N.Y. State Urged to Deny Arab Controlled Take over of Two Banks

— Manfred Ohrenstein, State Senate Democratic Minority Leader, has urged the State Superintendent of banks to deny the application of an Arab controlled cartel to take over two New York banks.

The banks, the Bank of Commerce in New York City, and the Community State Bank of Albany, are now owned by Financial General Bank Shares. There is currently a tender offer before the Federal Reserve Board by Credit and Commerce American Holdings and Investment, whose major stockholders are the Intelligence Director of Saudi Arabia and the Financial Advisor to the United Arab Emirates, to but out Financial General.

In a letter to Banking Superintendent Muriel Siebert, Ohrenstein said such a takeover could cause a “non-competitive conduit for substantial deposits of petrol dollars, mostly at the expense of New York banks. While New York welcomes increases in the competitive market place the investors can hardly be said to be engaging in free-market competition, when the buyers are an indirect arm of a consortium of governments, drawing upon resources and laws that take them out of the realm of competition.”

The Manhattan Democrat said that even if the Federal Reserve Board were to grant the application, approval would still be needed from the New York Banking Board. He expressed “disappointment” to find that New York had not registered objections to the merger, and said that he would call for a public hearing in the state when the application is made. Ohrenstein said the proposed merger would have a “severe negative impact” on both communities now served by the two banks.

The Democratic leader said that Organization of Petroleum Exporting Counties wealth has been increasing rapidly, with assets reported to be almost $400 billion for 1980 and something near $70 billion invested in the United States. “With such large resources upon which to draw, the opportunity to manipulation–financial and political–is obvious, ” Ohrenstein said.