The US Federal Reserve has approved the merger of J.P. Morgan Chase & Co. and Bank One Corp., creating the second largest American bank after Citigroup.
Shareholders of New York-based J.P. Morgan Chase and Chicago-based Bank One approved the merger in May, with the companies setting July 1 as their formal merger date. The Fed approval, which had been expected, came on a 6-0 vote of the Fed Board of Governors. Last week, the banks said the Bank One name would disappear from about 1,800 bank branches and 52 million credit cards, to be replaced by Chase, which officials said was a more effective brand. According to the Fed, the post-merger J.P. Morgan will be the second largest U.S. banking institution, with consolidated assets of about $1.1 trillion and deposits worth $344.6 billion, or equivalent to about 6.7 percent of all U.S. federally insured deposits. The combined bank’s share of deposits world rise but would still be below a limit of 10 percent that banks can hold nationally. The merger of the financial giants — J.P. Morgan Chase is the third largest U.S. bank while Bank One is the sixth biggest – had been controversial, especially among community development activists.
The Fed said its two public meetings in New York and Chicago had allowed more than 150 people to testify on the merger’s effects. In its approval, the Fed dismissed criticism that J.P. Morgan had engaged in “predatory” lending, high-cost loans to unsophisticated borrowers with spotty credit records.