HSBC would control less than 30 percent or the appropriate percentage established by applicable state law of total deposits held by insured depository institutions in the states in which HSBC and RNYC both operate an insured depository institution.
HSBC and RNYC control banking operations that compete directly in the New York/New Jersey Metropolitan banking market ("New York banking market").(15) HSBC is the ninth largest depository institution in the New York banking market, controlling deposits of $10 billion, representing approximately 2.4 percent of total deposits in depository institutions in the New York banking market ("market deposits").
In addition, the Board has reviewed confidential examination and other supervisory information assessing the financial and managerial strength of HSBC and its subsidiaries and of RNYC and its subsidiaries.
Moreover, the proposed transaction would not materially affect the capital position of HSBC or RNYC and is not expected to have a significantly adverse effect on the financial resources of HSBC.
The Board has also considered the managerial resources of HSBC and RNYC in light of all the facts of record, including confidential examination and other supervisory information.(19) In particular, the Board has taken into account the record of operation by HSBC of banks, branches, and representative offices in the United States.
The Board has carefully considered the convenience and needs factor and the CRA performance records of the subsidiary depository institutions of HSBC and RNYC in light of all the facts of record, including public comments on the proposal.
Several commenters opposed the proposal, alleging that HSBC and, to a lesser extent, RNYC have inadequate records of meeting the banking and credit needs of the communities they serve and, in particular, of communities with predominantly LMI and minority populations.
Both of RNYC's subsidiary banks that are subject to the CRA also received "satisfactory" ratings in the most recent examinations of their CRA performance.(23) Republic Bank, RNYC's lead bank, received its "satisfactory" rating from the Office of the Comptroller of the Currency ("OCC"), as of May 15, 1997.
Consequently, the Board has taken into account the CRA performance records of both HSBC and RNYC in evaluating this proposal.(24)
The Board has also carefully considered the lending records of HSBC and RNYC in light of comments on the 1997 and 1998 HMDA data of the organizations' subsidiaries.(34) The data reflect certain disparities and weaknesses in the rates of loan applications, originations, and denials by racial group and income level.(35) The Board is concerned when the record of an institution indicates such disparities in lending, and believes that all banks are obligated to ensure that their lending practices are based on criteria that ensure not only safe and sound lending but also equal access to credit by creditworthy applicants regardless of their race or income level.
Because of the limitations of HMDA data, the Board has considered these data carefully in light of other information, including examination reports that provide an on-site evaluation of the compliance by the subsidiary banks of HSBC and RNYC with fair lending laws and the overall lending and community development activities of the banks.