Fed Approves FleetBoston Financial, Bank of America Merger, CUs Brace for Fallout

BOSTON – The Federal Reserve approved the merger of FleetBoston Financial and Bank of America on March 8, paving the way for what some credit unions see as an opportunity to woo customers away from the litany of fees that have typically come with large bank acquisitions. The FleetBoston Financial and Bank of America merger would create the second largest commercial bank behind Citigroup Inc. in the nation, with a combined $938 billion in assets. The merger would mean a total of 33 million customers and 2.5 million business clients. FleetBoston is New England’s largest bank, according to a press release, and is strong in New York, New Jersey and eastern Pennsylvania. Charlotte, N.C.-based Bank of America has a strong presence in the South, Midwest and West. Last fall, Bank of America announced its intentions to acquire FleetBoston Financial. Shareholders are scheduled to meet March. 17 to vote on the transaction with the deal expected to be completed by early April. In the past, New England credit unions have noticed an up tick in new accounts as a result of the dozen or so mergers that have occurred over the years. Interestingly, at least one banking group disapproves of the merger. The Independent Community Bankers of America questioned whether “banks this size that are too-big-to-fail can be effectively regulated.” “The U.S. now has two trillion dollar banks and will soon have a third. When the pending J.P. Morgan Chase/Bank One merger is completed, the three largest banks will control more than one-third of U.S. banking assets, said ICBA President/CEO Kenneth Guenther. “History may judge that three financial behemoths, each controlling $1 trillion in assets, quasi-nationalized our financial services industry. And that unlike trust-busting Teddy Roosevelt one hundred years ago, we weren’t sufficiently sensitive to the threat.” In January, J. P. Morgan Chase & Co. announced its plans to acquire Bank One Corp. for $60 billion. If approved, the banks’ total assets could top the $1 trillion mark. [email protected]