Fed Approves BankAmerica Purchase of HonFed
WASHINGTON (AP) _ The Federal Reserve on Tuesday approved BankAmerica Corp.’s purchase of Hawaii’s largest thrift institution, owned by an investment group including former Treasury Secretary William E. Simon.
BankAmerica, the nation’s second-largest banking company with $201 billion in assets, is acquiring the parent company of HonFed Bank of Honolulu, a profitable savings and loan with $2.6 billion in assets.
The purchase of H.F. Holdings Inc., HonFed’s Marina del Rey, Calif., parent, will give BankAmerica presence in a 10th state. It currently operates in California, Arizona, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington.
Just three months ago, the San Francisco-based giant completed its merger with Security Pacific Corp., the biggest bank merger ever in the United States. BankAmerica now is nearly as big as the nation’s largest banking company, Citicorp, with $217 billion in assets.
In approving the application, the Federal Reserve said it would allow BankAmerica to merge HonFed with its Oregon-based S&L subsidiary, in effect removing previous restrictions on interstate branching by S&Ls owned by bank holding companies.
A banking group opposed to interstate branching, the Independent Bankers Association of America, immediately questioned the ruling.
″One would have to wonder if this will be used as a precedent that will be used to skirt the fact that Congress hasn’t passed an interstate branching law,″ said the association’s legislative counsel, Gary Kohn. ″We’re deeply concerned at the prospect of a regulatory attempt to bypass Congress in this area.″
In its approval, the Federal Reserve required that the agency also required that BankAmerica sell some of HonFed’s subsidiaries involved in real estate development, an activity not generally permitted for bank holding companies.