Merger Watch: JPMorgan Chase Aqcuires Assets of Bank of New York
This merger has been approved by the Office of the Comptroller of the Currency as of September 15, 2006.
On April 8, 2006, JPMorgan Chase Bank, N.A., a national bank, announced its plan to acquire 338 bank branches, $14.5 billion in deposits and $7.8 in loan balances from The Bank of New York, a New York state-chartered bank, in exchange for JPMorgan Chase’s corporate trust business.
With the addition of these branches, Chase will expand what is already the largest branch network in New York City and establish the most extensive branch network in Long Island and New York City’s northern suburbs. The combined business will have more than 800 branch locations in the New York metropolitan area and hold more than one-quarter of all bank deposits in New York State.
Chase submitted its application to the Office of the Comptroller of the Currency (OCC) for regulatory approval on May 5, marking the start of the 30-day comment period. The receipt of the application and the beginning of the comment period was not, however, announced until May 17 – nearly halfway through the public comment period. (Because this acquisition does not involve bank holding companies, it is not subject to Federal Reserve approval.)
A number of NY groups have called on the OCC to hold a public hearing and extend the public comment period, currently slated to end on June 2, 2006.
Issues of Concern:
Banking Services to low and moderate income areas – The Associated Press reported on April 17 that JPMorgan Chase plans to close up to 80 branches in the NYC area.
Job Retention – With the consolidation of Chase and Bank of New York business, thousands of jobs are potentially on the line.
Bank Monopolization – The combined JPMorgan Chase-Bank of New York business will account for 28% of all deposits held in New York State.
Abuses in high-cost, “sub-prime”, lending markets – Questions persist about Chase’s involvement in subprime securitizations, FHA loan targeting, property flipping schemes and tax refund anticipation lending.
Small Business Lending in low and moderate income areas – Chase’s poor small business lending record in lower income areas of New York City was cited in a challenge to Chase’s 2004 merger with Bank One.
Free Electronic Benefit Access for public assistant recipients – Since Chase became the contractor for electronic delivery of public assistance benefits in New York State in 2003, public assistance recipients in New York City have paid more than $14.5 million in ATM surcharges to receive their cash benefits.
CLICK HERE to see comments NEDAP filed with the Office of the Comptroller of the Currency in June 2006, in opposition to the Chase-BNY merger, along with Empire Justice Center, the Foreclosure Prevention Project at South Brooklyn Legal Services, Good Jobs New York, and NYPIRG.
Read the Merger Watch Action Alert.