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FDIC Federal Register Citations

[Federal Register: December 27, 2002 (Volume 249, Number 67)] 

[Rules and Regulations]

[Page 79245-79270]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr27de02-25]

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Part II

Federal Deposit Insurance Corporation

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12 CFR Part 303, et al.

Filing Procedures; Unsafe and Unsound Banking Practices; Registration

of Transfer Agents; International Banking; Management Official

Interlocks; and Golden Parachutes and Indemnification Payments; FDIC

Statement of Policy on Bank Merger Transactions; Application for

Deposit Insurance; Filing Procedures; Corporate Powers; Final Rule,

Proposed Rule, and Notices

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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 303

RIN 3064-AC51

Filing Procedures; Unsafe and Unsound Banking Practices;

Registration of Transfer Agents; International Banking; Management

Official Interlocks; and Golden Parachutes and Indemnification Payments

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: The FDIC is amending its regulations governing application,

notice and request procedures to reflect changes from an internal

reorganization order, which included the consolidation of the Division

of Supervision and the Division of Compliance and Consumer Affairs into

the Division of Supervision and Consumer Protection. The FDIC has also

determined that the delegations of authority found in its filing

procedures regulation should be removed to allow for greater

flexibility in its delegation and decision making process.

EFFECTIVE DATE: December 27, 2002.

FOR FURTHER INFORMATION CONTACT: Division of Supervision and Consumer

Protection: Steven D. Fritts, Associate Director, 202/898/3723, Mindy

West, Examination Specialist, 202/898/7221. Legal Division: Supervision

and Legislation Branch, Susan van den Toorn, Counsel, 202/898/8707,

Robert C. Fick, Counsel, 202/898/8962, FDIC, Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

On July 2, 2002, the FDIC published in the Federal Register a final

rule implementing the decision by the FDIC, through an internal

reorganization order dated June 30, 2002 to merge certain divisions of

the FDIC and, as a result, to change the names of the ``Division of

Supervision'' ``DOS'' and the ``Division of Compliance and Consumer

Affairs'' ``DCA'' to the ``Division of Supervision and Consumer

Protection (DSC)'' and make changes to the names of other divisions of

the FDIC. 67 FR 44351, July 2, 2002. The rule made the name changes to

chapter III of title 12 of the Code of Federal Regulations.

Specifically, the rule changed all references to the ``Division of

Supervision'' and the ``Division of Compliance and Consumer Affairs''

to the ``Division of Supervision and Consumer Protection (DSC).'' The

FDIC noted at that time that it intended to make further revisions to

12 CFR chapter III to reflect other changes as a result of the

reorganization. This final rule constitutes those changes. In chapter

III, part 303 of the FDIC's regulations (12 CFR part 303) (part 303)

contains the procedures to be followed with respect to applications,

notices, or requests (collectively ``filings'') required to be filed by

statute or regulation. With the creation of the new Division of

Supervision and Consumer Protection (DSC), the internal FDIC

administrative scheme set forth in the previous part 303, approved by

the Board in 1998 (63 FR 44686, August 20, 1998), must be amended to

reflect the new organizational structure.

II. Discussion

Throughout part 303 there are numerous references to DOS and DCA

and the Directors and Deputy Directors of those Divisions and an

administrative scheme for the approval, denial or modification of

applications, notices or requests based on the existence of two

separate divisions. The FDIC's internal reorganization of those

divisions thus necessitates a revision of the regulation to reflect the

new structure. The new part 303 reflects that new organizational

structure.

A primary purpose of the new structure was to streamline management

and certain decision making processes. To support these efforts and

provide greater flexibility in the future, the FDIC decided to remove

the delegation authority found in part 303. The FDIC Board of Directors

has affirmed and adopted the delegations of authority for DSC to act on

certain supervisory applications and enforcement actions. In addition,

the Board has also authorized these delegations of authority to be

transferred from its regulation in part 303 and reissued in a Financial

Institution Letter. The delegations of authority state which

individuals within the FDIC are authorized to approve or deny specific

applications and issue enforcement actions and what authority the Board

has retained. While the FDIC has codified these delegations in its

rules and regulations for many years, there is no statutory requirement

that the agency's internal delegations authority be published in its

regulation. In order to provide the maximum amount of flexibility and

efficiency, the FDIC is moving its delegation of authority from the

regulation to its Internet Web site (http://www.fdic.gov), where the

delegations will be maintained. The public will be able to access the

delegations of authority to determine which individuals are authorized

to act on behalf of the FDIC. Instructions relating to the filing of

applications will remain in part 303 of the FDIC's regulations.

III. Public Comment Waiver and Effective Date

As noted, this final rule reflects changes in part 303 as a result

of the FDIC internal reorganization and does not affect any regulatory

requirement imposed by the FDIC on the public. The changes are matters

of ``agency organization, procedure, or practice'' and are thus not

subject to the general requirement of the Administrative Procedure Act

(APA) for notice and comment, pursuant to 5 U.S.C. 553(b)(3)(A). The

changes are technical and non-substantive in nature and impact. Thus,

the FDIC finds, for good cause, that the APA notice-and-comment

provisions are unnecessary. 5 U.S.C. 553(b)(3)(B). This final rule is

also effective immediately, because: (a) The changes are technical and

procedural; (b) the public does not need a delayed period of time to

conform or adjust; and (c) the current part 303 contains references to

offices that have been merged with others and which should be corrected

as promptly as possible. Therefore, it is determined that good cause

exists for making these amendments effective on publication in the

Federal Register, pursuant to 5 U.S.C. 553(d)(3).

IV. Paperwork Reduction Act

This final rule does not create or modify any collection of

information pursuant to the Paperwork Reduction Act (44 U.S.C. 3501 et

seq.). Consequently, no information has been submitted to the Office of

Management and Budget for review.

V. Regulatory Flexibility Act

A regulatory flexibility analysis under the Regulatory Flexibility

Act (RFA) is required only when an agency must publish a notice of

proposed rulemaking. 5 U.S.C. 603 and 604. As already noted, the FDIC

has determined that publication of a notice of proposed rulemaking is

not necessary here. Accordingly, the RFA does not require a regulatory

flexibility analysis.

VI. Assessment of Federal Regulations and Policies on Families

The FDIC has determined that this final rule will not affect family

well being within the meaning of section 654 of the Treasury and

General Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat.

2681 (1998).

[[Page 79247]]

List of Subjects in 12 CFR Part 303

Administrative practice and procedure, Bank deposit insurance,

Banks, banking, Bank merger, Branching, Foreign branches, Foreign

investments, Golden parachute payments, Reporting and record keeping

requirements.

For the reasons set forth in the preamble and under the authority

of 12 U.S.C. 1819(a)(Tenth), the FDIC Board of Directors hereby revises

12 CFR part 303 as follows:

PART 303--FILING PROCEDURES

Sec.

303.0 Scope.

Subpart A--Rules of General Applicability

303.1 Scope.

303.2 Definitions.

303.3 General filing procedures.

303.4 Computation of time.

303.5 Effect of Community Reinvestment Act performance on filings.

303.6 Investigations and examinations.

303.7 Public notice requirements.

303.8 Public access to filing.

303.9 Comments.

303.10 Hearings and other meetings.

303.11 Decisions.

303.12--303.13 [Reserved]

303.14 Being ``engaged in the business of receiving deposits other

than trust funds.''

303.15--303.19 [Reserved]

Subpart B--Deposit Insurance

303.20 Scope.

303.21 Filing procedures.

303.22 Processing.

303.23 Public notice requirements.

303.24 Application for deposit insurance for an interim institution.

303.25 Continuation of deposit insurance upon withdrawing from

membership in the Federal Reserve System.

303.26--303.39 [Reserved]

Subpart C--Establishment and Relocation of Domestic Branches and

Offices

303.40 Scope.

303.41 Definitions.

303.42 Filing procedures.

303.43 Processing.

303.44 Public notice requirements.

303.45 Special provisions.

303.46--303.59 [Reserved]

Subpart D--Merger Transactions

303.60 Scope.

303.61 Definitions.

303.62 Transactions requiring prior approval.

303.63 Filing procedures.

303.64 Processing.

303.65 Public notice requirements.

303.66--303.79 [Reserved]

Subpart E--Change in Bank Control

303.80 Scope.

303.81 Definitions.

303.82 Transactions requiring prior notice.

303.83 Transactions not requiring prior notice.

303.84 Filing procedures.

303.85 Processing.

303.86 Public notice requirements.

303.87--303.99 [Reserved]

Subpart F-- Change of Director or Senior Executive Officer

303.100 Scope.

303.101 Definitions.

303.102 Filing procedures and waiver of prior notice.

303.103 Processing.

303.104--303.119 [Reserved]

Subpart G--Activities of Insured State Banks

303.120 Scope.

303.121 Filing procedures.

303.122 Processing.

303.123-303.139 [Reserved]

Subpart H-Activities of Insured Savings Associations

303.140 Scope.

303.141 Filing procedures.

303.142 Processing.

303.143-303.159 [Reserved]

Subpart I--Mutual-to-Stock Conversions

303.160 Scope.

303.161 Filing procedures.

303.162 Waiver from compliance.

303.163 Processing.

303.164-303.179 [Reserved]

Subpart J--International Banking

303.180 Scope.

303.181 Definitions.

303.182 Establishing, moving or closing a foreign branch of a state

nonmember bank; Sec. 347.103.

303.183 Investmentby insured state nonmember banks in foreign

organizations; Sec. 347.108.

303.184 Moving an insured branch of a foreign bank.

303.185 Merger transactions involving foreign banks or foreign

organizations.

303.186 Exemptions from insurance requirement for a state branch of

a foreign bank; Sec. 347.206.

303.187 Approval for an insured state branch of a foreign bank to

conduct activities not permissible for federal branches; Sec.

347.213

303.188-303.199 [Reserved]

Subpart K--Prompt Corrective Action

303.200 Scope.

303.201 Filing procedures.

303.202 Processing.

303.203 Applications for capital distribution.

303.204 Applicationsfor acquisitions, branching, and new lines of

business.

303.205 Applications for bonuses and increased compensation for

senior executive officers.

303.206 Application for payment of principal or interest on

subordinated debt.

303.207 Restricted activities for critically undercapitalized

institutions.

303.208-303.219 [Reserved]

Subpart L--Section 19 of the FDI Act (Consent to Service of Persons

Convicted of Certain Criminal Offenses)

303.220 Scope.

303.221 Filing procedures.

303.222 Service at another insured depository institution.

303.223 Applicant's right to hearing following denial.

303.224-303.239 [Reserved]

Subpart M--Other Filings

303.240 General.

303.241 Reduce or retire capital stock or capital debt instruments.

303.242 Exercise of trust powers.

303.243 Brokered deposit waivers.

303.244 Golden parachute and severance plan payments.

303.245 Waiver of liability for commonly controlled depository

institutions.

303.246 Insurance fund conversions.

303.247 Conversion with diminution of capital.

303.248 Continue or resume status as an insured institution

following termination under section 8 of the FDI Act.

303.249 Truth in Lending Act--Relief from reimbursement.

303.250 Management official interlocks.

303.251 Modification of conditions.

303.252 Extension of time.

303.253-303.259 [Reserved]

Subpart N--[Reserved]

Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817, 1818, 1819,

(Seventh and Tenth), 1820, 1823, 1828, 1831e, 1831p-l, 1835a, 3104,

3105, 3108; 3207; 15 U.S.C. 1601-1607.

Sec. 303.0 Scope.

(a) This part describes the procedures to be followed by both the

FDIC and applicants with respect to applications, requests, or notices

(filings) required to be filed by statute or regulation. Additional

details concerning processing are explained in related FDIC statements

of policy.

(b) Additional application procedures may be found in the following

FDIC regulations:

(1) 12 CFR part 327--Assessments (Request for review of assessment

risk classification);

(2) 12 CFR part 328--Advertisement of Membership (Application for

temporary waiver of advertising requirements);

(3) 12 CFR part 345--Community Reinvestment (CRA strategic plans

and requests for designation as a wholesale or limited purpose

institution);

Subpart A--Rules of General Applicability

Sec. 303.1 Scope.

Subpart A prescribes the general procedures for submitting filings

to the FDIC which are required by statute or regulation. This subpart

also prescribes the procedures to be followed by the

[[Page 79248]]

FDIC, applicants and interested parties during the process of

considering a filing, including public notice and comment. This subpart

explains the availability of expedited processing for eligible

depository institutions (defined in Sec. 303.2(r)). Certain terms used

throughout this part are also defined in this subpart.

Sec. 303.2 Definitions.

For purposes of this part:

(a) Act or FDI Act means the Federal Deposit Insurance Act (12

U.S.C. 1811 et seq.).

(b) Adjusted part 325 total assets means adjusted 12 CFR part 325

total assets as calculated and reflected in the FDIC's Report of

Examination.

(c) Adverse comment means any objection, protest, or other adverse

written statement submitted by an interested party relative to a

filing. The term adverse comment shall not include any comment

concerning the Community Reinvestment Act (CRA), fair lending, consumer

protection, or civil rights that the appropriate regional director or

designee determines to be frivolous (for example, raising issues

between the commenter and the applicant that have been resolved). The

term adverse comment also shall not include any other comment that the

appropriate regional director or designee determines to be frivolous

(for example, a non-substantive comment submitted primarily as a means

of delaying action on the filing).

(d) Amended order to pay means an order to forfeit and pay civil

money penalties, the amount of which has been changed from that

assessed in the original notice of assessment of civil money penalties.

(e) Applicant means a person or entity that submits a filing to the

FDIC.

(f) Application means a submission requesting FDIC approval to

engage in various corporate activities and transactions.

(g) Appropriate FDIC region and appropriate regional director mean,

respectively, the FDIC region and the FDIC regional director which the

FDIC designates as follows:

(1) When an institution or proposed institution that is the subject

of a filing or administrative action is not and will not be part of a

group of related institutions, the appropriate FDIC region for the

institution and any individual associated with the institution is the

FDIC region in which the institution or proposed institution is or will

be located, and the appropriate regional director is the regional

director for that region; or

(2) When an institution or proposed institution that is the subject

of a filing or administrative action is or will be part of a group of

related institutions, the appropriate FDIC region for the institution

and any individual associated with the institution is the FDIC region

in which the group's major policy and decision makers are located, or

any other region the FDIC designates on a case-by-case basis, and the

appropriate regional director is the regional director for that region.

(h) Associate director means any associate director of the Division

of Supervision and Consumer Protection (DSC) or, in the event such

title become obsolete, any official of equivalent authority within the

division.

(i) Book capital means total equity capital which is comprised of

perpetual preferred stock, common stock, surplus, undivided profits and

capital reserves, as those items are defined in the instructions of the

Federal Financial Institutions Examination Council (FFIEC) for the

preparation of Consolidated Reports of Condition and Income for insured

banks.

(j) Comment means any written statement of fact or opinion

submitted by an interested party relative to a filing.

(k) Corporation or FDIC means the Federal Deposit Insurance

Corporation.

(l) CRA protest means any adverse comment from the public related

to a pending filing which raises a negative issue relative to the

Community Reinvestment Act (CRA) (12 U.S.C. 2901 et seq.), whether or

not it is labeled a protest and whether or not a hearing is requested.

(m) Deputy director means the deputy director of the Division of

Supervision and Consumer Protection (DSC) or, in the event such title

become obsolete, any official of equivalent or higher authority within

the division.

(n) Deputy regional director means any deputy regional director of

the Division of Supervision and Consumer Protection (DSC) or, in the

event such title become obsolete, any official of equivalent authority

within the same FDIC region of DSC.

(o) Appropriate FDIC office means the office designated by the

appropriate regional director or designee.

(p) DSC means the Division of Supervision and Consumer Protection

or, in the event the Division of Supervision and Consumer Protection is

reorganized, such successor division.

(q) Director means the Director of the Division of Supervision and

Consumer Protection (DSC) or, in the event such title become obsolete,

any official of equivalent or higher authority within the division.

(r) Eligible depository institution means a depository institution

that meets the following criteria:

(1) Received an FDIC-assigned composite rating of 1 or 2 under the

Uniform Financial Institutions Rating System (UFIRS) as a result of its

most recent federal or state examination;

(2) Received a satisfactory or better Community Reinvestment Act

(CRA) rating from its primary federal regulator at its most recent

examination, if the depository institution is subject to examination

under part 345 of this chapter;

(3) Received a compliance rating of 1 or 2 from its primary federal

regulator at its most recent examination;

(4) Is well-capitalized as defined in the appropriate capital

regulation and guidance of the institution's primary federal regulator;

and

(5) Is not subject to a cease and desist order, consent order,

prompt corrective action directive, written agreement, memorandum of

understanding, or other administrative agreement with its primary

federal regulator or chartering authority.

(s) Filing means an application, notice or request submitted to the

FDIC under this part.

(t) General Counsel means the head of the Legal Division of the

FDIC or any official within the Legal Division exercising equivalent

authority for purposes of this part.

(u) Insider means a person who is or is proposed to be a director,

officer, organizer, or incorporator of an applicant; a shareholder who

directly or indirectly controls 10 percent or more of any class of the

applicant's outstanding voting stock; or the associates or interests of

any such person.

(v) Institution-affiliated party shall have the same meaning as

provided in section 3(u) of the Act (12 U.S.C. 1813(u)).

(w) NEPA means the National Environmental Policy Act of 1969 (42

U.S.C. 4321 et seq.).

(x) NHPA means the National Historic Preservation Act of 1966 (16

U.S.C. 470 et seq.).

(y) Notice means a submission notifying the FDIC that a depository

institution intends to engage in or has commenced certain corporate

activities or transactions.

(z) Notice to primary regulator means the notice described in

section 8(a)(2)(A) of the Act concerning termination of deposit

insurance (12 U.S.C. 1818(a)(2)(A)).

(aa) Regional counsel means a regional counsel of the Legal

Division or, in the event the title becomes

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obsolete, any official of equivalent authority within the Legal

Division.

(bb) Regional director means any regional director in the Division

of Supervision and Consumer Protection (DSC), or in the event such

title become obsolete, any official of equivalent authority within the

division.

(cc) [Reserved]

(dd) Standard conditions means the conditions that the FDIC may

impose as a routine matter when approving a filing, whether or not the

applicant has agreed to their inclusion. The following conditions, or

variations thereof, are standard conditions:

(1) That the applicant has obtained all necessary and final

approvals from the appropriate federal or state authority or other

appropriate authority;

(2) That if the transaction does not take effect within a specified

time period, or unless, in the meantime, a request for an extension of

time has been approved, the consent granted shall expire at the end of

the specified time period;

(3) That until the conditional commitment of the FDIC becomes

effective, the FDIC retains the right to alter, suspend or withdraw its

commitment should any interim development be deemed to warrant such

action; and

(4) In the case of a merger transaction (as defined in ] 303.61(a)

of this part), including a corporate reorganization, that the proposed

transaction not be consummated before the 30th calendar day (or shorter

time period as may be prescribed by the FDIC with the concurrence of

the Attorney General) after the date of the order approving the merger

transaction.

(ee) Tier 1 capital shall have the same meaning as provided in ]

325.2(v) of this chapter (12 CFR 325.2(v)).

(ff) Total assets shall have the same meaning as provided in ]

325.2(x) of this chapter (12 CFR 325.2(x)).

Sec. 303.3 General filing procedures.

Unless stated otherwise, filings should be submitted to the

appropriate FDIC office. Forms and instructions for submitting filings

may be obtained from any FDIC regional director. If no form is

prescribed, the filing should be in writing; be signed by the applicant

or a duly authorized agent; and contain a concise statement of the

action requested. For specific filing and content requirements, consult

the appropriate subparts of this part. The FDIC may require the

applicant to submit additional information.

Sec. 303.4 Computation of time.

For purposes of this part, the FDIC begins computing the relevant

period on the day after an event occurs (e.g., the day after a

substantially complete filing is received by the FDIC or the day after

publication begins) through the last day of the relevant period. When

the last day is a Saturday, Sunday or federal holiday, the period runs

until the end of the next business day.

Sec. 303.5 Effect of Community Reinvestment Act performance on

filings.

Among other factors, the FDIC takes into account the record of

performance under the Community Reinvestment Act (CRA) of each

applicant in considering a filing for approval of:

(a) The establishment of a domestic branch;

(b) The relocation of the bank's main office or a domestic branch;

(c) The relocation of an insured branch of a foreign bank;

(d) A transaction subject to the Bank Merger Act; and

(e) Deposit insurance.

Sec. 303.6 Investigations and examinations.

The FDIC may examine or investigate and evaluate facts related to

any filing under this chapter to the extent necessary to reach an

informed decision and take any action necessary or appropriate under

the circumstances.

Sec. 303.7 Public notice requirements.

(a) General. The public must be provided with prior notice of a

filing to establish a domestic branch, relocate a domestic branch or

the main office, relocate an insured branch of a foreign bank, engage

in a merger transaction, initiate a change of control transaction, or

request deposit insurance. The public has the right to comment on, or

to protest, these types of proposed transactions during the relevant

comment period. In order to fully apprise the public of this right, an

applicant shall publish a public notice of its filing in a newspaper of

general circulation. For specific publication requirements, consult

subparts B (Deposit Insurance), C (Branches and Relocations), D (Merger

Transactions), E (Change in Bank Control), and J (International

Banking) of this part.

(b) Confirmation of publication. The applicant shall mail or

otherwise deliver a copy of the newspaper notice to the appropriate

FDIC office as part of its filing, or, if a copy is not available at

the time of filing, promptly after publication.

(c) Content of notice. (1) The public notice referred to in

paragraph (a) of this section shall consist of the following:

(i) Name and address of the applicant(s). In the case of an

application for deposit insurance for a de novo bank, include the names

of all organizers or incorporators. In the case of an application to

establish a branch, include the location of the proposed branch or, in

the case of an application to relocate a branch or main office, include

the current and proposed address of the office. In the case of a merger

application, include the names of all parties to the transaction. In

the case of a notice of acquisition of control, include the name(s) of

the acquiring parties. In the case of an application to relocate an

insured branch of a foreign bank, include the current and proposed

address of the branch.

(ii) Type of filing being made;

(iii) Name of the depository institution(s) that is the subject

matter of the filing;

(iv) That the public may submit comments to the appropriate FDIC

regional director;

(v) The address of the appropriate FDIC office where comments may

be sent (the same location where the filing will be made);

(vi) The closing date of the public comment period as specified in

the appropriate subpart; and

(vii) That the nonconfidential portions of the application are on

file in the appropriate FDIC office and are available for public

inspection during regular business hours; photocopies of the

nonconfidential portion of the application file will be made available

upon request.

(2) The requirements of paragraphs (c)(1)(iv) through (vii) of this

section may be satisfied through use of the following notice:

Any person wishing to comment on this application may file his or

her comments in writing with the regional director of the Federal

Deposit Insurance Corporation at the appropriate FDIC office [insert

address of office] not later than [insert closing date of the public

comment period specified in the appropriate subpart of part 303].

The non-confidential portions of the application are on file at the

appropriate FDIC office and are available for public inspection

during regular business hours. Photocopies of the nonconfidential

portion of the application file will be made available upon request.

(d) Multiple transactions. The FDIC may consider more than one

transaction, or a series of transactions, to be a single filing for

purposes of the publication requirements of this section. When

publishing a single public notice for multiple transactions, the

applicant shall explain in the public notice how the transactions are

related. The closing date of the comment period shall be the closing

date of the longest public comment period that applies to any of the

related transactions.

[[Page 79250]]

(e) Joint public notices. For a transaction subject to public

notice requirements by the FDIC and another federal or state banking

authority, the FDIC will accept publication of a single joint notice

containing all the information required by both the FDIC and the other

federal agency or state banking authority, provided that the notice

states that comments must be submitted to the appropriate FDIC office

and, if applicable, the other federal or state banking authority.

(f) Where public notice is required, the FDIC may determine on a

case-by-case basis that unusual circumstances surrounding a particular

filing warrant modification of the publication requirements.

Sec. 303.8 Public access to filing.

(a) General. For filings subject to a public notice requirement,

any person may inspect or request a copy of the non-confidential

portions of a filing (the public file) until 180 days following final

disposition of a filing. Following the 180-day period, non-confidential

portions of an application file will be made available in accordance

with ' 303.8(c). The public file generally consists of portions of the

filing, supporting data, supplementary information, and comments

submitted by interested persons (if any) to the extent that the

documents have not been afforded confidential treatment. To view or

request photocopies of the public file, an oral or written request

should be submitted to the appropriate FDIC office. The public file

will be produced for review not more than one business day after

receipt by the appropriate FDIC office of the request (either written

or oral) to see the file. The FDIC may impose a fee for photocopying in

accordance with Sec. 309.5(f) of this chapter at the rates the FDIC

publishes annually in the Federal Register.

(b) Confidential treatment. (1) The applicant may request that

specific information be treated as confidential. The following

information generally is considered confidential:

(i) Personal information, the release of which would constitute a

clearly unwarranted invasion of privacy;

(ii) Commercial or financial information, the disclosure of which

could result in substantial competitive harm to the submitter; and

(iii) Information, the disclosure of which could seriously affect

the financial condition of any depository institution.

(2) If an applicant requests confidential treatment for information

that the FDIC does not consider to be confidential, the FDIC may

include that information in the public file after notifying the

applicant. On its own initiative, the FDIC may determine that certain

information should be treated as confidential and withhold that

information from the public file.

(c) FOIA requests. A written request for information withheld from

the public file, or copies of the public file following closure of the

file 180 days after final disposition, should be submitted pursuant to

the Freedom of Information Act (5 U.S.C. 552) and part 309 of this

chapter to the FDIC, Attn: FOIA/Privacy Group, Legal Division, 550 17th

Street, NW., Washington, DC 20429.

Sec. 303.9 Comments.

(a) Submission of comments. For filings subject to a public notice

requirement, any person may submit comments to the appropriate FDIC

regional director during the comment period.

(b) Comment period--(1) General. Consult appropriate subparts of

this part for the comment period applicable to a particular filing.

(2) Extension. The FDIC may extend or reopen the comment period if:

(i) The applicant fails to file all required information on a

timely basis to permit review by the public or makes a request for

confidential treatment not granted by the FDIC that delays the public

availability of that information;

(ii) Any person requesting an extension of time satisfactorily

demonstrates to the FDIC that additional time is necessary to develop

factual information that the FDIC determines may materially affect the

application; or

(iii) The FDIC determines that other good cause exists.

(3) Solicitation of comments. Whenever appropriate, the appropriate

regional director may solicit comments from any person or institution

which might have an interest in or be affected by the pending filing.

(4) Applicant response. The FDIC will provide copies of all

comments received to the applicant and may give the applicant an

opportunity to respond.

Sec. 303.10 Hearings and other meetings.

(a) Matters covered. This section covers hearings and other

proceedings in connection with filings and determinations for or by:

(1) Deposit insurance by a proposed new depository institution or

operating non-insured institution;

(2) An insured state nonmember bank to establish a domestic branch

or to relocate a main office or domestic branch;

(3) Relocation of an insured branch of a foreign bank;

(4)(i) Merger transaction which requires the FDIC's prior approval

under the Bank Merger Act (12 U.S.C. 1828(c));

(ii) Except as otherwise expressly provided, the provisions of this

Sec. 303.10 shall not be applicable to any proposed merger transaction

which the FDIC Board of Directors determines must be acted upon

immediately to prevent the probable failure of one of the institutions

involved, or must be handled with expeditious action due to an existing

emergency condition, as permitted by the Bank Merger Act (12 U.S.C.

1828(c)(6));

(5) Nullification of a decision on a filing; and

(6) Any other purpose or matter which the FDIC Board of Directors

in its sole discretion deems appropriate.

(b) Hearing requests. (1) Any person may submit a written request

for a hearing on a filing:

(i) To the appropriate regional director before the end of the

comment period; or

(ii) To the appropriate regional director, pursuant to a notice to

nullify a decision on a filing issued pursuant to Sec. 303.11(g)(2)(i)

or (ii).

(2) The request must describe the nature of the issues or facts to be

presented and the reasons why written submissions would be insufficient

to make an adequate presentation of those issues or facts to the FDIC.

A person requesting a hearing shall simultaneously submit a copy of the

request to the applicant.

(c) Action on a hearing request. The appropriate regional director,

after consultation with the Legal Division, may grant or deny a request

for a hearing and may limit the issues that he or she deems relevant or

material. The FDIC generally grants a hearing request only if it

determines that written submissions would be insufficient or that a

hearing otherwise would be in the public interest.

(d) Denial of a hearing request. If the appropriate regional

director, after consultation with the Legal Division, denies a hearing

request, he or she shall notify the person requesting the hearing of

the reason for the denial. A decision to deny a hearing request shall

be a final agency determination and is not appealable.

(e) FDIC procedures prior to the hearing--(1) Notice of hearing.

The FDIC shall issue a notice of hearing if it grants a request for a

hearing or orders a hearing because it is in the public interest. The

notice of hearing shall state the subject and date of the filing, the

time and place of the hearing, and the issues to be addressed. The FDIC

shall send a copy of the notice of hearing to

[[Page 79251]]

the applicant, to the person requesting the hearing, and to anyone else

requesting a copy.

(2) The presiding officer shall be the regional director or

designee or such other person as may be named by the Board or the

Director. The presiding officer is responsible for conducting the

hearing and determining all procedural questions not governed by this

section.

(f) Participation in the hearing. Any person who wishes to appear

(participant) shall notify the appropriate regional director of his or

her intent to participate in the hearing no later than 10 days from the

date that the FDIC issues the Notice of Hearing. At least 5 days before

the hearing, each participant shall submit to the appropriate regional

director, as well as to the applicant and any other person as required

by the FDIC, the names of witnesses, a statement describing the

proposed testimony of each witness, and one copy of each exhibit the

participant intends to present.

(g) Transcripts. The FDIC shall arrange for a hearing transcript.

The person requesting the hearing and the applicant each shall bear the

cost of one copy of the transcript for his or her use unless such cost

is waived by the presiding officer and incurred by the FDIC.

(h) Conduct of the hearing--(1) Presentations. Subject to the

rulings of the presiding officer, the applicant and participants may

make opening and closing statements and present and examine witnesses,

material, and data.

(2) Information submitted. Any person presenting material shall

furnish one copy to the FDIC, one copy to the applicant, and one copy

to each participant.

(3) Laws not applicable to hearings. The Administrative Procedure

Act (5 U.S.C. 551 et seq.), the Federal Rules of Evidence (28 U.S.C.

Appendix), the Federal Rules of Civil Procedure (28 U.S.C. Rule 1 et

seq.), and the FDIC's Rules of Practice and Procedure (12 CFR part 308)

do not govern hearings under this Sec. 303.10.

(i) Closing the hearing record. At the applicant's or any

participant's request, or at the FDIC's discretion, the FDIC may keep

the hearing record open for up to 10 days following the FDIC's receipt

of the transcript. The FDIC shall resume processing the filing after

the record closes.

(j) Disposition and notice thereof. The presiding officer shall

make a recommendation to the FDIC within 20 days following the date the

hearing and record on the proceeding are closed. The FDIC shall notify

the applicant and all participants of the final disposition of a filing

and shall provide a statement of the reasons for the final disposition.

(k) Computation of time. In computing periods of time under this

section, the provisions of Sec. 308.12 of the FDIC's Rules of Practice

and Procedure (12 CFR 308.12) shall apply.

(l) Informal proceedings. The FDIC may arrange for an informal

proceeding with an applicant and other interested parties in connection

with a filing, either upon receipt of a written request for such a

meeting made during the comment period, or upon the FDIC's own

initiative. No later than 10 days prior to an informal proceeding, the

appropriate regional director shall notify the applicant and each

person who requested a hearing or oral presentation of the date, time,

and place of the proceeding. The proceeding may assume any form,

including a meeting with FDIC representatives at which participants

will be asked to present their views orally. The regional director may

hold separate meetings with each of the participants.

(m) Authority retained by FDIC Board of Directors to modify

procedures. The FDIC Board of Directors may delegate authority by

resolution on a case-by-case basis to the presiding officer to adopt

different procedures in individual matters and on such terms and

conditions as the Board of Directors determines in its discretion. The

resolution shall be made available for public inspection and copying in

the Office of the General Counsel, Executive Secretary Section under

the Freedom of Information Act (5 U.S.C. 552(a)(2)).

Sec. 303.11 Decisions.

(a) General procedures. The FDIC may approve, conditionally

approve, deny, or not object to a filing after appropriate review and

consideration of the record. The FDIC will promptly notify the

applicant and any person who makes a written request of the final

disposition of a filing. If the FDIC denies a filing, the FDIC will

immediately notify the applicant in writing of the reasons for the

denial.

(b) Authority retained by FDIC Board of Directors to modify

procedures. In acting on any filing under this part, the FDIC Board of

Directors may by resolution adopt procedures which differ from those

contained in this part when it deems it necessary or in the public

interest to do so. The resolution shall be made available for public

inspection and copying in the Office of the General Counsel, Executive

Secretary Section under the Freedom of Information Act (5 U.S.C.

552(a)(2)).

(c) Expedited processing. (1) A filing submitted by an eligible

depository institution as defined in Sec. 303.2(r) will receive

expedited processing as specified in the appropriate subparts of this

part unless the FDIC determines to remove the filing from expedited

processing for any of the reasons set forth in paragraph (c)(2) of this

section. Except for filings made pursuant to subpart J (International

Banking), expedited processing will not be available for any filing

that the appropriate regional director does not have delegated

authority to approve.

(2) Removal of filing from expedited processing. The FDIC may

remove a filing from expedited processing at any time prior to final

disposition if:

(i) For filings subject to public notice under Sec. 303.7, an

adverse comment is received that warrants additional investigation or

review;

(ii) For filings subject to evaluation of CRA performance under

Sec. 303.5, a CRA protest is received that warrants additional

investigation or review, or the appropriate regional director

determines that the filing presents a significant CRA or compliance

concern;

(iii) For any filing, the appropriate regional director determines

that the filing presents a significant supervisory concern, or raises a

significant legal or policy issue; or

(iv) For any filing, the appropriate regional director determines

that other good cause exists for removal.

(3) For purposes of this section, a significant CRA concern

includes, but is not limited to, a determination by the appropriate

regional director that, although a depository institution may have an

institution-wide rating of satisfactory or better, a depository

institution's CRA rating is less than satisfactory in a state or multi-

state metropolitan statistical area, or a depository institution's CRA

performance is less than satisfactory in a metropolitan statistical

area as defined in 12 CFR 345.12 (MSA) or in the non-MSA portion of a

state in which it seeks to expand through approval of an application

for a deposit facility as defined in 12 U.S.C. 2902(3).

(4) If the FDIC determines that it is necessary to remove a filing

from expedited processing pursuant to paragraph (c)(2) of this section,

the FDIC promptly will provide the applicant with a written explanation

(d) Multiple transactions. If the FDIC is considering related

transactions, some or all of which have been granted expedited

processing, then the longest processing time for any of the related

transactions shall govern for purposes of approval.

(e) Abandonment of filing. A filing must contain all information

set forth in

[[Page 79252]]

the applicable subpart of this part. To the extent necessary to

evaluate a filing, the FDIC may require an applicant to provide

additional information. If information requested by the FDIC is not

provided within the time period specified by the agency, the FDIC may

deem the filing abandoned and shall provide written notification to the

applicant and any interested parties that submitted comments to the

FDIC that the file has been closed.

(f) Appeals and requests for reconsideration--(1) General. Appeal

procedures for a denial of a change in bank control (subpart E), change

in senior executive officer or board of directors (subpart F) or denial

of an application pursuant to section 19 of the FDI Act (subpart L) are

contained in 12 CFR part 308, subparts D, L, and M, respectively. For

all other filings covered by this chapter for which appeal procedures

are not provided by regulation or other written guidance, the

procedures specified in paragraphs (f) (2) and (3) of this section

shall apply. A decision to deny a request for a hearing is a final

agency determination and is not appealable.

(2) Filing procedures. Within 15 days of receipt of notice from the

FDIC that its filing has been denied, any applicant may file a request

for reconsideration with the appropriate regional director.

(3) Content of filing. A request for reconsideration must contain

the following information:

(i) A resolution of the board of directors of the applicant

authorizing filing of the request if the applicant is a corporation, or

a letter signed by the individual(s) filing the request if the

applicant is not a corporation;

(ii) Relevant, substantive information that for good cause was not

previously set forth in the filing; and

(iii) Specific reasons why the FDIC should reconsider its prior

decision.

(4) [Reserved]

(5) [Reserved]

(6) Processing. The FDIC will notify the applicant whether

reconsideration will be granted or denied within 15 days of receipt of

a request for reconsideration. If a request for reconsideration is

granted pursuant to Sec. 303.11(f), the FDIC will notify the applicant

of the final agency decision on such filing within 60 days of its

receipt of the request for reconsideration.

(g) Nullification, withdrawal, revocation, amendment, and

suspension of decisions on filings--(1) Grounds for action. Except as

otherwise provided by law or regulation, the FDIC may nullify,

withdraw, revoke, amend or suspend a decision on a filing if it becomes

aware at anytime:

(i) Of any material misrepresentation or omission related to the

filing or of any material change in circumstance that occurred prior to

the consummation of the transaction or commencement of the activity

authorized by the decision on the filing; or

(ii) That the decision on the filing is contrary to law or

regulation or was granted due to clerical or administrative error.

(iii) Any person responsible for a material misrepresentation or

omission in a filing or supporting materials may be subject to an

enforcement action and other penalties, including criminal penalties

provided in Title 18 of the United States Code.

(2) Notice of intent and temporary order. (i) Except as provided in

Sec. 303.11(g)(2)(ii), before taking action under this Sec.

303.11(g), the FDIC shall issue and serve on an applicant written

notice of its intent to take such action. A notice of intent to act on

a filing shall include:

(A) The reasons for the proposed action; and

(B) The date by which the applicant may file a written response

with the FDIC.

(ii) The FDIC may issue a temporary order on a decision on a filing

without providing an applicant a prior notice of intent if the FDIC

determines that:

(A) It is necessary to reevaluate the impact of a change in

circumstance prior to the consummation of the transaction or

commencement of the activity authorized by the decision on the filing;

or

(B) The activity authorized by the filing may pose a threat to the

interests of the depository institution's depositors or may threaten to

impair public confidence in the depository institution.

(iii) A temporary order shall provide the applicant with an

opportunity to make a written response in accordance with Sec.

303.11(g)(3) of this section.

(3) Response to notice of intent or temporary order. An applicant

may file a written response to a notice of intent or a temporary order

within 15 days from the date of service of the notice or temporary

order. The written response should include:

(i) An explanation of why the proposed action or temporary order is

not warranted; and

(ii) Any other relevant information, mitigating circumstance,

documentation, or other evidence in support of the applicant's

position. An applicant may also request a hearing under Sec. 303.10 of

this part. Failure by an applicant to file a written response with the

FDIC to a notice of intent or a temporary order within the specified

time period, shall constitute a waiver of the opportunity to respond

and shall constitute consent to a final order under this Sec.

303.11(g).

(4) Effective date. All orders issued pursuant to this section

shall become effective immediately upon issuance unless otherwise

stated therein.

Sec. Sec. 303. 12-303.13 [Reserved]

Sec. 303.14 Being ``engaged in the business of receiving deposits

other than trust funds.''

(a) Except as provided in paragraphs (b), (c), and (d) of this

section, a depository institution shall be ``engaged in the business of

receiving deposits other than trust funds'' only if it maintains one or

more non-trust deposit accounts in the minimum aggregate amount of

$500,000.

(b) An applicant for federal deposit insurance under section 5 of

the FDI Act, 12 U.S.C. 1815(a), shall be deemed to be ``engaged in the

business of receiving deposits other than trust funds'' from the date

that the FDIC approves deposit insurance for the institution until one

year after it opens for business.

(c) Any depository institution that fails to satisfy the minimum

deposit standard specified in paragraph (a) of this section as of two

consecutive call report dates (i.e., March 31st, June 30th, September

30th, and December 31st) shall be subject to a determination by the

FDIC that the institution is not ``engaged in the business of receiving

deposits other than trust funds'' and to termination of its insured

status under section 8(p) of the FDI Act, 12 U.S.C. 1818(p). For

purposes of this paragraph, the first three call report dates after the

institution opens for business are excluded.

(d) Notwithstanding any failure by an insured depository

institution to satisfy the minimum deposit standard in paragraph (a) of

this section, the institution shall continue to be ``engaged in the

business of receiving deposits other than trust funds'' for purposes of

section 3 of the FDI Act until the institution's insured status is

terminated by the FDIC pursuant to a proceeding under section 8(a) or

section 8(p) of the FDI Act. 12 U.S.C. 1818(a) or 1818(p).

Sec. Sec. 303.15-303.19 [Reserved]

Subpart B--Deposit Insurance

Sec. 303.20 Scope.

This subpart sets forth the procedures for applying for deposit

insurance for a proposed depository institution or an operating

noninsured depository

[[Page 79253]]

institution under section 5 of the FDI Act (12 U.S.C. 1815). It also

sets forth the procedures for requesting continuation of deposit

insurance for a state-chartered bank withdrawing from membership in the

Federal Reserve System and for interim institutions chartered to

facilitate a merger transaction.

Sec. 303.21 Filing procedures.

(a) Applications for deposit insurance shall be filed with the

appropriate FDIC office. The relevant application forms and

instructions for applying for deposit insurance for an existing or

proposed depository institution may be obtained from any FDIC regional

director.

(b) An application for deposit insurance for an interim depository

institution shall be filed and processed in accordance with the

procedures set forth in Sec. 303.24, subject to the provisions of

Sec. 303.62(b)(2) regarding deposit insurance for interim

institutions. An interim institution is defined as a state- or

federally-chartered depository institution that does not operate

independently but exists solely as a vehicle to accomplish a merger

transaction.

(c) A request for continuation of deposit insurance upon

withdrawing from membership in the Federal Reserve System shall be in

letter form and shall provide the information prescribed in Sec.

303.25.

Sec. 303.22 Processing.

(a) Expedited processing for proposed institutions. (1) An

application for deposit insurance for a proposed institution which will

be a subsidiary of an eligible depository institution as defined in

Sec. 303.2(r) or an eligible holding company will be acknowledged in

writing by the FDIC and will receive expedited processing unless the

applicant is notified in writing to the contrary and provided with the

basis for that decision. An eligible holding company is defined as a

bank or thrift holding company that has consolidated assets of $150

million or more, has an assigned composite rating of 2 or better, and

has at least 75 percent of its consolidated depository institution

assets comprised of eligible depository institutions. The FDIC may

remove an application from expedited processing for any of the reasons

set forth in Sec. 303.11(c)(2).

(2) Under expedited processing, the FDIC will take action on an

application within 60 days of receipt of a substantially complete

application or 5 days after the expiration of the comment period

described in Sec. 303.23, whichever is later. Final action may be

withheld until the FDIC has assurance that permission to organize the

proposed institution will be granted by the chartering authority.

Notwithstanding paragraph (a)(1) of this section, if the FDIC does not

act within the expedited processing period, it does not constitute an

automatic or default approval.

(b) Standard processing. For those applications that are not

processed pursuant to the expedited procedures, the FDIC will provide

the applicant with written notification of the final action when the

decision is rendered.

Sec. 303.23 Public notice requirements.

(a) De novo institutions and operating noninsured institutions. The

applicant shall publish a notice as prescribed in Sec. 303.7 in a

newspaper of general circulation in the community in which the main

office of the depository institution is or will be located. Notice

shall be published as close as practicable to, but no sooner than five

days before, the date the application is mailed or delivered to the

appropriate FDIC office. Comments by interested parties must be

received by the appropriate regional director within 30 days following

the date of publication, unless the comment period has been extended or

reopened in accordance with Sec. 303.9(b)(2).

(b) Exceptions to public notice requirements. No publication shall

be required in connection with the granting of insurance to a new

depository institution established pursuant to the resolution of a

depository institution in default, or to an interim depository

institution formed solely to facilitate a merger transaction, or for a

request for continuation of federal deposit insurance by a state-

chartered bank withdrawing from membership in the Federal Reserve

System.

Sec. 303.24 Application for deposit insurance for an interim

institution.

(a) Application required. Subject to Sec. 303.62(b)(2), a deposit

insurance application is required for a state-chartered interim

institution if the related merger transaction is subject to approval by

a federal banking agency other than the FDIC. A separate application

for deposit insurance for an interim institution is not required in

connection with any merger requiring FDIC approval pursuant to subpart

D of this part.

(b) Content of separate application. A letter application for

deposit insurance for an interim institution, accompanied by a copy of

the related merger application, shall be filed with the appropriate

FDIC office. The letter application shall briefly describe the

transaction and contain a statement that deposit insurance is being

requested for an interim institution that does not operate

independently but exists solely as a vehicle to accomplish a merger

transaction which will be reviewed by a federal banking agency other

than the FDIC.

(c) Processing. An application for deposit insurance for an interim

depository institution will be acknowledged in writing by the FDIC.

Final action will be taken within 21 days after receipt of a

substantially complete application, unless the applicant is notified in

writing that additional review is warranted. If the FDIC does not act

within the expedited processing period, it does not constitute an

automatic or default approval.

Sec. 303.25 Continuation of deposit insurance upon withdrawing from

membership in the Federal Reserve System.

(a) Content of application. To continue its insured status upon

withdrawal from membership in the Federal Reserve System, a state-

chartered bank shall submit a letter application to the appropriate

FDIC office. A complete application shall consist of the following

information:

(1) A copy of the letter, and any attachments thereto, sent to the

appropriate Federal Reserve Bank setting forth the bank's intention to

terminate its membership;

(2) A copy of the letter from the Federal Reserve Bank

acknowledging the bank's notice to terminate membership;

(3) A statement regarding any anticipated changes in the bank's

general business plan during the next 12-month period; and

(4)(i) A statement by the bank's management that there are no

outstanding or proposed corrective programs or supervisory agreements

with the Federal Reserve System.

(ii) If such programs or agreements exist, a statement by the

applicant that its Board of Directors is willing to enter into similar

programs or agreements with the FDIC which would become effective upon

withdrawal from the Federal Reserve System.

(b) Processing. An application for deposit insurance under this

section will be acknowledged in writing by the FDIC. The FDIC shall

notify the applicant, within 15 days of receipt of a substantially

complete application, either that federal deposit insurance will

continue upon termination of membership in the Federal Reserve System

or that additional review is warranted and the applicant will be

notified, in writing, of the FDIC's final

[[Page 79254]]

decision regarding continuation of deposit insurance. If the FDIC does

not act within the expedited processing period, it does not constitute

an automatic or default approval.

Sec. Sec. 303.26--303.39 [Reserved]

Subpart C--Establishment and Relocation of Domestic Branches and

Offices

Sec. 303.40 Scope.

(a) General. This subpart sets forth the application requirements

and procedures for insured state nonmember banks to establish a branch,

relocate a branch or main office, and retain existing branches after

the interstate relocation of the main office subject to the approval by

the FDIC pursuant to sections 13(f), 13(k), 18(d) and 44 of the FDI

Act.

(b) Merger transaction. Applications for approval of the

acquisition and establishment of branches in connection with a merger

transaction under section 18(c) of the FDI Act (12 U.S.C. 1828(c)), are

processed in accordance with subpart D (Merger Transactions) of this

part.

(c) Insured branches of foreign banks and foreign branches of

domestic banks. Applications regarding insured branches of foreign

banks and foreign branches of domestic banks are processed in

accordance with subpart J (International Banking) of this part.

(d) Interstate acquisition of individual branch. Applications

requesting approval of the interstate acquisition of an individual

branch or branches located in a state other than the applicant's home

state without the acquisition of the whole bank are treated as

interstate bank merger transactions under section 44 of the FDI Act (12

U.S.C. 1831a(u)), and are processed in accordance with subpart D

(Merger Transactions) of this part.

Sec. 303.41 Definitions.

For purposes of this subpart:

(a) Branch includes any branch bank, branch office, additional

office, or any branch place of business located in any State of the

United States or in any territory of the United States, Puerto Rico,

Guam, American Samoa, the Trust Territory of the Pacific Islands, the

Virgin Islands, and the Northern Mariana Islands at which deposits are

received or checks paid or money lent. A branch does not include an

automated teller machine, an automated loan machine, or a remote

service unit. The term branch also includes the following:

(1) A messenger service that is operated by a bank or its affiliate

that picks up and delivers items relating to transactions in which

deposits are received or checks paid or money lent. A messenger service

established and operated by a non-affiliated third party generally does

not constitute a branch for purposes of this subpart. Banks contracting

with third parties to provide messenger services should consult with

the FDIC to determine if the messenger service constitutes a branch.

(2) A mobile branch, other than a messenger service, that does not

have a single, permanent site and uses a vehicle that travels to

various locations to enable the public to conduct banking business. A

mobile branch may serve defined locations on a regular schedule or may

serve a defined area at varying times and locations.

(3) A temporary branch that operates for a limited period of time

not to exceed one year as a public service, such as during an emergency

or disaster situation.

(4) A seasonal branch that operates at various periodically

recurring intervals, such as during state and local fairs, college

registration periods, and other similar occasions.

(b) Branch relocation means a move within the same immediate

neighborhood of the existing branch that does not substantially affect

the nature of the business of the branch or the customers of the

branch. Moving a branch to a location outside its immediate

neighborhood is considered the closing of an existing branch and the

establishment of a new branch. Closing of a branch is covered in the

FDIC Statement of Policy Concerning Branch Closing Notices and

Policies. 1 FDIC Law, Regulations, Related Acts 5391; see Sec. 309.4

(a) and (b) of this chapter for availability.

(c) De novo branch means a branch of a bank which is established by

the bank as a branch and does not become a branch of such bank as a

result of:

(1) The acquisition by the bank of an insured depository

institution or a branch of an insured depository institution; or

(2) The conversion, merger, or consolidation of any such

institution or branch.

(d) Home state means the state by which the bank is chartered.

(e) Host state means a state, other than the home state of the

bank, in which the bank maintains, or seeks to establish and maintain,

a branch.

Sec. 303.42 Filing procedures.

(a) General. An applicant shall submit an application to the

appropriate FDIC office on the date the notice required by Sec. 303.44

is published, or within 5 days after the date of the last required

publication.

(b) Content of filing. A complete letter application shall include

the following information:

(1) A statement of intent to establish a branch, or to relocate the

main office or a branch;

(2) The exact location of the proposed site including the street

address. With regard to messenger services, specify the geographic area

in which the services will be available. With regard to a mobile branch

specify the community or communities in which the vehicle will operate

and the manner in which it will be used;

(3) Details concerning any involvement in the proposal by an

insider of the bank as defined in Sec. 303.2(u), including any

financial arrangements relating to fees, the acquisition of property,

leasing of property, and construction contracts;

(4) A statement on the impact of the proposal on the human

environment, including, information on compliance with local zoning

laws and regulations and the effect on traffic patterns for purposes of

complying with the applicable provisions of the NEPA and the FDIC

Statement of Policy on NEPA (1 FDIC Law, Regulations, Related Acts

5185; see Sec. 309.4 (a) and (b) of this chapter for availability);

(5) A statement as to whether or not the site is eligible for

inclusion in the National Register of Historic Places for purposes of

complying with applicable provisions of the NHPA and the FDIC Statement

of Policy on NHPA (1 FDIC Law, Regulations, Related Acts 5175; see

Sec. 309.4 (a) and (b) of this chapter for availability) including

documentation of consultation with the State Historic Preservation

Officer, as appropriate;

(6) Comments on any changes in services to be offered, the

community to be served, or any other effect the proposal may have on

the applicant's compliance with the CRA;

(7) A copy of each newspaper publication required by Sec. 303.44

of this subpart, the name and address of the newspaper, and date of the

publication;

(8) When an application is submitted to relocate the main office of

the applicant from one state to another, a statement of the applicant's

intent regarding retention of branches in the state where the main

office exists prior to relocation.

(c) Undercapitalized institutions. Applications to establish a

branch by applicants subject to section 38 of the FDI Act (12 U.S.C.

1831o) also should provide the information required by Sec. 303.204.

Applications pursuant to sections 38 and 18(d) of the FDI Act (12

[[Page 79255]]

U.S.C. 1831o and 1828(d)) may be filed concurrently or as a single

application.

(d) Additional information. The FDIC may request additional

information to complete processing.

Sec. 303.43 Processing.

(a) Expedited processing for eligible depository institutions. An

application filed under this subpart by an eligible depository

institution as defined in Sec. 303.2(r) will be acknowledged in

writing by the FDIC and will receive expedited processing, unless the

applicant is notified in writing to the contrary and provided with the

basis for that decision. The FDIC may remove an application from

expedited processing for any of the reasons set forth in Sec.

303.11(c)(2). Absent such removal, an application processed under

expedited processing will be deemed approved on the latest of the

following:

(1) The 21st day after receipt by the FDIC of a substantially

complete filing;

(2) The 5th day after expiration of the comment period described

inSec. 303.44; or

(3) In the case of an application to establish and operate a de

novo branch in a state that is not the applicant's home state and in

which the applicant does not maintain a branch, the 5th day after the

FDIC receives confirmation from the host state that the applicant has

both complied with the filing requirements of the host state and

submitted a copy of the application with the FDIC to the host state

bank supervisor.

(b) Standard processing. For those applications which are not

processed pursuant to the expedited procedures, the FDIC will provide

the applicant with written notification of the final action when the

decision is rendered.

Sec. 303.44 Public notice requirements.

(a) Newspaper publications. For applications to establish or

relocate a branch, a notice as described in Sec. 303.7(c) shall be

published once in a newspaper of general circulation. For applications

to relocate a main office, notice shall be published at least once each

week on the same day for two consecutive weeks. The required

publication shall be made in the following communities:

(1) To establish a branch. In the community in which the main

office is located and in the communities to be served by the branch

(including messenger services and mobile branches).

(2) To relocate a main office. In the community in which the main

office is currently located and in the community to which it is

proposed the main office will relocate.

(3) To relocate a branch. In the community in which the branch is

located.

(b) Public comments. Comments by interested parties must be

received by the appropriate regional director within 15 days after the

date of the last newspaper publication required by paragraph (a) of

this section, unless the comment period has been extended or reopened

in accordance with Sec. 303.9(b)(2).

(c) Lobby notices. In the case of applications to relocate a main

office or a branch, a copy of the required newspaper publication shall

be posted in the public lobby of the office to be relocated for at

least 15 days beginning on the date of the last published notice

required by paragraph (a) of this section.

Sec. 303.45 Special provisions.

(a) Emergency or disaster events. (1) In the case of an emergency

or disaster at a main office or a branch which requires that an office

be immediately relocated to a temporary location, applicants shall

notify the appropriate FDIC office within 3 days of such temporary

relocation.

(2) Within 10 days of the temporary relocation resulting from an

emergency or disaster, the bank shall submit a written application to

the appropriate FDIC office, that identifies the nature of the

emergency or disaster, specifies the location of the temporary branch,

and provides an estimate of the duration the bank plans to operate the

temporary branch.

(3) As part of the review process, the FDIC will determine on a

case by case basis whether additional information is necessary and may

waive public notice requirements.

(b) Redesignation of main office and existing branch. In cases

where an applicant desires to redesignate its main office as a branch

and redesignate an existing branch as the main office, a single

application shall be submitted. The FDIC may waive the public notice

requirements in instances where an application presents no significant

or novel policy, supervisory, CRA, compliance or legal concerns. A

waiver will be granted only to a redesignation within the applicant's

home state.

(c) Expiration of approval. Approval of an application expires if

within 18 months after the approval date a branch has not commenced

business or a relocation has not been completed.

Sec. Sec. 303.46-303.59 [Reserved]

Subpart D--Merger Transactions

Sec. 303.60 Scope.

This subpart sets forth the application requirements and procedures

for transactions subject to FDIC approval under the Bank Merger Act,

section 18(c) of the FDI Act (12 U.S.C. 1828(c)). Additional guidance

is contained in the FDIC ``Statement of Policy on Bank Merger

Transactions'' (1 FDIC Law, Regulations, Related Acts 5145; see Sec.

309.4(a) and (b) of this chapter for availability).

Sec. 303.61 Definitions.

For purposes of this subpart:

(a) Merger transaction includes any transaction:

(1) In which an insured depository institution merges or

consolidates with any other insured depository institution or, either

directly or indirectly, acquires the assets of, or assumes liability to

pay any deposits made in, any other insured depository institution; or

(2) In which an insured depository institution merges or

consolidates with any noninsured bank or institution or assumes

liability to pay any deposits made in, or similar liabilities of, any

noninsured bank or institution, or in which an insured depository

institution transfers assets to any noninsured bank or institution in

consideration of the assumption of any portion of the deposits made in

the insured depository institution.

(b) Corporate reorganization means a merger transaction between

commonly-owned institutions, between an insured depository institution

and its subsidiary, or between an insured depository institution and

its holding company, provided that the merger transaction would have no

effect on competition or otherwise have significance under the

statutory standards set forth in section 18(c) of the FDI Act (12

U.S.C. 1828(c)). For purposes of this paragraph, institutions are

commonly-owned if more than 50 percent of the voting stock of each of

the institutions is owned by the same company, individual, or group of

closely-related individuals acting in concert.

(c) Interim merger transaction means a merger transaction (other

than a purchase and assumption transaction) between an operating

depository institution and a newly-formed depository institution or

corporation that will not operate independently and that exists solely

for the purpose of facilitating a corporate reorganization.

(d) Optional conversion (Oakar transaction) means a merger

transaction

[[Page 79256]]

in which an insured depository institution assumes deposit liabilities

insured by the deposit insurance fund (either the Bank Insurance Fund

(BIF) or the Savings Association Insurance Fund (SAIF)) of which that

assuming institution is not a member, and elects not to convert the

insurance covering the assumed deposits. Such transactions are covered

by section 5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)).

(e) Resulting institution refers to the acquiring, assuming or

resulting institution in a merger transaction.

Sec. 303.62 Transactions requiring prior approval.

(a) Merger transactions. The following merger transactions require

the prior written approval of the FDIC under this subpart:

(1) Any merger transaction, including any corporate reorganization,

interim merger transaction, or optional conversion, in which the

resulting institution is to be an insured state nonmember bank; and

(2) Any merger transaction, including any corporate reorganization

or interim merger transaction, that involves an uninsured bank or

institution.

(b) Related provisions. Transactions covered by this subpart also

may be subject to other provisions or application requirements,

including the following:

(1) Interstate merger transactions. Merger transactions between

insured banks that are chartered in different states are subject to the

provisions of section 44 of the FDI Act (12 U.S.C. 1831u). In the case

of a merger transaction that consists of the acquisition by an out of

state bank of a branch without acquisition of the bank, the branch is

treated for section 44 purposes as a bank whose home state is the state

in which the branch is located.

(2) Deposit insurance. An application for deposit insurance will be

required in connection with a merger transaction between a state-

chartered interim institution and an insured depository institution if

the related merger application is being acted upon by a federal banking

agency other than the FDIC. If the FDIC is the federal banking agency

responsible for acting on the related merger application, a separate

application for deposit insurance is not necessary. Procedures for

applying for deposit insurance are set forth in subpart B of this part.

An application for deposit insurance will not be required in connection

with a merger transaction (other than a purchase and assumption

transaction) of a federally-chartered interim institution and an

insured institution, even if the resulting institution is to operate

under the charter of the federal interim institution.

(3) Deposit insurance fund conversions. Procedures for conversion

transactions involving the transfer of deposits from BIF to SAIF or

from SAIF to BIF are set forth in subpart M of this part at Sec.

303.246.

(4) Branch closings. Branch closings in connection with a merger

transaction are subject to the notice requirements of section 42 of the

FDI Act (12 U.S.C. 1831r-1), including requirements for notice to

customers. These requirements are addressed in the ``Interagency Policy

Statement Concerning Branch Closings Notices and Policies'' (1 FDIC

Law, Regulations, Related Acts (FDIC) 5391; see Sec. 309.4(a) and (b)

of this chapter for availability.)

(5) Undercapitalized institutions. Applications for a merger

transaction by applicants subject to section 38 of the FDI Act (12

U.S.C. 1831o) should also provide the information required by Sec.

303.204. Applications pursuant to sections 38 and 18(c) of the FDI Act

(12 U.S.C, 1831o and 1828(c)) may be filed concurrently or as a single

application.

(6) Certification of assumption of deposit liability. An insured

depository institution assuming deposit liabilities of another insured

institution must provide certification of assumption of deposit

liability to the FDIC in accordance with 12 CFR part 307.

Sec. 303.63 Filing procedures.

(a) General. Applications required under this subpart shall be

filed with the appropriate FDIC office. The appropriate forms and

instructions may be obtained upon request from any FDIC regional

director.

(b) Merger transactions. Applications for approval of merger

transactions shall be accompanied by copies of all agreements or

proposed agreements relating to the merger transaction and any other

information requested by the FDIC.

(c) Interim merger transactions. Applications for approval of

interim merger transactions and any related deposit insurance

applications shall be made by filing the forms and other documents

required by paragraphs (a) and (b) of this section and such other

information as may be required by the FDIC for consideration of the

request for deposit insurance.

(d) Optional conversions. If the proposed merger transaction is an

optional conversion, the merger application shall include a statement

that the proposed merger transaction is a transaction covered by

section 5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)).

Sec. 303.64 Processing.

(a) Expedited processing for eligible depository institutions--(1)

General. An application filed under this subpart by an eligible

depository institution as defined in Sec. 303.2(r) and which meets the

additional criteria in paragraph (a)(4) of this section will be

acknowledged by the FDIC in writing and will receive expedited

processing, unless the applicant is notified in writing to the contrary

and provided with the basis for that decision. The FDIC may remove an

application from expedited processing for any of the reasons set forth

in Sec. 303.11(c)(2).

(2) Under expedited processing, the FDIC will take action on an

application by the date that is the latest of:

(i) 45 days after the date of the FDIC's receipt of a substantially

complete merger application; or

(ii) 10 days after the date of the last notice publication required

under Sec. 303.65 of this subpart; or

(iii) 5 days after receipt of the Attorney General's report on the

competitive factors involved in the proposed transaction; or

(iv) For an interstate merger transaction subject to the provisions

of section 44 of the FDI Act (12 U.S.C. 1831u), 5 days after the FDIC

receives confirmation from the host state (as defined in Sec.

303.41(e)) that the applicant has both complied with the filing

requirements of the host state and submitted a copy of the FDIC merger

application to the host state's bank supervisor.

(3) Notwithstanding paragraph (a)(1) of this section, if the FDIC

does not act within the expedited processing period, it does not

constitute an automatic or default approval.

(4) Criteria. The FDIC will process an application using expedited

procedures if:

(i) Immediately following the merger transaction, the resulting

institution will be ``well-capitalized'' pursuant to subpart B of part

325 of this chapter (12 CFR part 325); and

(ii)(A) All parties to the merger transaction are eligible

depository institutions as defined in Sec. 303.2(r); or

(B) The acquiring party is an eligible depository institution as

defined in Sec. 303.2(r) and the amount of the total assets to be

transferred does not exceed an amount equal to 10 percent of the

acquiring institution's total assets as reported in its report of

condition for the quarter immediately preceding the filing of the

merger application.

(b) Standard processing. For those applications not processed

pursuant to the expedited procedures, the FDIC will provide the

applicant with written

[[Page 79257]]

notification of the final action taken by the FDIC on the application

when the decision is rendered.

Sec. 303.65 Public notice requirements.

(a) General. Except as provided in paragraph (b) of this section,

an applicant for approval of a merger transaction must publish notice

of the proposed transaction on at least three occasions at

approximately equal intervals in a newspaper of general circulation in

the community or communities where the main offices of the merging

institutions are located or, if there is no such newspaper in the

community, then in the newspaper of general circulation published

nearest thereto.

(1) First publication. The first publication of the notice should

be as close as practicable to the date on which the application is

filed with the FDIC, but no more than 5 days prior to the filing date.

(2) Last publication. The last publication of the notice shall be

on the 25th day after the first publication or, if the newspaper does

not publish on the 25th day, on the newspaper's publication date that

is closest to the 25th day.

(b) Exceptions--(1) Emergency requiring expeditious action. If the

FDIC determines that an emergency exists requiring expeditious action,

notice shall be published twice. The first notice shall be published as

soon as possible after the FDIC notifies the applicant of such

determination. The second notice shall be published on the 7th day

after the first publication or, if the newspaper does not publish on

the 7th day, on the newspaper's publication date that is closest to the

7th day.

(2) Probable failure. If the FDIC determines that it must act

immediately to prevent the probable failure of one of the institutions

involved in a proposed merger transaction, publication is not required.

(c) Content of notice--(1) General. The notice shall conform to the

public notice requirements set forth in Sec. 303.7.

(2) Branches. If it is contemplated that the resulting institution

will operate offices of the other institution(s) as branches, the

following statement shall be included in the notice required in Sec.

303.7(b):

It is contemplated that all offices of the above-named institutions

will continue to be operated (with the exception of [insert identity

and location of each office that will not be operated]).

(3) Emergency requiring expeditious action. If the FDIC determines

that an emergency exists requiring expeditious action, the notice shall

specify as the closing date of the public comment period the date that

is the 10th day after the date of the first publication.

(d) Public comments. Comments must be received by the appropriate

FDIC office within 30 days after the first publication of the notice,

unless the comment period has been extended or reopened in accordance

with Sec. 303.9(b)(2). If the FDIC has determined that an emergency

exists requiring expeditious action, comments must be received by the

appropriate FDIC office within 10 days after the first publication.

Sec. Sec. 303.66--303.79 [Reserved]

Subpart E--Change in Bank Control

Sec. 303.80 Scope.

This subpart sets forth the procedures for submitting a notice to

acquire control of an insured state nonmember bank pursuant to the

Change in Bank Control Act of 1978, section 7(j) of the FDI Act (12

U.S.C. 1817(j)).

Sec. 303.81 Definitions.

For purposes of this subpart:

(a) Acquisition means a purchase, assignment, transfer, pledge or

other disposition of voting shares, or an increase in percentage

ownership of an insured state nonmember bank resulting from a

redemption of voting shares.

(b) Acting in concert means knowing participation in a joint

activity or parallel action towards a common goal of acquiring control

of an insured state nonmember bank, whether or not pursuant to an

express agreement.

(c) Control means the power, directly or indirectly, to direct the

management or policies of an insured bank or to vote 25 percent or more

of any class of voting shares of an insured bank.

(d) Person means an individual, corporation, partnership, trust,

association, joint venture, pool, syndicate, sole proprietorship,

unincorporated organization, and any other form of entity; and a voting

trust, voting agreement, and any group of persons acting in concert.

Sec. 303.82 Transactions requiring prior notice.

(a) Prior notice requirement. Any person acting directly or

indirectly, or through or in concert with one or more persons, shall

give the FDIC 60 days prior written notice, as specified in Sec.

303.84, before acquiring control of an insured state nonmember bank,

unless the acquisition is exempt under Sec. 303.83.

(b) Acquisitions requiring prior notice--(1) Acquisition of

control. The acquisition of control, unless exempted, requires prior

notice to the FDIC.

(2) Rebuttable presumption of control. The FDIC presumes that an

acquisition of voting shares of an insured state nonmember bank

constitutes the acquisition of the power to direct the management or

policies of an insured bank requiring prior notice to the FDIC, if,

immediately after the transaction, the acquiring person (or persons

acting in concert) will own, control, or hold with power to vote 10

percent or more of any class of voting shares of the institution, and

if:

(i) The institution has registered shares under section 12 of the

Securities Exchange Act of 1934 (15 U.S.C. 78l); or

(ii) No other person will own, control or hold the power to vote a

greater percentage of that class of voting shares immediately after the

transaction. If two or more persons, not acting in concert, each

propose to acquire simultaneously equal percentages of 10 percent or

more of a class of voting shares of an insured state nonmember bank,

each such person shall file prior notice with the FDIC.

(c) Acquisitions of loans in default. The FDIC presumes an

acquisition of a loan in default that is secured by voting shares of an

insured state nonmember bank to be an acquisition of the underlying

shares for purposes of this section.

(d) Other transactions. Transactions other than those set forth in

paragraph (b)(2) of this section resulting in a person's control of

less than 25 percent of a class of voting shares of an insured state

nonmember bank are not deemed by the FDIC to constitute control for

purposes of the Change in Bank Control Act (12 U.S.C. 1817j).

(e) Rebuttal of presumptions. Prior notice to the FDIC is not

required for any acquisition of voting shares under the presumption of

control set forth in this section, if the FDIC finds that the

acquisition will not result in control. The FDIC will afford any person

seeking to rebut a presumption in this section an opportunity to

present views in writing or, if appropriate, orally before its

designated representatives at an informal meeting.

Sec. 303.83 Transactions not requiring prior notice.

(a) Exempt transactions. The following transactions do not require

notice to the FDIC under this subpart:

(1) The acquisition of additional voting shares of an insured state

nonmember bank by a person who:

(i) Held the power to vote 25 percent or more of any class of

voting shares of that institution continuously since

[[Page 79258]]

March 9, 1979, or since that institution commenced business, whichever

is later; or

(ii) Is presumed, under Sec. 303.82(b)(2), to have controlled the

institution continuously since March 9, 1979, if the aggregate amount

of voting shares held does not exceed 25 percent or more of any class

of voting shares of the institution or, in other cases, where the FDIC

determines that the person has controlled the bank continuously since

March 9, 1979;

(2) The acquisition of additional shares of a class of voting

shares of an insured state nonmember bank by any person (or persons

acting in concert) who has lawfully acquired and maintained control of

the institution (for purposes of Sec. 303.82) after complying with the

procedures of the Change in Bank Control Act to acquire voting shares

of the institution under this subpart;

(3) Acquisitions of voting shares subject to approval under section

3 of the Bank Holding Company Act (12 U.S.C. 1842(a)), section 18(c) of

the FDI Act (12 U.S.C. 1828(c)), or section 10 of the Home Owners' Loan

Act (12 U.S.C. 1467a);

(4) Transactions exempt under the Bank Holding Company Act:

foreclosures by institutional lenders, fiduciary acquisitions by banks,

and increases of majority holdings by bank holding companies described

in sections 2(a)(5), 3(a)(A), or 3(a)(B) respectively of the Bank

Holding Company Act (12 U.S.C. 1841(a)(5), 1842(a)(A), and 1842(a)(B));

(5) A customary one-time proxy solicitation;

(6) The receipt of voting shares of an insured state nonmember bank

through a pro rata stock dividend; and

(7) The acquisition of voting shares in a foreign bank, which has

an insured branch or branches in the United States. (This exemption

does not extend to the reports and information required under

paragraphs 9, 10, and 12 of the Change in Bank Control Act of 1978 (12

U.S.C. 1817(j) (9), (10), and (12)).

(b) Prior notice exemption. (1) The following acquisitions of

voting shares of an insured state nonmember bank, which otherwise would

require prior notice under this subpart, are not subject to the prior

notice requirements if the acquiring person notifies the appropriate

FDIC office within 90 calendar days after the acquisition and provides

any relevant information requested by the FDIC.

(i) The acquisition of voting shares through inheritance;

(ii) The acquisition of voting shares as a bona fide gift; or

(iii) The acquisition of voting shares in satisfaction of a debt

previously contracted in good faith, except that the acquiror of a

defaulted loan secured by a controlling amount of a state nonmember

bank's voting securities shall file a notice before the loan is

acquired.

(2) The following acquisitions of voting shares of an insured state

nonmember bank, which otherwise would require prior notice under this

subpart, are not subject to the prior notice requirements if the

acquiring person notifies the appropriate FDIC office within 90

calendar days after receiving notice of the acquisition and provides

any relevant information requested by the FDIC.

(i) A percentage increase in ownership of voting shares resulting

from a redemption of voting shares by the issuing bank; or

(ii) The sale of shares by any shareholder that is not within the

control of a person resulting in that person becoming the largest

shareholder.

(3) Nothing in paragraph (b)(1) of this section limits the

authority of the FDIC to disapprove a notice pursuant to Sec.

303.85(c).

Sec. 303.84 Filing procedures.

(a) Filing notice. (1) A notice required under this subpart shall

be filed with the appropriate FDIC office and shall contain all the

information required by paragraph 6 of the Change in Bank Control Act,

section 7 (j) of the FDI Act, (12 U.S.C. 1817(j)(6)), or prescribed in

the designated interagency form which may be obtained from any FDIC

regional director.

(2) The FDIC may waive any of the informational requirements of the

notice if the FDIC determines that it is in the public interest.

(3) A notificant shall notify the appropriate FDIC office

immediately of any material changes in a notice submitted to the FDIC,

including changes in financial or other conditions.

(4) When the acquiring person is an individual, or group of

individuals acting in concert, the requirement to provide personal

financial data may be satisfied by a current statement of assets and

liabilities and an income summary, as required in the designated

interagency form, together with a statement of any material changes

since the date of the statement or summary. The FDIC may require

additional information if appropriate.

(b) Other laws. Nothing in this subpart shall affect any obligation

which the acquiring person(s) may have to comply with the federal

securities laws or other laws.

Sec. 303.85 Processing.

(a) Acceptance of notice. The 60-day notice period specified in

Sec. 303.82 shall commence on the date of receipt of a substantially

complete notice. The FDIC shall notify the person or persons submitting

a notice under this subpart in writing of the date the notice is

accepted for processing. The FDIC may request additional information at

any time.

(b) Time period for FDIC action; consummation of acquisition. (1)

The notificant(s) may consummate the proposed acquisition 60 days after

submission to the appropriate FDIC office of a substantially complete

notice under paragraph (a) of this section, unless within that period

the FDIC disapproves the proposed acquisition or extends the 60-day

period.

(2) The notificant(s) may consummate the proposed transaction

before the expiration of the 60-day period if the FDIC notifies the

notificant(s) in writing of its intention not to disapprove the

acquisition.

(c) Disapproval of acquisition of control. Subpart D of 12 CFR part

308 sets forth the rules of practice and procedure for a notice of

disapproval.

Sec. 303.86 Public notice requirements.

(a) Publication--(1) Newspaper announcement. Any person(s) filing a

notice under this subpart shall publish an announcement soliciting

public comment on the proposed acquisition. The announcement shall be

published in a newspaper of general circulation in the community in

which the home office of the state nonmember bank to be acquired is

located. The announcement shall be published as close as is practicable

to the date the notice is filed with the appropriate FDIC office, but

in no event more than 10 calendar days before or after the filing date.

(2) Contents of newspaper announcement. The newspaper announcement

shall conform to the public notice requirements set forth in Sec.

303.7.

(b) Delay of publication. The FDIC may permit delay in the

publication required by this section if the FDIC determines, for good

cause, that it is in the public interest to grant such a delay.

Requests for delay of publication may be submitted to the appropriate

FDIC office.

(c) Shortening or waiving notice. The FDIC may shorten the public

comment period to a period of not less than 10 days, or waive the

public comment or newspaper publication requirements of

[[Page 79259]]

this paragraph, or act on a notice before the expiration of a public

comment period, if it determines in writing either that an emergency

exists or that disclosure of the notice, solicitation of public

comment, or delay until expiration of the public comment period would

seriously threaten the safety or soundness of the bank to be acquired.

(d) Consideration of public comments. In acting upon a notice filed

under this subpart, the FDIC shall consider all public comments

received in writing within 20 days following the required newspaper

publication or, if the FDIC has shortened the public comment period

pursuant to paragraph (c) of this section, within such shorter period.

(e) Publication if filing is subsequent to acquisition of control.

(1) Whenever a notice of a proposed acquisition of control is not filed

in accordance with the Change in Bank Control Act and these

regulations, the acquiring person(s) shall, within 10 days of being so

directed by the FDIC, publish an announcement of the acquisition of

control in a newspaper of general circulation in the community in which

the home office of the state nonmember bank to be acquired is located.

(2) The newspaper announcement shall contain the name(s) of the

acquiror(s), the name of the depository institution involved, and the

date of the acquisition of the stock. The announcement shall also

contain a statement indicating that the FDIC is currently reviewing the

acquisition of control. The announcement also shall state that any

person wishing to comment on the change in control may do so by

submitting written comments to the appropriate regional director of the

FDIC (give address of appropriate FDIC office) within 20 days following

the required newspaper publication.

Sec. Sec. 303.87-303.99 [Reserved]

Subpart F--Change of Director or Senior Executive Officer

Sec. 303.100 Scope.

This subpart sets forth the circumstances under which an insured

state nonmember bank must notify the FDIC of a change in any member of

its board of directors or any senior executive officer and the

procedures for filing such notice. This subpart implements section 32

of the FDI Act (12 U.S.C. 1831i).

Sec. 303.101 Definitions.

For purposes of this subpart:

(a) Director means a person who serves on the board of directors or

board of trustees of an insured state nonmember bank, except that this

term does not include an advisory director who:

(1) Is not elected by the shareholders;

(2) Is not authorized to vote on any matters before the board of

directors or board of trustees or any committee thereof;

(3) Solely provides general policy advice to the board of directors

or board of trustees and any committee thereof; and

(4) Has not been identified by the FDIC as a person who performs

the functions of a director for purposes of this subpart.

(b) Senior executive officer means a person who holds the title of

president, chief executive officer, chief operating officer, chief

managing official (in an insured state branch of a foreign bank), chief

financial officer, chief lending officer, or chief investment officer,

or, without regard to title, salary, or compensation, performs the

function of one or more of these positions. Senior executive officer

also includes any other person identified by the FDIC, whether or not

hired as an employee, with significant influence over, or who

participates in, major policymaking decisions of the insured state

nonmember bank.

(c) Troubled condition means any insured state nonmember bank that:

(1) Has a composite rating, as determined in its most recent report

of examination, of 4 or 5 under the Uniform Financial Institutions

Rating System (UFIRS), or in the case of an insured state branch of a

foreign bank, an equivalent rating; or

(2) Is subject to a proceeding initiated by the FDIC for

termination or suspension of deposit insurance; or

(3) Is subject to a cease-and-desist order or written agreement

issued by either the FDIC or the appropriate state banking authority

that requires action to improve the financial condition of the bank or

is subject to a proceeding initiated by the FDIC or state authority

which contemplates the issuance of an order that requires action to

improve the financial condition of the bank, unless otherwise informed

in writing by the FDIC; or

(4) Is informed in writing by the FDIC that it is in troubled

condition for purposes of the requirements of this subpart on the basis

of the bank's most recent report of condition or report of examination,

or other information available to the FDIC.

Sec. 303.102 Filing procedures and waiver of prior notice.

(a) Insured state nonmember banks. An insured state nonmember bank

shall give the FDIC written notice, as specified in paragraph (c)(1) of

this section, at least 30 days prior to adding or replacing any member

of its board of directors, employing any person as a senior executive

officer of the bank, or changing the responsibilities of any senior

executive officer so that the person would assume a different senior

executive officer position, if:

(1) The bank is not in compliance with all minimum capital

requirements applicable to the bank as determined on the basis of the

bank's most recent report of condition or report of examination;

(2) The bank is in troubled condition; or

(3) The FDIC determines, in connection with its review of a capital

restoration plan required under section 38(e)(2) of the FDI Act (12

U.S.C. 1831o(e)(2)) or otherwise, that such notice is appropriate.

(b) Insured branches of foreign banks. In the case of the addition

of a member of the board of directors or a change in senior executive

officer in a foreign bank having an insured state branch, the notice

requirement shall not apply to such additions and changes in the

foreign bank parent, but only to changes in senior executive officers

in the state branch.

(c) Waiver of prior notice--(1) Waiver requests. The FDIC may

permit an individual, upon petition by the bank to the appropriate FDIC

office, to serve as a senior executive officer or director before

filing the notice required under this subpart if the FDIC finds that:

(i) Delay would threaten the safety or soundness of the bank;

(ii) Delay would not be in the public interest; or

(iii) Other extraordinary circumstances exist that justify waiver

of prior notice.

(2) Automatic waiver. In the case of the election of a new director

not proposed by management at a meeting of the shareholders of an

insured state nonmember bank, the prior 30-day notice is automatically

waived and the individual immediately may begin serving, provided that

a complete notice is filed with the appropriate FDIC office within two

business days after the individual's election.

(3) Effect on disapproval authority. A waiver shall not affect the

authority of the FDIC to disapprove a notice within 30 days after a

waiver is granted under paragraph (c)(1) of this section or the

election of an individual who has filed a notice and is serving

pursuant to an automatic waiver under paragraph (c)(2) of this section.

(d)(1) Content of filing. The notice required by paragraph (a) of

this section

[[Page 79260]]

shall be filed with the appropriate FDIC office and shall contain

information pertaining to the competence, experience, character, or

integrity of the individual with respect to whom the notice is

submitted, as prescribed in the designated interagency form which is

available from any FDIC regional director. The FDIC may require

additional information.

(2) Modification. The FDIC may modify or accept other information

in place of the requirements of paragraph (d)(1) of this section for a

notice filed under this subpart.

Sec. 303.103 Processing.

(a) Processing. The 30-day notice period specified in Sec.

303.102(a) shall begin on the date substantially all information

required to be submitted by the notificant pursuant to Sec.

303.102(c)(1) is received by the appropriate FDIC office. The FDIC

shall notify the bank submitting the notice of the date on which the

notice is accepted for processing and of the date on which the 30-day

notice period will expire. If processing cannot be completed within 30

days, the notificant will be advised in writing, prior to expiration of

the 30-day period, of the reason for the delay in processing and of the

additional time period, not to exceed 60 days, in which processing will

be completed.

(b) Commencement of service--(1) At expiration of period. A

proposed director or senior executive officer may begin service after

the end of the 30-day period or any other additional period as provided

under paragraph (a) of this section, unless the FDIC disapproves the

notice before the end of the period.

(2) Prior to expiration of period. A proposed director or senior

executive officer may begin service before the end of the 30-day period

or any additional time period as provided under paragraph (a) of this

section, if the FDIC notifies the bank and the individual in writing of

the FDIC's intention not to disapprove the notice.

(c) Notice of disapproval. The FDIC may disapprove a notice filed

under Sec. 303.102 if the FDIC finds that the competence, experience,

character, or integrity of the individual with respect to whom the

notice is submitted indicates that it would not be in the best

interests of the depositors of the bank or in the best interests of the

public to permit the individual to be employed by, or associated with,

the bank. Subpart L of 12 CFR part 308 sets forth the rules of practice

and procedure for a notice of disapproval.

Sec. Sec. 303.104-303.119 [Reserved]

Subpart G--Activities of Insured State Banks

Sec. 303.120 Scope.

This subpart sets forth procedures for complying with notice and

application requirements contained in subpart A of part 362 of this

chapter, governing insured state banks and their subsidiaries engaging

in activities which are not permissible for national banks and their

subsidiaries. This subpart sets forth procedures for complying with

notice and application requirements contained in subpart B of part 362

of this chapter, governing certain activities of insured state

nonmember banks, their subsidiaries, and certain affiliates. This

subpart also sets forth procedures for complying with the notice

requirements contained in subpart E of part 362 of this chapter,

governing subsidiaries of insured state nonmember banks engaging in

financial activities.

Sec. 303.121 Filing procedures.

(a) Where to file. A notice or application required by subpart A,

subpart B, or subpart E of part 362 of this chapter shall be submitted

in writing to the appropriate FDIC office.

(b) Contents of filing. A complete letter notice or letter

application shall include the following information:

(1) Filings generally. (i) A brief description of the activity and

the manner in which it will be conducted;

(ii) The amount of the bank's existing or proposed direct or

indirect investment in the activity as well as calculations sufficient

to indicate compliance with any specific capital ratio or investment

percentage limitation detailed in subpart A, B, or E of part 362 of

this chapter;

(iii) A copy of the bank's business plan regarding the conduct of

the activity;

(iv) A citation to the state statutory or regulatory authority for

the conduct of the activity;

(v) A copy of the order or other document from the appropriate

regulatory authority granting approval for the bank to conduct the

activity if such approval is necessary and has already been granted;

(vi) A brief description of the bank's policy and practice with

regard to any anticipated involvement in the activity by a director,

executive office or principal shareholder of the bank or any related

interest of such a person; and

(vii) A description of the bank's expertise in the activity.

(2) [Reserved]

(3) Copy of application or notice filed with another agency. If an

insured state bank has filed an application or notice with another

federal or state regulatory authority which contains all of the

information required by paragraph (b) (1) of this section, the insured

state bank may submit a copy to the FDIC in lieu of a separate filing.

(4) Additional information. The FDIC may request additional

information to complete processing.

Sec. 303.122 Processing.

(a) Expedited processing. A notice filed by an insured state bank

seeking to commence or continue an activity under Sec.

362.3(a)(2)(iii)(A)(2), Sec. 362.4(b)(3)(i), or Sec. 362.4(b)(5) of

this chapter will be acknowledged in writing by the FDIC and will

receive expedited processing, unless the applicant is notified in

writing to the contrary and provided a basis for that decision. The

FDIC may remove the notice from expedited processing for any of the

reasons set forth in Sec. 303.11(c)(2). Absent such removal, a notice

processed under expedited processing is deemed approved 30 days after

receipt of a complete notice by the FDIC (subject to extension for an

additional 15 days upon written notice to the bank) or on such earlier

date authorized by the FDIC in writing.

(b) Standard processing for applications and notices that have been

removed from expedited processing. For an application filed by an

insured state bank seeking to commence or continue an activity under

Sec. 362.3(a)(2)(iii)(A)(2), Sec. 362.3(b)(2)(i), Sec.

362.3(b)(2)(ii)(A), Sec. 362.3(b)(2)(ii)(C), Sec. 362.4(b)(1), Sec.

362.4(b)(4), Sec. 362.5(b)(2), or Sec. 362.8(b) or seeking a waiver

or modification under Sec. 362.18(e) or Sec. 362.18(g)(3) of this

chapter or for notices which are not processed pursuant to the

expedited processing procedures, the FDIC will provide the insured

State bank with written notification of the final action as soon as the

decision is rendered. The FDIC will normally review and act in such

cases within 60 days after receipt of a completed application or notice

(subject to extension for an additional 30 days upon written notice to

the bank), but failure of the FDIC to act prior to the expiration of

these periods does not constitute approval.

Sec. Sec. 303.123-303.139 [Reserved]

Subpart H--Activities of Insured Savings Associations

Sec. 303.140 Scope.

This subpart sets forth procedures for complying with the notice

and application requirements contained in subpart C of part 362 of this

chapter, governing insured state savings

[[Page 79261]]

associations and their service corporations engaging in activities

which are not permissible for federal savings associations and their

service corporations. This subpart also sets forth procedures for

complying with the notice requirements contained in subpart D of part

362 of this chapter, governing insured savings associations which

establish or engage in new activities through a subsidiary.

Sec. 303.141 Filing procedures.

(a) Where to file. All applications and notices required by subpart

C or subpart D of part 362 of this chapter are to be in writing and

filed with the appropriate FDIC office.

(b) Contents of filing--(1) Filings generally. A complete letter

notice or letter application shall include the following information:

(i) A brief description of the activity and the manner in which it

will be conducted;

(ii) The amount of the association's existing or proposed direct or

indirect investment in the activity as well as calculations sufficient

to indicate compliance with any specific capital ratio or investment

percentage limitation detailed in subpart C or D of part 362 of this

chapter;

(iii) A copy of the association's business plan regarding the

conduct of the activity;

(iv) A citation to the state statutory or regulatory authority for

the conduct of the activity;

(v) A copy of the order or other document from the appropriate

regulatory authority granting approval for the association to conduct

the activity if such approval is necessary and has already been

granted;

(vi) A brief description of the association's policy and practice

with regard to any anticipated involvement in the activity by a

director, executive officer or principal shareholder of the association

or any related interest of such a person; and

(vii) A description of the association's expertise in the activity.

(2) [Reserved]

(3) Copy of application or notice filed with another agency. If an

insured savings association has filed an application or notice with

another federal or state regulatory authority which contains all of the

information required by paragraph (b)(1) of this section, the insured

state bank may submit a copy to the FDIC in lieu of a separate filing.

(4) Additional information. The FDIC may request additional

information to complete processing.

Sec. 303.142 Processing.

(a) Expedited processing. A notice filed by an insured state

savings association seeking to commence or continue an activity under

Sec. 362.11(b)(2)(ii) of this chapter will be acknowledged in writing

by the FDIC and will receive expedited processing, unless the applicant

is notified in writing to the contrary and provided a basis for that

decision. The FDIC may remove the notice from expedited processing for

any of the reasons set forth in Sec. 303.11(c)(2). Absent such

removal, a notice processed under expedited processing is deemed

approved 30 days after receipt of a complete notice by the FDIC

(subject to extension for an additional 15 days upon written notice to

the bank) or on such earlier date authorized by the FDIC in writing.

(b) Standard processing for applications and notices that have been

removed from expedited processing. For an application filed by an

insured state savings association seeking to commence or continue an

activity under Sec. 362.11(a)(2)(ii), Sec. 362.11(b)(2)(i), Sec.

362.12(b)(1) of this chapter or for notices which are not processed

pursuant to the expedited processing procedures, the FDIC will provide

the insured state savings association with written notification of the

final action as soon as the decision is rendered. The FDIC will

normally review and act in such cases within 60 days after receipt of a

completed application or notice (subject to extension for an additional

30 days upon written notice to the bank), but failure of the FDIC to

act prior to the expiration of these periods does not constitute

approval.

(c) Notices of activities in excess of an amount permissible for a

federal savings association; subsidiary notices. Receipt of a notice

filed by an insured state savings association as required by Sec.

362.11(b)(3) or Sec. 362.15 of this chapter will be acknowledged in

writing by the FDIC. The notice will be reviewed at the appropriate

FDIC office, which will take such action as it deems necessary and

appropriate.

Sec. Sec. 303.143--303.159 [Reserved]

Subpart I--Mutual-To-Stock Conversions

Sec. 303.160 Scope.

This subpart sets forth the notice requirements and procedures for

the conversion of an insured mutual state-chartered savings bank to the

stock form of ownership. The substantive requirements governing such

conversions are contained in Sec. 333.4 of this chapter.

Sec. 303.161 Filing procedures.

(a) Prior notice required. In addition to complying with the

substantive requirements in Sec. 333.4 of this chapter, an insured

state-chartered mutually owned savings bank that proposes to convert

from mutual to stock form shall file with the FDIC a notice of intent

to convert to stock form.

(b) General. (1) A notice required under this subpart shall be

filed in letter form with the appropriate FDIC office at the same time

as required conversion application materials are filed with the

institution's state regulator.

(2) An insured mutual savings bank chartered by a state that does

not require the filing of a conversion application shall file a notice

in letter form with the appropriate FDIC office as soon as practicable

after adoption of its plan of conversion.

(c) Content of notice. The notice shall provide a description of

the proposed conversion and include all materials that have been filed

with any state or federal banking regulator and any state or federal

securities regulator. At a minimum, the notice shall include, as

applicable, copies of:

(1) The plan of conversion, with specific information concerning

the record date used for determining eligible depositors and the

subscription offering priority established in connection with any

proposed stock offering;

(2) Certified board resolutions relating to the conversion;

(3) A business plan, including a detailed discussion of how the

capital acquired in the conversion will be used, expected earnings for

at least a three-year period following the conversion, and a

justification for any proposed stock repurchases;

(4) The charter and bylaws of the converted institution;

(5) The bylaws and operating plans of any other entities formed in

connection with the conversion transaction, such as a holding company

or charitable foundation;

(6) A full appraisal report, prepared by an independent appraiser,

of the value of the converting institution and the pricing of the stock

to be sold in the conversion transaction;

(7) Detailed descriptions of any proposed management or employee

stock benefit plans or employment agreements and a discussion of the

rationale for the level of benefits proposed, individually and by

participant group;

(8) Indemnification agreements;

[[Page 79262]]

(9) A preliminary proxy statement and sample proxy;

(10) Offering circular(s) and order form;

(11) All contracts or agreements relating to solicitation,

underwriting, market-making, or listing of conversion stock and any

agreements among members of a group regarding the purchase of

unsubscribed shares;

(12) A tax opinion concerning the federal income tax consequences

of the proposed conversion;

(13) Consents from experts to use their opinions as part of the

notice; and

(14) An estimate of conversion-related expenses.

(d) Additional information. The FDIC, in its discretion, may

request any additional information it deems necessary to evaluate the

proposed conversion. The institution proposing to convert from mutual

to stock form shall promptly provide such information to the FDIC.

(e) Acceptance of notice. The 60-day notice period specified

inSec. 303.163 shall commence on the date of receipt of a

substantially complete notice. The FDIC shall notify the institution

proposing to convert in writing of the date the notice is accepted.

(f) Related applications. Related applications that require FDIC

action may include:

(1) Applications for deposit insurance, as required by subpart B of

this part; and

(2) Applications for consent to merge, as required by subpart D of

this part.

Sec. 303.162 Waiver from compliance.

(a) General. An institution proposing to convert from mutual to

stock form may file with the appropriate FDIC office a letter

requesting waiver of compliance with this subpart or Sec. 333.4 of

this chapter:

(1) When compliance with any provision of this section or Sec.

333.4 of this chapter would be inconsistent or in conflict with

applicable state law, or

(2) For any other good cause shown.

(b) Content of filing. In making a request for waiver under

paragraph (a) of this section, the institution shall demonstrate that

the requested waiver, if granted, would not result in any effects that

would be detrimental to the safety and soundness of the institution,

entail a breach of fiduciary duty on part of the institution's

management or otherwise be detrimental or inequitable to the

institution, its depositors, any other insured depository

institution(s), the federal deposit insurance funds, or to the public

interest.

Sec. 303.163 Processing.

(a) General considerations. The FDIC shall review the notice and

other materials submitted by the institution proposing to convert from

mutual to stock form, specifically considering the following factors:

(1) The proposed use of the proceeds from the sale of stock, as set

forth in the business plan;

(2) The adequacy of the disclosure materials;

(3) The participation of depositors in approving the transaction;

(4) The form of the proxy statement required for the vote of the

depositors/members on the conversion;

(5) Any proposed increased compensation and other remuneration

(including stock grants, stock option rights and other similar

benefits) to be granted to officers and directors/trustees of the bank

in connection with the conversion;

(6) The adequacy and independence of the appraisal of the value of

the mutual savings bank for purposes of determining the price of the

shares of stock to be sold;

(7) The process by which the bank's trustees approved the

appraisal, the pricing of the stock, and the proposed compensation

arrangements for insiders;

(8) The nature and apportionment of stock subscription rights; and

(9) The bank's plans to fulfill its commitment to serving the

convenience and needs of its community.

(b) Additional considerations. (1) In reviewing the notice and

other materials submitted under this subpart, the FDIC will take into

account the extent to which the proposed conversion transaction

conforms with the various provisions of the mutual-to-stock conversion

regulations of the Office of Thrift Supervision (OTS) (12 CFR part

563b), as currently in effect at the time the notice is submitted. Any

non-conformity with those provisions will be closely reviewed.

(2) Conformity with the OTS requirements will not be sufficient for

FDIC regulatory purposes if the FDIC determines that the proposed

conversion transaction would pose a risk to the bank's safety or

soundness, violate any law or regulation, or present a breach of

fiduciary duty.

(c) Notice period. (1) The period in which the FDIC may object to

the proposed conversion transaction shall be the later of:

(i) 60 days after receipt of a substantially complete notice of

proposed conversion; or

(ii) 20 days after the last applicable state or other federal

regulator has approved the proposed conversion.

(2) The FDIC may, in its discretion, extend the initial 60-day

period for up to an additional 60 days by providing written notice to

the institution.

(d) Letter of non-objection. If the FDIC determines, in its

discretion, that the proposed conversion transaction would not pose a

risk to the institution's safety or soundness, violate any law or

regulation, or present a breach of fiduciary duty, then the FDIC shall

issue to the institution proposing to convert a letter of non-objection

to the proposed conversion.

(e) Letter of objection. If the FDIC determines, in its discretion,

that the proposed conversion transaction poses a risk to the

institution's safety or soundness, violates any law or regulation, or

presents a breach of fiduciary duty, then the FDIC shall issue a letter

to the institution stating its objection(s) to the proposed conversion

and advising the institution not to consummate the proposed conversion

until such letter is rescinded. A copy of the letter of objection shall

be furnished to the institution's primary state regulator and any other

state or federal banking regulator and state or federal securities

regulator involved in the conversion.

(f) Consummation of the conversion. (1) An institution may

consummate the proposed conversion upon either:

(i) The receipt of a letter of non-objection; or

(ii) The expiration of the notice period.

(2) If a letter of objection is issued, then the institution shall

not consummate the proposed conversion until the FDIC rescinds such

letter.

Sec. Sec. 303.164-303.179 [Reserved]

Subpart J--International Banking

Sec. 303.180 Scope.

This subpart sets forth procedures for complying with application

requirements relating to the foreign activities of insured state

nonmember banks, U.S. activities of insured branches of foreign banks,

and certain foreign mergers of insured depository institutions.

Sec. 303.181 Definitions.

For the purposes of this subpart, the following additional

definitions apply:

(a) Board of Governors means the Board of Governors of the Federal

Reserve System.

(b) Comptroller means the Office of the Comptroller of the

Currency.

(c) Eligible insured branch. An insured branch will be treated as

an eligible depository institution within

[[Page 79263]]

the meaning of Sec. 303.2(r) if the insured branch:

(1) Received an FDIC-assigned composite ROCA supervisory rating

(which rates risk management, operational controls, compliance, and

asset quality) of 1 or 2 as a result of its most recent federal or

state examination, and the FDIC, Comptroller, or Board of Governors

have not expressed concern about the condition or operations of the

foreign banking organization or the support it offers the branch;

(2) Received a satisfactory or better Community Reinvestment Act

(CRA) rating from its primary federal regulator at its most recent

examination, if the depository institution is subject to examination

under part 345 of this chapter;

(3) Received a compliance rating of 1 or 2 from its primary federal

regulator at its most recent examination;

(4) Is well-capitalized as defined in subpart B of part 325 of this

chapter; and

(5) Is not subject to a cease and desist order, consent order,

prompt corrective action directive, written agreement, memorandum of

understanding, or other administrative agreement with any U.S. bank

regulatory authority.

(d) Federal branch means a federal branch of a foreign bank as

defined by Sec. 347.202 of this chapter.

(e) Foreign bank means a foreign bank as defined by Sec. 347.202

of this chapter.

(f) Foreign branch means a foreign branch of an insured state

nonmember bank as defined by Sec. 347.102 of this chapter.

(g) Foreign organization means a foreign organization as defined by

Sec. 347.102 of this chapter.

(h) Insured branch means an insured branch of a foreign bank as

defined by Sec. 347.202 of this chapter.

(i) Noninsured branch means a noninsured branch of a foreign bank

as defined by Sec. 347.202 of this chapter.

(j) State branch means a state branch of a foreign bank as defined

by Sec. 347.202 of this chapter.

Sec. 303.182 Establishing, moving or closing a foreign branch of a

state nonmember bank; Sec. 347.103.

(a) Notice procedures for general consent. Notice in the form of a

letter from an eligible depository institution establishing or

relocating a foreign branch pursuant to Sec. 347.103(b) of this

chapter shall be provided to the appropriate FDIC office no later than

30 days after taking such action, and include the location of the

foreign branch, including a street address, and a statement that the

foreign branch has not been located on a site on the World Heritage

List or on the foreign country's equivalent of the National Register of

Historic Places (National Register), in accordance with section 402 of

the National Historic Preservation Act Amendments of 1980 (NHPA

Amendments Act) (16 U.S.C. 470a-2). The FDIC will provide written

acknowledgment of receipt of the notice.

(b) Filing procedures for other branch establishments--(1)Where to

file. An applicant seeking to establish a foreign branch other than

under Sec. 347.103(b) of this chapter shall submit an application to

the appropriate FDIC office.

(2) Content of filing. A complete letter application shall include

the following information:

(i) The exact location of the proposed foreign branch, including

the street address, and a statement whether the foreign branch will be

located on a site on the World Heritage List or on the foreign

country's equivalent of the National Register, in accordance with

section 402 of the NHPA Amendments Act;

(ii) Details concerning any involvement in the proposal by an

insider of the applicant, as defined in Sec. 303.2(u), including any

financial arrangements relating to fees, the acquisition of property,

leasing of property, and construction contracts;

(iii) A brief description of the applicant's business plan with

respect to the foreign branch; and

(iv) A brief description of the activities of the branch, and to

the extent any activities are not authorized by Sec. 347.103(a) of

this chapter, the applicant's reasons why they should be approved.

(3) Additional information. The FDIC may request additional

information to complete processing.

(c) Processing--(1) Expedited processing for eligible depository

institutions. An application filed under Sec. 347.103(c) of this

chapter by an eligible depository institution as defined in Sec.

303.2(r) of this part seeking to establish a foreign branch by

expedited processing will be acknowledged in writing by the FDIC and

will receive expedited processing, unless the applicant is notified in

writing to the contrary and provided with the basis for that decision.

The FDIC may remove the application from expedited processing for any

of the reasons set forth in Sec. 303.11(c)(2). Absent such removal, an

application processed under expedited processing is deemed approved 45

days after receipt of a substantially complete application by the FDIC,

or on such earlier date authorized by the FDIC in writing.

(2) Standard processing. For those applications which are not

processed pursuant to the expedited procedures, the FDIC will provide

the applicant with written notification of the final action when the

decision is rendered.

(d) Closing. Notices of branch closing under Sec. 347.103(f) of

this chapter, in the form of a letter including the name, location, and

date of closing of the closed branch, shall be filed with the

appropriate FDIC office no later than 30 days after the branch is

closed.

Sec. 303.183 Investment by insured state nonmember banks in foreign

organizations; Sec. 347.108.

(a) Notice procedures for general consent. Notice in the form of a

letter from an eligible depository institution making direct or

indirect investments in a foreign organization pursuant to Sec.

347.108(a) of this chapter shall be provided to the appropriate FDIC

office no later than 30 days after taking such action. The FDIC will

provide written acknowledgment of receipt of the notice.

(b) Filing procedures for other investments--(1) Where to file. An

applicant seeking to make a foreign investment other than under Sec.

347.108(a) of this chapter shall submit an application to the

appropriate FDIC office.

(2) Content of filing. A complete application shall include the

following information:

(i) Basic information about the terms of the proposed transaction,

the amount of the investment in the foreign organization and the

proportion of its ownership to be acquired;

(ii) Basic information about the foreign organization, its

financial position and income, including any available balance sheet

and income statement for the prior year, or financial projections for a

new foreign organization;

(iii) A listing of all shareholders known to hold ten percent or

more of any class of the foreign organization's stock or other evidence

of ownership, and the amount held by each;

(iv) A brief description of the applicant's business plan with

respect to the foreign organization;

(v) A brief description of any business or activities which the

foreign organization will conduct directly or indirectly in the United

States, and to the extent such activities are not authorized by subpart

A of part 347, the applicant's reasons why they should be approved;

(vi) A brief description of the foreign organization's activities,

and to the extent such activities are not authorized

[[Page 79264]]

by subpart A of part 347, the applicant's reasons why they should be

approved; and

(vii) If the applicant seeks approval to engage in underwriting or

dealing activities, a description of the applicant's plans and

procedures to address all relevant risks.

(3) Additional information. The FDIC may request additional

information to complete processing.

(c) Processing--(1) Expedited processing for eligible depository

institutions. An application filed under Sec. 347.108(b) of this

chapter by an eligible depository institution as defined in Sec.

303.2(r) seeking to make direct or indirect investments in a foreign

organization will be acknowledged in writing by the FDIC and will

receive expedited processing, unless the applicant is notified in

writing to the contrary and provided with the basis for that decision.

The FDIC may remove the application from expedited processing for any

of the reasons set forth in Sec. 303.11(c)(2). Absent such removal, an

application processed under expedited processing is deemed approved 45

days after receipt of a complete application by the FDIC, or on such

earlier date authorized by the FDIC in writing.

(2) Standard processing. For those applications which are not

processed pursuant to the expedited procedures, the FDIC will provide

the applicant with written notification of the final action when the

decision is rendered.

(d) Divestiture. If an insured state nonmember bank holding 50

percent or more of the voting equity interests of a foreign

organization or otherwise controlling the foreign organization divests

itself of such ownership or control, the insured state nonmember bank

shall file a notice in the form of a letter, including the name,

location, and date of divestiture of the foreign organization, with the

appropriate FDIC office no later than 30 days after the divestiture.

Sec. 303.184 Moving an insured branch of a foreign bank.

(a) Filing procedures--(1) Where and when to file. An application

by an insured branch of a foreign bank seeking the FDIC's consent to

move from one location to another, as required by section 18(d)(1) of

the FDI Act (12 U.S.C. 1828(d)(1)), shall be submitted in writing to

the appropriate FDIC office on the date the notice required by

paragraph (c) of this section is published, or within 5 days after the

date of the last required publication.

(2) Content of filing. A complete letter application shall include

the following information:

(i) The exact location of the proposed site, including the street

address;

(ii) Details concerning any involvement in the proposal by an

insider of the applicant, as defined in Sec. 303.2(u), including any

financial arrangements relating to fees, the acquisition of property,

leasing of property, and construction contracts;

(iii) A statement of the impact of the proposal on the human

environment, including information on compliance with local zoning laws

and regulations and the effect on traffic patterns, for purposes of

complying with the applicable provisions of the NEPA, and the FDIC

``Statement of Policy on NEPA'' (1 FDIC Law, Regulations, Related Acts

5185; see Sec. 309.4(a) and (b) of this chapter for availability).

(iv) A statement as to whether or not the site is eligible for

inclusion in the National Register of Historic Places for purposes of

complying with the applicable provisions of the NHPA, and the FDIC

AStatement of Policy on NHPA'' (1 FDIC Law, Regulations, Related Acts

5175; see Sec. 309.4(a) and (b) of this chapter for availability),

including documentation of consultation with the State Historic

Preservation Officer, as appropriate.

(v) Comments on any changes in services to be offered, the

community to be served, or any other effect the proposal may have on

the applicant's compliance with the CRA; and

(vi) A copy of the newspaper publication required by paragraph (c)

of this section, as well as the name and address of the newspaper and

the date of the publication.

(3) Comptroller's application. If the applicant is filing an

application with the Comptroller which contains the information

required by paragraph (a)(2) of this section, the applicant may submit

a copy to the FDIC in lieu of a separate application.

(4) Additional information. The FDIC may request additional

information to complete processing.

(b) Processing--(1) Expedited processing for eligible insured

branches. An application filed by an eligible insured branch as defined

in Sec. 303.181(c) will be acknowledged in writing by the FDIC and

will receive expedited processing, unless the applicant is notified to

the contrary and provided with the basis for that decision. The FDIC

may remove an application from expedited processing for any of the

reasons set forth in Sec. 303.11(c)(2). Absent such removal, an

application processed under expedited processing will be deemed

approved on the latest of the following:

(i) The 21st day after the FDIC's receipt of a substantially

complete application; or

(ii) The 5th day after expiration of the comment period described

in paragraph (c) of this section.

(2) Standard processing. For those applications that are not

processed pursuant to the expedited procedures, the FDIC will provide

the applicant with written notification of the final action as soon as

the decision is rendered.

(c) Publication requirement and comment period--(1) Newspaper

publications. The applicant shall publish a notice of its proposal to

move from one location to another, as described in Sec. 303.7(b), in a

newspaper of general circulation in the community in which the insured

branch is located prior to its being moved and in the community to

which it is to be moved. The notice shall include the insured branch's

current and proposed addresses.

(2) Public comments. All public comments must be received by the

appropriate regional director within 15 days after the date of the last

newspaper publication required by paragraph (c)(1) of this section,

unless the comment period has been extended or reopened in accordance

with Sec. 303.9(b)(2).

(3) Lobby notices. If the insured branch has a public lobby, a copy

of the newspaper publication shall be posted in the public lobby for at

least 15 days beginning on the date of the publication required by

paragraph (c)(1) of this section.

(d) Other approval criteria. (1) The FDIC may approve an

application under this section if the criteria in paragraphs (d)(1)(i)

through (d)(1)(vi) of this section is satisfied.

(i) The factors set forth in section 6 of the FDI Act (12 U.S.C.

1816) have been considered and favorably resolved;

(ii) The applicant is at least adequately capitalized as defined in

subpart B of part 325 of this chapter;

(iii) Any financial arrangements which have been made in connection

with the proposed relocation and which involve the applicant's

directors, officers, major shareholders, or their interests are fair

and reasonable in comparison to similar arrangements that could have

been made with independent third parties;

(iv) Compliance with the CRA, the NEPA, the NHPA and any applicable

related regulations, including 12 CFR part 345, has been considered and

favorably resolved;

(v) No CRA protest as defined in Sec. 303.2(l) has been filed

which remains unresolved or, where such a protest has

[[Page 79265]]

been filed and remains unresolved, the Director or designee concurs

that approval is consistent with the purposes of the CRA and the

applicant agrees in writing to any conditions imposed regarding the

CRA; and

(vi) The applicant agrees in writing to comply with any conditions

imposed by the FDIC, other than the standard conditions defined in

Sec. 303.2(dd) which may be imposed without the applicant's written

consent.

Sec. 303.185 Merger transactions involving foreign banks or foreign

organizations.

(a) Merger transactions involving an insured branch of a foreign

bank. Merger transactions requiring the FDIC's prior approval as set

forth in Sec. 303.62 include any merger transaction in which the

resulting institution is an insured branch of a foreign bank which is

not a federal branch, or any merger transaction which involves any

insured branch and any uninsured institution. In such cases:

(1) References to an eligible depository institution in subpart D

of this part include an eligible insured branch as defined in Sec.

303.181;

(2) The definition of a corporate reorganization in Sec. 303.61(b)

includes a merger transaction between an insured branch and other

branches, agencies, or subsidiaries in the United States of the same

foreign bank; and

(3) For the purposes of Sec. 303.62(b)(1) on interstate mergers, a

merger transaction involving an insured branch is one involving the

acquisition of a branch of an insured bank without the acquisition of

the bank for purposes of section 44 of the FDI Act (12 U.S.C. 1831u)

only when the merger transaction involves fewer than all the insured

branches of the same foreign bank in the same state.

(b) Certain merger transactions with foreign organizations outside

any State. Merger transactions requiring the FDIC's prior approval as

set forth in Sec. 303.62 include any merger transaction in which an

insured depository institution becomes directly liable for obligations

which will, after the merger transaction, be treated as deposits under

section 3(l)(5)(A)(i)-(ii) of the FDI Act (12 U.S.C. 1813(l)(5)(A)(i)-

(ii)), as a result of a merger or consolidation with a foreign

organization or an assumption of liabilities of a foreign organization.

Sec. 303.186 Exemptions from insurance requirement for a state branch

of a foreign bank; Sec. 347.206.

(a) Filing procedures--(1) Where to file. An application by a state

branch for consent to operate as a noninsured state branch, as

permitted by Sec. 347.206(b) of this chapter, shall be submitted in

writing to the appropriate FDIC office.

(2) Content of filing. A complete letter application shall include

the following information:

(i) The kinds of deposit activities in which the state branch

proposes to engage;

(ii) The expected source of deposits;

(iii) The manner in which deposits will be solicited;

(iv) How the activity will maintain or improve the availability of

credit to all sectors of the United States economy, including the

international trade finance sector;

(v) That the activity will not give the foreign bank an unfair

competitive advantage over United States banking organizations; and

(vi) A resolution by the applicant's board of directors, or

evidence of approval by senior management if a resolution is not

required pursuant to the applicant's organizational documents,

authorizing the filing of the application.

(3) Additional information. The FDIC may request additional

information to complete processing.

(4) Processing. The FDIC will provide the applicant with written

notification of the final action taken.

Sec. 303.187 Approval for an insured state branch of a foreign bank

to conduct activities not permissible for federal branches; Sec.

347.213.

(a) Filing procedures--(1) Where to file. An application by an

insured state branch seeking approval to conduct activities not

permissible for a federal branch, as required by Sec. 347.213(a) of

this chapter, shall be submitted in writing to the appropriate FDIC

office.

(2) Content of filing. A complete letter application shall include

the following information:

(i) A brief description of the activity, including the manner in

which it will be conducted and an estimate of the expected dollar

volume associated with the activity;

(ii) An analysis of the impact of the proposed activity on the

condition of the United States operations of the foreign bank in

general and of the branch in particular, including a copy of the

feasibility study, management plan, financial projections, business

plan, or similar document concerning the conduct of the activity;

(iii) A resolution by the applicant's board of directors, or

evidence of approval by senior management if a resolution is not

required pursuant to the applicant's organizational documents,

authorizing the filing of the application;

(iv) A statement by the applicant of whether it is in compliance

with Sec. Sec. 347.210 and 347.211 of this chapter, Pledge of assets

and Asset maintenance, respectively;

(v) A statement by the applicant that it has complied with all

requirements of the Board of Governors concerning applications to

conduct the activity in question and the status of each such

application, including a copy of the Board of Governors' disposition of

such application, if applicable; and

(vi) A statement of why the activity will pose no significant risk

to the Bank Insurance Fund.

(3) Board of Governors application. If the application to the Board

of Governors contains the information required by paragraph (a) of this

section, the applicant may submit a copy to the FDIC in lieu of a

separate letter application.

(4) Additional information. The FDIC may request additional

information to complete processing.

(b) Divestiture or cessation--(1) Where to file. Divestiture plans

necessitated by a change in law or other authority, as required by

Sec. 347.213(e) of this chapter, shall be submitted in writing to the

appropriate FDIC office.

(2) Content of filing. A complete letter application shall include

the following information:

(i) A detailed description of the manner in which the applicant

proposes to divest itself of or cease the activity in question; and

(ii) A projected timetable describing how long the divestiture or

cessation is expected to take.

(3) Additional information. The FDIC may request additional

information to complete processing.

Sec. Sec. 303.188-303.199 [Reserved]

Subpart K--Prompt Corrective Action

Sec. 303.200 Scope.

(a) General. (1) This subpart covers applications filed pursuant to

section 38 of the FDI Act (12 U.S.C. 1831o), which requires insured

depository institutions that are not adequately capitalized to receive

approval prior to engaging in certain activities. Section 38 restricts

or prohibits certain activities and requires an insured depository

institution to submit a capital restoration plan when it becomes

undercapitalized. The restrictions and prohibitions become more severe

as an institution's capital level declines.

(2) Definitions of the capital categories referenced in this Prompt

Corrective Action subpart may be found in subpart B of part 325 of this

chapter,

[[Page 79266]]

Sec. 325.103(b) for state nonmember banks and Sec. 325.103(c) for

insured branches of foreign banks.

(b) Institutions covered. Restrictions and prohibitions contained

in subpart B of part 325 of this chapter apply primarily to insured

state nonmember banks and insured branches of foreign banks, as well as

to directors and senior executive officers of those institutions.

Portions of subpart B of part 325 of this chapter also apply to all

insured depository institutions that are deemed to be critically

undercapitalized.

Sec. 303.201 Filing procedures.

Applications shall be filed with the appropriate FDIC office. The

application shall contain the information specified in each respective

section of this subpart, and shall be in letter form as prescribed in

Sec. 303.3. Additional information may be requested by the FDIC. Such

letter shall be signed by the president, senior officer or a duly

authorized agent of the insured depository institution and be

accompanied by a certified copy of a resolution adopted by the

institution's board of directors or trustees authorizing the

application.

Sec. 303.202 Processing.

The FDIC will provide the applicant with a subsequent written

notification of the final action taken as soon as the decision is

rendered.

Sec. 303.203 Applications for capital distributions.

(a) Scope. An insured state nonmember bank and any insured branch

of a foreign bank shall submit an application for capital distribution

if, after having made a capital distribution, the institution would be

undercapitalized, significantly undercapitalized, or critically

undercapitalized.

(b) Content of filing. An application to repurchase, redeem, retire

or otherwise acquire shares or ownership interests of the insured

depository institution shall describe the proposal, the shares or

obligations which are the subject thereof, and the additional shares or

obligations of the institution which will be issued in at least an

amount equivalent to the distribution. The application also shall

explain how the proposal will reduce the institution's financial

obligations or otherwise improve its financial condition. If the

proposed action also requires an application under section 18(i) of the

FDI Act (12 U.S.C. 1828(i)) as implemented by Sec. 303.241 of this

part regarding prior consent to retire capital, such application should

be filed concurrently with, or made a part of, the application filed

pursuant to section 38 of the FDI Act (12 U.S.C. 1831o).

Sec. 303.204 Applications for acquisitions, branching, and new lines

of business.

(a) Scope. (1) Any insured state nonmember bank and any insured

branch of a foreign bank which is undercapitalized or significantly

undercapitalized, and any insured depository institution which is

critically undercapitalized, shall submit an application to engage in

acquisitions, branching or new lines of business.

(2) A new line of business will include any new activity exercised

which, although it may be permissible, has not been exercised by the

institution.

(b) Content of filing. Applications shall describe the proposal,

state the date the institution's capital restoration plan was accepted

by its primary federal regulator, describe the institution's status in

implementing the plan, and explain how the proposed action is

consistent with and will further the achievement of the plan or

otherwise further the purposes of section 38 of the FDI Act. If the

FDIC is not the applicant's primary federal regulator, the application

also should state whether approval has been requested from the

applicant's primary federal regulator, the date of such request and the

disposition of the request, if any. If the proposed action also

requires applications pursuant to section 18 (c) or (d) of the FDI Act

(mergers and branches) (12 U.S.C. 1828 (c) or (d)), such applications

should be filed concurrently with, or made a part of, the application

filed pursuant to section 38 of the FDI Act (12 U.S.C. 1831o).

Sec. 303.205 Applications for bonuses and increased compensation for

senior executive officers.

(a) Scope. Any insured state nonmember bank or insured branch of a

foreign bank that is significantly or critically undercapitalized, or

any insured state nonmember bank or any insured branch of a foreign

bank that is undercapitalized and which has failed to submit or

implement in any material respect an acceptable capital restoration

plan, shall submit an application to pay a bonus or increase

compensation for any senior executive officer.

(b) Content of filing. Applications shall list each proposed bonus

or increase in compensation, and for the latter shall identify

compensation for each of the twelve calendar months preceding the

calendar month in which the institution became undercapitalized.

Applications also shall state the date the institution's capital

restoration plan was accepted by the FDIC, and describe any progress

made in implementing the plan.

Sec. 303.206 Application for payment of principal or interest on

subordinated debt.

(a) Scope. Any critically undercapitalized insured depository

institution shall submit an application to pay principal or interest on

subordinated debt.

(b) Content of filing. Applications shall describe the proposed

payment and provide an explanation of action taken under section

38(h)(3)(A)(ii) of the FDI Act (action other than receivership or

conservatorship). The application also shall explain how such payments

would further the purposes of section 38 of the FDI Act (12 U.S.C.

1831o). Existing approvals pursuant to requests filed under section

18(i)(1) of the FDI Act (12 U.S.C. 1828(i)(1)) (capital stock

reductions or retirements) shall not be deemed to be the permission

needed pursuant to section 38.

Sec. 303.207 Restricted activities for critically undercapitalized

institutions.

(a) Scope. Any critically undercapitalized insured depository

institution shall submit an application to engage in certain restricted

activities.

(b) Content of filing. Applications to engage in any of the

following activities, as set forth in sections 38(i)(2) (A) through (G)

of the FDI Act, shall describe the proposed activity and explain how

the activity would further the purposes of section 38 of the FDI Act

(12 U.S.C. 1831o):

(1) Enter into any material transaction other than in the usual

course of business including any action with respect to which the

institution is required to provide notice to the appropriate federal

banking agency. Materiality will be determined on a case-by-case basis;

(2) Extend credit for any highly leveraged transaction (as defined

in part 325 of this chapter);

(3) Amend the institution's charter or bylaws, except to the extent

necessary to carry out any other requirement of any law, regulation, or

order;

(4) Make any material change in accounting methods;

(5) Engage in any covered transaction (as defined in section 23A(b)

of the Federal Reserve Act (12 U.S.C. 371c(b));

(6) Pay excessive compensation or bonuses. Part 364 of this chapter

provides guidance for determining excessive compensation; or

(7) Pay interest on new or renewed liabilities at a rate that would

increase the institution's weighted average cost

[[Page 79267]]

of funds to a level significantly exceeding the prevailing rates of

interest on insured deposits in the institution's normal market area.

Section 337.6 of this chapter (Brokered deposits) provides guidance for

defining the relevant terms of this provision; however this provision

does not supersede the general prohibitions contained in Sec. 337.6.

Sec. Sec. 303.208--303.219 [Reserved]

Subpart L--Section 19 of the FDI Act (Consent to Service of Persons

Convicted of Certain Criminal Offenses)

Sec. 303.220 Scope.

This subpart covers applications under section 19 of the FDI Act

(12 U.S.C. 1829). Pursuant to section 19, any person who has been

convicted of any criminal offense involving dishonesty, breach of

trust, or money laundering, or has agreed to enter into a pretrial

diversion or similar program in connection with a prosecution for such

offense, may not become, or continue as, an institution-affiliated

party of an insured depository institution; own or control, directly or

indirectly, any insured depository institution; or otherwise

participate, directly or indirectly, in the conduct of the affairs of

any insured depository institution without the prior written consent of

the FDIC.

Sec. 303.221 Filing procedures.

(a) Where to file. An application under section 19 of the FDI Act

shall be filed with the appropriate FDIC office.

(b) Contents of filing. Application forms may be obtained from any

FDIC regional director. The FDIC may require additional information

beyond that sought in the form, as warranted, in individual cases.

Sec. 303.222 Service at another insured depository institution.

In the case of a person who has already been approved by the FDIC

under this subpart or section 19 of the FDI Act in connection with a

particular insured depository institution, such person may not become

an institution affiliated party, or own or control directly or

indirectly another insured depository institution, or participate in

the conduct of the affairs of another insured depository institution,

without the prior written consent of the FDIC.

Sec. 303.223 Applicant's right to hearing following denial.

An applicant may request a hearing following a denial of an

application in accordance with the provisions of part 308 of this

chapter.

Sec. Sec. 303.224--303.239 [Reserved]

Subpart M--Other Filings

Sec. 303.240 General.

This subpart sets forth the filing procedures to be followed when

seeking the FDIC's consent to engage in certain activities or

accomplish other matters as specified in the individual sections

contained herein. For those matters covered by this subpart that also

have substantive FDIC regulations or related statements of policy,

references to the relevant regulations or statements of policy are

contained in the specific sections.

Sec. 303.241 Reduce or retire capital stock or capital debt

instruments.

(a) Scope. This section contains the procedures to be followed by

an insured state nonmember bank to seek the prior approval of the FDIC

to reduce the amount or retire any part of its common or preferred

stock, or to retire any part of its capital notes or debentures

pursuant to section 18(i)(1) of the Act (12 U.S.C. 1828(i)(1)).

(b) Where to file. Applicants shall submit a letter application to

the appropriate FDIC office.

(c) Content of filing. The application shall contain the following:

(1) The type and amount of the proposed change to the capital

structure and the reason for the change;

(2) A schedule detailing the present and proposed capital

structure;

(3) The time period that the proposal will encompass;

(4) If the proposal involves a series of transactions affecting

Tier 1 capital components which will be consummated over a period of

time which shall not exceed twelve months, the application shall

certify that the insured depository institution will maintain itself as

a well-capitalized institution as defined in part 325 of this chapter,

both before and after each of the proposed transactions;

(5) If the proposal involves the repurchase of capital instruments,

the amount of the repurchase price and the basis for establishing the

fair market value of the repurchase price;

(6) A statement that the proposal will be available to all holders

of a particular class of outstanding capital instruments on an equal

basis, and if not, the details of any restrictions; and

(7) The date that the applicant's board of directors approved the

proposal.

(d) Additional information. The FDIC may request additional

information at any time during processing of the application.

(e) Undercapitalized institutions. Procedures regarding

applications by an undercapitalized insured depository institution to

retire capital stock or capital debt instruments pursuant to section 38

of the FDI Act (12 U.S.C. 1831o) are set forth in subpart K (Prompt

Corrective Action), Sec. 303.203. Applications pursuant to sections 38

and 18(i) may be filed concurrently, or as a single application.

(f) Expedited processing for eligible depository institutions. An

application filed under this section by an eligible depository

institution as defined inSec. 303.2(r) will be acknowledged in writing

by the FDIC and will receive expedited processing, unless the applicant

is notified in writing to the contrary and provided with the basis for

that decision. The FDIC may remove an application from expedited

processing for any of the reasons set forth in Sec. 303.11(c)(2).

Absent such removal, an application processed under expedited

processing will be deemed approved 20 days after the FDIC's receipt of

a substantially complete application.

(g) Standard processing. For those applications that are not

processed pursuant to expedited procedures, the FDIC will provide the

applicant with written notification of the final action as soon as the

decision is rendered.

Sec. 303.242 Exercise of trust powers.

(a) Scope. This section contains the procedures to be followed by a

state nonmember bank to seek the FDIC's prior consent to exercise trust

powers. The FDIC's prior consent to exercise trust powers is not

required in the following circumstances:

(1) Where a state nonmember bank received authority to exercise

trust powers from its chartering authority prior to December 1, 1950;

or

(2) Where an insured depository institution continues to conduct

trust activities pursuant to authority granted by its chartering

authority subsequent to a charter conversion or withdrawal from

membership in the Federal Reserve System.

(b) Where to file. Applicants shall submit to the appropriate FDIC

office a completed form, ``Application for Consent To Exercise Trust

Powers''. This form may be obtained from any FDIC regional director.

(c) Content of filing. The filing shall consist of the completed

trust application form.

(d) Additional information. The FDIC may request additional

information at any time during processing of the filing.

[[Page 79268]]

(e) Expedited processing for eligible depository institutions. An

application filed under this section by an eligible depository

institution as defined in Sec. 303.2(r) will be acknowledged in

writing by the FDIC and will receive expedited processing, unless the

applicant is notified in writing to the contrary and provided with the

basis for that decision. The FDIC may remove an application from

expedited processing for any of the reasons set forth in Sec.

303.11(c)(2). Absent such removal, an application processed under

expedited procedures will be deemed approved 30 days after the FDIC's

receipt of a substantially complete application.

(f) Standard processing. For those applications that are not

processed pursuant to the expedited procedures, the FDIC will provide

the applicant with written notification of the final action when the

decision is rendered.

Sec. 303.243 Brokered deposit waivers.

(a) Scope. Pursuant to section 29 of the FDI Act (12 U.S.C. 1831f)

and part 337 of this chapter, an adequately capitalized insured

depository institution may not accept, renew or roll over any brokered

deposits unless it has obtained a waiver from the FDIC. A well-

capitalized insured depository institution may accept brokered deposits

without a waiver, and an undercapitalized insured depository

institution may not accept, renew or roll over any brokered deposits

under any circumstances. This section contains the procedures to be

followed to file with the FDIC for a brokered deposit waiver. The FDIC

will provide notice to the depository institution's appropriate federal

banking agency and any state regulatory agency, as appropriate, that a

request for a waiver has been filed and will consult with such agency

or agencies, prior to taking action on the institution's request for a

waiver. Prior notice and/or consultation shall not be required in any

particular case if the FDIC determines that the circumstances require

it to take action without giving such notice and opportunity for

consultation.

(b) Where to file. Applicants shall submit a letter application to

the appropriate FDIC office.

(c) Content of filing. The application shall contain the following:

(1) The time period for which the waiver is requested;

(2) A statement of the policy governing the use of brokered

deposits in the institution's overall funding and liquidity management

program;

(3) The volume, rates and maturities of the brokered deposits held

currently and anticipated during the waiver period sought, including

any internal limits placed on the terms, solicitation and use of

brokered deposits;

(4) How brokered deposits are costed and compared to other funding

alternatives and how they are used in the institution's lending and

investment activities, including a detailed discussion of asset growth

plans;

(5) Procedures and practices used to solicit brokered deposits,

including an identification of the principal sources of such deposits;

(6) Management systems overseeing the solicitation, acceptance and

use of brokered deposits;

(7) A recent consolidated financial statement with balance sheet

and income statements; and

(8) The reasons the institution believes its acceptance, renewal or

rollover of brokered deposits would pose no undue risk.

(d) Additional information. The FDIC may request additional

information at any time during processing of the application.

(e) Expedited processing for eligible depository institutions. An

application filed under this section by an eligible depository

institution as defined in this paragraph will be acknowledged in

writing by the FDIC and will receive expedited processing, unless the

applicant is notified in writing to the contrary and provided with the

basis for that decision. For the purpose of this section, an applicant

will be deemed an eligible depository institution if it satisfies all

of the criteria contained in Sec. 303.2(r) except that the applicant

may be adequately capitalized rather than well-capitalized. The FDIC

may remove an application from expedited processing for any of the

reasons set forth in Sec. 303.11(c)(2). Absent such removal, an

application processed under expedited procedures will be deemed

approved 21 days after the FDIC's receipt of a substantially complete

application.

(f) Standard processing. For those filings which are not processed

pursuant to the expedited procedures, the FDIC will provide the

applicant with written notification of the final action as soon as the

decision is rendered.

(g) Conditions for approval. A waiver issued pursuant to this

section shall:

(1) Be for a fixed period, generally no longer than two years, but

may be extended upon refiling; and

(2) May be revoked by the FDIC at any time by written notice to the

institution.

Sec. 303.244 Golden parachute and severance plan payments.

(a) Scope. Pursuant to section 18(k) of the FDI Act (12 U.S.C.

1828(k)) and part 359 of this chapter, an insured depository

institution or depository institution holding company may not make

golden parachute payments or excess nondiscriminatory severance plan

payments unless the depository institution or holding company obtains

permission to make such payments in accordance with the rules contained

in part 359 of this chapter. This section contains the procedures to

file for the FDIC's consent when such consent is necessary under part

359 of this chapter.

(1) Golden parachute payments. A troubled insured depository

institution or a troubled depository institution holding company is

prohibited from making golden parachute payments (as defined in Sec.

359.1(f)(1) of this chapter) unless it obtains the consent of the

appropriate federal banking agency and the written concurrence of the

FDIC. Therefore, in the case of golden parachute payments, the

procedures in this section apply to all troubled insured depository

institutions and troubled depository institution holding companies.

(2) Excess nondiscriminatory severance plan payments. In the case

of excess nondiscriminatory severance plan payments as provided by

Sec. 359.1(f)(2)(v) of this chapter, the FDIC's consent is necessary

for state nonmember banks that meet the criteria set forth in Sec.

359.1(f)(1)(ii) of this chapter. In addition, the FDIC's consent is

required for all insured depository institutions or depository

institution holding companies that meet the same criteria and seek to

make payments in excess of the 12-month amount specified in Sec.

359.1(f)(2)(v).

(b) Where to file. Applicants shall submit a letter application to

the appropriate FDIC regional director.

(c) Content of filing. The application shall contain the following:

(1) The reasons why the applicant seeks to make the payment;

(2) An identification of the institution-affiliated party who will

receive the payment;

(3) A copy of any contract or agreement regarding the subject

matter of the filing;

(4) The cost of the proposed payment and its impact on the

institution's capital and earnings; and

(5) The reasons why consent to the payment should be granted.

(d) Additional information. The FDIC may request additional

information at any time during processing of the filing.

(e) Processing. The FDIC will provide the applicant with a

subsequent written notification of the final action taken as soon as

the decision is rendered.

[[Page 79269]]

Sec. 303.245 Waiver of liability for commonly controlled depository

institutions.

(a) Scope. Section 5(e) of the FDI Act (12 U.S.C. 1815(e)) creates

liability for commonly controlled insured depository institutions for

losses incurred or anticipated to be incurred by the FDIC in connection

with the default of a commonly controlled insured depository

institution or any assistance provided by the FDIC to any commonly

controlled insured depository institution in danger of default. In

addition to certain statutory exceptions and exclusions contained in

sections 5(e)(6), (7) and (8), the FDI Act also permits the FDIC, in

its discretion, to exempt any insured depository institution from this

liability if it determines that such exemption is in the best interests

of the Bank Insurance Fund (BIF) or the Savings Association Insurance

Fund (SAIF). This section describes procedures to request a conditional

waiver of liability pursuant to section 5 of the FDI Act (12 U.S.C.

1815(e)(5)(A)).

(b) Definition. Conditional waiver of liability means an exemption

from liability pursuant to section 5(e) of the FDI Act (12 U.S.C.

1815(e)) subject to terms and conditions.

(c) Where to file. Applicants shall submit a letter application to

the appropriate FDIC office.

(d) Content of filing. The application shall contain the following

information:

(1) The basis for requesting a waiver;

(2) The existence of any significant events (e.g., change in

control, capital injection, etc.) that may have an impact upon the

applicant and/or any potentially liable institution;

(3) Current, and if applicable, pro forma financial information

regarding the applicant and potentially liable institution(s); and

(4) The benefits to the appropriate FDIC insurance fund resulting

from the waiver and any related events.

(e) Additional information. The FDIC may request additional

information at any time during the processing of the filing.

(f) Processing. The FDIC will provide the applicant with written

notification of the final action as soon as the decision is rendered.

(g) Failure to comply with terms of conditional waiver. In the

event a conditional waiver of liability is issued, failure to comply

with the terms specified therein may result in the termination of the

conditional waiver of liability. The FDIC reserves the right to revoke

the conditional waiver of liability after giving the applicant written

notice of such revocation and a reasonable opportunity to be heard on

the matter pursuant to Sec. 303.10.

Sec. 303.246 Insurance fund conversions.

(a) Scope. This section contains the procedures to be followed by

an insured depository institution to seek the FDIC's prior approval to

engage in an insurance fund conversion that involves the transfer of

deposits between the SAIF and the BIF. Optional conversion

transactions, commonly referred to as Oakar transactions, pursuant to

section 5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)), which do not

involve the transfer of deposits between the SAIF and the BIF, are

governed by the procedures set forth in subpart D (Merger Transactions)

of this part.

(b) Where to file. Applicants shall submit a letter application to

the appropriate FDIC regional director. The filing shall be signed by

representatives of each institution participating in the transaction.

Insurance fund conversions which are proposed in conjunction with a

merger application filed by a state nonmember bank pursuant to section

18(c) of the FDI Act (12 U.S.C. 1828(c)) should be included with that

filing.

(c) Content of filing. The application shall include the following

information:

(1) A description of the transaction;

(2) The amount of deposits involved in the conversion transaction;

(3) A pro forma balance sheet and income statement for each

institution upon consummation of the transaction; and

(4) Certification by each party to the transaction that applicable

entrance and exit fees will be paid pursuant to part 312 of this

chapter.

(d) Additional information. The FDIC may request additional

information at any time during processing of the filing.

(e) Processing. The FDIC will provide the applicant with written

notification of the final action as soon as the decision is rendered.

Sec. 303.247 Conversion with diminution of capital.

(a) Scope. This section contains the procedures to be followed by

an insured federal depository institution seeking the prior written

consent of the FDIC pursuant to section 18(i)(2) of the FDI Act (12

U.S.C. 1828(i)(2)) to convert from an insured federal depository

institution to an insured state nonmember bank (except a District bank)

where the capital stock or surplus of the resulting bank will be less

than the capital stock or surplus, respectively, of the converting

institution at the time of the shareholders' meeting approving such

conversion.

(b) Where to file. Applicants shall submit a letter application to

the appropriate FDIC office.

(c) Content of filing. The application shall contain the following

information:

(1) A description of the proposed transaction;

(2) A schedule detailing the present and proposed capital

structure; and

(3) A copy of any documents submitted to the state chartering

authority with respect to the charter conversion.

(d) Additional information. The FDIC may request additional

information at any time during the processing.

(e) Processing. The FDIC will provide the applicant with written

notification of the final action when the decision is rendered.

Sec. 303.248 Continue or resume status as an insured institution

following termination under section 8 of the FDI Act.

(a) Scope. This section relates to an application by a depository

institution whose insured status has been terminated under section 8 of

the FDI Act (12 U.S.C. 1818) for permission to continue or resume its

status as an insured depository institution. This section covers

institutions whose deposit insurance continues in effect for any

purpose or for any length of time under the terms of an FDIC order

terminating deposit insurance, but does not cover operating non-insured

depository institutions which were previously insured by the FDIC, or

any non-insured, non-operating depository institution whose charter has

not been surrendered or revoked.

(b) Where to file. Applicants shall submit a letter application to

the appropriate FDIC office.

(c) Content of filing. The filing shall contain the following

information:

(1) A complete statement of the action requested, all relevant

facts, and the reason for such requested action; and

(2) A certified copy of the resolution of the depository

institution's board of directors authorizing submission of the filing.

(d) Additional information. The FDIC may request additional

information at any time during processing of the filing.

(e) Processing. The FDIC will provide the applicant with written

notification of the final action as soon as the decision is rendered.

Sec. 303.249 Truth in Lending Act--Relief from reimbursement.

(a) Scope. This section applies to requests for relief from

reimbursement pursuant to the Truth in Lending Act (15 U.S.C. 1601 et

seq.) and Regulation Z (12 CFR part 226). Related delegations of

authority are also set forth.

[[Page 79270]]

(b) Procedures to be followed in filing initial requests for

relief. Requests for relief from reimbursement shall be filed with the

appropriate FDIC office or within 60 days after receipt of the

compliance report of examination containing the request to conduct a

file search and make restitution to affected customers. The filing

shall contain a complete and concise statement of the action requested,

all relevant facts, the reasons and analysis relied upon as the basis

for such requested action, and all supporting documentation.

(c) Additional information. The FDIC may request additional

information at any time during processing of any such requests.

(d) Processing. The FDIC will acknowledge receipt of the request

for reconsideration and provide the applicant with written notification

of its determination within 60 days of its receipt of the request for

reconsideration.

(e) Procedures to be followed in filing requests for

reconsideration. Within 15 days of receipt of written notice that its

request for relief has been denied, the requestor may petition the

appropriate FDIC office for reconsideration of such request in

accordance with the procedures set forth inSec. 303.11(f).

Sec. 303.250 Management official interlocks.

(a) Scope. This section contains the procedures to be followed by

an insured state nonmember bank to seek the approval of FDIC to

establish an interlock pursuant to the Depository Institutions

Management Interlocks Act (12 U.S.C. 3207), section 13 of the FDI Act

(12 U.S.C. 1823(k)) and part 348 of this chapter (12 CFR part 348).

(b) Where to file. Applicants shall submit a letter application to

the appropriate FDIC office.

(c) Content of filing. The application shall contain the following:

(1) A description of the proposed interlock;

(2) A statement of reason as to why the interlock will not result

in a monopoly or a substantial lessening of competition; and

(3) If the applicant is seeking an exemption set forth in Sec.

348.5 or 348.6 of this chapter, a description of the particular

exemption which is being requested and a statement of reasons as to why

the exemption is applicable.

(d) Additional information. The FDIC may request additional

information at any time during processing of the filing.

(e) Processing. The FDIC will provide the applicant with written

notification of the final action when the decision is rendered.

Sec. 303.251 Modification of conditions.

(a) Scope. This section contains the procedures to be followed by

an insured depository institution to seek the prior consent of the FDIC

to modify the requirement of a prior approval of a filing issued by the

FDIC.

(b) Where to file. Applicants should submit a letter application to

the appropriate FDIC regional director.

(c) Content of filing. The application should contain the following

information:

(1) A description of the original approved application;

(2) A description of the modification requested; and

(3) The reason for the request.

(d) Additional information. The FDIC may request additional

information at any time during processing of the filing.

(e) Processing. The FDIC will provide the applicant with a written

notification of the final action as soon as the decision is rendered.

Sec. 303.252 Extension of time.

(a) Scope. This section contains the procedures to be followed by

an insured depository institution to seek the prior consent of the FDIC

for additional time to fulfill a condition required in an approval of a

filing issued by the FDIC or to consummate a transaction which was the

subject of an approval by the FDIC.

(b) Where to file. Applicants shall submit a letter application to

the appropriate FDIC office.

(c) Content of filing. The application shall contain the following

information:

(1) A description of the original approved application;

(2) Identification of the original time limitation;

(3) The additional time period requested; and

(4) The reason for the request.

(d) Additional information. The FDIC may request additional

information at any time during processing of the filing.

(e) Processing. The FDIC will provide the applicant with written

notification of the final action as soon as the decision is rendered.

Sec. Sec. 303.253-303.259 [Reserved]

By order of the Board of Directors.

Dated at Washington, DC, this 3rd day of December, 2002.

Federal Deposit Insurance Corporation.

Valerie J. Best,

Assistant Executive Secretary.

[FR Doc. 02-31922 Filed 12-26-02; 8:45 am]

BILLING CODE 6714-01-P

Last Updated 12/27/2002 regs@fdic.gov