FDIC Federal Register Citations

[Federal Register: April 1, 1997 (Volume 62, Number 62)]

[Notices]

[Page 15479-15480]

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

[DOCID:fr01ap97_dat-83]

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FEDERAL DEPOSIT INSURANCE CORPORATION

Applications, Legal Fees, and Other Expenses

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Rescission of statement of policy.

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SUMMARY: As part of the FDIC's systematic review of its regulations and

written policies under section 303(a) of the Riegle Community

Development and Regulatory Improvement Act of 1994 (CDRI), the FDIC is

rescinding its statement of policy concerning applications, legal fees,

and other expenses (Statement of Policy). The Statement of Policy

addresses unreasonable or excessive fees, insider fees, and contingency

fee arrangements incidental to certain applications filed with the

FDIC. The FDIC is rescinding the Statement of Policy because portions

are now considered outmoded and similar information is duplicated or

cross-referenced in other Statements of Policy. Remaining information

that is relevant will be placed, in condensed form, into Statements of

Policy regarding Applications for Deposit Insurance, and Bank Merger

Transactions. The rescission does not reflect any substantive change in

the FDIC's supervisory attitude toward excessive or unwarranted fees

incident to an application.

EFFECTIVE DATE: This Statement of Policy is rescinded effective April

1, 1997.

FOR FURTHER INFORMATION CONTACT: Jesse G. Snyder, Assistant Director,

(202/ 898-6915), Division of Supervision; Susan van den Toorn, Counsel,

(202/898-8707), Legal

[[Page 15480]]

Division, FDIC, 550 17th Street, N.W., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: The FDIC is conducting a systematic

review of its regulations and written policies. Section 303(a) of

the CDRI (12 U.S.C. 4803(a)) requires the FDIC, the Office of the

Comptroller of the Currency, the Board of Governors of the Federal

Reserve System, and the Office of Thrift Supervision (Federal

banking agencies) to each streamline and modify its regulations and

written policies in order to improve efficiency, reduce unnecessary

costs, and eliminate unwarranted constraints on credit

availability. Section 303(a) also requires each of the Federal

banking agencies to remove inconsistencies and outmoded and

duplicative requirements from its regulations and written policies.

As a part of this review, the FDIC has determined that the

Statement of Policy contains a substantial amount of information that

is outmoded, and duplicated or cross-referenced elsewhere. The FDIC's

written policies can be streamlined by eliminating the Statement of

Policy. The relevant information contained in the Policy Statement will

be condensed and placed into Statements of Policy regarding

Applications for Deposit Insurance, and Bank Merger Transactions.

On September 8, 1980, the Statement of Policy was adopted by the

Board of the FDIC and was published on September 15, 1980 (45 FR

61025). The Statement of Policy addresses unreasonable or excessive

fees, insider fees, and contingency fee arrangements incidental to

applications filed with the FDIC. Some of the information contained in

the Statement of Policy is now also in other Statements of Policy

addressing specific applications and, as a result, it is no longer

necessary to have a Statement of Policy dealing specifically with legal

fees and other expenses.

Issues formerly dealt with in the Statement of Policy have now been

condensed and placed into other application specific ``Statements of

Policy''. The following specific statements are now included in

relevant ``Statements of Policy'' published concurrently herein.

``The commitment to or payment of unreasonable or excessive fees

and other expenses incident to an application reflects adversely

upon the management of the applicant institution. Fees and other

organizational expenses incurred or committed to should be fully

supported.

Expenses for professional or other services rendered by

organizers, present or prospective board members, major shareholders

or executive officers will receive special review for any indication

of self-dealing to the detriment of the bank and its other

shareholders. As a matter of practice, the FDIC expects full

disclosure to all directors and shareholders of any material

arrangement with an insider.

In no case will an FDIC application be approved where the

payment of a fee, in whole or in part, is contingent upon any act or

forbearance by the FDIC or by any other federal or state agency or

official.''

The rescission does not reflect any substantive change in the

FDIC's supervisory attitude toward excessive, unwarranted, or otherwise

inappropriate fees incident to an application, and the relevant issues

will continue to be addressed.

For the above reasons, the Statement of Policy is hereby rescinded.

By order of the Board of Directors.

Dated at Washington, DC, this 25th day of March, 1997.

Federal Deposit Insurance Corporation

Robert E. Feldman,

Deputy Executive Secretary.

[FR Doc. 97-8171 Filed 3-31-97; 8:45 am]

BILLING CODE 6714-01-P