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| ## Comptroller of the Currency                                        |
|                                                                       |
| > **Administrator of National Banks**                                 |
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Washington, D.C.

**Conditional Approval #658**

**November 2004**

**DECISION OF THE OFFICE OF THE COMPTROLLER OF THE CURRENCY**

**ON THE APPLICATIONS TO CONVERT**

**JPMORGAN CHASE BANK, NEW YORK, NEW YORK,**

**INTO A NATIONAL BANKING ASSOCIATION, AND**

**TO MERGE BANK ONE, N.A., CHICAGO, ILLINOIS,**

**AND BANK ONE, N.A., COLUMBUS, OHIO,**

**WITH AND INTO THE CONVERTED BANK**

**October 13, 2004**

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

##### I. INTRODUCTION 

On July 9, 2004, JPMorgan Chase Bank, New York, New York, ("JPMCB") a
New York state chartered bank, applied to the Office of the Comptroller
of the Currency ("OCC") for approval to convert into a national banking
association with the title "JPMorgan Chase Bank, National Association,
("JPMCB-National"), under 12 U.S.C. § 35 (the "Conversion"). Approval
was also requested, under 12 U.S.C. § 92a, for JPMCB-National to
exercise fiduciary powers similar to those currently exercised by JPMCB.

JPMCB currently operates branches in New York, New Jersey, Connecticut,
and Texas, and in the application, approval is requested for
JPMCB-National to retain those branches under 12 U.S.C. § 36(b)(1).
JPMCB also currently has a number of domestic subsidiaries and other
investments (described in Part II-A-3), and approval is requested for
JPMCB-National to retain these subsidiaries and investments. Upon the
Conversion, the board of directors of the bank will change, and a waiver
of the residency requirement for the board of directors of the converted
bank is requested under 12 U.S.C. § 72.

On July 9, 2004, application was also made for approval to merge Bank
One, National Association, Chicago, Illinois, ("Bank One Chicago") and
Bank One, National Association, Columbus, Ohio, ("Bank One Columbus")
with and into JPMCB-National under the charter and title of
JPMCB-National under 12 U.S.C. §§ 215a-1, 1828(c), and 1831u (the
"Merger"). It is contemplated that the Merger will occur immediately
after the Conversion. All three banks are insured by the Federal Deposit
Insurance Corporation. The three banks are affiliates, owned by J.P.
Morgan Chase & Co., ("JP Morgan") a financial holding company within the
meaning of the Bank Holding Company Act. At the time of the Merger,
JPMCB-National will operate branches in New York, New Jersey,
Connecticut, and Texas. Bank One Chicago and Bank One Columbus operate
branches in Arizona, Colorado, Florida, Illinois, Indiana, Kentucky,
Louisiana, Michigan, Ohio, Oklahoma, Texas, Utah, West Virginia, and
Wisconsin.

In the Merger application, OCC approval is also requested for
JPMCB-National, as the bank resulting from the Merger, to retain Bank
One Columbus' main office[^1] in Columbus, Ohio, as the main office of
the resulting bank under 12 U.S.C. § 1831u(d)(1), and to retain the main
offices of Bank One Chicago and JPMCB-National and the branches of all
three banks as branches after the Merger under 12 U.S.C. §§ 36(d) &
1831u(d)(1). In the Merger application, a waiver of the residency
requirement for the board of directors of the resulting bank is
requested under 12 U.S.C. § 72.

The banks published notice of the applications in *The Chicago Tribune,
The Columbus Dispatch,* and the *New York Post* on July 9, July 24, and
August 8, 2004. The OCC received no comments on the applications.

##### II. LEGAL AUTHORITY FOR THE TRANSACTIONS

##### A. The Conversion 

**1. Authority for the Conversion, Fiduciary Powers, and Directors'
Residency Waiver**

State banks may convert to a national charter under 12 U.S.C. § 35.
Section 35 provides in relevant part:

> Any bank incorporated by special law of any State or of the United
> States or organized under the general laws of any State or of the
> United States and having an unimpaired capital sufficient to entitle
> it to become a national banking association under the provisions of
> the existing laws may, by the vote of the shareholders owning not less
> than fifty-one per centum of the capital stock of such bank or banking
> association, with the approval of the Comptroller of the Currency be
> converted into a national banking association, with a name that
> contains the word "national": *Provided, however,* That said
> conversion shall not be in contravention of the State law.

Revised Statutes § 5154, 12 U.S.C. § 35.

JPMCB is a bank organized under the general laws of the State of New
York, and so it is a "state bank" within the meaning of section 35. The
conversion would not be in contravention of state law. New York permits
New York state banks and trust companies to convert to a national
charter.[^2] Only New York law, and not also the laws of New Jersey,
Connecticut, and Texas where JPMCB operates branches, is relevant to
this requirement. The requirement that the conversion "not be in
contravention of state law" refers only to the law of the state of
organization of the state bank that is converting, since the requirement
pertains to the authority to convert, an aspect of the corporate
organization and existence of the state bank, not to banking powers or
branching operations.[^3] JPMCB also meets the other criteria in section
35. It has capital sufficient to meet the statutory requirement for a
national bank. JP Morgan, the sole shareholder, has approved the
conversion. Thus, the Conversion is authorized under section 35.

JPMCB currently has fiduciary powers and exercises those powers in the
four states in which it operates. It will continue that business and its
fiduciary appointments[^4] and so requested OCC approval to exercise
fiduciary powers under 12 U.S.C. § 92a. Under section 92a(a), the OCC
may grant a national bank the right to act in the fiduciary capacities
listed in the statute and in any other fiduciary capacities permitted to
state banks and trust companies in the states in which the national bank
is located, when not in contravention of state law.[^5]

JPMCB-National proposes to act in the same range of fiduciary capacities
that JPMCB exercises now, and it will act in a fiduciary capacity in
each of the four states in which it presently operates. Each of those
states permits its own state banks or trust companies to act in a full
range of fiduciary capacities,[^6] and so national banks in those states
may do likewise. In addition, under section 92a(i), the OCC may not
grant fiduciary powers to a national bank unless the bank has at least
the minimum capital required by state law for state banks and trust
companies. JPMCB's capital exceeds the minimum required under the laws
of the four states, and JPMCB-National's capital will continue to do so
after the conversion. Accordingly, the OCC may grant fiduciary powers to
JPMCB-National.

Upon the Conversion, the board of directors of JPMCB will change, and
some of the members of the board of JPMCB-National may not meet the
residency requirement of 12 U.S.C. § 72. Under 12 U.S.C. § 72, a
majority of the board of directors of a national bank must reside in the
state in which the bank is located or within 100 miles of the location
of the office of the association, except that the OCC may waive the
requirement of residency.[^7] JPMCB has requested a waiver of the
residency requirement for JPMCB-National, both after the Conversion and
after the Merger, based on the necessity of selecting directors with
experience in various areas of the bank's operations who might not meet
the residency requirement and based on the wide geographic scope of
JPMCB-National's operations. The OCC has authority to grant waivers of
the residency requirement, and we deem it appropriate to do so in this
instance.

##### 

**2. Retention of Branches in the Conversion**

The authority of JPMCB-National, as the national bank resulting from the
Conversion, to retain the existing branches of JPMCB is governed by
12 U.S.C. § 36(b)(1). Section 36(b)(1) provides:

> A national bank resulting from the conversion of a State bank may
> retain and operate as a branch any office which was a branch of the
> State bank immediately prior to conversion if such office ---
>
> \(A\) might be established under subsection (c) of this section as a
> new branch of the resulting national bank, and is approved by the
> Comptroller of the Currency for continued operation as a branch of the
> resulting national bank;
>
> \(B\) was a branch of any bank under February 25, 1927; or
>
> \(C\) is approved by the Comptroller of the Currency for continued
> operation as a branch of the resulting national bank.
>
> The Comptroller of the Currency may not grant approval under clause
> (C) of this paragraph if a State bank (in a situation identical to
> that of the national bank) resulting from the conversion of a national
> bank would be prohibited by the law of such State from retaining and
> operating as a branch an identically situated office which was a
> branch of the national bank immediately prior to conversion.

12 U.S.C. § 36(b)(1).

JPMCB-National has the authority to retain JPMCB's branches under both
Clause (A) and Clause (C).[^8] Under Clause (A), the resulting national
bank may retain any branch of the converting state bank if that branch
might be established as a new branch of the resulting national bank
under 12 U.S.C. § 36(c). Under section 36(c), a national bank may
establish branches at any point within the state in which the national
bank "is situated," if such establishment is authorized for state banks
by the statute law of the state in question. Thus, to apply Clause (A),
it is necessary to determine in which state the resulting national bank
"is situated."

JPMCB has its main office in New York and branches in New York, New
Jersey, Connecticut, and Texas. Thus, this matter involves the
application of section 36(b)(1) in the context of a conversion of a
state bank that already operates branches on an interstate basis. The
OCC has previously addressed section 36(b)(1) in that context. We
determined that the proper interpretation of section 36(b)(1) is that a
national bank that results from the conversion of an interstate state
bank is situated in each state in which the state bank had its main
office or branches and then the provisions of sections 36(b) and (c) are
applied on that basis.[^9]

Essentially, we give effect to the existing extent of the state bank
when it first becomes subject to the national bank branching framework
of section 36. In this regard, our treatment of a converting interstate
state bank is similar to the statutory treatment of existing interstate
national banks on February 25, 1927, and the caselaw treatment of
subsequent branching by those banks. When existing interstate national
banks first became subject to the framework of section 36 in 1927, they
were permitted to retain their existing branches. *See* 12 U.S.C.
§ 36(a). Then, when one of those banks later applied to establish an
additional branch in a state in which it had one of its pre-1927
branches, the courts held it was situated in that state for section
36(c) purposes, and could establish branches to the same extent as state
banks of that state. It was not viewed as situated only in the state of
its main office.[^10]

Thus, for purposes of applying section 36(b)(1), JPMCB-National is
situated in each of the four states in which JPMCB had its main office
or branches. JPMCB-National may retain the branches in each state under
section 36(b)(1)(A) because a national bank situated in each of those
states could establish new branches at all the locations in that state.
New York authorizes its state banks to establish branches at any
location within the state, except that a bank is restricted from opening
a branch in a city or village (except for the city or village in which
its principal office is located) with a population of fifty thousand or
less in which is already located the principal office of another
bank.[^11] JPMCB represents that it is in compliance with section
105(a). Each of the other three states (New Jersey, Connecticut, and
Texas) authorizes its own state banks to establish branches within the
state without geographic limitation.[^12] Thus, a national bank situated
in each state could establish JPMCB's branch locations as branches under
section 36(c). Therefore, JPMCB-National may retain them under section
36(b)(1)(A).

Similarly, JPMCB-National also may retain the branches in each state
under section 36(b)(1)(C) because an identically situated state bank
resulting from the conversion of an interstate national bank would not
be prohibited by the law of each state from retaining identically
situated offices that were branches of the national bank before the
conversion. We have found no laws of any of the states that by their
terms expressly prohibit a state bank resulting from the conversion of
an interstate national bank from retaining its branches.

Moreover, JPMCB-National's retention of the branches in the four states
is also consistent with additional provisions added to section 36 by the
Riegle-Neal Act in 1994.[^13] The Riegle-Neal Act authorized banks to
engage in interstate mergers and operate the acquired branches in other
states, to acquire single branches in other states, and to establish *de
novo* branches in other states, subject to provisions set out in the
Act. The Act also added a provision to section 36 to limit the ability
to acquire branches in new states to specified ways:

> Effective June 1, 1997, a national bank may not acquire, establish, or
> operate a branch in any State other than the bank's home State (as
> defined in subsection (g)(3)(B) of this section) or a State in which
> the bank already has a branch unless the acquisition, establishment,
> or operation of such branch in such State by such national bank is
> authorized under this section or section 1823(f), 1823(k), or 1831u of
> this title.

12 U.S.C. § 36(e)(1).

JPMCB-National's retention of the branches complies with the terms of
section 36(e) in two ways. First, JPMCB already operates branches in the
four states, and so the national bank resulting from the conversion is
not acquiring, establishing, or operating a branch in a state other than
one in which the bank already has a branch. The national bank that
results from the conversion of a state bank continues the corporate
identity and existence, property, assets, and banking business of the
state bank.[^14] Thus, as the continuation of JPMCB, JPMCB-National is
not acquiring, establishing, or operating branches in a new state in
which it did not have a branch before. Second, as discussed above,
JPMCB-National is authorized to retain the branches under sections
36(b)(1)(A)&(C), a part of "this section" included in section 36(e)(1).

JPMCB-National's retention of the branches complies with the intent of
the Riegle-Neal Act as well. Nowhere did Congress evidence an intent
that a state bank with existing interstate branches obtained through
earlier transactions under the Riegle-Neal Act that later proposes to
convert into a national bank, or a national bank with existing
interstate branches that later proposes to convert into a state bank,
would have to divest its existing branches in states other than its main
office state and re-establish them anew only if permissible as a new
bank from that main office state.

Accordingly, JPMCB-National may retain the offices of JPMCB that were
branches of JPMCB immediately prior to the conversion under section
36(b)(1).[^15]

##### 3. Retention of Subsidiaries and Investments 

JPMCB has a number of subsidiaries and other equity investments that
will become subsidiaries and investments of JPMCB-National after the
Conversion and will continue as such after the Merger. JPMCB requests
OCC approval for the resulting national bank to retain them.[^16] Except
for one group of related subsidiaries (discussed in section 3-a-(vii)
below), all of the subsidiaries and investments involve activities that
are clearly permissible for national banks by statute, regulations, and
prior OCC precedent.

**a. Operating subsidiaries**

Most of JPMCB's domestic subsidiaries qualify as operating subsidiaries.
Operating subsidiaries are those that conduct activities that are
permissible for a national bank to engage in directly and conduct those
activities pursuant to the same authorization, terms, and conditions
that apply to the conduct of those activities by their parent bank.
12 C.F.R. § 5.34(e)(1), (3). JPMCB proposes to retain the operating
subsidiaries set out below. All of the subsidiaries are wholly-owned by
JPMCB, unless otherwise noted.

**(i) Real estate lending and related activities**

JPMCB has several subsidiaries that engage in residential real estate
lending, commercial real estate lending, and related activities. These
subsidiaries are legally permissible because national banks and their
operating subsidiaries may make, purchase, sell, service or warehouse
loans or other extensions of credit for their own or another's account.
12 U.S.C. §§ 24(Seventh) & 371; 12 C.F.R. § 5.34(e)(v)(C) & (D).
Moreover a national bank may securitize and sell assets that it holds.
12 C.F.R. § 1.3(g).

***Chase Manhattan Mortgage Corporation ("CMMC").*** CMMC is engaged in
the mortgage banking business, including the origination and servicing
of home mortgage loans and other related services directly and through
subsidiaries, Chase Ventures Holdings, Inc. ("CVHI") and Blue Box
Holdings Inc. ("Blue Box").[^17] CMMC, and its subsidiaries, were
previously subsidiaries of JPMCB's affiliated national bank, Chase
Manhattan USA, National Association ("Chase USA"). In 2002, CMMC was
transferred to JPMCB as part of an internal restructuring.

CVHI participates, through one or more existing subsidiaries or through
ones that may be established in the future, in joint ventures to conduct
residential mortgage brokerage and lending activities. These joint
ventures are conducted in accordance with the OCC's original approval
dated May 9, 1997. *See* OCC Conditional Approval No. 243 (May 9, 1997)

Blue Box is engaged in two joint ventures with The First American
Corporation ("First American"), CVMS and Quantrix LLC ("Quantrix"). CMMC
and First American are the only managing members of the companies, and
each has appointed managers to manage the companies. CVMS provides
technology and related services to JPMCB and affiliates, including
placing orders with vendors, providing electronic confirmation back to
the customer, providing metrics on vendor performance, and providing
consolidated billing and reconcilement capabilities. Quantrix provides
settlement and other real estate related services.

JPMCB represents that both the CVHI joint ventures and the Blue Box
joint ventures meet the four criteria used to assess the permissibility
of non-controlling equity investments by national banks.[^18]

***Chase Mortgage Holdings, Inc.*** This subsidiary serves as a holding
company for mortgages originated by CMMC outside of the state of New
York.

***Chase Preferred Capital Corporation ("CPCC").*** This subsidiary is a
recognized real estate investment trust under the Internal Revenue Code.
CPCC currently holds for investment closed-end home equity loans that
were originated by CMMC and Chase USA. It also lends money to CMMC and
Chase USA secured by open-end home equity loans made by CMMC and Chase
USA.

***JPMorgan Healthcare and Housing Funding Corporation.*** This
subsidiary engages in the following activities: (i) origination and
servicing of multifamily housing and healthcare mortgage loans, insured
under Federal Housing Administration ("FHA") mortgage insurance
programs, and other mortgage programs offered by conventional non-FHA
lenders, (including instances where such loans will serve as collateral
for mortgage revenue bond issuances), (ii) mortgage loan placement in
instances where there is no contemplated mortgage revenue bond issuance,
and (iii) the provision of advisory and consulting services in
connection with real estate mortgages.

***J.P. Morgan Chase Commercial Mortgage Securities Corp. ("CMSC").***
This subsidiary is a special purpose corporation used by JPMCB for its
commercial mortgage backed securities ("CMBS") conduit program.

***J.P. Morgan Mortgage Capital Inc. ("JPMMC").*** This subsidiary
assists JPMCB in its CMBS conduit program under which JPMCB originates
CMLS for later securitization as CMBS. JPMMC acts as agent for JPMCB in
the origination of the loans.

***J.P. Morgan Mortgage Acquisition Corp. ("JPMMAC").*** This subsidiary
is a part of JP Morgan's principal finance mortgage backed securities
("MBS") platform. JPMMAC purchases whole residential mortgage loans that
are typically sold in pools by mortgage originators, including JPMCB and
third-party originators. The pools that are purchased by JPMMAC
typically are held for approximately 8 - 12 weeks and then aggregated
with other pools for sale to J.P. Morgan Acceptance Corporation, which
sells MBS backed by such pools.

**(ii) Other types of lending and related activities**

JPMCB has several subsidiaries that engage in other types of lending and
related activities. These subsidiaries are legally permissible because
national banks and their operating subsidiaries may make, purchase,
sell, service or warehouse loans or other extensions of credit for their
own or another's account. 12 U.S.C. §§ 24(Seventh); 12 C.F.R.
§ 5.34(e)(v)(C) & (D). Moreover a national bank may securitize and sell
assets that it holds. 12 C.F.R. § 1.3(g).

***Chase Education Holdings, Inc. ("CEH").*** This subsidiary holds
JPMCB's 50% ownership interest in a limited liability company, Education
First Finance, LLC ("Education First"), that is part of a joint venture
with the Student Loan Marketing Association ("Sallie Mae") relating to
the student loan business. Sallie Mae owns the other 50% of Education
First. Education First purchases federally guaranteed student loans from
JPMCB and immediately sells them to Sallie Mae. Another subsidiary of
JPMCB, TCB Education First Marketing Corporation, holds JPMCB's 50%
interest in a second limited liability company, Chase Education First
L.L.C ("Chase Education"), with the other 50% owned by Sallie Mae. Chase
Education is the exclusive marketing representative for federally
guaranteed student loans made by JPMCB. It also markets certain private
student loans made by Chase USA.

***Chase Manhattan Automotive Finance Corporation ("CMAFC").*** This
subsidiary provides services with respect to loans to be made or
purchased by it affiliates, JPMCB and Chase USA.

***Systems & Services Technologies, Inc. ("SST").*** This subsidiary is
a consumer receivable servicing company. SST's principal servicing
business pertains to consumer automobile receivables.

***Cedar Hill International Corp. ("Cedar Hill").*** This subsidiary was
originally established to be used to invest in performing and
nonperforming loan portfolios, including portfolios of mortgage loans
secured by properties in foreign jurisdictions. It is no longer being
used to book new business of this sort, and its remaining holdings are
small.

***Chase SPV Corporation ("Chase SPV").*** This subsidiary was
established as a special purpose entity to facilitate the making of a
loan financed by the issuance of commercial paper supported by a
liquidity facility provided by a group of banks. Chase SPV entered into
a series of transactions in which Chase SPV essentially made a five-year
self-amortizing loan. Chase SPV is not engaging in any new transactions
at the present time.

***Flagstaff Capital Corporation ("Flagstaff").*** This subsidiary was
established as a special purpose entity to facilitate the making of a
loan by a group of banks. Flagstaff entered into a series of
transactions in which Flagstaff essentially made a five-year
self-amortizing loan. At the present time, Flagstaff is not engaging any
new transactions.

Cedar Hill, Chase SPV, and Flagstaff have engaged in structured loan
transactions. Chase SPV and Flagstaff were each formed to engage in a
specific transaction. Any future complex structured finance transactions
by JPMCB-National or its operating subsidiaries will be subject, as
appropriate, to notification or approval requirements, OCC supervisory
oversight and application of policy guidance on complex structured
finance transactions. *See* 69 Fed. Reg. 28980 (May 19, 2004).

In this regard, we also note that J.P. Morgan Chase & Co., JPMCB's
holding company, entered into a Written Agreement, dated July 28, 2003,
with the Federal Reserve Bank of New York and the New York State Banking
Department under which J.P. Morgan Chase & Co. undertook to adopt and
implement strengthened credit risk management and legal and reputational
risk management programs applicable to J.P. Morgan Chase & Co. and its
subsidiaries, especially regarding complex structured finance
transactions. J.P. Morgan Chase & Co. and its subsidiaries, including
JPMCB, have been implementing measures responsive to the Written
Agreement. After the Conversion and the Merger, the OCC will monitor the
implementation of the measures that pertain to the bank as part of the
OCC's ongoing supervision, and approval of the application is made
subject to JPMCB-National's continued implementation of appropriate
measures to facilitate compliance with the Written Agreement.

**(iii) Personal property leasing and lease financing**

JPMCB has three subsidiaries (Chase Funding Corporation, J.P. Morgan
Leasing Inc., and Manufacturers Hanover Leasing International Corp.)
that are engaged in the business of personal property and equipment
leasing (including rail cars and commercial aircraft) and lease
financing. Manufacturers Hanover Leasing International Corp. also
engages in leasing activities through two subsidiaries, Chase Leasing of
Texas, Inc., and JPMC Leasing Services, Inc. These activities are
permissible for national banks. 12 U.S.C. §§ 24(Seventh) & 24(Tenth);
12 C.F.R. § 5.34(e)(v)(M); 12 C.F.R. Part 23.

**(iv) Financial advice, investment advice, and related activities**

JPMCB has several subsidiaries that engage in various forms of financial
advice, investment advice, and related activities. These subsidiaries
are legally permissible because national banks and their operating
subsidiaries may offer investment advice, investment management
services, and financial and transaction advice. 12 U.S.C.
§§ 24(Seventh); 12 C.F.R. § 5.34(e)(v)(I) & (K).

***J.P. Morgan Realty Advisors, Inc.*** This subsidiary provides
financial and transactional advice to clients and assists clients in
structuring, arranging, and executing various real estate-related
financial transactions, including debt placements, assets sales, and
sale-leasebacks.

***J.P. Morgan Alternative Asset Management, Inc.*** This subsidiary is
an investment fund manager that specializes in offering alternative
investment portfolios that utilize hedge funds. As part of its services,
it develops and manages alternative investment products and evaluates,
selects, and monitors third-party alternative investment managers for
its clients.

***Plexus Group, Inc. ("Plexus").*** This subsidiary is a registered
investment advisor and is engaged in the business of providing
transaction cost analysis, trade research, and consulting services that
are used by investment managers, pension fund sponsors, and brokerage
firms.

***Chase Manhattan of Wyoming.*** This subsidiary organizes and provides
administrative services to limited liability companies (LLCs),
established pursuant to Wyoming law to operate as private investment
companies for institutional investors and high-net-worth individuals.

***J.P. Morgan Partners (23A SBIC Manager), Inc. ("SBIC Manager").***
This subsidiary serves as the managing partner of J.P. Morgan Partners
(23A SBIC), L.P. ("JPMP SBIC"). It also holds an 80% ownership interest
in JPMP SBIC, with the remaining 20% owned by JPMP Master Fund Manager,
LP, an indirect subsidiary of JP Morgan. JPMP SBIC is a Delaware limited
partnership organized to operate as a small business investment company
("SBIC"), under a license from the U.S. Small Business Administration.
It makes qualifying investments as authorized by the SBIC Act. SBIC
Manager's management of the investments made by JPMP SBIC is permissible
as a lending activity or investment securities activity with respect to
qualifying investments that are loans or investment securities and as
investment management generally for those assets and others. Its
ownership interest in JPMP SBIC is permissible under 15 U.S.C. § 682(b)
under which national banks are expressly authorized to invest in small
business investment companies.

***J.P. Morgan Realty Asset Management, Inc., ("JPMRAMI").*** This
subsidiary acted as the asset manager for the Harvest Opportunity Fund,
L.L.C. (\"Harvest"). JPMRAMI managed, collected and disposed of
Harvest\'s portfolio which consisted of loans transferred from JPMCB.
The portfolio has been disposed of, and Harvest is winding down. JPRAMI
is inactive, and once all final accountings have been completed, it will
be dissolved.

**(v) Data processing and financial processing services**

JPMCB has several subsidiaries that engage in data processing, financial
processing, transaction services, and other services for the bank, its
affiliates, and other financial institutions. These subsidiaries are
legally permissible because national banks and their operating
subsidiaries may offer services to the bank and its affiliates and to
other financial institutions, 12 C.F.R. §§ 5.34(e)(v)(B) & (F) and
7.5007, and may offer data processing services involving banking,
financial, or economic data, 12 C.F.R. § 7.5006(a).

***Chase Image Archive Services Inc. ("Chase Image").*** This subsidiary
holds JPMCB's noncontrolling ownership interest in Viewpointe Archive
Services, LLC ("Viewpointe"). Viewpointe was formed in 2000 as a joint
venture among Chase Image and several unrelated parties. Viewpointe
provides check image archive services, including the loading, electronic
storage, and on-line retrieval of digital images of checks and check
statements to its member financial institutions and other financial
institutions. It also offers related services, such as advice, check
image systems design, implementation, and equipment leasing. JPMCB
represents that its ownership interest in Viewpointe meets the criteria
used to assess the permissibility of non-controlling equity investments
by national banks, see note 18 above.

***Chase Merchant Ventures, Inc.*** This subsidiary holds JPMCB's
interest in Chase Merchant Services, L.L.C. ("CMS"). CMS is a joint
venture between JPMCB and First Data Merchant Services Corporation. CMS
is a merchant acquirer that contracts with merchants to process Visa and
MasterCard credit and debit transactions conducted by the merchants'
customers. JPMCB represents that its ownership interest in CMS meets the
criteria used to assess the permissibility of non-controlling equity
investments by national banks, see note 18 above.

***J.P. Morgan FCS Corporation ("FCS").*** This subsidiary markets and
provides software applications to JPMCB and its affiliates, unaffiliated
financial institutions, investment managers, and other financial
services companies. FCS's products are designed to provide users with
the ability to efficiently manage portfolios of syndicated bank loans
and other types of high-yield and alternative debt issues.

***J.P. Morgan Custody Services, Inc. ("Custody").*** This subsidiary
provides business services and data processing and warehousing products,
services and related activities for JPMCB and its affiliates. Custody
also serves as trustee on certain deeds of trust on mortgages serviced
by JPMCB's affiliates.

***J.P. Morgan Treasury Technology Services ("JPMTTS").*** This
subsidiary provides technological services to JPMCB and its affiliates
in support of their Cash Management and Trade and Treasury Management
Services businesses through its back office operations center in
Florida. JPMTTS also provides similar services to The Clearing House
Service Company L.L.C.

**(vi) Stored value and electronic benefit transfer**

JPMCB has three subsidiaries that offer stored value and electronic
benefit transfer services. J.P. Morgan Electronic Financial Services,
Inc., a provider of services related to the electronic delivery of (i)
government issued payments through electronic benefits transfer ("EBT")
and pre-paid/stored value cards for state and federal government
agencies, and (ii) stored value services for private institutions. TCB
Mondex Originator Member USA, Inc., holds JPMCB's interest in Mondex USA
Originator LLC, which owns an ownership interest in a stored value
system known as "Mondex." TCB Mondex Member USA, Inc., holds JPMCB's
interest in Mondex USA Services LLC, which acts as the servicing entity
for the Mondex UAS services.[^19] These electronic benefit transfer and
stored value activities are permissible for national banks. 12 C.F.R.
§ 5.34(e)(v)(Y) & 7.5002(a)(3).

**(vii) Other operating subsidiaries**

***J.P. Morgan Property Exchange Inc., J.P. Morgan Property Holdings
LLC, and J.P. Morgan Aircraft Holdings Inc. (collectively, the "JPEX
entities").*** These subsidiaries engage in the business of arranging
and facilitating, for customers, exchanges of like kind property under
Section 1031 of the Internal Revenue Code. The JPEX Entities advise and
consult with customers on the structure of the transaction and its
suitability for a like kind exchange. They assist in reviewing property
information, in reviewing technical tax requirements, and in preparing
documentation. They also act as Qualified Intermediary and Exchange
Accommodation Titleholder to fulfill Internal Revenue Code requirements
for the customer to qualify for deferral of an otherwise taxable gain
under Section 1031.

The OCC previously has approved national banks and their operating
subsidiaries offering like kind exchange services in certain
contexts,[^20] and many of the activities of the JPEX Entities are
similar to what the OCC has approved before. The OCC is continuing to
review the other subject activities and will address their
permissibility separately. Until the review is complete, the JPEX
Entities may continue to engage in this activity for up to two years,
consistent with OCC policy to permit national banks resulting from a
conversion or merger to have a reasonable period of time to demonstrate
that an activity conforms to activities permissible for a national bank
or to divest any nonconforming activities.[^21] Accordingly, if the
activity is determined not to be permissible, then JPMCB National must
divest the activity within two years from the date of the conversion.

***Colson Services Corp. ("Colson").*** This subsidiary is principally
engaged in the financial record-keeping business for a variety of
government-guaranteed and non-guaranteed loan programs. It also acts as
the Fiscal and Transfer Agent for the Small Business Administration's
7(a) Secondary Market Program and Central Servicing Agent for the Small
Business Administration's 504 Loan Program. Colson also provides
recordkeeping and paying agent services for a number of other programs
including the Federal Agriculture Mortgage Corporation's Farmer Mac II
programs and the Finance Authority of Maine ("FAME") secondary market
program for FAME insured business loans. Colson's activities are legally
permissible because national banks and their operating subsidiaries may
make, purchase, sell, service or warehouse loans or other extensions of
credit for its own or another's account. 12 C.F.R. § 5.34(e)(v)(C) &
(D). And they may serve as a transfer or fiscal agent. 12 C.F.R.
§ 5.34(e)(v)(W).

***DPC subsidiaries.*** JPMCB has a large number of subsidiaries that
hold property acquired through foreclosure or otherwise in satisfaction
of debts previously contracted or that are otherwise used by the bank in
loan workouts. This is a permissible activity for national banks and
their operating subsidiaries. 12 C.F.R. § 5.34(e)(v)(A).

***Nominee custody subsidiaries.*** JPMCB has a large number of nominee
custody subsidiaries that are organized solely for the purpose of
registering securities that JPMCB or its affiliates hold as trustee or
custodian. This is permissible for a national bank and its operating
subsidiaries under 12 C.F.R. § 5.34(e)(v)(A) (holding assets acquired by
the parent bank) & (B) (providing services to or for the bank or its
affiliates). It is also permissible as part of or incidental to a
national bank's authority to provide trust, custody and safekeeping
services.

***Inactive or dormant subsidiaries.*** JPMCB has several inactive or
dormant subsidiaries. These subsidiaries result, among other reasons,
when a subsidiary's business is sold, but the resulting shell company
has not been dissolved, or when a company is formed, but not immediately
used to conduct any business. A national bank's ownership of such
inactive companies is permissible. If JPMCB-National in the future
proposes to activate such a subsidiary and commence new activity in it,
it must comply with the applicable filing requirements.

**b. Bank premises subsidiaries**

JPMCB has a number of subsidiaries that own or manage premises used by
the bank. This is permissible for national banks. 12 U.S.C. §§ 29(First)
& 371d; 12 C.F.R. § 5.37.

**c. Bank service companies**

JPMCB has three bank service companies. JPMCB owns 100% of Chase Access
Services Corporation ("CAS"). JPMCB owns 90% of Chase Automated Clearing
House, Inc., ("CACH") with the remaining 10% owned by its national bank
affiliate, Chase USA. Both CAS and CACH provide only services to
depository institutions for which no prior approval is necessary under
12 U.S.C. § 1862. *See also* 12 C.F.R. § 5.35(f)(3).

JPMCB's third bank service company is CSL Leasing Inc. ("CSL"). CSL is
wholly-owned by JPMCB. CSL is engaged in the leasing of real estate and
related personal property on a full pay-out basis to the extent
permitted under Regulation Y of the Board of Governors of the Federal
Reserve System (the "Board"), 12 C.F.R. § 225.28(b)(3). National banks
are authorized to own such bank service companies. 12 U.S.C. § 1864(f);
12 C.F.R. § 5.35(f)(4). Thus, JPMCB-National may continue to own CSL. No
additional OCC approval is required for JPMCB to retain its ownership in
CSL because the acquisition was approved by the Board under
section 1865(b) & (c). *See* 12 C.F.R. § 5.35(f)(1) & (4).

**d. Community development investments**

JPMCB currently has approximately \$937,763,000 in previously made
community development investments and outstanding commitments.
JPMCB-National will retain these investments under the investment
authority of 12 U.S.C. § 24(Eleventh) and 12 C.F.R. Part 24 concerning
national bank investments in community and economic development
entities, community development projects, and other public welfare
investments.

The previously made investments include \$446,019,000 in investments
made directly by JPMCB that involve affordable housing primarily
benefiting low- and moderate-income persons using federal low-income
housing tax credits, or that are in community and economic development
entities that were permitted by the OCC for other national banks under
Part 24. That amount also includes an investment in the New York
Business Development Corporation, a nonprofit corporation formed under
New York State Banking Law § 215, which provides financing for small-
and medium-size businesses. The investment would be considered a
qualified investment under 12 C.F.R. § 25.23, the OCC's Community
Reinvestment Act regulation.

The previously made investments also include \$491,744,000 in
investments and unfunded commitments made by the Chase Community
Development Corporation ("Chase CDC"), a wholly-owned subsidiary of
JPMCB that will be a subsidiary of JPMCB-National after the Conversion
and after the Merger. The purpose of the Chase CDC is to make equity and
debt investments in projects designed primarily to promote community
welfare, such as by providing loans and investments for affordable
housing or small businesses in low- and moderate-income communities.

The foregoing investments promote the public welfare consistent with
12 U.S.C. § 24(Eleventh) and 12 C.F.R. § 24.3 by primarily benefiting
low- and moderate-income persons, low- and moderate-income areas, or
other areas targeted by a government entity for redevelopment, or the
investments would receive consideration under 12 C.F.R. § 25.23 as a
qualified investment. Thus, JPMCB-National may retain them.

**e. Other equity investments**

JPMCB has two non-controlling investments in Depository Trust & Clearing
Corporation ("DTC") and Small Value Payments Company ("SPVC"). DTC
provides clearance, settlement, and information services for equities,
corporate and municipal bonds, government and mortgage-backed
securities, over-the-counter credit derivatives and emerging market debt
trades. DTC has a wholly-owned subsidiary, Emerging Markets Clearing
Corporation, that provides trade matching, clearance, settlement and
risk management services to global interdealer brokers and correspondent
clearing firms involved in emerging market and debt instruments. SPVC
provides electronic payment and check electronification services to
financial institutions through Automated Clearing House, electronic
check presentment and check verification and conversion services. These
investments are permissible, as national banks may make investments in
entities providing securities clearing and settlement activities, check
clearing, presentment, and payment services, and related services.[^22]

**f. Nonconforming assets**

JPMCB has also requested permission for JPMCB-National to retain certain
assets of JPMCB that do not conform to the requirements for assets
acquired and held by national banks. These nonconforming assets are real
estate, equity securities and other assets that JPMCB acquired in
satisfaction of debts previously contracted ("DPC") in loan workouts or
similarly. The OCC will permit JPMCB-National to retain these DPC assets
subject to the requirements applicable to national banks.

Accordingly, after the Conversion and Merger, JPMCB-National may retain
the foregoing subsidiaries and other investments that JPMCB held at the
time of the Conversion.[^23]

In conclusion, the Conversion is authorized, JPMCB-National may be
granted fiduciary powers, and it may retain the branches, subsidiaries,
and other investments of JPMCB.

##### B. The Merger 

**1. Authority for the Merger**

In the proposed Merger, Bank One Columbus and Bank One Chicago will
merge with JPMCB-National. This is a merger between insured national
banks with different home states (Ohio, Illinois, and New York). Mergers
of insured banks with different home states are authorized under section
44 of the Federal Deposit Insurance Act:

> \(1\) In General. \-- Beginning on June 1, 1997, the responsible
> agency may approve a merger transaction under section 18(c) \[12
> U.S.C. § 1828(c), the Bank Merger Act\] between insured banks with
> different home States, without regard to whether such transaction is
> prohibited under the law of any State.

12 U.S.C. § 1831u(a)(1).[^24] The Riegle-Neal Act permitted a state to
elect to prohibit such interstate merger transactions under section 44
involving a bank whose home state is the prohibiting state by enacting a
law between September 29, 1994, and May 31, 1997, that expressly
prohibits all mergers with all out-of-state banks. *See* 12 U.S.C.
§ 1831u(a)(2) (state \"opt-out\" laws). In the proposed Merger, none of
the home states of the banks here opted out. Accordingly, this
application is covered by 12 U.S.C. §§ 215a-1 & 1831u(a).

An application to engage in an interstate merger transaction under
12 U.S.C. § 1831u is also subject to certain requirements and conditions
set forth in sections 1831u(a)(5) and 1831u(b). These conditions are:
(1) compliance with state-imposed age limits, if any, subject to the
Riegle-Neal Act's limits; (2) compliance with certain state filing
requirements, to the extent the filing requirements are permitted in the
Act; (3) compliance with nationwide and state concentration limits; (4)
community reinvestment compliance; and (5) adequacy of capital and
management skills. This application satisfies all these conditions to
the extent applicable.

First, the application satisfies the state-imposed age requirements
permitted by section 1831u(a)(5). Under that section, the OCC may not
approve a merger under section 1831u(a)(1) \"that would have the effect
of permitting an out-of-State bank or out-of-State bank holding company
to acquire a bank in a host state that has not been in existence for the
minimum period of time, if any, specified in the statutory law of the
host State.\" 12 U.S.C. § 1831u(a)(5)(A). But the maximum age
requirement a state is permitted to impose is five years. 12 U.S.C.
§ 1831u(a)(5)(B). In this Merger, the banks are combining under the
charter of JPMCB-National, but the resulting bank will have Columbus,
Ohio, as its main office. The OCC previously has determined that, in
such circumstances, the relevant banks subject to the age requirement
are the banks *being acquired* (*i.e.,* here, Bank One Columbus and Bank
One Chicago), not the acquiring bank located in what will become a host
state for the resulting bank (here, JPMCB-National).[^25] However, we
need not consider this further in the present application, because each
bank meets its state's age limit[^26] and, in any event, all three banks
have been in existence for more than five years. The Riegle-Neal Act's
requirement of compliance with state age requirements is met.[^27]

Second, the proposed Merger meets the applicable filing requirements. A
bank applying for an interstate merger transaction under section
1831u(a) must (1) \"comply with the filing requirements of any host
State of the bank which will result from such transaction\" as long as
the filing requirement does not discriminate against out-of-state banks
and is similar in effect to filing requirements imposed by the host
state on out-of-state nonbanking corporations doing business in the host
state, and (2) submit a copy of the application to the state bank
supervisor of the host state. 12 U.S.C. § 1831u(b)(1).[^28] The
resulting bank in the Merger will have its main office in Ohio; and so
New York, as well as other states listed below, will become host states
of the resulting bank for filing requirement purposes as a result of the
Merger.[^29]

The states that will become host states as a result of this Merger are
Arizona, Colorado, Florida, Illinois, Indiana, Kentucky, Louisiana,
Michigan, New York, Oklahoma, Utah, West Virginia, and Wisconsin.[^30]
The applicant banks sent a copy of the application to the state bank
supervisors of all the states involved, including Ohio, New York,
Connecticut, New Jersey, and Texas, as well as the other states. The
applicants represent that JPMCB-National has complied, or will comply,
with the state filing requirements applicable under the Riegle-Neal Act
for the states that will become host states of JPMCB-National as a
result of the Merger.[^31] Thus, this application satisfies the
Riegle-Neal Act's filing requirements.

Third, the proposed Merger does not raise issues with respect to the
deposit concentration limits of the Riegle-Neal Act. Section 1831u(b)(2)
places certain nationwide and statewide deposit concentration limits on
section 1831u(a) interstate merger transactions. However, interstate
merger transactions involving only affiliated banks are specifically
excepted from these provisions. 12 U.S.C. § 1831u(b)(2)(E). The three
banks are affiliates; and so section 1831u(b)(2) is not applicable to
this Merger.

Fourth, the proposed Merger also does not raise issues with respect to
the special community reinvestment compliance provision of the
Riegle-Neal Act. In determining whether to approve an application for an
interstate merger transaction under section 1831u(a), the OCC must (1)
comply with its responsibilities under section 804 of the federal
Community Reinvestment Act (\"CRA\"), 12 U.S.C. § 2903, (2) take into
account the CRA evaluations of any bank which would be an affiliate of
the resulting bank, and (3) take into account the applicant bank's
record of compliance with applicable state community reinvestment laws.
12 U.S.C. § 1831u(b)(3). However, this provision does not apply to
mergers between affiliated banks.[^32] The three banks are affiliates,
and so this Riegle-Neal Act provision is not applicable. However, the
CRA itself is applicable, as discussed below in Part III-B.

Finally, the proposed Merger satisfies the adequacy of capital and
management skills requirements in the Riegle-Neal Act. The OCC may
approve an application for an interstate merger transaction under
section 1831u(a) only if each bank involved in the transaction is
adequately capitalized as of the date the application is filed and the
resulting bank will continue to be adequately capitalized and adequately
managed upon consummation of the transaction. 12 U.S.C. § 1831u(b)(4).
As of the date the application was filed, the three banks satisfied all
regulatory and supervisory requirements relating to adequate
capitalization. Currently, each bank is at least satisfactorily managed.
The OCC has also determined that, following the Merger, JPMCB-National
will continue to be at least adequately capitalized and adequately
managed. The requirements of 12 U.S.C. § 1831u(b)(4) are therefore
satisfied.

**2. Retention of Offices in the Merger**

The applicants also requested that, upon the completion of the Merger,
JPMCB-National (as the resulting bank in the Merger) be permitted (1) to
retain and operate, as its main office, the current main office of Bank
One Columbus in Columbus, Ohio, under 12 U.S.C. § 1831u(d)(1), and (2)
to retain and operate, as branches, JPMCB-National's current main office
and branches, Bank One Columbus's branches and Bank One Chicago's main
office and branches, under 12 U.S.C. §§ 36(d) and 1831u(d)(1).

In interstate merger transactions under section 1831u, the resulting
bank\'s retention and continued operation of the offices of the merging
banks is expressly provided for:

> \(1\) Continued Operations. \-- A resulting bank may, subject to the
> approval of the appropriate Federal banking agency, retain and
> operate, *as a main office* or a branch, *any office that any bank
> involved* in an interstate merger transaction was operating as a main
> office or a branch immediately before the merger transaction.

12 U.S.C. § 1831u(d)(1) (emphasis added). The resulting bank is the
\"bank that has resulted from an interstate merger transaction under
this section \[section 1831u(a)\].\" 12 U.S.C. § 1831u(f)(11).[^33]

Thus, in the present application, JPMCB-National (as the resulting bank
after the Merger) may retain and operate as its main office "any office
that \[Bank One Columbus, Bank One Chicago, or JPMCB-National\] was
operating as a main office or branch immediately before the merger
transaction." The office in Columbus is currently operating as the main
office of Bank One Columbus, and so the resulting bank, JPMCB-National,
may retain and operate it as its main office, provided the Merger is
approved under section 1831u. [^34]

Similarly, JPMCB-National (as the resulting bank after the Merger) may
retain and operate as branches "any office that \[Bank One Columbus,
Bank One Chicago, or JPMCB-National\] was operating as a main office or
branch immediately before the merger transaction." JPMCB-National's
current main office and branches, Bank One Columbus' branches, and Bank
One Chicago's main office and branches are all operating as main offices
or branches, and so the resulting bank, JPMCB-National, may retain and
operate them as branches, provided the Merger is approved under
section 1831u.

**3. The Resulting Bank's Activities, Subsidiaries, and Community
Development Investments**

JPMCB-National, as the resulting bank, will succeed to the fiduciary
appointments of JPMCB-National, Bank One Columbus, and Bank One Chicago
as a result of the Merger, and it is authorized to engage in all
activities permissible for national banks, including fiduciary
activities, at its main office and branches in all the states in which
it operates. *See, e.g.,* 12 U.S.C. § 215a-1 (Riegle-Neal mergers with a
resulting national bank occur under the National Bank Consolidation and
Merger Act) & 215a(e) (the resulting national bank in a merger succeeds
to all the rights, franchises and interests, including fiduciary
appointments, of the merging banks).[^35]

Similarly, all of the existing subsidiaries and other investments of
Bank One Columbus and Bank One Chicago will become subsidiaries and
investments of JPMCB-National as a result of the Merger. These
subsidiaries and investments are already subsidiaries and investments of
national banks, and so are permissible for JPMCB-National.

As part of this application, the applicants provided information about
the community development investments of Bank One Chicago. The aggregate
amount of those investments and outstanding commitments totals
\$509,211,000. The applicants indicate that all of the Bank One Chicago
investments involve affordable housing that primarily benefits low- and
moderate-income persons using federal low-income housing tax credits.
Those investments either are made directly into projects or indirectly
through national and regional community development funds.

Based on the information provided by the applicants, the community
development investments of both JPMCB and Bank One Chicago primarily
promote the public welfare consistent with requirements of 12 U.S.C.
§ 24(Eleventh) and 12 C.F.R. § 24.3. After the Merger, the aggregate
amount of JPMCB-National's investments and unfunded commitments will be
approximately \$1,446,974,000, which is less than two percent of its
capital and surplus. The applicants indicate that the investments have
been structured so that they do not expose JPMCB-National to unlimited
liability. The investments, therefore, are consistent with 12 U.S.C.
§ 24(Eleventh) and 12 C.F.R. Part 24.

In conclusion, the Merger is authorized, JPMCB-National may retain the
proposed main office and branches, and JPMCB-National may retain the
subsidiaries and investments of the merging banks.

##### III. ADDITIONAL STATUTORY AND POLICY REVIEWS

##### A. The Bank Merger Act

The Bank Merger Act, 12 U.S.C. § 1828(c), requires the OCC\'s approval
for a merger between insured banks where the resulting institution will
be a national bank. Under the Act, the OCC generally may not approve a
merger which would substantially lessen competition. In addition, the
Act also requires the OCC to take into consideration the financial and
managerial resources and future prospects of the existing and proposed
institutions, and the convenience and needs of the community to be
served. For the reasons stated below, we find this Merger may be
approved under section 1828(c).

**1. Competitive Analysis**

Since the three banks involved in this transaction are already owned by
the same holding company, the Merger will have no anticompetitive
effects.

**2. Financial and Managerial Resources**

We find that the financial and managerial resources of the three banks
in the Merger, and of JPMCB-National as the resulting bank, do not raise
concerns that would cause the application to be disapproved. The
proposed Merger is a corporate reorganization to achieve efficiencies
and economies of scale. Further, the participant banks are
well-capitalized and well-managed. The future prospects of the
proponents, individually and combined, are thus considered favorable and
consistent with an approval.

The Bank Merger Act also requires the OCC to "take into consideration
the effectiveness of any insured depository institution involved in the
proposed merger transaction in combatting money laundering activities,
including in overseas branches." 12 U.S.C. § 1828(c)(11). We have
considered this factor, and determined that no material weaknesses to
preclude approval are present.

**3. Convenience and Needs**

The Merger will have no adverse impact on the convenience and needs of
the communities to be served. The Merger is an internal reorganization.
No reductions in products or services available to the public are
contemplated. JPMCB-National will continue to serve the same areas that
the three merging banks serve today. The only state in which retail
branches of the merging banks will overlap is Texas, primarily in the
Houston and Dallas markets. Although eventually some branches in
immediate proximity to each other in these markets may be closed, no
branches have yet been identified for closing. As business plans for the
configuration of the Texas branches are developed, if any branches are
identified for closure, such closures will be made in accordance with
applicable statutes and regulations. Accordingly, we believe the impact
of the Merger on community convenience and needs is consistent with
approval.

**B. The Community Reinvestment Act**

The Community Reinvestment Act ("CRA") requires the OCC to take into
account the applicants' record of helping to meet the credit needs of
the community, including low- and moderate income ("LMI") neighborhoods,
when evaluating certain applications, including conversions and mergers.
12 U.S.C. § 2903; 12 C.F.R. § 25.29. The OCC considers the CRA
performance evaluation of each institution involved in the transaction.
Under the CRA regulations effective July 1, 1997, the OCC evaluates
performance of most large banks using lending, investment, and service
criteria. In these evaluations, the OCC considers the institution's
capacity and constraints, including the size and financial condition of
the bank and its subsidiaries.

A review of the record of these applications and other information
available to the OCC as a result of its regulatory responsibilities
revealed no evidence that the applicants' record of helping to meet the
credit needs of their communities, including low- and moderate-income
neighborhoods, is less that satisfactory. JPMCB currently has an
Outstanding rating for CRA performance, and both Bank One Chicago and
Bank One Columbus have satisfactory ratings.

The Conversion and the Merger are not expected to have an adverse effect
on the resulting bank's CRA performance. JPMCB-National will continue to
serve the same communities that the merging banks currently serve.
JPMCB-National will carry forward the CRA program and policies of JPMCB,
and add to them features from Bank One Chicago and Bank One Columbus.
The combined bank's community development group will include substantial
staff and resources from the merging banks. The assessment areas of Bank
One Chicago and Bank One Columbus will become part of JPMCB-National's
assessment area. As a general matter, the resulting bank will have the
same obligation to helping meet the credit needs of all the communities
it serves as the merging banks have today as separate banks. Moreover,
JPMCB also has represented that JPMCB-National will honor all the
CRA-related commitments of the target banks. We find that approval of
the Conversion and the Merger is consistent with the Community
Reinvestment Act.

**IV. CONCLUSION AND APPROVAL**

For the reasons set forth above, including the representations and
commitments of the applicants, the OCC finds that JPMCB may convert into
a national banking association under 12 U.S.C. § 35, may be granted
fiduciary powers under 12 U.S.C. § 92a, may retain its branches under
12 U.S.C. § 36(b)(1), and may retain its subsidiaries and investments.
The OCC also finds that Bank One Columbus and Bank One Chicago may merge
with and into JPMCB-National under 12 U.S.C. §§ 215a-1, 1828(c), and
1831u, and that JPMCB-National may retain the offices of the three banks
under 12 U.S.C. § 36(d) and 1831u(d)(1). The OCC also determined the
grant of directors' residency waivers for the converted bank and for the
bank resulting from the merger are appropriate. Accordingly, the
applications are hereby approved and the request for directors'
residency waivers granted.

This approval is subject to the following condition:

> After consummation of the Conversion and the Merger, JPMCB-National
> shall continue to implement appropriate measures to facilitate J.P.
> Morgan Chase & Co.'s compliance with the Written Agreement among J.P.
> Morgan Chase & Co., the Federal Reserve Bank of New York, and the New
> York State Banking Department, dated July 28, 2003, with respect to
> activities at JPMCB-National and its subsidiaries.

This condition of approval is a "condition imposed in writing by the
agency in connection with the granting of any application or other
request" within the meaning of 12 U.S.C. § 1818. As such, the condition
is enforceable under 12 U.S.C. § 1818.

This approval, and the activities and communications by OCC employees in
connection with the filing, do not constitute a contract, express or
implied, or any other obligation binding upon the OCC, the United
States, any agency or entity of the United States, or any officer or
employee of the United States, and do not affect the ability of the OCC
to exercise its supervisory, regulatory, and examination authorities
under applicable law and regulations. The foregoing may not be waived or
modified by any employee or agent of the OCC or the United States.

Julie L. Williams 10-13-04

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Julie L. Williams Date

First Senior Deputy Comptroller

and Chief Counsel

Application Control Numbers:

2004-ML-01-0004

2004-ML-02-0006

[^1]: At the time the applications were filed, Bank One Columbus' main
    office was located at 100 East Broad Street, Columbus, Ohio.
    However, Bank One Columbus applied to relocate its main office to
    1111 Polaris Parkway in Columbus, under 12 U.S.C. § 30, and to
    establish a branch at the former main office location under
    12 U.S.C. § 36(c). These applications were approved on August 11,
    2004, and the transactions will be completed before the Merger.
    Thus, in the discussion in this decision, 1111 Polaris Parkway is
    Bank One Columbus' main office.

[^2]: New York Banking Law § 137(1).

[^3]: For a further discussion of the "not in contravention of state
    law" requirement in the context of a converting interstate state
    bank, see *Decision on the Application of Republic Bank for Savings,
    New York, New York, to Convert into a National Banking Association*
    (OCC Corporate Decision No. 95-32, July 25, 1995) ("*OCC Republic
    Decision*") (at the time of its conversion, the bank had its
    principal office in New York and branches in New York and Florida).

[^4]: The national bank resulting from the conversion of a state bank
    continues the state bank's fiduciary appointments without the need
    for formal re-appointment. *See, e.g., Poisson v. Williams,* 15 F.2d
    582, 583 (E.D.N.C. 1926); *In re Barreiro's Estate,* 13 P.2d 1017,
    1024 (Cal. Dist. Ct. App. 1932); *Interdiction of Le Boeuf,*
    47 So.2d 687, 689 (La. 1950); *New England Merchants National Bank
    of Boston v. Centenary Methodist Church,* 173 N.E.2d 294, 298-99
    (Mass. 1961); *Citizens & Southern National Bank of South Carolina
    v. Conner,* 11 S.E.2d 271, 272 (S.C. 1940). This is a particular
    instance of the fundamental principle that the resulting national
    bank is a continuation of the corporate existence and corporate
    identity of the state bank. *See* cases cited in note 14 below. *See
    also In re Barreiro's Estate, supra.*

[^5]: ^?^ *See* 12 U.S.C. § 92a(a). A national bank's exercise of
    fiduciary powers in a state is deemed not in contravention of state
    law if the state permits its own state banks, trust companies, or
    other corporations that compete with national banks to exercise such
    powers. 12 U.S.C. § 92a(b). The OCC's regulations provide for the
    application of section 92a in a multi-state context. A national bank
    may act in a fiduciary capacity in any state. 12 C.F.R. § 9.7(a).
    From the states in which it acts in a fiduciary capacity, it may
    also serve customers in other states. 12 C.F.R. § 9.7(b). When a
    bank acts in more than one state, then for purposes of determining
    the relevant state for section 92a purposes, a national bank is
    located in the state, with respect to each fiduciary relationship,
    in which the bank acts in a fiduciary capacity with respect to that
    relationship. 12 C.F.R. § 9.7(d). A bank "acts in a fiduciary
    capacity" in the state in which it accepts the fiduciary
    appointment, executes the documents that create the fiduciary
    relationship, and makes discretionary decisions regarding the
    investment or distribution of fiduciary assets, and if these
    activities take place in more than one state, then in the state the
    bank designates from among those states. *Id.*

[^6]: New York Banking Law §§ 100 & 100-a; N.J. Stat. Ann. § 17:9A-28;
    Conn. Gen. Stat. Ann. § 36a-250(a)(2), (3), (7), (8), (9), (11)-(14)
    & (40); Tex. \[Fin.\] Code Ann. §§ 32.001(b)(3) (fiduciary powers of
    state banks) & 182.001 (powers of state trust companies).

[^7]: For purposes of section 72, a national bank is located in every
    state in which it maintains a branch. *See* OCC Interpretive Letter
    No. 654 (December 19, 1994). Thus, JPMCB-National directors who
    reside anywhere in New York State, New Jersey, Connecticut, and
    Texas, or within 100 miles of JPMCB-National's main office would
    meet the residency requirement. The applicants in the Merger
    similarly have requested a waiver of the directors' residency
    requirement for the board of directors of JPMCB-National, as the
    resulting bank after the Merger.

[^8]: Because of the long history of JPMCB and its predecessors, it is
    possible that some of its branches were branches of a bank on
    February 25, 1927, and so could also be retained under the authority
    of Clause (B). Because Clauses (A) and (C) apply, there is no need
    to review the history of individual branches to determine if Clause
    (B) might apply.

[^9]: *See, e.g., OCC Republic Decision; Decision on the Application of
    State Savings Bank, Southington, Connecticut, to Convert into a
    National Banking Association, State Savings Bank, N.A., and on the
    Application to Merge State Savings Bank. N.A., into Connecticut
    National Bank, Hartford, Connecticut* (OCC Merger Decision No.
    91-07, April 8, 1991) (at the time of its conversion, State Savings
    Bank's main office was in Connecticut, and it had branches in Rhode
    Island). The OCC has interpreted the similar provisions of section
    36(b)(2) in a similar manner when the target bank in a merger had
    branches in other states, but the merger was not effected under the
    interstate merger provisions of the Riegle-Neal Act because, *e.g.,*
    both banks had the same home state. *See, e.g., Decision on the
    Application to Merge First Bank, N.A., Minneapolis, Minnesota, and
    First National Bank of East Grand Forks, East Grand Forks,
    Minnesota* (OCC Corporate Decision No. 97-68, July 10, 1997). (First
    Bank, the target bank in the merger, had branches in nine states in
    addition to Minnesota)

[^10]: *See Seattle Trust & Savings Bank v. Bank of California, N.A.,*
    492 F.2d 48, 51 (9^th^ Cir. 1974), *cert. denied,* 419 U.S. 844
    (1974).

[^11]: N.Y. Banking Law § 105(a). Moreover, this "home office
    protection" limitation does not apply to the retention of branches
    in a conversion or a merger. *See id.* (last clause). Thus, that
    authority would be incorporated into section 36(c), and a national
    bank resulting from a conversion or merger could retain such
    branches*. See State ex rel. Edwards v. Heimann,* 633 F.2d 886, 890
    (9^th^ Cir. 1980).

[^12]: N.J. Stat. Ann. § 17:9A-23.11(a) (branching by New Jersey state
    banks in New Jersey); Conn. Gen. Stat. § 36a-145(b)(1) (branching by
    Connecticut banks in Connecticut); Tex. \[Fin.\] Code Ann.
    § 32.203(a).

[^13]: Riegle-Neal Interstate Banking and Branching Act of 1994, Pub. L.
    No. 103-328, 108 Stat. 2338 (1994).

[^14]: *See, e.g., Michigan Insurance Bank v. Eldred,* 143 U.S. 293, 300
    (1892); *Metropolitan National Bank v. Claggett,* 141 U.S. 520, 527
    (1891). *See also* cases cited in note 4 above. *See generally* 10
    Am. Jur. 2d §§  202 & 203.

[^15]: In addition, JPMCB had several approved but not yet opened
    branches at the time the Conversion application was filed. If those
    branches are opened prior to the Conversion, authority to retain
    them will be included under section 36(b)(1). If they are not opened
    prior to Conversion, JPMCB-National subsequently would have
    authority to establish them under section 36(c), since they are
    additional branches in states in which the bank already maintains a
    branch. The OCC's approval of the Conversion and the Merger includes
    approval under section 36(c) to establish any such pending branches.

    JPMCB also operates a number of foreign branches under the authority
    of Regulation K, 12 C.F.R. § 211.3, and JPMCB-National will continue
    to operate these branches after the Conversion and the Merger. JPMCB
    will consult with the Federal Reserve System to determine if any
    filings are required under Regulation K with regard to
    JPMCB-National's continued operation of the branches after the
    Conversion and Merger. Under 12 C.F.R. § 28.3(a), national banks are
    required to notify the OCC regarding foreign branches. JPMCB
    included a list of its foreign branches in the applications in
    fulfillment of this requirement.

[^16]: JPMCB plans to transfer one subsidiary, CMB Title Holdings, Inc.,
    to an affiliate prior to the Conversion, and so it will not be owned
    by JPMCB-National. CMB Title Holdings, Inc., engages in title
    insurance activities in New York. Title insurance agency activities
    can be permissible for a national bank.

[^17]: CMMC also has inactive subsidiaries.

[^18]: The criteria, as set out in many previous OCC opinions, are: (1)
    The activities of the entity or enterprise in which the investment
    is made must be limited to activities that are part of, or
    incidental to, the business of banking. (2) The bank must be able to
    prevent the entity or enterprise from engaging in activities that do
    not meet the foregoing standard or be able to withdraw its
    investment. (3) The bank's loss exposure must be limited, as a legal
    and accounting matter, and the bank must not have open-ended
    liability for the obligations of the enterprise. (4) The investment
    must be convenient or useful to the bank in carrying out its
    business and not a mere passive investment unrelated to that bank's
    banking business.

[^19]: The acquisition of non-controlling interests in the Mondex
    entities by operating subsidiaries of national banks, including a
    predecessor of JPMCB, was approved in OCC Conditional Approval No.
    220 (December 2, 1996). JPMCB represents that its ownership
    interests in the Mondex entities continue to meet the criteria used
    to assess the permissibility of non-controlling equity investments
    by national banks, see note 18 above.

[^20]: *See, e.g.,* OCC Corporate Decision No. 2001-30 (October 10,
    2001); Letter from Richard Erb, Licensing Manager, to American
    National Investor Services Corporation (June 21, 1996)
    (unpublished).

[^21]: *See, e.g.,* 12 C.F.R. §§ 5.24(d)(2)(ii)(H) & 5.33(e)(5);
    Comptroller's Licensing Manual, Conversions, page 9 (April 2004).

[^22]: 12 C.F.R. §§ 7.5002, 7.5006 & 7.5007. *See also* OCC Interpretive
    Letter No. 993 (May 16, 1997) and other authorities cited therein.
    JPMCB represents that its ownership interests in these entities meet
    the criteria used to assess the permissibility of non-controlling
    equity investments by national banks, see note 18 above.

[^23]: JPMCB also has foreign subsidiaries and investments that will
    continue to be held by JPMCB-National after the Conversion and
    Merger. J.P. Morgan International Inc. and J.P. Morgan International
    Finance Limited are the two investment Edge Corporations, organized
    under 12 U.S.C. §§ 611-614, used to hold many of the overseas
    operating entities owned by JPMCB. No additional OCC approval is
    required with regard to these entities since their organization and
    activities have been approved by the Board and are in accord with
    its Regulation K, 12 C.F.R. Part 211. JPMCB will consult with the
    Board to determine if any filings are required in connection with
    the Conversion and Merger. JPMCB also has two inactive Edge
    Corporations, Chase Bank International and Morgan Guaranty
    International Bank.

[^24]: Section 44 was added by section 102(a) of the Riegle-Neal
    Interstate Banking and Branching Efficiency Act of 1994, Pub. L. No.
    103-328, 108 Stat. 2338 (the \"Riegle-Neal Act\"). For purposes of
    section 1831u, the following definitions apply: The term \"home
    State\" means, with respect to a national bank, \"the State in which
    the main office of the bank is located.\" The term \"host State\"
    means, \"with respect to a bank, a State, other than the home State
    of the bank, in which the bank maintains, or seeks to establish and
    maintain, a branch.\" The term \"interstate merger transaction\"
    means any merger transaction approved pursuant to
    section 1831u(a)(1). The term \"out-of-State bank\" means, \"with
    respect to any State, a bank whose home State is another State.\"
    The term \"responsible agency\" means the agency determined in
    accordance with 12 U.S.C. § 1828(c)(2) (namely, the OCC if the
    acquiring, assuming, or resulting bank is a national bank). *See*
    12 U.S.C. § 1831u(f)(4), (5), (6), (8) & (10).

[^25]: *See Decision on the Application to Merge First National Bank and
    Trust Company and TeamBank, N.A.* (OCC Corporate Decision No.
    2000-09, June 20, 2000). This decision was subject to court review,
    *see TeamBank, N.A. v. McClure,* 279 F.3d 614 (8^th^ Cir. 2002).

[^26]: New York Banking Law §  223-a (five year age requirement if banks
    are related); Ohio Rev. Code § 1115.05 (no age requirement); Ill.
    Rev. Stat. ch. 205, § 5/21.2(a) (five year age requirement).

[^27]: While the banks have branches in other states, the home states of
    the banks -- New York, Ohio, and Illinois \-- are the only relevant
    states for age limit purposes under section 1831u(a)(5), since the
    home state is the only state in which an out-of-state bank
    "acquire\[s\] a bank" for purposes of section 1831u(a)(5)(A). *See,
    e.g., Decision on the Application to Merge United States National
    Bank of Oregon, Portland, Oregon with First Bank, N.A., East Grand
    Forks, Minnesota* (OCC Corporate Decision No. 1997-74, July 31,
    1997). Moreover, even if the age requirement were to be applied with
    respect to the other states, this merger would meet it. Each bank is
    more than five years old, and so it meets the maximum age
    requirement that a state may impose under the Riegle-Neal Act.

[^28]: Under this provision, states are permitted to impose a filing
    requirement on out-of-state banks that will operate branches in the
    state as a result of an interstate merger transaction under the
    Riegle-Neal Act, but the states may impose only those requirements
    that are within the terms specified. Since Congress has specifically
    set forth and limited what state filing requirements apply for these
    interstate transactions, it clearly intended that only those
    requirements would apply, and the states may not impose others.
    Thus, in a transaction involving only national banks, only the
    filing requirements allowed under section 1831u(b)(1) must be
    complied with. For a fuller discussion of this subject, *see, e.g.*,
    *Decision on the Applications to Merge First Interstate Banks into
    Wells Fargo Bank, N.A.* (OCC Corporate Decision No. 96-29, June 1,
    1996) (at pages 4-5, 12-14 & note 11).

[^29]: Thus, in the fact setting of this Merger, the "host state" for
    age limit purposes under section 1831u(a)(5) is different than the
    "host state" for filing requirement purposes under section
    1831u(b)(1). The age requirement of section 1831u(a)(5) applies
    within the merger itself, and so we concluded it should apply to the
    banks being acquired in the merger. But the filing requirements of
    section 1831u(b)(1) are related to the bank that results from the
    merger, and the host states for filing purposes are clearly
    determined with respect to that bank. The filing requirement
    provision is directed toward permitting a state to impose a filing
    requirement on an out-of-state bank doing business in the state.
    After this Merger is concluded, JPMCB-National will have its main
    office in Ohio and will be an out-of-state bank with branches in the
    other states.

[^30]: Ohio is the home state of the resulting bank, and so it will not
    become a host state. Connecticut, New Jersey, and Texas are
    currently host states for JPMCB and will continue to be host states
    for JPMCB-National after the Conversion and the Merger, and so they
    do not become host states as a result of the Merger, and so the
    filing requirements of section 1831u(b)(1) do not apply with respect
    to them. *See* *Decision on the Application to Merge First
    Interstate Bank of Washington, N.A., into Wells Fargo Bank, N.A.*
    (OCC Corporate Decision No. 96-30, June 6, 1996) (page 8, note 9).
    In any event, the applicants sent a copy of the applications to
    these states, as well as the others.

[^31]: In many of the states, submission of a copy of the federal
    application, along with a cover letter notifying the state of the
    application satisfied the state filing requirement, and no further
    action is required. JPMCB represents it has confirmed with these
    states that nothing further is required. In a few of the states, the
    state requires the out-of-state bank to comply with foreign
    corporation registration requirements comparable to those imposed on
    nonbanking corporations. The applicants represent that
    JPMCB-National will comply with those requirements.

[^32]: It does not apply to mergers between affiliated banks because it
    applies only \"for an interstate merger transaction in which the
    resulting bank would have a branch or bank affiliate immediately
    following the transaction in any State in which the bank submitting
    the application (as the acquiring bank) had no branch or bank
    affiliate immediately before the transaction.\" 12 U.S.C.
    § 1831u(b)(3). *See also* H.R. Conf. Rep. No. 651, 103d Cong., 2d
    Sess. 52 (1994). JPMCB-National has bank affiliates or branches in
    all of the states involved.

[^33]: In addition, Congress also added a conforming amendment to the
    McFadden Act to emphasize that branch retention in an interstate
    merger transaction under section 1831u occurs under the authority of
    section 1831u(d):

    > \(d\) Branches Resulting From Interstate Merger Transactions. \--
    > A national bank resulting from an interstate merger transaction
    > (as defined in section 44(f)(6) of the Federal Deposit Insurance
    > Act) may maintain and operate a branch in a State other than the
    > home State (as defined in subsection (g)(3)(B)) of such bank in
    > accordance with section 44 of the Federal Deposit Insurance Act.

    12 U.S.C. § 36(d) (as added by Riegle-Neal Act § 102(b)(1)(B)). By
    its action in adding section 36(d), Congress made it clear that
    section 1831u(d)(1) is an express and complete grant of
    office-retention authority for interstate merger transactions
    effected under section 1831u and that it operates independently of
    the provisions for branch retention in 12 U.S.C. § 36(b)(2) that
    apply to mergers under 12 U.S.C. § 215a. Neither section 36(d) nor
    section 1831u(d)(1) refer to section 36(b)(2). By expressly
    providing for office-retention in section 1831u(d)(1) and then
    incorporating that into the McFadden Act in section 36(d), Congress
    clearly intended that those provisions, rather than the complex
    branch retention provisions of section 36(b)(2), apply to branch
    retention in interstate merger transactions under section 1831u.

[^34]: The OCC previously has approved other applications under the
    Riegle-Neal Act in which the resulting bank retained, as its main
    office, an office other than the main office of the acquiring bank.
    *See, e.g., Decision on the Application to Merge First National Bank
    and Trust Company and TeamBank, N.A.* (OCC Corporate Decision No.
    2000-09, June 20, 2000); *Decision on the Application to Merge Bank
    of America N.T. & S.A. with NationsBank, N.A.* (OCC CRA Decision No.
    94 (May 20, 1999); *Decision on the Application to Merge PNC Bank,
    N.A. with Midlantic Bank, N.A.* (OCC Corporate Decision No. 96-47,
    August 20, 1996). One of these transactions was subject to court
    review, *see TeamBank, N.A. v. McClure,* 279 F.3d 614 (8^th^ Cir.
    2002).

[^35]: Under section 4 of the National Bank Consolidation and Merger
    Act, 12 U.S.C. § 215a-1, "\[A\] national bank may engage in a
    consolidation or merger *under this Act* \[*i.e.,* the National Bank
    Consolidation and Merger Act\] with an out-of-State bank if the
    consolidation or merger is approved pursuant to section 44 of the
    Federal Deposit Insurance Act." 12 U.S.C. § 215a-1 (emphasis added).
    Sections 2 and 3 of the National Bank Consolidation and Merger Act,
    12 U.S.C. § 215 & 215a, authorize consolidations (section 215(a))
    and mergers (section 215a(a)) between a national bank and another
    bank located in the same state. Sections 2 and 3 also contain the
    procedures, requirements, conditions, and rules for the status of
    the resulting institution that govern all consolidations and mergers
    that occur under the Act. In particular, section 2(e) of the Act,
    12 U.S.C. § 215a(e) provides that, in a merger under the Act, the
    resulting national bank succeeds to all of the rights, franchises,
    and interests, including fiduciary appointments, of the merging
    banks, upon the merger and without the need for any further action.
    Since a merger under section 215a-1 is a merger under the National
    Bank Consolidation and Merger Act, these provisions, including
    section 215a(e), apply to it. The phrase "under this Act" in section
    215a-1 clearly makes mergers under section 215a-1 subject to these
    provisions of section 215a. If they were not intended to be
    applicable, section 215a-1 would simply have authorized mergers that
    met the requirements of section 44, without any reference to the
    rest of the National Bank Consolidation and Merger Act. *See also*
    12 C.F.R. § 5.33(h). Thus, this Merger is governed, *inter alia,* by
    section 215a(e). Accordingly, JPMCB-National automatically succeeds
    to all such rights, franchises, and interests, including fiduciary
    appointments, of the merging banks by operation of federal law, any
    state law to the contrary notwithstanding.