[Federal Register Volume 59, Number 218 (Monday, November 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27987]


[[Page Unknown]]

[Federal Register: November 14, 1994]


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FEDERAL RESERVE SYSTEM

 

Carbon County Holding Company, Englewood, Colorado; Application 
to Engage in Nonbanking Activities

    Carbon County Holding Company, Englewood, Colorado (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 acquire Hanifen, Imhoff 
Management Co., Inc., Denver, Colorado (Company), and thereby engage in 
providing investment advisory and administrative services to mutual 
funds. Applicant states that the proposed administrative services 
include, among other things, preparing and filing securities 
registration statements, preparing and filing various financial and 
operating reports pertaining to the fund, maintaining the records of 
the fund, computing the net asset value of the fund, and providing 
office facilities and clerical support for the fund.
    Section 4(c)(8) of the BHC Act provides that a bank holding company 
may, with 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 (January 5, 1984). 
Applicant maintains that the Board has previously determined that the 
proposed administrative services are closely related to banking and may 
be provided together with investment advisory services. Mellon Bank 
Corporation, 79 Federal Reserve Bulletin 626 (1993).
    Applicant also proposes to have one individual serve as an officer 
of Applicant and its subsidiary bank and also serve as an officer of 
Company. As an officer of Company, this individual would perform 
ministerial functions for the fund, such as preparing minutes for 
meetings of the fund's board of trustees. This individual would not 
serve as an officer, director, or employee of any fund. Applicant 
maintains that neither Company nor the individual who would perform 
administrative services for the fund would be able to control the fund. 
In this regard, Applicant notes that an independent third party would 
distribute the shares of the fund and that the fund would be governed 
by an independent board of trustees.
    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 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 December 
5, 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 Kansas City.

    Board of Governors of the Federal Reserve System, November 7, 
1994.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 94-27987 Filed 11-10-94; 8:45 am]
BILLING CODE 6210-01-F