For immediate release

The Federal Reserve Board today announced its approval of the applications of Royal Bank of Canada, Montreal, Canada; Norwest Corporation, Minneapolis, Minnesota; Stichting Prioriteit ABN AMRO Holding, Stichting Administratiekantoor ABN AMRO Holding, ABN AMRO Holding N.V., ABN AMRO Bank N.V., all of Amsterdam, The Netherlands, and ABN AMRO North America, Inc., Chicago, Illinois, each to acquire more than 5 percent of the voting interests in Integrion Financial Network, LLC, White Plains, New York, and thereby engage in data processing and data transmission activities pursuant to the Board's Regulation Y. Attached is the Board's Order relating to this action.

Royal Bank of Canada Montreal, Canada Norwest Corporation Minneapolis, Minnesota Stichting Prioriteit ABN AMRO Holding Stichting Administratiekantoor ABN AMRO Holding ABN AMRO Holding N.V. ABN AMRO Bank N.V. all of Amsterdam, The Netherlands ABN AMRO North America, Inc. Chicago, Illinois Order Approving Notices to Engage in Nonbanking Activities

Royal Bank of Canada, Montreal, Canada, a foreign banking organization that is subject to the Bank Holding Company ("BHC") Act; Norwest Corporation, Minneapolis, Minnesota; Stichting Prioriteit ABN AMRO Holding, Stichting Administratiekantoor ABN AMRO Holding, ABN AMRO Holding N.V., ABN AMRO Bank N.V., and ABN AMRO North America, Inc., bank holding companies within the meaning of the BHC Act, have requested the Board's approval under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23 of the Board's Regulation Y (12 C.F.R. 225.23) each to acquire more than 5 percent of the voting interests in Integrion Financial Network, LLC, White Plains, New York ("Integrion"), and thereby engage in data processing and data transmission activities pursuant to section 225.25(b)(7) of the Board's Regulation Y (12 C.F.R. 225.25(b)(7)).1

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (61 Federal Register 54,441 (1996)). The time for filing comments has expired, and the Board has considered the notice and all comments received in light of the factors set forth in section 4(c)(8) of the BHC Act. RBC, with total consolidated assets of approximately $131.6 billion,2 is the largest commercial banking organization in Canada, and operates a branch in New York, New York; agencies in Los Angeles, California, and Miami, Florida; and a representative office in Chicago, Illinois. Norwest, with total consolidated assets of $77.8 billion,3 is the 12th largest commercial banking organization in the United States, and controls banks in Minnesota and 14 other states. ABN AMRO, with total consolidated assets of $339.4 billion, is the largest commercial banking organization in the Netherlands, and controls seven depository institutions in Illinois and one commercial bank in New York. ABN AMRO Bank N.V. also operates branches in Boston, Massachusetts; Chicago, Illinois; New York, New York; Pittsburgh, Pennsylvania; and Seattle, Washington; and agencies in Atlanta, Georgia; Miami, Florida; Houston, Texas; and Los Angeles and San Francisco, California. Each Notificant also engages in a number of nonbanking activities in the United States.

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Proposed Activities Integrion is a joint venture among Notificants, 12 national banks, one savings and loan holding company,4 and Gemini Management Corporation, a subsidiary of International Business Machines Corporation ("IBM"). Integrion will design, develop, and operate a data processing and transmission system through which depository institutions and their affiliates would make available home banking and other financial services to their respective customers. Integrion will not itself provide home banking or other financial services. Instead, the data processing and data transmission system ("gateway") Integrion designs and operates will serve as a switch or interface, electronically connecting customers of member depository institutions with the member depository institutions themselves.5 Customers would connect to Integrion's gateway, and thus a member depository institution, using a variety of devices, including personal computers ("PCs"), touch-tone telephones, or other electronic communication devices.6 Once a customer is connected to the gateway, Integrion would electronically route and connect the customer to the appropriate member depository institution, using software developed by Integrion that would facilitate communications between the customer's PC (or other device) and the depository institution's hardware and software.7 In this manner, the Integrion gateway will provide customers with access to the menu of electronic banking and financial services offered by their respective member depository institutions, including remote banking services;8 bill-payment functions; and access to stock quotations.9 The proposed activities appear to be data processing and transmission activities that are permissible for bank holding companies under section 4(c)(8) of the BHC Act and section 225.25(b)(7) of the Board's Regulation Y. The Board previously has determined by regulation that certain data processing and transmission activities are closely related to banking and therefore permissible for bank holding companies under section 4(c)(8) of the BHC Act. Regulation Y permits bank holding companies to provide data processing and transmission services, facilities, data bases, or access to such services, facilities, or data bases by any technological means, if the data to be processed or furnished are financial, banking, or economic in nature.10 Regulation Y also provides that bank holding companies may engage in incidental activities that are necessary to carry on an activity that is closely related to banking.11

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Internet Access In addition to providing these services, Integrion's gateway will provide customers of member depository institutions with a means of connecting to the Internet, a non-proprietary computer network that contains significant amounts of data that are not financial, banking, or economic in nature.12 As an accommodation to its member depository institutions and their customers, Integrion proposes to provide an electronic link to an Internet access provider.13 The Board previously has permitted bank holding companies providing permissible data processing and transmission services to financial institutions to process and transmit a limited amount of nonfinancial data for such institutions as an incidental activity.14 Notificants contend that member depository institutions desire to offer Internet access to their customers in order to make their package of banking and financial services more marketable, and to permit the institutions to compete more effectively with nonbank financial service providers. Notificants have indicated that providing Internet access to customers of member depository institutions would constitute a small part of Integrion's overall data processing and transmission activities,15 and would not require modification of the gateway's capabilities or systems. In addition, as noted above, Integrion would provide Internet access only as an accommodation to its member depository institutions, which in turn would offer Internet access to their customers only as part of a broader package of banking or financial services. In light of the foregoing, and based on all the facts of record, the Board has concluded that Integrion's provision of Internet access to customers of its member depository institutions is incidental to its permissible data processing and transmission activities. Other Considerations In order to approve this notice, the Board also must find that the performance of the proposed activities by Integrion "can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices."16 As part of the Board's evaluation of these factors, the Board considers the financial and managerial resources of the notificants and their subsidiaries and the effect the transaction would have on such resources.17 The Board notes that the capital ratios of Norwest and ABN AMRO North America, Inc. meet applicable risk-based capital standards and that each of the foreign bank Notificants maintains capital equivalent to the capital levels that would be required of a U.S. banking organization. Based on all the facts of record, the Board has concluded that financial and managerial considerations are consistent with approval.

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The Board believes that consummation of the proposal would enhance consumer convenience by expanding the availability of remote banking services and by making these services available in new ways. Consummation of the proposal would permit member depository institutions and their affiliates to deliver remote banking services to their customers more efficiently, and would establish a joint venture that pools the resources of a number of banking organizations for the purpose of developing data processing and transmission systems that would facilitate the creation and distribution of additional remote banking products that respond to consumer needs. In addition, the communications gateway operated by Integrion would allow member depository institutions and their affiliates to make existing remote banking services available to consumers through additional means, such as through personal financial software programs, screen phones, and the public Internet. There is no evidence in the record to indicate that consummation of the proposal would result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition,18 conflicts of interests, or unsound banking practices, that are not outweighed by the public benefits of this proposal.19 On the basis of the foregoing and all the facts of record, the Board has concluded that the public benefits reasonably to be expected from Integrion's proposed activities outweigh any possible adverse effects from the proposal, and, therefore, that the activities are a proper incident to banking under section 4(c)(8) of the BHC Act. Conclusion Based on the foregoing and all the facts of record, including the commitments discussed in this order and all other commitments and representations made by Notificants in connection with the notices, and subject to the terms and conditions set forth in this order, the Board has determined that the notices should be, and hereby are, approved. The Board's determination is subject to all the conditions set forth in Regulation Y, including those in sections 225.7 and 225.23(g) of Regulation Y (12 C.F.R. 225.7 and 225.23(g)), and to the Board's authority to require such modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to ensure compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's regulations and orders issued thereunder. The Board's decision is specifically conditioned on Notificants' compliance with the commitments made in connection with this notice and the conditions discussed in this order. The commitments and conditions relied on in reaching this decision shall be deemed to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be enforced in proceedings under applicable law.

By order of the Board of Governors,20 effective December 2, 1996. Jennifer J. Johnson Deputy Secretary of the Board

Footnotes 1 Royal Bank of Canada ("RBC"), Norwest Corporation ("Norwest") and Stichting Prioriteit ABN AMRO Holding ("ABN AMRO") and its subsidiaries listed above are hereafter collectively referred to as "Notificants". 2 Except as otherwise noted, asset and ranking data are as of December 31, 1995, and use exchange rates then in effect. 3 Asset and ranking data for Norwest are as of June 30, 1996. 4 The following national banks would become members of Integrion on consummation of the proposal: Bank of America NT & SA; NationsBank, N.A.; KeyBank, N.A.; Bank One, Columbus, N.A.; Mellon Bank, N.A.; Barnett Bank, N.A.; First Bank N.A.; PNC Bank, N.A; Michigan National Bank; The First National Bank of Chicago; Comerica Bank - Ann Arbor, N.A.; and Fleet National Bank. Each of these national banks has applied to the Office of the Comptroller of the Currency to invest in Integrion through an operating subsidiary of the bank. Washington Mutual Inc., a savings and loan holding company, also would become a member of Integrion and has provided notice of its intent to invest in Integrion to the Office of Thrift Supervision. 5 Notificants do not currently anticipate that Integrion's facilities would be used by member depository institutions to store customer account data. Notificants do expect that Integrion would store limited amounts of data related to transactions conducted through the gateway, such as information relating to bill payment instructions transmitted to member depository institutions. Integrion is permitted to store and transmit data to the extent permissible under section 225.25(b)(7) of the Board's Regulation Y. 12 C.F.R. 225.25(b)(7). 6 Customers using a PC may connect to the Integrion gateway through dedicated, private communications networks; through personal financial software programs; or through the Internet. 7 Integrion has contracted with IBM to provide the telecommunications and data network infrastructure necessary for Integrion to electronically link member depository institutions with their customers. Under this contract, communications between Integrion and member depository institutions will be transmitted through an existing, proprietary IBM telecommunications and data network.

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8 It is expected that the remote banking services offered by a member depository institution would include the ability to gain access to account information, transfer funds between accounts, obtain information on available loan or deposit products, apply for a loan, establish additional accounts, order checks, or communicate electronically with a customer service representative. 9 The individual banking and financial services that a customer would be able to gain access to through Integrion's gateway would depend on the products offered by the member depository institution. Such products and services would be offered by the member depository institution in its own name, and would be displayed to the customer using the graphics, logo, and service marks chosen and developed by the depository institution. Thus, it would appear to customers connecting to their depository institutions through the Integrion gateway that they are connected directly to the depository institution, and the data processing and transmission services provided by Integrion would be essentially transparent to consumers. 10 See 12 C.F.R. 225.25(b)(7); see also Cardinal Bancshares, Inc., 82 Federal Reserve Bulletin 674 (1996); and The Royal Bank of Canada, 82 Federal Reserve Bulletin 363 (1996) (bank holding companies may provide data processing and transmission services to financial institutions for purposes of allowing such institutions to offer electronic banking, bill payment, and stock quotation services). Notificants must provide these financial data processing and transmission services through Integrion in accordance with the limitations set forth in section 225.25(b)(7) of Regulation Y. 11 See 12 C.F.R. 225.21(a)(2). 12 Notificants must consult with the Federal Reserve System prior to providing, through Integrion, data processing or transmission services to any non-depository organization, or providing access to non-financial databases other than as described in this order, in order to permit the System to determine whether such activities are permissible under section 4 of the BHC Act and Regulation Y. 13 Integrion could, for example, provide access to the Internet through an electronic link to IBM's proprietary network, which maintains connections to a wide variety of public and proprietary databases and computer networks, or to other Internet access providers. 14 See BNCCORP, INC., 81 Federal Reserve Bulletin 295 (1995); see also First National of Nebraska, Inc., 82 Federal Reserve Bulletin 82 (1996). 15 Notificants expect that less than 10 percent of Integrion's revenues would be derived from providing Internet access to customers of member depository institutions. Notificants have committed that Integrion will provide nonfinancial data processing and transmission services in accordance with the limitations in Regulation Y and relevant Board orders. 16 12 U.S.C. § 1843(c)(8). 17 See 12 C.F.R. 225.24; see also The Fuji Bank, Limited, 75 Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve Bulletin 155 (1987). 18 The Board notes that, pursuant to the terms of Integrion's charter, Notificants and other members of Integrion will remain free to compete with each other and Integrion in the development and marketing of data processing and transmission networks similar to the Integrion gateway, as well as remote banking and other financial services. 19 In considering the public interest factors in this case, the Board has carefully considered the measures that Integrion and member financial institutions will take to protect the account data and other financial information that will be transmitted through the gateway from electronic interception, interference, or fraud. The Board previously has noted that the nature of the risks associated with providing electronic banking services is not different from those associated with more traditional forms of banking. See Cardinal Bancshares, Inc., 82 Federal Reserve Bulletin 674, 676 (1996). Among other security measures, Integrion and member depository institutions will use log-in passwords and encryption procedures to attempt to maintain the privacy and integrity of data transmitted. In addition, as part of its operations, Integrion will transmit data to member institutions through a private communications network. 20 Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and Governors Kelley, Lindsey, Phillips, and Meyer. Absent and not voting: Governor Yellen.

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1996 Orders on banking applications