Shareholders and Regulators Approve Merger On February 4, shareholders of FirstFed America Bancorp, Inc., Swansea, MA, and People's Bancshares, Inc., New Bedford, MA, approved the sale of People's to FirstFed. The deal is expected to close during the first quarter.

On February 20, the Office of Thrift Supervision (OTS) and the Massachusetts Board of Bank Incorporation approved the merger between FirstFed America Bancorp, Inc., with People's Bancshares, Inc., New Bedford, MA. Upon completion of the merger, People's will be merged into FirstFed and People's unit, People's Savings Bank of Brockton, South Easton, MA, will be merged into FirstFed unit First Federal Savings Bank of America, Fall River, MA.

FirstFed said People's stockholders electing to receive stock significantly exceeded those electing to receive cash consideration. As a result, People's shareholders who elected to receive FirstFed stock will receive a combination of 0.73 share of FirstFed common stock and $9.34 for each share of People's owned. All other shareholders will receive a cash payment of $22 for each share of People's common stock they hold. As of June 30, 2001,

FirstFed America Bancorp had total deposits of $563.8 million and ranked 33rd among all commercial banking and thrift institutions in Massachusetts. As of the same date, People's Bancshares had total deposits of $582.3 million and ranked 32nd. (SNL Bank , Thrift Weekly, 2/11; 2/25/02)

Banknorth Becomes FHC On January 25, Banknorth Group, Inc., Portland, ME, became a financial holding company, after gaining Federal Reserve Bank of Boston approval. (Actions by the Board, 1/26/02)

Branch Address Change On February 28, North American Bank and Trust Company relocated its main office from 1151 Stratford Avenue, Stratford, CT, to 132 Grand Street, Waterbury, CT. (State of CT DOB News Bulletin, 2/22/02) Citizens in Stop , Shop Branch Transactions On January 7, the Massachusetts Division of Banks (MA DOB) approved the application by Citizens Bank of Massachusetts, Boston, MA, to establish 18 branch offices within Stop , Shop Supermarkets located in the Massachusetts towns of Allston, Beverly, Brockton, East Springfield, Fall River, Lynn, Malden, Medford, Milford, Natick, New Bedford, Quincy, Raynham, Somerset, Stoughton, Watertown (2), and West Springfield. The openings are part of a broader Citizens plan to open Stop , Shop branches in New England; the institution opened 22 Massachusetts branches between August 2001 and January 2002, and 20 Rhode Island branches on June 25, 2001.

On January 25, the MA DOB approved the application by Citizens Bank of Massachusetts to close its branch office located in Shaw's Supermarket, 780 South Main Street, Sharon, MA. (State of MA DOB Notice, 1/31/02)

Bank RI to Establish Branches On January 29, Bank Rhode Island, Providence, RI, a subsidiary of Bancorp Rhode Island, Inc., Providence, RI, announced that it will add three new branches in the state next year and will increase its total workforce by 15%. (SNL Bank , Thrift Weekly, 2/4/02)

Bank of New Canaan Applies for Deposit Insurance On February 4, Bank of New Canaan filed an application for deposit insurance with the Federal Deposit Insurance Corp (FDIC) seeking to operate as a commercial bank in New Canaan, CT. In addition to New Canaan, the de novo institution "expects to derive a modest level of banking business" from Darien, CT, and "the Silvermine" section of Norwalk, CT, as well as the "bordering New York community of Pound Ridge." The bank's organizers wrote in the application that these markets are currently underserved, and cited the rapid pace of consolidation in Connecticut as well as the 40 bank failures in the state since 1990. (SNL Bank , Thrift Weekly, 2/11/02)

NE Nonbanking Activity On February 20, Northeast Bank, FSB, Auburn, ME, through its subsidiary, Northeast Financial Services, Inc., acquired Kendall Insurance, Inc., Bethel, ME, for $569,564. Northeast Bank, FSB is a subsidiary of Northeast Bancorp, Auburn, ME. (SNL Daily ThriftWatch, 2/26/02)

NY Institutions in Nonbanking Activity On February 1, Bank of New York Co., Inc., New York, NY, acquired the core international ADR and domestic equity index investment management business of Axe-Houghton Associates, a unit of Hoenig Group, Inc., Rye Brook, NY. The bank said the deal will add approximately $2.6 million in assets under management. On February 1, Mellon Financial Corp, Pittsburgh, PA, sold online trading unit Dreyfus Brokerage Services, Inc., to Brown , Co. Securities Corp, Boston, MA, a subsidiary of J.P. Morgan Chase , Co., New York, NY. Brown , Company will assume approximately 75,000 Dreyfus accounts and $6 billion in assets for safekeeping. On February 4, Bank of New York Co., Inc., New York, NY, acquired Autranet Inc., a brokerage unit of Credit Suisse First Boston, Inc., Zurich, Switzerland. Bank of New York said Autranet is "one of the largest providers of independently originated research services," and has relationships with more than 500 institutional investment managers. (SNL Bank , Thrift Weekly, 2/4; 2/11/02)

CFSA Adopts New Payday Lending Guidelines On January 31, the Community Financial Services Association of America, an advocacy organization for the payday-advance industry, said it has adopted a new set of guidelines for agent-assisted bank-loan programs. Members of the group will now be urged to follow the guidelines when partnering with banks to provide short-term, small denomination loans. The guidelines come amidst increasing controversy over programs between banks and payday lenders. Both North Carolina and Colorado have recently filed suit against ACE Cash Express, a non-CFSA member, in part for the terms of the company's relationship with a bank, and the Office of the Comptroller of the Currency put restrictions on Eagle Bank after investigating its relationship with another non-CFSA member payday lender. The guidelines recommend that agent-assisted bank loan programs follow additional consumer protections outlined by the state in which the agent does business and where the provisions do not stand in conflict with federal laws that govern their relationship with banks. Banks and non-bank agents are encouraged to perform due diligence on one another to the extent they can determine whether the program will satisfy all applicable laws and banking regulatory policies. Additionally, payday lenders are encouraged to partner with banks that agree to maintain capital-concentration limits and loan-loss allowances at levels commensurate with the level of the banks' short-term lending activity. (SNL Bank , Thrift Weekly, 2/4/02)

Bachus Introduces Deposit-Insurance-Reform Legislation On February 7, Rep. Spencer T. Bachus, R-AL, chairman of the House of Representative's subcommittee on financial institutions, has introduced deposit-insurance-reform legislation that calls for the merger of the bank insurance and savings association funds, among several other provisions. The proposed bill, The Federal Deposit Insurance Act of 2002, would increase the limit for insured deposits from $100,000 to $130,000 and index future limits to allow for inflation. It would also increase coverage for municipal deposits, double coverage for individual retirement accounts, and "even out bank premiums to avoid sharp increases during times of recession." The new bill would also repeal the "existing restrictions" that prevent the agency from charging premiums for its deposit insurance. Within a year of its enactment, the bill would require studies on the FDIC's "organizational and management structure and control of expenses"; the effectiveness of "prompt corrective action"; and the FDIC's reserve practices for "problem and failed" companies for the period 1995 to 2002. (SNL Bank , Thrift Weekly, 2/11/02)

Fed Amends HMDA Rule to Expand Coverage of Nondepository Lenders On February 8, the Federal Reserve Board of Governors (Fed) amended its rules regarding the implementation of the Home Mortgage Disclosure Act (HMDA) to, among other things, expand the coverage of nondepository lenders. The provisions of the rule go into effect on January 1, 2003. The Fed's Regulation C, through which it enforces the HMDA, has been amended to expand the coverage of nondepository lenders by adding a $25 million volume test to the existing percentage-based coverage test. The HMDA requires lenders to report demographic data on home-mortgage lending. The amendment also requires lenders to report originations of loans with annual percentage rates (APRs) that exceed Treasury benchmarks by a specified amount. Lenders will be required to report the spread between the APR and the Treasury yield, and the Fed said it tentatively set the threshold at 3% for first-lien loans and 5% for second-lien loans. Lenders must also report whether the Home Ownership and Equity Protection Act covers the loan and whether an application or loan involves a manufactured home

Separately, the Fed said it is seeking public comment on items related to its final rule, including triggering thresholds for spreads between loan APRs and Treasury yields, and whether lenders should report the lien status of an application or loan. The Fed also asked the public to comment on whether lenders should be required to ask applicants for information on ethnicity, race, and sex in applications taken entirely by telephone. The Fed received nearly 300 comments following the publication of its December 2000 proposal to amend Regulation C. Most respondents supported the HMDA's expansion to cover nondepository lenders, although the Fed said most lenders "were opposed to reporting pricing and other new data items because of concerns about burden and about the potential public misinterpretation of the resulting data." (SNL Bank , Thrift Weekly, 2/11/02)

Items in Bank Notes focused on developments affecting banking structure in New England. They were condensed from daily newspapers and press releases from federal and state financial regulatory agencies. Their reproduction does not imply our endorsement of the accuracy, opinions or policies reflected in the subject matter.Items in Bank Notes focused on developments affecting banking structure in New England. They were condensed from daily newspapers and press releases from federal and state financial regulatory agencies. Their reproduction does not imply our endorsement of the accuracy, opinions or policies reflected in the subject matter.