[Federal Register: July 13, 1995 (Volume 60, Number 134)]
[Proposed Rules]
[Page 36074-36078]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 36074]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 346
RIN 3064-AB62
Foreign Banks
AGENCY: Federal Deposit Insurance Corporation (FDIC or Corporation).
ACTION: Notice of proposed rulemaking.
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SUMMARY: Section 107 of the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (Riegle-Neal Act) amended section 6 of
the International Banking Act of 1978 (IBA) to provide that the FDIC
shall amend its regulation concerning domestic retail deposit
activities by state-licensed branches of foreign banks. The proposal
would amend the FDIC's regulations to restrict the amount and types of
initial deposits of less than $100,000 which could be accepted by an
uninsured state-licensed branch of a foreign bank. The proposal is
intended to afford equal competitive opportunity to foreign and
domestic banks.
DATES: Comments must be received by September 11, 1995.
ADDRESSES: Send comments to Jerry L. Langley, Executive Secretary,
Federal Deposit Insurance Corporation, 550 17th Street, N.W.,
Washington, D.C. 20429. Comments may be hand-delivered to room 400,
1776 F Street, N.W., Washington, D.C. 20429, on business days between
8:30 a.m. and 5:00 p.m. [FAX number: (202) 898-3838; Internet address:
comments@fdic.gov]
FOR FURTHER INFORMATION CONTACT: Charles V. Collier, Assistant
Director, Division of Supervision, (202) 898-6850; Jeffrey M. Kopchik,
Counsel, Legal Division, (202) 898-3872, Federal Deposit Insurance
Corporation, 550 17th Street, N.W., Washington, D.C., 20429.
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
No collection of information pursuant to section 3504(h) of the
Paperwork Reduction Act (44 U.S.C. 3501 et seq.) is contained in the
proposed rule. Consequently, no information was submitted to the Office
of Management and Budget for review.
Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act (Pub.
L. 96-354, 5 U.S.C. 601 et seq.), it is certified that the proposed
rule will not have a significant impact on a substantial number of
small entities.
Background
Section 107 of the Riegle-Neal Act (Pub. L. 103-328, 108 Stat.
2358) amended section 6 of the IBA (12 U.S.C. 3104) to provide that the
FDIC shall amend its regulation concerning domestic retail deposit
activity by state-licensed branches of foreign banks (state-licensed
branches).1 Section 6 of the IBA, 12 U.S.C. 3104, concerns the
insurance of deposits maintained at domestic branches and subsidiaries
of foreign banks. Generally, section 6 provides that United States
branches of foreign banks may not accept domestic retail deposits
unless the branch is insured by the FDIC. Section 6 goes on to state
that, after December 19, 1991, foreign banks may not establish any de
novo insured branches in the United States. Section 107 of the Riegle-
Neal Act added a new subsection (a) to section 6 of the IBA. This new
subsection provides that:
\1\ The Riegle-Neal Act requires the FDIC to consult with the
Office of the Comptroller of the Currency (OCC) in the process of
making these amendments in order to assure uniformity. The FDIC has
worked in close consultation with the OCC in order to achieve
substantive uniformity.
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In implementing this section, the Comptroller and the Federal
Deposit Insurance Corporation shall each, by affording equal
competitive opportunities to foreign and United States banking
organizations in their United States operations, ensure that foreign
banking organizations do not receive an unfair competitive advantage
over United States banking organizations.
12 U.S.C. 3104(a).
In revising section 6 of the IBA, Congress made it clear that
foreign banks operating in the United States should not have an unfair
competitive advantage over domestically chartered banks. Thus, Congress
directed the FDIC and the OCC to revise their respective regulations
implementing IBA section 6 to ensure that foreign banks do not receive
an unfair competitive advantage over United States banks by affording
equal competitive opportunities to both.
The Current Regulatory Scheme
Section 346.4 of the FDIC's regulations (12 CFR 346.4) requires
that any state-licensed branch which is engaged in ``domestic retail
deposit activity'' shall be an insured branch. Section 346.6 provides
that a state-licensed branch will not be deemed to be engaged in
domestic retail deposit activity which requires the branch to be
insured if initial deposits of less than $100,000 are derived solely
from certain enumerated sources. The acceptance of initial deposits of
$100,000 or more is not considered to be retail deposit activity and,
thus, deposit insurance is not required for a state-licensed branch
which accepts only these types of initial deposits.
Section 346.6 delineates five categories of depositors from which a
state-licensed branch may accept initial deposits of less than $100,000
without triggering the insurance requirement. The five categories of
depositors are:
(1) Any business entity, including any corporation, partnership,
sole proprietorship, association or trust, which engages in commercial
activity for profit;
(2) Any governmental unit, including the United States government,
any state government, any foreign government and any political
subdivision or agency of the foregoing;
(3) Any international organization which is comprised of two or
more nations;
(4) Funds received in connection with any draft, check, or similar
instrument issued by the branch for the transmission of funds; and
(5) Any depositor who is not a citizen of the United States and who
is not a resident of the United States at the time of the initial
deposit.
This section of the regulation also includes a general exception
(commonly referred to as the ``de minimis exception'') which provides
that an uninsured state-licensed branch may accept initial deposits of
less than $100,000 from any depositor if the amount of such deposits
does not exceed on an average daily basis five percent of the average
of the branch's deposits for the last 30 days of the most recent
calendar quarter.
[[Page 36075]]
The Riegle-Neal Act
In directing the FDIC to amend its regulation to ensure that
foreign banking organizations do not have an unfair competitive
advantage over United States banking organizations, Congress directed
the FDIC to ``consider whether to permit'' an uninsured state-licensed
branch of a foreign bank to accept initial deposits of less than
$100,000 from a smaller class of depositors than is currently
delineated in Sec. 346.6. This suggested smaller class is limited to:
(1) Individuals who are not citizens or residents of the United
States at the time of the initial deposit;
(2) Individuals who:
(i) Are not citizens of the United States;
(ii) Are residents of the United States; and
(iii) Are employed by a foreign bank, foreign business, foreign
government, or recognized international organization;
(3) Persons to whom the branch or foreign bank has extended credit
or provided other nondeposit banking services;
(4) Foreign businesses and large United States businesses;
(5) Foreign governmental units and recognized international
organizations; and
(6) Persons who are depositing funds in connection with the
issuance of a financial instrument by the branch for the transmission
of funds.
Moreover, section 107(b)(3) of the Riegle-Neal Act provides that any de
minimis exception shall not exceed one percent of the average deposits
at the branch, as opposed to the current five percent. The FDIC may
establish a reasonable transition rule to facilitate any termination of
deposit taking activities. See section 107(b)(5)(B) of the Riegle-Neal
act.
If these new statutory criteria were adopted verbatim in the FDIC's
proposed regulation, they would eliminate an uninsured state-licensed
branch's current ability to accept initial deposits of less than
$100,000 from any domestic business entity engaged in a commercial
activity for profit regardless of size, i.e., only foreign businesses
and large United States businesses would be subject to the exception. A
verbatim adoption of the new statutory criteria would also remove the
current exception for domestic federal or state governmental units.
However, uninsured state-licensed branches would still be able to
accept initial deposits of less than $100,000 from foreign governmental
units.
If Congress had intended the FDIC to adopt these suggested criteria
verbatim, it could have so required. However, the statute explicitly
provides that the FDIC ``shall consider whether to permit'' an
uninsured state-licensed branch to accept initial deposits of less than
$100,000 from the enumerated sources. By requiring only that the FDIC
consider the statutory criteria, Congress explicitly recognized that
the ultimate decision should be made by the FDIC, consistent with the
statutory objective set forth in IBA section 6(a), in the exercise of
its regulatory discretion and expertise.
Deposit Taking Activities of Uninsured Foreign Branches
The objective set forth by Congress in section 6(a) of the IBA is
to afford equal competitive opportunities to foreign and United States
banking organizations by ensuring that foreign banks do not receive an
unfair competitive advantage. In order to accomplish this task, the
FDIC reviewed data compiled by the staff of the Board of Governors of
the Federal Reserve System concerning the deposit taking activities of
uninsured U.S. branches and agencies of foreign banks. This information
is significant in assessing the ability of uninsured branches and
agencies to compete with United States banking organizations. As of
year-end 1994, uninsured branches and agencies of foreign banks held
$386 billion of total deposits. Of that total, approximately 78 percent
were accepted from other banks or non-U.S. entities. Of the
approximately 22 percent of total deposits accepted from U.S. entities,
virtually all were accepted in initial amounts in excess of $100,000.
Thus, this data indicates that as a group, uninsured U.S. branches of
foreign banks do not compete with United States banking organizations
for retail deposits. See also ``Banking in a Global Economy: Economic
Benefits to the United States from the Activities of International
Banks'', Institute of International Bankers, September, 1993, p. 27
(IIB Study). Generally, foreign banks have established operations in
the United States in order to provide services to the international
operations of their home country customers. Id. at 10.
In addition, the FDIC reviewed a 1994 study conducted by the OCC
entitled ``Are Foreign Banks Out-Competing U.S. Banks in the U.S.
Market?'' The study found that although the United States market share
of subsidiaries, branches and agencies of foreign banks increased
during the 1980's and early 1990's, foreign banks operating in the
United States consistently performed less well than domestic banks in
terms of profitability, efficiency and credit quality. Thus, the OCC
study supports the conclusion that United States banking organizations
are competing quite well with their foreign counterparts operating in
the United States.
Section 107(b)(4) of the Riegle-Neal Act requires that the FDIC
consider the importance of maintaining and improving the availability
of credit to all sectors of the United States economy, including the
international trade finance sector, in affording equal competitive
opportunities to foreign and United States banking organizations.
United States branches and agencies of foreign banks play a substantial
role in financing the export of U.S. goods and services to their home
countries. See IIB Study, p. 35 (citing 1993 Federal Reserve Bank of
New York statistics). Thus, the FDIC must be careful not to
disadvantage state-licensed branches in order not to constrict the
exportation of U.S. produced goods and services.
The Proposal
The FDIC has given careful consideration to Congress' directive
that foreign banking organizations not receive an unfair competitive
advantage over United States banking organizations. The FDIC has also
considered the importance of maintaining and improving the availability
of credit to all sectors of the United States economy, including the
international trade finance sector. To that end, the Corporation has
examined in detail the available data and the suggested criteria
contained in section 107(b) of the Riegle-Neal Act in comparison to the
criteria currently delineated in Sec. 346.6(a) of the FDIC's
regulations. In general, the FDIC has concluded that uninsured state-
licensed branches of foreign banks do not have an overall unfair
competitive advantage over domestic banking organizations. Therefore,
the proposal provides that uninsured state-licensed branches of foreign
banks may accept initial deposits of less than $100,000 from the six
categories of depositors specified in sections 107(b)(2) (A) through
(F) of the Riegle-Neal Act. In addition, the proposal expands and adds
certain exceptions which are discussed in the following paragraphs.
These additional exceptions are consistent with Congress' concern that
the FDIC not adversely affect international trade finance.
Section 346.6(a)(3) of the proposed regulation adopts the criterion
suggested in section 107(b)(2)(C) of the Riegle-Neal Act that uninsured
state-licensed branches should be able to accept initial deposits of
less than $100,000 from persons to whom the branch or foreign bank has
extended credit or provided
[[Page 36076]]
other nondeposit banking services. However, the proposal refines this
exception somewhat by specifying that the extension of credit or
provision of other nondeposit banking services had to have occurred
during the past twelve months. The proposal expands the statutory
language to include persons with whom the branch or foreign bank has
entered into a written agreement to extend credit or provide other
nondeposit banking services within the next twelve months. The
Corporation is of the opinion that this addition may be a logical
extension of the statutory criterion which would not provide foreign
banking organizations with any unfair competitive advantage.
Section 346.6(a)(4) of the proposal adopts the exception contained
in section 107(b)(2)(D) of the Riegle-Neal Act concerning foreign
businesses and adds thereto ``persons from whom an Edge Corporation may
accept deposits under Sec. 211.4(e)(1) of Regulation K of the Board of
Governors of the Federal Reserve System''. Generally, this would
include foreign governments, their agencies and instrumentalities,
foreign persons, organizations engaged in international business
activities, other Edge corporations, foreign banks, other depository
institutions, etc. Once again, the FDIC is of the opinion that the
addition of this class of depositors is a natural outgrowth of section
107(b)(2)(D) of the Riegle-Neal Act and would not result in an unfair
competitive advantage being given to foreign banking organizations.
Section 107(b)(2)(F) of the Riegle-Neal Act refers to ``persons who
are depositing funds in connection with the issuance of a financial
instrument by the branch for the transmission of funds''. This language
is substantially similar to the exception contained in Sec. 346.6(a)(4)
of the existing regulation, except that the current regulation's
reference to ``draft, check or similar instrument'' has been replaced
by the use of the term ``financial instrument''. Section 346.6(a)(6) of
the Proposal includes the exception for funds deposited in connection
with the issuance of a financial instrument by the branch for the
transmission of funds, but also includes an exception for funds
deposited in connection with the transmission of such funds by any
electronic means. The addition of this language in the proposal
concerning funds deposited in connection with electronic transfers is
intended to reflect the FDIC's established interpretation of
Sec. 346.6(a)(4) of the current regulation.
Section 107(b)(2) of the Riegle-Neal Act does not contain an
exception for deposits from the federal or state governments.
Currently, initial deposits of less than $100,000 may be accepted from
any state or federal governmental unit. The FDIC has given this matter
considerable thought and we are not aware of any evidence which would
indicate that the ability to accept initial deposits of less than
$100,000 from state or federal governmental units confers any unfair
competitive advantage on an uninsured state-licensed branch in
comparison to insured domestic banking organizations. The statistics
indicate that uninsured foreign branches and agencies accept virtually
no deposits from domestic government entities.\2\ Thus, it appears to
the FDIC that the inclusion of this exception would not provide foreign
banking organizations with an unfair competitive advantage over United
States banking organizations. The FDIC is proposing a retention of the
existing exception for domestic governmental units. Proposed
Sec. 346.6(a)(5).
\2\ More specifically, the statistics indicate that uninsured
branches and agencies receive only 2.3% of their total deposits from
``Other Deposits'', the category which would include domestic
governmental units. It is fair to assume that domestic governmental
units most likely comprise less than the entire 2.3%. The figures do
not indicate what percentage of the 2.3% are initial deposits of
less than $100,000, but once again it is reasonable to assume that
it is less than the total.
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The proposal also amends Sec. 346.6(b), ``Application for an
Exemption''. This section has been revised to provide that any request
by an uninsured state-licensed branch to be permitted to accept initial
deposits of less than $100,000 from a depositor not included in
proposed Sec. 346.6(a) shall include information addressing how the
acceptance of such deposits will maintain or improve the availability
of credit to all sectors of the United States economy, including the
international trade finance sector, and how it will not give the
foreign bank an unfair competitive advantage over domestic banks.
Proposed Sec. 345.6(b)(3). The proposal also provides that the FDIC
Board of Directors must consider these factors in making its
determination. Proposed Sec. 346.6(b)(1).
Commenters are encouraged to provide their views as to whether the
exceptions incorporated into the proposed regulation are appropriate in
light of the statutory objective set forth in section 6(a) of the IBA.
The FDIC also encourages comment on whether additional exceptions
should be added, including a discussion of how the proposed exception
would satisfy the statutory objective set forth in IBA section 6(a).
Definitions
The proposal would expand Sec. 346.1 to include definitions of the
terms ``foreign business'', ``large United States business'', and
``person''. Proposed Secs. 346.1 (s) through (u). In addition, the
existing definitions of ``foreign bank'', ``initial deposit'' and
``affiliate'' contained in Secs. 346.1 (a), (k) and (o) would be
amended. Proposed Secs. 346.1 (a), (k) and (o). The FDIC is of the
opinion that the addition of these definitions would assist the
industry in interpreting the regulation in a clear and consistent
manner.
The proposal would define ``large United States business'' as any
entity, including but not limited to a corporation, partnership, sole
proprietorship, association, foundation or trust, which is organized
under the laws of the United States or any state thereof and: (1) Whose
securities are registered on a national securities exchange or quoted
on the National Association of Securities Dealers Automated Quotation
System; or (2) Has annual gross revenues in excess of $1,000,000 for
the fiscal year immediately preceding the initial deposit. The FDIC
believes that this definition would meet Congress' concern expressed in
IBA section 6(a) without having a negative impact on the availability
of credit to all sectors of the United States economy.
The proposed definition of ``foreign business'' would include
businesses organized under the laws of a foreign country, their United
States subsidiaries and businesses owned or controlled by foreign
nationals. This definition would encompass the ``plain meaning''
definition of foreign business as well as accommodating businesses
organized under United States law, but owned or controlled by foreign
entities or foreign nationals. These businesses may prefer to do
business with a branch of a foreign bank from their home country
regardless of whether the branch is FDIC insured.
The FDIC requests comment on the proposed definitions. We also
request comment on whether certain of the proposed definitions are
unnecessary or whether others should be added.
De Minimis Exception and Transition Rule
Section 107(b)(5) of the Riegle-Neal Act permits the FDIC to
establish ``reasonable transition rules to facilitate any termination
of any deposit-taking activities that were permissible under
regulations that were in effect before the date of [its enactment]''.
The proposal would provide for a five year transition period, beginning
on the effective date
[[Page 36077]]
of the final regulation. Proposed Sec. 346.6(c). Under this transition
proposal, uninsured state-licensed branches would have five years to
reclassify initial deposits received prior to the effective date of the
final regulation into one of the new exceptions contained in proposed
Secs. 346.6(a) (1) through (6) or the new one percent de minimis
exception contained in proposed Sec. 346.6(a)(7). In the case of a time
deposit, the branch would have until the first maturity date to
reclassify the deposit. In the event that the existing deposit does not
qualify under any of the new exceptions and cannot be included in the
new one percent de minimis category, the branch would be required to
close the account and divest the deposit.
Initial deposits received on or after the effective date of the
final regulation would be required to qualify under one of the new
exceptions or may be accepted under the new one percent de minimis
exception. The FDIC wishes to make it clear that the new one percent de
minimis exception would apply prospectively and would overlap with the
existing five percent de minimis exception during the five year
transition period.
Other Issues
The FDIC is considering including several other exceptions which
have not been included in the proposed regulation. Proposed
Sec. 346.6(a)(3) delineates the exception for persons to whom the
branch or foreign bank has or has agreed to extend credit or provide
other nondeposit banking services. The FDIC is considering expanding
this exception to include affiliates of the depositor as well as any
financial institution affiliate of the branch or foreign bank. The FDIC
requests comment on whether this exception would be desirable and
consistent with the Congressional objective set forth in IBA section
6(a). Detailed comments concerning the phrasing of such an exception,
including the definition of the term ``financial institution
affiliate'' are requested.
The FDIC is also considering adding a new exception that would
permit a state-licensed uninsured branch to accept initial deposits of
less than $100,000 from immediate family members of individuals that
qualify for an exception pursuant to proposed Secs. 346.6(a) (1)
through (6). Once again, commenters are requested to address the effect
of such an exception of the competitive opportunities between United
States and foreign banking organizations as well as credit availability
to all sectors of the United States economy.
List of Subjects in 12 CFR Part 346
Bank deposit insurance, Foreign banking, Reporting and
recordkeeping requirements.
For the reasons set out in the Preamble, the FDIC Board of
Directors hereby proposes to amend 12 CFR part 346 as follows:
PART 346--[AMENDED]
1. The authority citation for part 346 continues to read as
follows:
Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820, 3103, 3104,
3105, 3108.
2. Section 346.1 is amended by adding a sentence to the end of
paragraph (a), revising the first sentence of paragraph (k), revising
paragraph (o), and adding paragraphs (s) through (u) to read as
follows:
Sec. 346.1 Definitions.
* * * * *
(a) * * * For purposes of Sec. 346.6, the term foreign bank does
not include any bank organized under the laws of any territory of the
United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands
the deposits of which are insured by the Corporation pursuant to the
Act.
* * * * *
(k) Initial deposit means the first deposit transaction between a
depositor and the branch on or after [the effective date of the final
regulation]. * * *
* * * * *
(o) Affiliate means any entity that controls, is controlled by, or
is under common control with another entity. An entity shall be deemed
to ``control'' another entity if the entity directly or indirectly
owns, controls, or has the power to vote 25 percent or more of any
class of voting securities of the other entity or controls in any
manner the election of a majority of the directors or trustees of the
other entity.
* * * * *
(s) Foreign business means any entity, including but not limited to
a corporation, partnership, sole proprietorship, association,
foundation or trust, which is organized under the laws of a country
other than the United States or any United States entity which is owned
or controlled by an entity which is organized under the laws of a
country other than the United States or a foreign national.
(t) Large United States business means any entity including but not
limited to a corporation, partnership, sole proprietorship,
association, foundation or trust which is organized under the laws of
the United States or any state thereof, and:
(1) Whose securities are registered on a national securities
exchange or quoted on the National Association of Securities Dealers
Automated Quotation System; or
(2) Has annual gross revenues in excess of $1,000,000, for the
fiscal year immediately preceding the initial deposit.
(u) Person means an individual, bank, corporation, partnership,
trust, association, foundation, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization, or any other form of
entity.
3. Section 346.6 is revised to read as follows:
Sec. 346.6 Exemptions from the insurance requirement.
(a) Deposit activities not requiring insurance. A state branch will
not be deemed to be engaged in a domestic retail deposit activity which
requires the branch to be an insured branch under Sec. 346.4 if initial
deposits in an amount of less than $100,000 are derived solely from the
following:
(1) Individuals who are not citizens or residents of the United
States at the time of the initial deposit;
(2) Individuals who:
(i) Are not citizens of the United States;
(ii) Are residents of the United States; and
(iii) Are employed by a foreign bank, foreign business, foreign
government, or recognized international organization;
(3) Persons to whom the branch or foreign bank has extended credit
or provided other nondeposit banking services within the past twelve
months or has entered into a written agreement to provide such services
within the next twelve months;
(4) Foreign businesses, large United States businesses, and persons
from whom an Edge Corporation may accept deposits under
Sec. 211.4(e)(1) of Regulation K of the Board of Governors of the
Federal Reserve System, 12 CFR 211.4(e)(1);
(5) Any governmental unit, including the United States government,
any state government, any foreign government and any political
subdivision or agency of any of the foregoing, and recognized
international organizations;
(6) Persons who are depositing funds in connection with the
issuance of a financial instrument by the branch for the transmission
of funds or the transmission of such funds by any electronic means; and
(7) Any other depositor but only if the amount of deposits under
this paragraph
[[Page 36078]]
(a)(7) does not exceed on an average daily basis one percent of the
average of the branch's deposits for the last 30 days of the most
recent calendar quarter, excluding deposits in the branch of other
offices, branches, agencies or wholly owned subsidiaries of the bank
and the branch does not solicit deposits from the general public by
advertising, display of signs, or similar activity designed to attract
the attention of the general public. A foreign bank which has more than
one state branch in the same state may aggregate deposits in such
branches (excluding deposits of other branches, agencies or wholly
owned subsidiaries of the bank) for the purpose of this paragraph
(a)(7). The average shall be computed by using the sum of the close of
business figures for the last 30 calendar days ending with and
including the last day of the calendar quarter divided by 30. For days
on which the branch is closed, balances from the last previous business
day are to be used.
(b) Application for an exemption. (1) Whenever a foreign bank
proposes to accept at a state branch initial deposits of less than
$100,000 and such deposits are not otherwise excepted under paragraph
(a) of this section, the foreign bank may apply to the FDIC for consent
to operate the branch as a noninsured branch. The Board of Directors
may exempt the branch from the insurance requirement if the branch is
not engaged in domestic retail deposit activities requiring insurance
protection. The Board of Directors will consider the size and nature of
depositors and deposit accounts, the importance of maintaining and
improving the availability of credit to all sectors of the United
States economy, including the international trade finance sector of the
United State economy, whether the exemption would give the foreign bank
an unfair competitive advantage over United States banking
organizations, and any other relevant factors in making this
determination.
(2) Any request for an exemption under this paragraph (b) should be
in writing and authorized by the board of directors of the foreign
bank. The request should be filed with the Regional Director of the
Division of Supervision for the region where the state branch is
located.
(3) The request should detail the kinds of deposit activities in
which the branch proposes to engage, the expected source of deposits,
the manner in which deposits will be solicited, how this activity will
maintain or improve the availability of credit to all sectors of the
United States economy, including the international trade finance
sector, that the activity will not give the foreign bank an unfair
competitive advantage over United States banking organizations and any
other relevant information.
(c) Transition period. An uninsured state branch may maintain a
deposit lawfully accepted prior to [effective date of final
regulation]:
(1) If the deposit qualifies pursuant to paragraph (a) or (b) of
this section; or
(2) No later than until:
(i) Five years from [effective date of final regulation]; or
(ii) In the case of a time deposit, the first maturity date of the
time deposit.
By order of the Board of Directors, dated at Washington, D.C.,
this 27th day of June, 1995.
Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
[FR Doc. 95-17140 Filed 7-12-95; 8:45 am]
BILLING CODE 6714-01-P