**Conditional Approval #537**

**July 2002**

June 26, 2002

Martha Pampel

Associate General Counsel

Federal Regulatory Coordination

Household International, Inc.

2700 Sanders Road

Prospect Heights, IL 60070

Re: Application for Household Bank (SB) N.A., Las Vegas, NV to purchase
and assume assets of Beneficial National Bank USA, New Castle, DE -
(CAIS #2002-WO-02-0003).

> Application for Household Bank (Nevada) N.A., Las Vegas, NV to merge
> with and into Household Bank (SB) N.A., Las Vegas, NV - (CAIS
> #2002-WE-02-0003).

Dear Ms. Pampel:

This is to inform you that on June 26, 2002 the Office of the
Comptroller of the Currency ("OCC") has conditionally approved the above
referenced applications.[^1] We have found that your proposals meet the
requirements for conditional approval. This approval is granted based on
a thorough review of all information available, including commitments
and representations made in the applications and the merger agreements
and those of your representatives.

The above applications to us describe additional transactions expected
to consummate on July 1, 2002. Household Bank (SB), N.A. ("HBSB") will
purchase and assume certain assets of Beneficial National Bank USA
("BNB") under 12 CFR § 5.33. Next, Household Bank (Nevada), N.A. will
merge with and into HBSB under 12 U.S.C. § 215a and § 1828(c).
Beneficial Corporation, as the sole shareholder, expects to dissolve BNB
under 12 USC § 181 immediately upon completion of the purchase of the
assets by HBSB. Following the above transactions, HBSB will make a
permanent capital reduction and simultaneously issue up to \$1 billion
in subordinated debt.[^2]

The transactions in the applications meet the applicable statutory and
policy factors and are, therefore, conditionally approved. OCC reviewed
the relevant factors under applicable law and regulation. The
transactions are all among affiliates, so they have no impact on
competition. The transactions will introduce additional operating
control and efficiencies that support the management of and financial
health of the reorganizing companies, enhancing their future prospects.
The resultant bank will offer the full range of services offered by each
of the constituent banks. The most recent CRA rating of each of the
merging banks was satisfactory.[^3]

This conditional approval is subject to the following "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. The condition
is:

No later than three days after consummation of the merger of Household
Bank Nevada, N.A. into HBSB, the board of directors of HBSB and
Household Finance Company ("HFC") shall execute an operating agreement
("Operating Agreement") with the OCC on terms and provisions acceptable
to the OCC. The Operating Agreement shall require, among other things,
that HBSB will maintain, at all times, specified minimum levels of
capital and liquidity, and that HFC will ensure that HBSB has, at all
times, adequate capital and liquidity to support its operations. The
boards of directors of HBSB and HFC shall fully implement and ensure
continued adherence to the terms and provisions of the Operating
Agreement.

Until consummation of the transactions, the OCC has the right to alter,
suspend, or revoke preliminary approval should any interim development
be deemed by the OCC to warrant such action.

As a reminder, you should advise me in writing five days in advance of
the desired effective date for the merger so we may issue the necessary
certification letter. Please note that the effective date may be on or
after the date of this letter but must be in accordance with any other
required regulatory approvals.

The OCC will issue a letter certifying consummation of the transactions
when we have received the following:

1\. Secretary's Certificates for each entity, certifying that a majority
of the board of directors approved the transactions, if not previously
provided.

2\. Executed merger agreements with Articles of Association for the
resulting bank attached.

3\. A copy of the approval by the Office of Thrift Supervision for the
capital stock transfer of HBSB from Household Bank f.s.b. to HII.

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 U.S., any
agency or entity of the U.S., or an officer or employee of the U.S., 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 U.S.

A separate letter is enclosed requesting your opinion of our service in
processing your applications. We would appreciate your response so we
may evaluate our service. If you have questions, please contact Steven
M. Strasser, Licensing Analyst or me at (202) 874-5060.

Sincerely,

**-signed-**

Alan Herlands

Director for Licensing Operations

Enclosure: Survey Letter

[^1]: In addition, this includes approval for the application by
    Beneficial National Bank USA, New Castle, DE to declare and pay a
    dividend-in-kind to Beneficial Corporation (CAIS #2002-WO-02-0009).
    You provided the description of the consummation activities as
    follows: First, Household Bank f.s.b. will distribute its capital
    stock in Household Bank (SB) NA to its parent company Household
    International Inc. ("HII"). HII will subsequently transfer the same
    capital stock to Household Finance Corporation, a subsidiary of HII.
    Beneficial National Bank USA will pay a dividend-in-kind of certain
    account assets to Beneficial Corporation under 12 CFR § 5.66.

[^2]: This letter transmits approval for HBSB to make an \$850 million
    reduction in permanent capital (CAIS #2002-WO-12-0013), and issue up
    to one billion dollars in subordinated debt (CAIS #2002-WO-12-0014).

[^3]: The OCC did not receive any public comments concerning the
    transaction to merge Household Bank (Nevada), N.A. with and into
    HBSB.