There’s a law in this country that prevents any one bank from holding over 10% of the insured deposits. If Bank of America manages to hold on to its deal to buy Chicago’s LaSalle Bank, Bank of America would hold approximately 10.7% of deposits—about 5.1 billion dollars too much.
Bank of America says its confident that it will be able to slide under the cap should the deal go through. Said deal is currently being challenged by an uninvited takeover bid (of LaSalle’s parent company ABN Amro) by the Royal Bank of Scotland. Drama!
The 10% cap was instituted in 1994, when no banks were anywhere close to controlling 10%. Bank of America has been lobbying to get the cap removed, but has so far been unsuccessful. —MEGHANN MARCO
LaSalle Deal May Push Bank Of America Over 10% Deposit Cap [CNN Money]