[Federal Register Volume 60, Number 205 (Tuesday, October 24, 1995)]
[Notices]
[Pages 54503-54504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26279]
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FEDERAL RESERVE SYSTEM
First National of Nebraska, Inc.; Application to Engage in
Nonbanking Activities
First National of Nebraska, Inc., Omaha, Nebraska (Applicant), has
given notice 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 a
wholly owned subsidiary, First Technology Solutions, Inc., Omaha,
Nebraska (Company), in designing,
[[Page 54504]]
selecting, installing, and testing client/server computer networks
(server networks), and providing support services for the operation of
such networks. These services would be provided to depository
institutions and certain other customers. Applicant proposes to conduct
these activities on a nationwide basis.
Section 4(c)(8) of the BHC Act provides that a bank holding company
may engage in any activity that 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).
Applicant states that the Board previously has determined by
regulation that providing certain data processing and data transmission
services and facilities and providing access to such services and
facilities by any technological means are closely related to banking
for purposes of section 4(c)(8) of the BHC Act. In order to be found to
be closely related to banking, the data to be handled must be
``financial, banking, or economic'' in nature, and such activities must
be conducted within certain additional limitations established by the
Board. See 12 CFR 225.25(b)(7) (providing data processing and data
transmission services and facilities). Applicant maintains that
Company's activities with respect to server networks would be data
processing, would relate primarily to financial, banking, or economic
data, and would otherwise conform to Regulation Y.
Applicant also states that the Board has determined by order that a
bank holding company may engage in these activities with respect to
other data as part of its offering of a larger package of data
processing services, when nonfinancial data processing is a relatively
small part of the package and is a necessary part of providing
financial data processing. See BNCCORP, 81 Federal Reserve Bulletin 295
(1995). Applicant represents that nonfinancial data processing would be
a relatively small part of its proposed activities, and that it is
necessary to provide nonfinancial data processing on a client/server
network in order to accommodate traditional financial data processing.
In order to approve the proposal, the Board also must determine
that the proposed activities to be engaged in 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 interests, or
unsound banking practices.'' 12 U.S.C. 1843(c)(8). Applicant states
that its proposal would produce public benefits that outweigh any
potential adverse effects. In particular, Applicant maintains that
Company's proposed activities would increase the availability of the
proposed services to smaller financial institutions (and certain other
customers), which frequently lack staff expertise in selecting and
supporting the operation of server networks. In addition, Applicant
states that the proposed activities would not result in adverse effects
such as an undue concentration of resources, decreased or unfair
competition, conflicts of interests, or unsound banking practices.
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 notice 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
to William W. Wiles, Secretary, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551, not later than November 7,
1995. Any request for a hearing on this notice 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 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, October 18,
1995.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 95-26279 Filed 10-23-95; 8:45 am]
BILLING CODE 6210-01-F