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FEDERAL RESERVE SYSTEMThe Chase Manhattan Bank New York, New York Order Approving the Merger of BanksThe Chase Manhattan Bank, (“Chase-NY ”), a state member bank, hasapplied under section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. §1828(c)) (“Bank Merger Act”) to acquire Chase Bank of Texas, NationalAssociation, Houston, Texas (“Chase-TX”), through merger and to retain andoperate branches at the current locations of the Chase-TX branches.
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Notice of the application, affording interested persons an opportunityto submit comments, has been given in accordance with the Bank Merger Act andthe Board’s Rules of Procedure (12 C.F.R. 262.3(b)). As required by the Bank Merger Act, reports on the competitive effects of the merger were requested fromthe United States Attorney General and the other federal banking agencies. Thetime for filing comments has expired, and the Board has considered the applicationand all the facts of record in light of the factors set forth in the Bank Merger Act.Chase-NY and Chase-TX are wholly owned subsidiaries of The ChaseManhattan Corporation, New York, New York, (“Chase”). Chase is the thirdlargest commercial banking organization in the United States, with $391.5 billion intotal assets.
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Chase-NY is the largest depository institution in New York,controlling deposits of $97.7 billion, representing 23.3 percent of the total depositsin depository institutions in the state. Chase-TX is the second largest depositoryinstitutions in Texas, controlling deposits of 
 
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These branches are listed in the Appendix.
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Asset data are as of March 31, 2000.
 
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$18.5 billion, representing 8.9 percent of the total deposits in depository institutionsin the state.
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This proposal represents a reorganization of Chase’s existing bankingoperations.Interstate AnalysisSection 102 of the Riegle-Neal Interstate Banking and BranchingEfficiency Act of 1994 (“Riegle-Neal Act”) authorizes a bank to merge withanother bank under certain conditions unless, beforeJune 1, 1997, the home state of one of the banks involved in the transaction adopteda law expressly prohibiting merger transactions involving out-of-state banks.
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TheRiegle-Neal Act also authorizes the acquiring bank to retain and operate, as a mainoffice or branch, any bank offices of the acquired bank.
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New York and Texas have enacted legislation allowing interstatemergers between banks located in their states and out-of-state banks pursuant to theprovisions of the Riegle-Neal Act. Chase-NY has notified the appropriate statebanking agencies regarding its proposal to consolidate its banking operations andhas provided a copy of its Bank Merger Act application to all the relevant stateagencies. In light of the foregoing, it appears that the proposal complies with therequirements of the Riegle-Neal Act.
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In this context, depository institutions include commercial banks, savingsbanks, and savings associations. All banking data are as of June 30, 1999.
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12 U.S.C. § 1831u.
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12 U.S.C. § 1831u(d)(1).
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See 12 U.S.C. § 1831u. Chase-NY is adequately capitalized andadequately managed, as defined in the Riegle-Neal Act. The New York and TexasDepartments of Banking have indicated that this transaction would comply withapplicable New York and Texas law. See NY Banking Law, Art. 5-C, § 225; Tex.Fin. Code Ann §§ 202.001, 203.003. Chase-TX has been in existence and operationfor the minimum amount of time required by Texas law. See Tex. Fin. Code Ann. §
 
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Other FactorsThe Bank Merger Act requires the Board to consider the financial andmanagerial resources and future prospects of the institutions involved, and theconvenience and needs of the communities to be served. The Board has reviewedthese factors in light of the facts of record, including supervisory reports of examination assessing the financial and managerial resources of Chase-NY andChase-TX, and information provided by the banks. Based on all the facts of record,the Board concludes that the financial and managerial resources and futureprospects of Chase-NY and Chase-TX are consistent with approval of the proposal.The Board has also considered likely effects of the proposal oncompetition. As noted above, the proposal represents the reorganization of twobanks that have been affiliates for a number of years. Based on all the facts of record, the Board concludes that consummation of the proposal would not have asignificantly adverse effect on competition or on the concentration of bankingresources in any relevant banking market and that competitive considerations areconsistent with approval.In reviewing the convenience and needs factors, the Board has carefullyconsidered the effect of the proposal on the convenience and needs of thecommunities to be served in light of all the facts of record, including the records of performance of the depository institutions of Chase under the CommunityReinvestment Act (“CRA”). The Board also has carefully reviewed the lendingrecords of Chase-NY and Chase-TX, the policies and programs designed to ensurecompliance with the fair lending laws, recent data provided by Chase’s depository203.005. On consummation of the proposal, Chase-NY would control less than 10percent of the total amount of deposits in insured institutions in the United States.All other requirements of the section 102 of the Riegle-Neal Act would also be meton consummation of the proposal.
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