 
closely related to banking and proper incidents thereto under section 4 
of the BHC Act:
    (1) issuing and selling foreign currency denominated money orders 
and similar payment instruments with a face value of the U.S. dollar 
equivalent of $1,000 or less, Midland Bank, PLC, 76 Federal Reserve 
Bulletin 860 (1990);
    (2) receiving money for transmission and transmitting the same to a 
foreign country, Philippines Commercial International Bank, 56 Federal 
Reserve Bulletin 861 (1991);
    (3) buying and selling foreign currency at retail and at wholesale 
solely to manage its retail inventory of currency, Midland Bank, PLC, 
76 Federal Reserve Bulletin 860 (1990); and
    (4) cashing U.S. dollar payroll checks drawn on unaffiliated banks, 
Midland Bank, PLC, 76 Federal Reserve Bulletin 860 (1990).
Applicant has committed that it will conduct these activities in 
accordance with the limitations established by regulation and order on 
the conduct of such activities.
    The Board has not previously determined that cashing federal, 
state, and local government benefit checks is permissible under section 
4(c)(8) of the BHC Act. Applicant states that this proposed activity is 
closely related and a proper incident to banking because the cashing of 
government benefit checks is no less fundamental to banking than is the 
cashing of payroll checks, which the Board has determined is 
permissible under section 4(c)(8) of the BHC Act. Applicant also states 
that recipients of such checks should have the same access to check 
cashing services as do individuals who cash payroll checks.
    In order to satisfy the proper incident to banking test, section 
4(c)(8) of the BHC Act requires the Board to find that the performance 
of the activities by Company can reasonably be expected to produce 
benefits to the public, such as greater convenience, increased 
competition, or gains in efficiency that outweigh possible adverse 
effects, such as undue concentration of resources, decreased or unfair 
competition, conflicts of interest, or unsound banking practices. 
Applicant believes that the proposed activities will benefit the public 
by promoting competition. Applicant also believes that approval of this 
application will allow Company to provide a wider range of services and 
added convenience to its customers. Applicant believes that the 
proposed activities will not result in any unsound banking practices or 
other adverse effects.
    In publishing the proposal for comment, the Board does not take a 
position on issues raised by the proposal. Notice of the proposal is 
published solely in order to seek the views of interested persons on 
the issues presented by the application and does not represent a 
determination by the Board that the proposal meets, or is likely to 
meet, the standards of the BHC Act.
    Any comments or requests for hearing should be submitted in writing 
and received by William W. Wiles, Secretary, Board of Governors of the 
Federal Reserve System, Washington, D.C. 20551, not later than June 13, 
1994. Any request for a hearing on this application must, as required 
by Sec.  262.3(e) of the Board's Rules of Procedure (12 CFR 262.3(e)), 
be accompanied by a statement of the reasons why a written presentation 
would not suffice in lieu of a hearing, identifying specifically any 
questions of fact that are in dispute, summarizing the evidence that 
would be presented at a hearing, and indicating how the party 
commenting would be aggrieved by approval of the proposal.
    This application may be inspected at the offices of the Board of 
Governors or the Federal Reserve Bank of San Francisco.

    Board of Governors of the Federal Reserve System, June 17, 1994.
Jennifer J. Johnson,
Associate Secretary of the Board.
[FR Doc. 94-15271 Filed 6-22-94; 8:45 am]
BILLING CODE 6210-01-F