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2000 - FDIC Rules and Regulations
{{12-30-83 p.2895}}
PART 349—REPORTS AND PUBLIC DISCLOSURE OF INDEBTEDNESS OF
EXECUTIVE OFFICERS AND PRINCIPAL SHAREHOLDERS TO A STATE NONMEMBER BANK
AND ITS CORRESPONDENT BANKS
Sec.
349.1
Purpose and scope.
349.2
Definitions.
349.3
Reports by executive officers and principal shareholders.
349.4
Disclosure of indebtedness of executive officers and principal
shareholders.
AUTHORITY: Sec. 2 [9 "Seventh" and "Tenth"], Pub. L.
No. 797, 64 Stat. 881, as amended by sec. 309, Pub. L. No. 95-630, 92
Stat. 3677 (12 U.S.C. 1819 "Seventh" and "Tenth"); secs.
428(b) and 429, Pub. L. No. 97-320, 96 Stat. 1526, 1527.
SOURCE: The provisions of this Part 349 appear at 48 Fed. Reg.
57114, December 28, 1983, effective December 31, 1983, except as
otherwise noted.
§ 349.1 Purpose and scope.
Section 106(b)(2) of the Bank Holding Company Act Amendments of 1970
(12 U.S.C. 1972(2))
("BHCA Amendments") prohibits (1) preferential lending by a bank
to executive officers, directors, and principal shareholders of another
bank when there is a correspondent account relationship between the
banks, or (2) the opening of a correspondent account relationship
between banks when there is a preferential extension of credit by one
of the banks to an executive officer, director, or principal
shareholder of the other bank. Section 106(b)(2) also imposes
requirements on executive officers and principal shareholders to submit
reports on their indebtedness to correspondent banks to the board of
directors of their bank.
Section 7(k) of the Federal Deposit Insurance Act
(12 U.S.C. 1817(k)) and section
106(b)(2)(G)(ii) of the BHCA Amendments (12 U.S.C. 1972(2)(G)(ii))
authorize the Federal banking agencies to issue rules and regulations,
including definitions of terms, to require the reporting and public
disclosure of information by a bank or an executive officer or
principal shareholder thereof concerning extensions of credit by the
bank or its correspondent banks to any of the reporting bank's
executive officers or principal shareholders, or the related interests
of such persons. This Part 349 implements the authorization of the
latter sections to require such reporting and disclosure by insured
State nonmember banks and their executive officers and principal
shareholders.
[Codified to 12 C.F.R.
§ 349.1]
§ 349.2 Definitions.
For the purposes of the reporting and disclosure requirements of
this Part 349, the following definitions apply:
(a) "Bank" has the meanings provided in (1)
12 U.S.C. 1841(c), and includes
a branch or agency of a foreign bank, or a commercial lending company
controlled by a foreign bank or by a company that controls a foreign
bank, where the branch or agency is maintained in a State of the United
States or in the District of Columbia or the commercial lending company
is organized under State law, and (2)
12 U.S.C. 1972(2)(H)(i).
Notwithstanding the foregoing, with respect to disclosures made
pursuant to paragraph (a)(1) of section 349.4 and with respect to
copies of requests maintained pursuant to paragraph (c) of section
349.4, "bank" shall mean "State nonmember bank" as defined
in 12 U.S.C. 1813(b), including
a "mutual savings bank" as defined in
12 U.S.C. 1813(f).
(b) "Capital stock and unimpaired surplus" shall have the
meaning provided in § 215.2(f) of Federal Reserve Board Regulation O,
subpart A (12 CFR 215.2(f)).
Notwithstanding the foregoing, with respect to "mutual savings
banks," the term "total equity capital" found in 12 CFR
215.2(f) shall mean "total surplus accounts."
{{12-30-83 p.2896}}
(c) "Company," "control of a company or bank,"
"executive officer," 1
"extension of credit," "immediate family," and
"person" have the meanings provided in § 215.2 and § 215.3 of
subpart A of Federal Reserve Board Regulation O
(12 CFR 215.2 and
215.3). All references to the
term "member bank" in § 215.2 and § 215.3 shall be deemed to
refer to an insured State nonmember bank for the purposes of this Part
349.
(d) "Correspondent account" is an account that is maintained
by an insured State nonmember bank with another bank for the deposit or
placement of funds. A correspondent account does not include:
(1) Time deposits at prevailing market rates; or
(2) An account maintained in the ordinary course of business
solely for the purpose of effecting Federal funds transactions at
prevailing market rates or making Eurodollar placements at prevailing
market rates.
(e) "Correspondent bank" means a bank that maintains one or
more correspondent accounts for an insured State nonmember bank during
a calendar year that in the aggregate exceed an average daily balance
during that year of $100,000 or one-half of one percent of the insured
State nonmember bank's total deposits (as reported in its first
Consolidated Report of Condition during that calendar year), whichever
amount is smaller.
(f) "Indebtedness" means an extension of credit, but does not
include:
(1) Commercial paper, bonds, debentures and other types of
marketable securities issued in the ordinary course of business; or
(2) Consumer credit (as defined in
12 CFR 226.2(p)) in an
aggregate amount of $5,000 or less from each of the insured State
nonmember bank's correspondent banks, provided the indebtedness is
incurred under terms that are not more favorable than those offered to
the general public.
(g) "Maximum amount of indebtedness" means, at the option of
the reporting person, either (1) the highest outstanding indebtedness
during the calendar year for which the report is made, or (2) the
highest end of the month indebtedness outstanding during the calendar
year for which the report is made.
(h) For the purpose of this Part 349, "principal shareholder"
and "related interest" have the meanings provided in
§ 215.10(a) of Federal Reserve Board Regulation O, subpart A
(12 CFR 215.10(a)), except
that the term "principal shareholder" is synonymous with the term
"stockholder of record" as that term is used in the reporting
provisions of 12 U.S.C.
1972(2)(G)(i). All references to the term "member bank"
in § 215.10(a) shall be deemed to refer to an insured State nonmember
bank for the purposes of this Part 349.
[Codified to 12 C.F.R. § 349.2]
§ 349.3 Reports by executive officers and principal
shareholders.
(a) Annual report. If during any calendar year an
executive officer or principal shareholder of an insured State
nonmember bank or a related interest of such a person has outstanding
an extension of credit from a correspondent bank, the executive officer
or principal shareholder must make a written report to the board of
directors of the insured State nonmember bank on or before January 31
of the following year. 2
(b) Contents of report. The report required by this
section shall include the following information:
(1) The maximum amount of indebtedness of the executive officer
or principal shareholder and of each of that person's related interests
to each of the insured State nonmember bank's correspondent banks
during the calendar year; and
{{12-31-87 p.2897}}
(2) The amount of indebtedness of the executive officer or
principal shareholder and of each of that person's related interests
outstanding to each of the insured State nonmember bank's correspondent
banks not more than ten business days before the report required by
this section is filed; 3
and
(3) A description of the terms and conditions (including the
range of interest rates, the original amount and date, maturity date,
payment terms, security, if any, and any other unusual terms or
conditions) of each extension of credit included in the indebtedness
reported under paragraph (b)(1) of this section.
(c) Retention of reports. The reports required by this
section must ordinarily be retained at the insured State nonmember bank
for a period of three years, but the Federal Deposit Insurance
Corporation may require that they be retained by the bank for an
additional period of time. The reports filed under this section are not
required by this regulation to be made available to the public and
shall not be filed with the Federal Deposit Insurance Corporation
unless specifically requested.
(d) Bank's responsibility. Each insured State nonmember
bank shall advise each of its executive officers and each of its
principal shareholders (to the extent known by the bank) of the reports
required by this section and make available to each of these persons a
list with the name and address of each of the insured State nonmember
bank's correspondent banks.
[Codified to 12 C.F.R.
§ 349.3]
§ 349.4 Disclosure of indebtedness of executive officers and
principal shareholders.
(a) Upon receipt of a written request, an insured State nonmember
bank shall disclose to the requester the name of each executive officer
or principal shareholder of the bank whose aggregate indebtedness,
including the indebtedness of related interests of such person,
(1) at the bank itself as of the end of the latest calendar
quarter; or
(2) at the correspondent banks of the disclosing bank at any time
during the previous calendar year
equals or exceeds the lesser of five percent (5%) of the disclosing
bank's capital stock and unimpaired surplus or $500,000, but in no
event shall an insured State nonmember bank be required to make such
disclosure where the aggregate indebtedness of an executive officer or
principal shareholder is less than $25,000.
(b) Contents of disclosure. (1) An insured State
nonmember bank is not required to disclose any additional information
concerning the indebtedness referred to in paragraph (a), except that
it must observe the requirement of subparagraph (2) below.
(2) Disclosures made pursuant to paragraph (a) shall specify
whether the individual or individuals named in the disclosure, who are
indebted in the amount specified in paragraph (a), are indebted solely
to the bank itself or to one or more correspondent banks of the
reporting bank or to both.
(c) An insured State nonmember bank shall maintain a copy of any
request for information made under paragraph (a) of this section and a
record of the bank's disposition of such request for a period of two
years.
(d) OMB review. The Office of Management and Budget has
reviewed and approved the collection of information requirements
contained in this Part 349. (OMB Control No. 3064-0023).
[Codified to 12 C.F.R. § 349.4]
[The page following this is 2905.]
1 For the purposes of this Part 349, executive officers of an
insured State nonmember bank do not include an executive officer of a
bank holding company of which such bank is a subsidiary or of any other
subsidiary of the bank company, unless the executive officer is also an
executive officer of the insured State nonmember bank. Go Back to Text
2 Persons reporting under this section are not required to
include information on extensions of credit that are fully described in
a report by a person they control or a person that controls them,
provided they identify their relationship with such other person. Go Back to Text
3 If the amount of indebtedness outstanding to a correspondent
bank ten days before the filing of the report is not available or
cannot be readily ascertained, an estimate of the amount of
indebtedness may be filed with the report, provided that the report is
supplemented within the next 30 days with the actual amount of
indebtedness. Go Back to Text
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