[Federal Register: October 9, 1997 (Volume 62, Number 196)]
[Proposed Rules]
[Page 52809-52868]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09oc97-18]
[[Page 52809]]
_______________________________________________________________________
Part II
Federal Deposit Insurance Corporation
_______________________________________________________________________
12 CFR Parts 303, 337, et al.
Practice and Procedure: Golden Parachute and Indemnification Payments;
Proposed Rule
Deposit Insurance Applications; Notice
Bank Merger Transactions; Notice
Domestic Branch Establishment Applications; Notice
Main Office or Branch Relocation Applications; Notice
Liability of Commonly Controlled Depository Institutions; Notice
[[Page 52810]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Parts 303, 337, 341, 346, 348, and 359
RIN 3064-AC02
Applications, Requests, Submittals, Delegations of Authority, and
Notices Required To Be Filed by Statute or Regulation; Unsafe and
Unsound Banking Practices; Registration of Transfer Agents; Foreign
Banks; Management Official Interlocks; Golden Parachute and
Indemnification Payments
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Proposed rule.
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SUMMARY: The FDIC is proposing to amend its regulations governing
application, notice and request procedures and delegations of authority
by streamlining, modernizing and clarifying current policies and
practices. Specifically, the FDIC proposes to offer qualifying well-
capitalized and well-managed insured depository institutions and their
holding companies expedited review procedures for several major types
of filings, including deposit insurance, merger and branch
applications. The agency also proposes to centralize substantially all
filing procedures found throughout its rules within the regulation for
ease of reference. Furthermore, the FDIC proposes to reorganize the
requirements for each major application or notice type into a separate
regulatory subpart that will contain all information necessary to
submit a filing to the agency, as well as any relevant internal agency
delegations of authority to approve or deny submissions. In addition,
the agency is incorporating statutory changes to its application
procedures made by the Economic Growth and Regulatory Paperwork
Reduction Act of 1996. Finally, the FDIC is proposing technical
amendments to related regulations to conform these changes.
This action is being taken in accordance with section 303(a) of the
Riegle Community Development and Regulatory Improvement Act of 1994
which requires the federal banking agencies to review and streamline
their regulations and policies in order to improve efficiency, reduce
unnecessary costs, eliminate unwarranted constraints on credit
availability, and remove inconsistencies and outmoded and duplicative
requirements.
The proposal seeks to reduce burden on insured depository
institutions by imposing regulatory requirements only where needed to
address safety and soundness concerns or accomplish other statutory
responsibilities of the FDIC. The proposed rule also strives to more
closely align the FDIC's application processing regulations with those
of the other federal banking agencies.
DATES: Comments must be received by January 7, 1998.
ADDRESSES: Send written comments to Robert E. Feldman, Executive
Secretary, Attention: Comments/OES, Federal Deposit Insurance
Corporation, 550 17th Street, NW., Washington, DC 20429. Comments may
be hand-delivered to the guard station at the rear of the 17th Street
building (located on F Street), on business days between 7 a.m. and 5
p.m. (Fax number (202) 898-3838; Internet address: comments@fdic.gov).
Comments may be inspected and photocopied in the FDIC Public
Information Center, Room 100, 801 17th Street, NW., Washington, DC
20429, between 9 a.m. and 4:30 p.m. on business days.
FOR FURTHER INFORMATION CONTACT: Division of Supervision: Cary H.
Hiner, Associate Director, (202) 898-6814; Jesse G. Snyder, Assistant
Director, (202) 898-6915; Mark S. Schmidt, Assistant Director, (202)
898-6918. Division of Compliance and Consumer Affairs: Steven D.
Fritts, Associate Director, (202) 942-3454, and Louise N. Kotoshirodo,
Review Examiner, (202) 942-3599. Legal Division: Susan van den Toorn,
Counsel, Regulation and Legislation Section, (202) 898-8707, and Nancy
Schucker Recchia, Counsel, Regulation and Legislation Section, (202)
898-8885. For administrative enforcement issues: Grovetta N. Gardineer,
Counsel, Compliance and Enforcement Section, (202) 736-0665, and Philip
P. Houle, Counsel, Compliance and Enforcement Section, (202) 736-0758.
For foreign bank activities (Subpart J): Jamey G. Basham, Counsel,
Regulation and Legislation Section, Legal Division (202) 898-7265, and
Christie A. Sciacca, Assistant Director, Division of Supervision (202)
898-3671, Federal Deposit Insurance Corporation, 550 17th Street, NW.,
Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
Part 303 of the FDIC's regulations (12 CFR part 303) generally
describes the procedures to be followed by both the FDIC and applicants
with respect to applications, notices, or requests required to be filed
by statute or regulation. Additional information concerning processing
is contained in related FDIC statements of policy. Part 303 also sets
forth delegations of authority from the FDIC's Board of Directors to
the Directors of the Division of Supervision (DOS), the Division of
Compliance and Consumer Affairs (DCA), the General Counsel of the Legal
Division, the Executive Secretary, and, in some cases, their designees
to act on certain applications, notices, requests, and enforcement
matters.
The FDIC is proposing comprehensive revisions to part 303 as part
of a systematic review of its regulations and policy statements
undertaken in accordance with section 303(a) of the Riegle Community
Development and Regulatory Improvement Act of 1994 (CDRIA) (12 U.S.C.
4803(a)). Section 303(a) of CDRIA 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 streamline and modify their regulations and written
policies in order to improve efficiency, reduce unnecessary costs, and
eliminate unwarranted constraints on credit availability. The statute
also requires each of the federal banking agencies to remove
inconsistencies and outmoded and duplicative requirements from their
regulations and written policies.
To initiate its CDRIA review, the FDIC published in the Federal
Register a notice soliciting comment on its regulations and written
policies. 60 FR 62345, December 6, 1995. In response to that request,
the FDIC received four comments regarding part 303 and one comment
concerning a related policy statement.
One commenter wrote that electronic filing of various reports and
documents has the potential to reduce burden arising from compliance
with filing requirements. In particular, the commenter noted that other
governmental agencies already have recognized the benefits of
electronic filing and that certain application procedures, such as
applications to establish or relocate an office and applications
relating to mergers are well-suited for electronic filing. The FDIC is
working the other federal banking agencies in an attempt to adopt
uniform filing forms for common applications and to have such forms
filed electronically where possible.
Another commenter suggested that with regard to applications by
insured state nonmember banks to establish a branch, move its main
office, or relocate a branch pursuant to Sec. 303.2(c), the regulations
should reduce the regulatory burden of setting up shared automated
teller machines (ATMs). Applications are no longer required for ATMs
and
[[Page 52811]]
remote service units (RSUs) as a result of section 2205 of the Economic
Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA) (Pub. L.
104-208, 110 Stat. 3009), which excluded ATMs and RSUs from the
definition of a ``domestic branch'' under section 3(o) of the FDI Act
(12 U.S.C. 1831(o)). Therefore, the definition of ``branch'' in
proposed Sec. 303.41 excludes ATMs and RSUs.
With regard to section 32 notices (change in director or senior
executive officer), a commenter suggested that exceptions be carved out
for two of the three statutory triggering events. Section 32 of the
Federal Deposit Insurance Act (FDI Act) required prior notice from a
depository institution or holding company that (1) was chartered less
than two years; (2) had undergone a change in control within the
preceding two years; or (3) was not in compliance with minimum capital
requirements or was otherwise in ``troubled condition.'' Section 2209
of EGRPRA subsequently amended section 32 by eliminating the prior
notice requirement for institutions and holding companies that are
chartered for less than two years or that have undergone a change in
control within the preceding two years. However, institutions and
holding companies that are not in compliance with minimum capital
requirements or are otherwise in ``troubled condition'' remain subject
to the prior notice requirement. As a result, this comment has been
rendered moot.
One commenter questioned why current Sec. 303.2(a)(4) includes a
requirement that an application by an insured state nonmember bank to
establish a branch, move its main office or relocate a branch contain a
statement as to whether or not the site is included in or is eligible
for inclusion in the National Register of Historic Places, including
evidence that clearance has been obtained from the State Historic
Preservation Officer (SHPO). As a federal agency, the FDIC is subject
to the National Historic Preservation Act (NHPA) (16 U.S.C. 470 et
seq.) which creates a mandatory review and consultation process for
Federal undertakings that may affect properties included in or eligible
for inclusion in the National Register of Historic Places maintained by
the Secretary of the Interior. In order to comply with NHPA, the FDIC
currently requests applicants to state whether the site is included in,
or eligible for inclusion in the National Register and to provide
evidence that clearance has been obtained from the SHPO. See 12 CFR
Sec. 303.2(a)(4). However, the proposed filing procedures at
Sec. 303.42(b)(5) modify the current requirements to provide that
applicants submit a statement that clearance has been or will be
obtained from the SHPO. In addition, the FDIC is undertaking a review
of its statement of policy on the National Historic Preservation Act of
1966 as part of the CDRIA review process and is exploring the
possibility of entering into a programmatic agreement with the Advisory
Council on Historic Preservation which would greatly streamline the
historic preservation review process, especially for those applications
which do not involve a historic site. The FDIC expects to issue a
revised statement of policy on NHPA in 1998.
Finally, the comment received on the FDIC's written policies
concerned the statement of policy on Applications for Deposit
Insurance. Discussion of the comment is contained in the revised
statement of policy on Applications for Deposit Insurance published
elsewhere in today's Federal Register.
The proposed revisions to part 303 seek to reduce regulatory burden
on insured depository institutions, particularly upon state nonmember
banks supervised by the FDIC. The proposed rule also strives to more
closely align the FDIC's application processing regulations with those
of the other federal banking agencies. Furthermore, the proposal
reflects changes to the FDIC's application procedures made by EGRPRA.
II. Discussion
The proposed regulation meets the goals of section 303(a) of CDRIA
in several important ways.
New expedited processing procedures have been introduced
for six application types which represent the majority of all filings
(applications for deposit insurance, mergers, branches, consent to
exercise trust powers, retirement of capital, and certain foreign
banking activities).
During the first six months of 1997, the FDIC acted on 1615
applications, notices and requests. Approximately 1500 or 93 percent of
these filings were of the type for which expedited processing or notice
procedures would be available under this proposal. Under present
regulations, only 130 of the filings acted upon during the first six
months of 1997 actually took the form of notices with clear time frames
for regulatory action. In addition to reducing processing time for
filings submitted by well managed and well capitalized banks, the
proposed expedited procedures will add more certainty to the timing of
regulatory decision. This new approach will allow the FDIC to focus its
resources on applications that do not fall within the new expedited
review procedure and are therefore more likely to present safety and
soundness risks or raise CRA or compliance concerns.
The processing of some applications has been structured to
act like notices. For example, applications to establish a branch or to
relocate a main office or branch processed under expedited procedures
will generally be deemed approved 21 days after receipt of a
substantially complete application. Branch related applications
represented more than 50 percent of all applications acted upon by the
FDIC in the first six months of 1997.
Regulations and guidelines issued by the federal banking
agencies implementing common statutes have been made more uniform. This
is particularly true for filings regarding mergers, changes in bank
control, and changes in director or senior executive officer.
Filing contents have been clarified and streamlined
wherever practical. Examples include applications for a merger which
qualifies as a corporate reorganization, a temporary office in an
emergency or disaster situation, applications for deposit insurance for
an interim institution in connection with a related merger transaction,
and applications for continuation for deposit insurance by a state bank
withdrawing from the Federal Reserve System.
The procedural requirements for virtually all applications
and notices have been centralized in part 303. Subpart A of the
proposed regulation contains the general rules applicable to all
filings. Each subpart that follows contains all of the procedural
requirements for a particular application type. For example, subpart C
on branching contains definitions applicable to that subpart, filing
procedures, processing procedures, public notice provisions and
delegations of authority. Subpart M contains miscellaneous filings that
do not merit separate subparts. Subpart N contains all administrative
enforcement action delegations.
Delegations of authority from the FDIC's Board of
Directors to the Directors of DOS, DCA, the General Counsel of the
Legal Division, and the Executive Secretary to act on certain
applications, notices, requests, and enforcement matters have been
reviewed and updated.
Duplicative and outdated material has been deleted from
existing part 303. An example is eliminating application procedures for
the establishment or relocation of a remote service facility,
[[Page 52812]]
which is no longer required pursuant to section 2205 of EGRPRA.
Concurrently with this proposal to amend part 303, the FDIC is
publishing elsewhere in today's Federal Register two revised statements
of policy on Applications for Deposit Insurance and Bank Merger
Transactions for comment. The FDIC is also proposing elsewhere in
today's Federal Register to rescind its statements of policy on
Applications to Establish a Domestic Branch and Applications to
Relocate Main Office or Branch, and to amend its statement of policy on
Liability of Commonly Controlled Depository Institutions. The latter
policy statement is being amended to move the application procedures to
request a waiver of cross-guaranty liability from the policy statement
to proposed part 303. It is recommended that interested parties read
those policy statements in conjunction with the proposed regulatory
text of part 303 and submit combined comments to the agency, if
practicable.
In addition, the FDIC has already rescinded the following policy
statements related to part 303 as unnecessary or duplicative:
Changes in Control in Insured State Nonmember Banks (62 FR
24927, May 7, 1997)
Applications, Legal Fees, and Other Expenses (62 FR 15479,
April 1, 1997)
Eligibility to Make Application to Become an Insured Bank
Under Section 5 of the Federal Deposit Insurance Act (62 FR 15706,
April 2, 1997)
The FDIC rescinded the first two statements of policy because any
necessary substantive information contained in them has been moved to
the proposed regulation or other policy statements. The third statement
of policy was rescinded because the analysis was based on a provision
of the FDI Act that was repealed by the Federal Deposit Insurance
Corporation Improvement Act of 1991 (Pub. L. 102-242, 105 Stat. 2236).
III. Proposed Rule
The discussion below identifies and explains significant proposed
changes to part 303. The FDIC requests general comments on all aspects
of the proposed regulation as well as specific comments on certain
issues as noted throughout the preamble. To aid the reader, a
derivation table follows the preamble which relates the sections of
proposed part 303 to current part 303, as well as other sections of the
FDIC regulations which are being relocated to part 303.
A. Subpart A--Rules of General Applicability
Subpart A of part 303 clarifies and simplifies the rules generally
applicable to processing of applications, notices and requests
(filings) required by regulation or statute by reorganizing the
definitions and general rules of procedure currently found in
Sec. 303.0 and Sec. 303.6, respectively, into one subpart. Subpart A
also explains the availability of expedited processing for an
``eligible depository institution'' (defined in proposed Sec. 303.2(r))
and the criteria under which the FDIC may remove a filing from
expedited processing. Further, subpart A contains general principles
governing delegations of authority from the Board of Directors to
certain FDIC officials, most of which are currently contained in
Sec. 303.10(a) and Sec. 303.11 (a) and (b).
The availability of expedited procedures for several major types of
filings (deposit insurance, branches, and mergers) as well as some
other filings (for example, consent to exercise trust powers and
reduce/retire capital stock or capital debt instruments) will reduce
burden upon the banking industry by enabling banks and thrifts to
undertake corporate activities more quickly. Expedited processing will
also introduce more certainty into the application process for both
applicants and interested parties by establishing fixed timeframes for
decision and receipt of comment letters. Furthermore, centralizing in
one subpart general information that was previously scattered
throughout part 303 will make part 303 much easier to use for the
public, bankers, attorneys and regulators.
In addition to reorganizing existing regulatory text into one
subpart, subpart A also updates terminology, streamlines procedures,
and reflects current FDIC policies and practices.
Definitions. Subpart A alphabetizes the definitions currently set
forth in Sec. 303.0 and adds several new definitions.
New definitions of ``applicant'' and ``filing'' were added for ease
of drafting regulatory text and to add clarity and consistency.
``Applicant'' is intended to replace the terms ``insured depository
institution,'' ``state nonmember bank'' or ``individual'' where they
appear throughout part 303. The scope section of each subpart will
explain whether particular filing procedures are applicable to all
insured depository institutions or only to state nonmember banks. The
term ``filing'' is intended to provide a convenient way to collectively
refer to applications, notices, or requests, where appropriate
throughout part 303. New definitions were also added for
``application'' and ``notice'' to clarify the distinctions between
those types of filings.
A definition of ``insider'' was added to avoid duplication in
several subparts. The current definition of ``protest'' found in
Sec. 303.0(b)(30) has been replaced with three terms (``comment,''
``adverse comment,'' and ``CRA protest'') to distinguish among the
types of comments that DOS and DCA may receive in connection with a
pending filing. The term ``deputy director'' has been defined to
include deputy directors of both DOS and DCA to reflect those
positions. Also, a definition has been added for ``General Counsel'' of
the FDIC. Further, the various types of Section 8 enforcement orders
have been grouped under one category ``Section 8 orders''.
A new definition of ``eligible depository institution'' has been
added to establish criteria that institutions must meet to qualify for
expedited processing, as discussed below.
Definitions of ``Associate General Counsel for Compliance and
Enforcement,'' ``regional manager,'' and ``remote service facility''
are being removed as obsolete or no longer necessary.
Expedited processing. Subpart A sets forth the general procedures
for expedited processing, for which only an eligible depository
institution qualifies. Proposed Sec. 303.2(r) of subpart A defines the
term ``eligible depository institution'' as a depository institution
that meets the following five criteria: (1) Received an FDIC-assigned
composite Uniform Financial Institutions Rating System (UFIRS) rating
of 1 or 2 as a result of its most recent federal or state examination;
\1\ (2) received at least a satisfactory CRA rating from its primary
federal regulator at its last examination; (3) received a compliance
rating of 1 or 2 from its primary federal regulator at its last
examination; (4) is well-capitalized; and (5) is not subject to any
corrective or supervisory order or agreement. Although an institution
must have a satisfactory or better CRA rating in order to qualify for
expedited processing for any filing, the CRA performance of an
institution will serve as a basis for decision only in connection with
``applications for a deposit facility'' as required by section 2903(2)
of the Community Reinvestment Act (12 U.S.C. 2903(2)). Proposed
Sec. 303.5 sets
[[Page 52813]]
forth those relevant filings for which an institution's CRA record will
be taken into account (deposit insurance, mergers, and establishment or
relocation of a branch or main office, including the relocation of an
insured branch of a foreign bank). The FDIC believes that these five
criteria for eligibility are appropriate to ensure that only well-
capitalized, well-managed institutions that do not present any
supervisory, compliance or CRA concerns receive expedited processing.
The FDIC specifically requests comment on whether these standards for
eligibility are appropriate.
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\1\ An FDIC-assigned composite UFIRS rating may be based on the
FDIC's own examination, or based on the review of examination
reports prepared by state banking authorities or the other federal
banking agencies.
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It should be noted that the FDIC recently issued two proposed rules
for comment which would revise and consolidate its international
banking regulations (12 CFR part 347) and regulations governing the
activities and investments of insured state banks and savings
associations (12 CFR part 362). 62 FR 37748, July 16, 1997; 62 FR
47969, Sept. 12, 1997. These proposals also contain expedited
procedures and definitions of an ``eligible'' type of institution which
generally parallel proposed Sec. 303.2(r) of subpart A, but add two
additional criteria: (1) That the institution has been chartered and
operating for at least three years; and (2) that the institution
received a rating of 1 or 2 under the ``management'' component rating
of the UFIRS at its most recent examination. The additional criteria
may be appropriate in connection with the part 347 and 362 proposals to
the extent that the eligibility criteria govern substantive issues
beyond the question of whether an application should receive expedited
processing. The FDIC will evaluate the necessity of the additional
criteria in the context of parts 347 and 362 as it goes forward with
those rulemakings.
Under Sec. 303.11(c) of the proposed rule, expedited processing
will be automatically given to institutions meeting the definition of
an ``eligible depository institution'' (with a few exceptions where
other conditions apply) upon determination by the appropriate regional
director (DOS). Therefore, an applicant need not request expedited
processing or even identify itself as an eligible institution. A filing
may be removed from expedited processing pursuant to proposed
Sec. 303.11(c)(2) if: (1) For filings subject to public notice, an
adverse comment is received that warrants additional investigation or
review; (2) for filings subject to evaluation of CRA performance, a CRA
protest is received that warrants additional investigation or review,
or the appropriate regional director (DCA) determines that the filing
presents a significant CRA or compliance concern; (3) for any filing,
the appropriate regional director (DOS) determines that the filing
presents a significant supervisory concern, or raises a significant
legal or policy issue; or (4) for any filing, the appropriate regional
director (DOS) determines that other good cause exists for removal. If
a filing is removed from expedited processing, the applicant will be
promptly informed in writing of the reason. For filings which the
appropriate regional director has not been delegated authority to
approve, the filing will generally be removed from expedited
processing.
Computation of time. Previously, part 303 simply contained a cross-
reference to Sec. 308.12, which governs computation of time for
purposes of the FDIC's rules of administrative procedure. The proposed
rule clarifies that the FDIC uses a calendar day rule and begins
computing the relevant period on the day after an event occurs (for
example, the day after receipt of a filing or newspaper publication).
Effect of CRA performance on filings. This new section clearly
states that CRA performance will be considered in connection with
applications to establish a domestic branch or relocate a domestic
branch or main office, merger applications, and deposit insurance
applications, and clarifies that CRA applies to applications to
relocate an insured branch of a foreign bank. Although this information
is currently contained in part 345 (Community Reinvestment Act), the
FDIC believes that an explicit statement concerning the filings covered
by CRA better serves the public and the banking industry than providing
a cross-reference.
Public notice. Current Sec. 303.6(f)(4) reproduces a notice that
institutions are required to use when publishing notice of a filing in
a local newspaper. Under Sec. 303.7(c) of the proposed rule, applicants
are offered the choice of a sample notice or a list of contents which
may be used to draft a notice tailored to the needs of the institution.
This choice is designed to reduce burden on the banking industry by
providing more flexibility.
Proposed Sec. 303.7(b) adds a new provision requiring confirmation
of publication. Promptly after publication, the applicant must mail or
otherwise deliver a copy of the newspaper notice to the appropriate
regional director (DOS). This is designed to avoid possible delays in
processing if a defective notice is discovered.
Proposed Sec. 303.7(d) reduces burden by providing that an
applicant may publish a single public notice for multiple transactions
provided that the notice includes an explanation of how the
transactions are related and states the closing date of the longest
public comment period that will apply. Further, Sec. 303.7(e) of the
proposed rule states that the FDIC may accept the publication of a
single joint notice containing information required by both the FDIC
and another federal banking agency or state banking authority provided
that the notice states that comments must be submitted to both
agencies.
Public comments. Current Sec. 303.6(f)(3) permits interested
parties to comment upon a pending filing until the date of final
disposition. Proposed Sec. 303.9(a) provides that comments would be
accepted only during a defined comment period in order to add certainty
to the filing process for both the public and the applicant. Closing
the comment period on a date certain eliminates the risk of final
action being delayed due to a late comment or of final action being
taken while a comment is in the process of being transmitted to the
FDIC.
In order to provide the public with adequate time to submit
meaningful comments, proposed Sec. 303.9(b)(2) grants the appropriate
regional director (DOS) three bases upon which to extend or reopen the
public comment period: (1) If 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; (2) if any person
requesting an extension of time satisfactorily demonstrates to the FDIC
that additional time is necessary to develop factual information that
may materially affect the application; or (3) for good cause. Good
cause is currently the only basis for extension of the comment period
under Sec. 303.6(f)(3).
Further, proposed Sec. 303.9(b)(4) clarifies that the FDIC will
provide copies of all comments to the applicant and that the applicant
will be given an opportunity to respond.
Hearings and other meetings. Proposed Sec. 303.10 simplifies the
current rules concerning hearing procedures contained in Sec. 303.6
(h), (i), and (j) and updates those provisions to reflect current FDIC
practices.
Decisions on filings. Proposed Sec. 303.11 sets forth new
provisions concerning multiple transactions, abandonment of filings,
and nullification of decisions. With regard to multiple transactions,
if all related transactions have been granted expedited processing,
then the longest
[[Page 52814]]
expedited processing time will govern for all transactions. The
proposed rule also codifies current FDIC practice concerning
abandonment of filings. If an applicant does not provide additional
information requested by the FDIC within the time period specified, the
FDIC may notify the applicant that the filing has been deemed abandoned
and processing has been discontinued. The proposal also contains three
nullification provisions. The FDIC may nullify a decision on a filing
if: (1) The agency becomes aware of any material misrepresentation or
omission after rendering a decision; (2) the agency is not informed by
the applicant of a subsequent material change in circumstances prior to
rendering a decision; or (3) the decision is contrary to law,
regulation, or FDIC policy, or granted due to clerical or
administrative error, or a material mistake of law or fact. The FDIC
believes these provisions are useful additions to part 303.
Appeals and petitions for reconsideration. Current Sec. 303.6(e)
contains the FDIC's procedures governing petitions for reconsideration
of a denied filing. Proposed Sec. 303.11(f) would clarify that these
procedures cover only requests for reconsideration of filings that do
not otherwise have appeal procedures provided by other regulation or
written guidance, and that decisions to deny a hearing request are
nonappealable.
As proposed, Sec. 303.11(f)(2) provides that within 15 days of
receipt of notice from the FDIC that its filing has been denied, an
applicant may file a petition with the appropriate regional director
containing either a resolution of the board of directors of the
applicant authorizing filing, if the applicant is a corporation or
other entity, or a letter signed by the individual(s) filing the
petition, if the applicant is not a corporation or other entity. As
under the existing rule, the filing must contain substantive
information that for good cause was not previously set forth in the
filing and specific reasons why the FDIC should reconsider its prior
decision.
A regional director or deputy regional director (DOS or DCA) may
approve, but not deny, a petition for reconsideration. However, the
Director or Deputy Director (DOS or DCA) may approve or deny a
petition. If the petition is granted, the filing will be reconsidered
by the Board of Directors if the filing was originally denied by the
Board of Directors or denied by the Director, Deputy Director, or an
associate director (DOS or DCA). The Director or Deputy Director (DOS
or DCA) will reconsider the filing if the filing was originally denied
by a regional director or deputy regional director. Proposed
Sec. 303.11(f) also clarifies that a decision on a petition for
reconsideration by the Director or Deputy Director (DOS or DCA) is a
final agency decision and is not appealable to the Board of Directors.
The FDIC specifically seeks comment on its new petition for
reconsideration procedures, which are designed to provide a more
objective review. It should be noted that the FDIC has separate appeal
procedures regarding material supervisory determinations such as
examination ratings, material disputed asset classifications,
determinations regarding violations of laws and regulations, etc. which
were published in the Federal Register on March 25, 1995. 60 FR 15923.
In addition, procedures for requesting a review of assessment risk
classification and for revision of computation of quarterly assessment
payments are contained in part 327. Therefore, proposed Sec. 303.11(f)
applies only to filings as that term is defined in part 303.
General delegations of authority. Proposed Sec. 303.12 contains the
general principles governing delegations of authority from the Board of
Directors to FDIC officials. Some, but not all, of these principles are
currently contained in Secs. 303.10(a) and 303.11 (a) and (b). This
proposed section states that the Board does not delegate its authority
regarding matters covered in the FDIC's regulations unless such a
delegation is specifically made. However, in matters where the Board
has neither specifically delegated nor retained authority, FDIC
officials may take action with respect to matters which generally
involve conditions or circumstances requiring prompt action to protect
the interests of the FDIC and to achieve flexibility and expedition in
the exercise of FDIC functions under part 303. Delegations are to be
broadly construed in favor of the existence of authority in FDIC
officials who act under delegated authority, and any exercise of
delegated authority by an official is conclusive evidence of that
official's authority. The purpose of this broad construction is to
promote the efficient operation of the FDIC, to allow the public to
rely on actions of FDIC officials, and to discourage frivolous
challenges to the exercise of delegated authority.
Delegations of authority to DOS and DCA officials. Proposed
Sec. 303.13 contains delegations of authority to DOS and DCA officials
to enable them to carry out the FDIC's applications function.
Where a CRA protest is filed and remains unresolved, proposed
Sec. 303.13(a) delegates authority to the regional director or deputy
regional director (DCA) to concur that approval of any filing subject
to CRA is consistent with the purposes of CRA. Previously, receipt of a
CRA protest caused a filing to be forwarded to Washington for review.
This change in policy is expected to improve and expedite decision
making by placing it closer to the source.
For purposes of determining when to commence processing of a
filing, proposed Sec. 303.13(b) delegates authority to DOS officials to
determine whether a filing is substantially complete. This provision
also is intended to clarify that the standard to initiate the
processing period is the receipt of a substantially complete filing.
Proposed Sec. 303.13(c) contains a delegation of authority
permitting DOS officials to enter into memoranda of agreement pursuant
to regulations of the Advisory Council on Historic Preservation which
implement the National Historic Preservation Act (NHPA). This provision
is currently found in Sec. 303.8(g) of the FDIC's regulations and
facilitates the agency's ability to comply with NHPA.
B. Subpart B--Deposit Insurance
Since passage of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (Pub. L. 102-242, 105 Stat. 2236), all proposed
depository institutions or existing noninsured depository institutions
that desire federal deposit insurance have been required to apply to
the FDIC. This includes all nationally chartered banks, state or
federally chartered savings associations, and state chartered banks,
including state member banks.
Subpart B reorganizes and clarifies the filing and processing
procedures for an applicant to follow in applying for deposit insurance
for a proposed or existing noninsured depository institution, for an
interim depository institution (when required), and for continuation of
deposit insurance for a state bank upon withdrawing from membership in
the Federal Reserve System. The proposal updates the regulation to
reflect current statutory requirements and current FDIC policy for
processing such applications. Subpart B also sets forth the delegations
of authority and criteria under which DOS may approve such
applications. The proposed rule should be read in conjunction with the
FDIC's revised policy statement on Applications for Deposit Insurance
found elsewhere in today's Federal Register. Substantive changes to the
regulatory text are discussed below.
[[Page 52815]]
Expedited processing. Under expedited processing, an application
for deposit insurance for a proposed depository institution which will
be a subsidiary of an ``eligible depository institution'' or an
``eligible holding company'' will be processed within 60 days of
receipt of a substantially complete application or 20 days after
publication, whichever is later. Currently, deposit insurance
applications are processed within 120 days. See FDIC Financial
Institutions Letter 26-96 dated May 6, 1996. An eligible depository
institution is defined in proposed Sec. 303.2(r). An eligible holding
company is defined in proposed Sec. 303.22(a) as a bank or thrift
holding company which 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 in eligible
depository institutions. If the FDIC does not act within the expedited
processing period, it does not constitute an automatic or default
approval. Public comment is invited on the definition of eligible
holding company and the time frame for processing applications for
deposit insurance under expedited review.
Public notice and comment period. Current regulations state that
notice shall be published on the date the application is mailed or
delivered to the regional director or not more than 30 days prior to
that date. Under proposed Sec. 303.23(a), notice would be published as
close as practicable to the filing date but not more than five days
before the filing date. This provides assurance that the public portion
of the application file will be available for inspection during the
comment period.
Currently, the notice informs the public that comments may be filed
with the regional director at any time before processing of the
application has been completed and that processing will not be
completed earlier than the 15th day following either the date of
publication or date of receipt of the application, whichever is later.
Proposed Sec. 303.23(a) would require that interested parties file
comments with the regional director on or before the 15th day following
the date of publication. Closing the comment period eliminates the risk
of final action being delayed due to a late comment or of final action
being taken while a comment is in the mail to the FDIC. The proposed
15-day comment period is considered adequate time for an interested
party to provide comments. Also, the regional director may extend or
reopen the comment period for good cause, such as when an interested
party cannot provide comments within the 15 days for reasons beyond the
party's control. Comment is invited on the adequacy of the 15 day
comment period, especially in light of the ability of regional
directors to extend or reopen the comment period under
Sec. 303.9(b)(2).
Application for deposit insurance for an interim depository
institution. An interim depository institution is defined in proposed
Sec. 303.24(a) as an institution formed or organized solely to
facilitate a merger transaction which will be reviewed by one of the
four federal banking agencies and that the institution will not open
for business. The filing will consist of a brief letter application and
a copy of the related merger transaction. Also, newspaper publication
requirements concerning the application for deposit insurance for an
interim is being eliminated as unnecessary since public notice would be
required for the merger transaction, which is considered to be the
primary transaction. It is anticipated that the FDIC will consult with
the federal banking agency reviewing the merger application and that
final action on the deposit insurance application will be taken within
21 days after receipt of a substantially complete application. If
additional review by the FDIC is warranted, the applicant will be so
advised in writing.
Continuation of deposit insurance upon withdrawing from membership
in the Federal Reserve System. Procedures are being simplified. Under
Sec. 303.25 of the proposal, the applicant would file a letter
application containing the information specified in the regulation,
including a new requirement that the application must contain a
statement by the bank's management that there are no current
outstanding or proposed corrective programs or supervisory agreements
with the Federal Reserve System. If such programs or agreements exist,
the application must contain a statement that the bank's board of
directors is willing to enter into a similar agreement with the FDIC
which would become effective upon the date of withdrawal from the
Federal Reserve System. The regional director would notify the
applicant in writing within 15 days of the date a substantially
complete application is received that deposit insurance will continue
upon termination of membership in the Federal Reserve System or that
additional review will be necessary. If additional review is warranted,
the regional director would inform the applicant in writing of the
reasons and inform the applicant that it will be notified in writing of
the FDIC's final decision regarding continuation of deposit insurance.
Upon further review, the regional director may approve the continuation
of deposit insurance or, if denial is deemed warranted, forward a
recommendation for action by the FDIC Board of Directors.
Other changes. Current Sec. 303.7(d)(1)(ii) lists a number of
specific criteria that must be met before delegated authority can be
exercised. The criteria relate to initial capitalization, legal fees
and other expenses, projected profitability, investment in fixed assets
and financial arrangements involving insiders, including stock
financing arrangements. These criteria, which have been updated to
reflect current policy, are discussed in the revised policy statement
on Applications for Deposit Insurance which is simply cross-referenced
in the proposed rule to avoid duplication.
Current Sec. 303.7(d)(1)(iii)(A) states that authority to approve
an application for deposit insurance may not be delegated to the
regional director or deputy regional director where a protest under the
Community Reinvestment Act (CRA) is filed. This provision is being
revised to permit approval of a CRA-protested application by the
regional director (DOS) or deputy regional director (DOS) where the
protest has been reviewed by DCA, the regional director (DCA) or deputy
regional director (DCA) concurs that approval is consistent with the
purposes of the CRA, and the applicant agrees in writing to any
conditions imposed regarding the CRA.
Section 303.7(d)(1)(iii)(B) of the current regulation states that
the authority to approve an application may not be delegated to a
regional director or deputy regional director where: (1) There is
direct or indirect financing by proposed directors, officers or 5
percent or more shareholders of more than 75 percent of the purchase
price of the stock subscribed by any one shareholder; (2) there is
aggregate financing of stock subscriptions in excess of 50 percent of
the total capital offered; or (3) warehoused or trusteed stock exceeds
10 percent of initial capital funds. This provision is being eliminated
because the revised policy statement contains a comprehensive
discussion of financing that the FDIC believes provides adequate
guidance. If proposed financing is not within the established
guidelines, the regional director will forward a recommendation to the
Director (DOS).
A new provision found at Sec. 303.26(d)(2) would permit DOS to
impose a condition which requires the maintenance of a leverage capital
ratio of at least 8 percent throughout the first three years of
operation of a depository institution while also providing an
[[Page 52816]]
adequate allowance for loan and lease losses. This clarifies the FDIC's
long-standing position that the minimum ratio of 8 percent is to be
maintained throughout the first three years of operation rather than
only requiring that the ratio be at least 8 percent at the end of the
third year of operation.
Under current Sec. 303.7(d)(2)(i), authority to approve
applications for deposit insurance by operating noninsured institutions
is delegated to the regional director (DOS) or deputy regional director
(DOS) only for those applicant institutions with total assets of less
than $250 million. There is no such restriction on the authority of the
Director or Deputy Director (DOS). Accordingly, this size limitation is
being eliminated from the proposed regulation.
Other minor changes are made within the subpart to facilitate
reorganization and clarification to produce a more concise and user-
friendly regulation.
C. Subpart C--Establishment and Relocation of Domestic Branches and
Offices
Subpart C reorganizes and clarifies the portion of part 303 that
implements section 18(d) of the FDI Act which requires insured state
nonmember banks to obtain the prior written consent of the FDIC in
order to establish a domestic branch, relocate the main office, or
relocate a branch. The most significant changes from the current
regulation are provisions implementing expedited processing for
eligible depository institutions, the addition of several new
definitions, and the exclusion of remote service units, including
automated teller machines and automated loan machines, from the
definition of a branch. As proposed, applications filed by eligible
depository institutions will be deemed approved 21 days after receipt
of a substantially complete application, or 5 days after the expiration
of the comment period, whichever is later. Additional technical
requirements regarding the expedited procedure apply to interstate
branch applications. The average processing time for branch
applications during the first six months of 1997 was 30 days. In
addition to expedited processing, the proposed subpart contains two
special provisions which provide further regulatory relief. One of
these provisions gives advance consent for the relocation of a branch
or main office in the event of a disaster or emergency and the other
provision allows the regional director to waive publication required in
the case of a redesignation of a main office and existing branch.
A section has also been added to allow the regional director (DOS)
to approve an application under this subpart that is the subject of an
unresolved CRA protest, provided the regional director (DCA) finds that
approval of the application would be consistent with the purposes of
CRA and the applicant agrees in writing to any nonstandard conditions
imposed regarding CRA. This provision is expected improve decision
making by placing it closer to the actual decision maker and avoiding
unnecessary delays. In addition, the subpart adds provisions which
implement relevant portions of the FDI Act regarding the establishment
of interstate branches and implements changes contained in section 2205
of EGRPRA.
Finally, as part of the systematic review of its written policies
pursuant to CDRIA, the FDIC is proposing elsewhere in today's Federal
Register to rescind its Statement of Policy of Applications to Relocate
a Main Office or Branch and Statement of Policy on Applications to
Establish a Domestic Branch. Both statements are considered obsolete
and unnecessary in view of the comprehensive approach taken in subpart
C.
Scope. Proposed Sec. 303.40 limits the scope of this subpart to
applications regarding the establishment of domestic branches, and the
relocation of a main office or domestic branch, including provisions
regarding interstate branching. Excluded from the scope of the subpart
are filings for the approval of the acquisition and establishment of
branches in connection with a bank merger transaction. Proposed
regulations for such filings are found in subpart D. The scope of the
subpart also does not include filings by insured branches of foreign
banks to relocate a branch or filings by state nonmember banks to
establish a foreign branch. Proposed regulations regarding foreign
banks and branches are contained in subpart J.
Interstate branching. The Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (Interstate Act) (Pub. L. 103-328, 108
Stat. 2338) became effective on September 29, 1994, and, among other
things, amended the FDI Act to establish a federal framework for
interstate branching effective June 1, 1997. Among the new interstate
branching authorities added by the Interstate Act are a provision
regarding the retention of branches after an interstate relocation of a
main office and a provision regarding interstate branching through de
novo branches.
Section 102(b)(3) of the Interstate Act adds a new paragraph (3) to
section 18(d) of the FDI Act that permits a state nonmember bank, after
the relocation of its main office to another state, to retain branches
in its former home state. Home state means the state by which a state
bank is chartered. This authority is, however, subject to certain
limitations. A bank relocating its main office from one state to
another may retain its branches in the original state only to the
extent that the bank would be authorized, as a bank chartered in the
new state, to establish or acquire those branches. As of June 1, 1997,
an out-of-state bank may establish branches in another state only if it
is authorized to establish such branches (i) as de novo branches under
section 18(d)(4)(A) of the FDI Act, (ii) as a result of an interstate
merger transaction under section 44 of the FDI Act, or (iii) as a
result of an emergency assisted transaction under section 13(f) or
13(k) of the FDI Act. In effect, this provision means that a state
nonmember bank can relocate its main office to another state and retain
its existing branches in the original state if it could, as a bank
chartered in the new state, establish those branches in the original
state. Therefore, if the bank were considered to be chartered in such
new state and could, with such other-state charter, establish those
branches in the original state by means of an interstate de novo branch
transaction, an interstate merger, or an emergency assisted
transaction, then it can retain those branches. Accordingly, the
proposed rule includes a requirement that an applicant seeking to
relocate its main office interstate indicate whether the applicant
intends to retain its existing home state branches.
Section 103(b) of the Interstate Act adds a new paragraph (4) to
section 18(d) of the FDI Act that permits, subject to certain
requirements and conditions, interstate branching through de novo
branches. Under this authority the FDIC may approve an application by a
state nonmember bank to establish and operate a de novo branch in a
state that is not the bank's home state and in which the bank does not
currently maintain a branch. In order to grant such approval, the FDIC
must: (i) Determine that the host state (the state in which the bank
seeks to establish a branch) has in effect a law that applies equally
to all banks and expressly permits all out-of-state banks to establish
de novo branches in such state, (ii) determine that the applicant has
complied with the host state's filing requirements and has submitted to
the host state a copy of the application it filed with the FDIC, (iii)
determine that
[[Page 52817]]
the applicant is adequately capitalized and will continue to be
adequately capitalized and adequately managed upon consummation of the
transaction, and (iv) take the applicant's CRA record into
consideration. Except for item (ii) in the foregoing listing, the FDIC
generally has the resources needed to make the determinations required.
Accordingly, among the application procedures included in this proposed
rule is the requirement that the applicant request that the host state
confirm in writing to the FDIC that the applicant has complied with the
host state's filing requirements and has submitted a copy of its
application with the FDIC to the host state supervisor.
Definitions. In Sec. 303.41 of the proposal, the FDIC has added
definitions for ``messenger service,'' ``mobile,'' ``temporary,'' and
``seasonal branches'' and, as noted above, ``de novo'' branches as well
as definitions of ``home state'' and ``host state'' . In an effort to
promote uniformity and increase the use of common terms, the
definitions used in this subpart are similar to those used by other
federal banking agencies.
With regard to the definition of ``branches,'' the proposed
regulation at Sec. 303.41(a) clarifies that remote service units,
including automated loan machines, are not branches. The exclusion of
automated teller machines and remote service units is a result of
statutory changes contained in section 2205 of EGRPRA.
The definition of ``messenger services'' in Sec. 303.41(a)(1)
provides that branch applications will be required only for those
messenger services operated by a bank or an affiliate that picks up and
delivers items relating to transactions between the bank and its
customer in which deposits are received, 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 for such services should
consult with the appropriate regional director (DOS) to determine if
the messenger service constitutes a branch.
Section 303.41(a)(2) defines ``mobile branch'' as a branch service
that does not have a permanent site and includes a vehicle that travels
to various public locations and enables the applicant bank to conduct
banking business with its customers. Because of the mobility inherent
in such branches, they may serve regularly scheduled locations or may
be open at irregular times and locations.
The definition of ``temporary branch'' contained in
Sec. 303.41(a)(3) clarifies that a bank may operate such a branch as a
public service such as during an emergency or disaster to provide
necessary banking services. A temporary branch can be approved for a
period not to exceed one year. Such a time period should provide
sufficient time for the applicant to restore appropriate services to
the community.
The definition of ``seasonal branch'' in Sec. 303.41(a)(4) provides
that such a branch operate at periodically recurring intervals, such as
during state fairs. This definition differs from the temporary branch
in that once an application is approved for a seasonal branch, the
applicant bank may return to that site on a recurring basis without the
need to reapply.
``Branch relocation'' is defined in Sec. 303.41(b) as 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 another location outside
its immediate neighborhood is considered the establishment of a new
branch and the closing of an existing branch.
The proposed regulation at Sec. 303.41(c) defines a ``de novo
branch'' to mean a branch of a bank which is originally established by
the bank and which does not become a branch of such bank as a result of
the acquisition, conversion, merger, or consolidation of an insured
depository institution or a branch of an insured depository
institution.
Definitions are also proposed for ``home state'' and ``host state''
at Sec. 303.41 (d) and (e). A home state means the state by which the
bank is chartered and 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.
Filing procedures. The proposed regulation also changes various
application requirements. Changes address the timing of filing, the
submission of copies of the publication, the inclusion of the
geographic area in which a messenger service will operate, the
inclusion of the community or communities in which a mobile branch will
operate, and whether the mobile branch will serve various regularly
scheduled locations or be open at irregular times and locations.
As proposed in Sec. 303.42, an applicant must submit a letter
application on the date the notice required by proposed Sec. 303.44 is
published or within 5 days after the date of the last required
publication. Previously, applicants could file up to 30 days subsequent
to the first publication date. By filing applications 5 days after the
date of the last newspaper publication, banks are able to submit all
copies of the newspaper publications required by the proposed
regulation and the public will have the assurance that the application
will be on file during the comment period.
Proposed Sec. 303.42(b)(7) has been added to require applicants to
submit a copy of each newspaper publication in addition to providing
the date of publication and the name and address of the newspaper. In
the past, applicants have been required to immediately notify the FDIC
after the publication. Submitting a copy of the newspaper notice allows
FDIC to verify publication and the contents of the notice.
The proposed regulation at Sec. 303.42(b)(2) clarifies the filing
procedures for messenger services and mobile branches. Since messenger
services by their very nature are not serving a fixed location, the
designation of a specific site for operation is not practical. Rather
these types of branches will operate in defined geographic areas, such
as a neighborhood, city or county. By approving such applications on a
geographic area, banks will be able to operate freely without
reapplying for changes to schedules. Filings relative to mobile
branches however must disclose the community or communities to be
served and the intention to serve defined locations on a regular
schedule or to be open at varying times and locations. Knowledge of the
community or communities to be served assists the FDIC in determining
compliance with the applicable statutory and regulatory provisions
relating to branch filings. Applicants must, however, reapply when the
geographic area to be served changes.
Processing. Pursuant to proposed Sec. 303.43(a), the FDIC proposes
to expedite processing for eligible depository institutions. It is the
FDIC's intent to reduce regulatory burden for well-run, well-managed
institutions by providing expeditious approvals of routine applications
to establish a branch or to relocate the main office or branch.
Pursuant to expedited processing procedures contained in proposed
Sec. 303.11(c), an application submitted by an eligible depository
institution as defined in proposed Sec. 303.2(r) will be acknowledged
in writing by the FDIC and will receive expedited processing unless the
FDIC removes the application from expedited processing for any of the
reasons set forth in Sec. 303.11(c)(2). Section 303.43(a) provides that
the FDIC may remove an application from expedited processing at any
time before
[[Page 52818]]
the approval date and will promptly notify the applicant in writing of
the reason for such action. 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 of a
substantially complete application by the FDIC, (2) the 5th day after
expiration of the comment period described in Sec. 303.44 of this
proposal, 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 from the host state confirmation 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.
The automatic approval date for an application under expedited
procedures provides an applicant with a firm date by which its
application will be approved. Under the existing regulation, the FDIC
can approve applications immediately after expiration of the comment
period, but applications can also be approved much later.
For applicants not eligible for expedited processing, the FDIC will
provide the applicant with written notification of the final action
taken with regard to the particular application as soon as a decision
is rendered.
Public notice requirements. The proposed regulation at Sec. 303.44
generally would amend and clarify the publication requirements relating
to relocating a main office and establishing or relocating branch
offices. It also provides for a specific time frame in which comments
must be received.
The proposed section retains current newspaper publication
requirements contained in Sec. 303.6(f)(1)(ii) of the existing
regulation, except for relocation of branches which will now require
publication only in the community which the branch serves. A branch
relocation can only occur in the same immediate neighborhood; hence,
publication is needed in only one newspaper since it is likely that the
one newspaper will cover all of the affected community. In such cases,
the FDIC has deemed publication in the community in which the home
office is located unnecessary. Furthermore, a single publication is
consistent with the requirements of the other federal banking agencies.
Section 303.44(a) continues the existing requirement that for
applications to relocate a main office, publication must be made at
least once each week on the same day for two consecutive weeks.
Currently in Sec. 303.6, individuals may comment until processing
of the application is completed. In order to eliminate the uncertainty
regarding the close of the comment period, it is proposed that the
comment period be limited as specified in Sec. 303.44. Proposed
Sec. 303.44 provides that comments must be received by the appropriate
regional director (DOS) within 15 days of the date of the last
newspaper publication. Proposed Sec. 303.9 provides for extension or
reopening of the comment period in certain situations.
Special provisions. Section 303.45 of the proposed regulation adds
several new provisions regarding procedures for opening temporary
branches in emergency or disaster situations, re-designating a main
office, and providing for the expiration of approved applications.
The proposed regulation at Sec. 303.45(a) clarifies procedures
relating to establishing temporary branches in emergency or disaster
situations. The current regulation on branching contains no specific
guidance on this issue. The FDIC recognizes the need in limited
circumstances, such as emergency or disaster situations, where there
exists a clear public need to continue banking services, that
applicants may not be in a position to follow the normal application
procedures for relocation of a main office or branch. As a result, the
proposed regulation provides that in the case of an emergency or
disaster at a main office or branch which requires that an office be
immediately relocated to a temporary location, the applicant notify the
appropriate regional director (DOS) within 3 days of such temporary
location. In such limited cases, the FDIC will accept initial
notification by whatever means appropriate. The FDIC is making this
limited exception to allow for the public's need to have uninterrupted
access to banking services. Such prior consent to relocate the office
is appropriate because it may not always be possible for a bank to
comply with the normal application procedures for relocating a main
office or branch in such circumstances.
The proposal further provides that within 10 days of the temporary
relocation resulting from the emergency or disaster, the bank shall
submit a written filing to the appropriate regional director (DOS) 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. Finally,
depending on the particular circumstances, as part of the review
process, the appropriate regional director (DOS) may waive public
notice requirements.
Section 303.45(b) of the proposed regulation provides that in cases
where an applicant desires to designate an existing branch as its main
office and redesignate its main office as a branch, an application must
be submitted to relocate the main office and to establish or relocate a
branch, as appropriate. The appropriate regional director (DOS) may
waive the public notice requirements in instances where an application
presents no significant or novel policy, supervisory, CRA, compliance,
or legal concern. Such waiver will be granted only within the
applicant's home state.
With regard to the expiration of approvals, applications which have
been approved by the FDIC to establish branches and to relocate main
offices and branches currently have no expiration date. The FDIC
believes that approvals should not remain in effect indefinitely
because circumstances surrounding an application may change over time.
Therefore, proposed Sec. 303.45(c) provides that approval of an
application expires if a branch has not commenced business or if a
relocation has not been completed within 18 months of approval.
Delegation of authority. Section 303.46 of the proposed regulations
adds a delegation for the appropriate regional director to approve
interstate branches. Additionally, the proposed regulation provides for
a delegation to permit approval of a CRA-protested application by the
regional director (DOS) or deputy regional director (DOS) where the
protest has been reviewed by DCA, and the regional director (DCA) or
deputy regional director (DCA) concurs that approval is consistent with
the purposes of the CRA, and the applicant agrees in writing to any
conditions imposed regarding CRA.
New Sec. 303.46(c)(8) makes clear that the Board of Directors has
not delegated authority to approve a branch application by a bank which
the FDIC has determined is not reasonably helping to meet the credit
needs of the community served by the bank in a host state pursuant to
section 109 of the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (12 U.S.C. 1835a).
The proposed regulation provides that appropriate regional
directors may exercise delegated authority to act on applications for
establishment of temporary branches or messenger services without a
favorable resolution of the statutory factors in section 6 of
[[Page 52819]]
the FDI Act. This delegation recognizes the limited nature of these
types of branches.
The proposed regulation eliminates an obsolete delegation of
authority relating to applications to establish and operate new
teller's windows, drive-in facilities, or any like office, as an
adjunct to the main office or branch (including offices not considered
branches under state law). Applications to establish a new teller's
window, drive-in facility, or any like offices are required when such a
facility is a branch office. If such facilities are extensions of
already approved main office and branches, no application to establish
the facility is necessary.
Other changes. Several other changes are proposed that affect the
new subpart C. These modifications involve changing the term ``move a
main office'' to ``relocate the main office,'' changing the term
``courier service'' to ``messenger service,'' and deleting provisions
relating to remote service facilities.
Public comment. In addition to seeking public comments on the above
revisions to subpart C associated with the establishment of branches
and relocation of branches and the main office, the FDIC also seeks
specific public comments on the following issues.
Comment period: Since the FDIC is proposing in Sec. 303.44(b) to
change from a comment period that was essentially open-ended in current
Sec. 303.6 to a specific time frame (i.e., 15 days), the FDIC seeks
comment on whether a 30-day comment period is more appropriate than the
proposed 15 days and if so, the reasons why 15 days would not be a
feasible period of time within which to submit comments.
Mobile branch applications: The FDIC is proposing that the
geographic location for a mobile branch be designated as to which
community or communities are to be served. The FDIC seeks comment on
whether such a designation is appropriate. The FDIC also seeks comment
on whether a new application should be required if a change is made in
the community or communities to be served.
D. Subpart D--Mergers
Subpart D covers transactions subject to FDIC approval under the
Bank Merger Act (12 U.S.C. 1828(c)). This includes mergers,
consolidations, and similar transactions involving insured depository
institutions (collectively, ``mergers''). This subpart gathers together
from various sections of part 303 the existing provisions governing
merger applications and reorganizes them to make the regulatory
requirements easier to understand. Substantive changes have been made
in processing procedures to reduce regulatory burden.
The principal changes proposed in subpart D include the addition of
an expedited processing procedure (proposed Sec. 303.64(a)); the
modification and centralization of various definitions applicable to
merger transactions, such as replacement of the term ``phantom merger''
used only by the FDIC with the more commonly-used ``interim merger''
(proposed Sec. 303.61(c)); and the addition of references to other
statutory or regulatory provisions often applicable to merger
transactions. These references, included at Sec. 303.62(b), are to the
interstate merger provisions of section 44 of the FDI Act (12 U.S.C.
1831u), applications for deposit insurance, insurance fund conversion
transactions, branch closings, prompt corrective action considerations,
and certification of assumption of deposit liabilities.
The most significant change from the existing merger approval
regulations is the proposed expedited processing procedure. This
procedure would be available for transactions to which all parties are
eligible depository institutions (as defined in proposed
Sec. 303.2(r)), and immediately following which the resulting
institution would be well-capitalized. Under expedited processing,
which is generally applicable only to merger applications that can be
approved under delegated authority, the application would be acted upon
by the latest of 45 days after the FDIC receives a substantially
complete application; 10 days after the last newspaper publication of
the notice of the proposed merger; 5 days after the FDIC receives the
Attorney General's comments on the competitive impact of the merger;
or, for an interstate merger, 5 days after the FDIC confirms that the
applicant has satisfactorily complied with the filing requirements of
the resulting institution's host state. An application that otherwise
qualifies for expedited processing may be removed from such treatment
for the reasons stated in subpart A, at proposed Sec. 303.11(c)(2).
Among the new references mentioned above, the reference to deposit
insurance applications at proposed Sec. 303.62(b)(2) clarifies that the
FDIC will not require a deposit insurance application to secure
insurance coverage for an institution resulting from a statutory merger
between a federally-chartered interim institution and an FDIC-insured
institution, even if the resulting institution will operate under the
interim federal charter. However, the FDIC will continue to require an
application for deposit insurance if the entity merging with the
interim federal institution is not insured and the parties wish the
resulting institution to be insured.2
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\2\ The Board does not believe that it is consistent with the
language or intent of the FDI Act to insure without FDIC approval an
institution resulting from a combination of institutions that
themselves have never been granted deposit insurance by the FDIC.
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In addition to reorganizing and enhancing the merger application
provisions to make them easier to use, the proposal reduces the
procedural burden on applicants. For example, in addition to
establishing an expedited processing procedure, the proposal would no
longer call for copies of the charter or articles of incorporation of
the resulting institution to be routinely submitted with a merger
application. The proposal also simplifies the application requirements
for mergers between institutions that are commonly-owned outside of a
bank holding company structure by treating such transactions as
``corporate reorganizations'' (proposed Sec. 303.61(b)).
Further, in order to add predictability to the procedure for
receiving and reviewing public comment on proposed mergers, the
proposal provides that the comment period for non-emergency
transactions will end on the 35th day after the applicant's first
newspaper publication of notice of the merger (proposed
Sec. 303.65(d)). This period provides additional time for interested
parties to respond to the final publication which occurs approximately
on the 30th day. No change is being made to the public notice
requirements for transactions determined to be an emergency requiring
expeditious action.
The proposal also relaxes the FDIC's current practice of requiring
that the first newspaper notice of the merger not be published until
after the merger application is filed with the FDIC. Under the
proposal, the applicant may publish its first notice up to 5 days
before filing with the FDIC (proposed Sec. 303.65(a)(1)).
With regard to CRA considerations, the proposal would expand the
existing delegation to permit approval of a CRA-protested application
by the regional director (DOS) or deputy regional director (DOS) where
the protest has been reviewed by DCA, the regional director (DCA) or
deputy regional director (DCA) concurs that approval is consistent with
the purposes of the CRA, and the applicant agrees in writing to any
conditions imposed regarding the CRA (proposed Sec. 303.66(b)(5)). This
would modify the existing merger regulations, which provide that
mergers
[[Page 52820]]
that are the subject of an unresolved CRA protest may be approved under
delegated authority by senior supervisory officials in Washington, but
may not be acted upon at the regional level.
The proposed rule eliminates consideration and favorable resolution
of compliance with the National Environmental Policy Act (NEPA) (42
U.S.C. 4321 et seq.) as a criteria for DOS officials to exercise
delegated authority to approve a merger transaction. This provision is
currently found in Sec. 303.7(b)(7)(ii). The FDIC has found that the
physical environment is unlikely to be affected by the FDIC's
consideration of bank merger transactions and that, typically, the
provisions of the NEPA would not be implicated. Since the FDIC is in
the process of reviewing its policy statement on NEPA, the agency
believes it is not advisable to include a reference to NEPA in the
proposed regulatory text.
The FDIC invites comment on all aspects of the proposed revisions
to the merger provisions of part 303. Comments are more specifically
invited regarding the expansion of the term ``corporate
reorganization,'' elements of the expedited processing procedures as
proposed for merger applications, and the inclusion of cross-references
to related provisions. In addition, comment is sought on the proposal
to require that comments regarding a particular merger application be
filed with the FDIC no later than the 35th day after the first
publication of notice of the merger.
E. Subpart E--Change in Bank Control
The FDIC proposes to reorganize, clarify, and simplify its
regulation implementing the Change in Bank Control Act of 1978. The
proposed changes, developed in consultation with the other federal
banking agencies, attempt to harmonize the scope and procedural
requirements of the FDIC's regulation with those of the other federal
banking agencies and to reduce unnecessary burden.
The proposal defines the previously undefined term ``acting in
concert'' to clarify the scope of the regulation. It also incorporates
the current FDIC position that the acquisition of a loan in default
that is secured by voting shares of an insured state nonmember bank is
presumed to be an acquisition of the underlying shares. Further, the
proposal lengthens the period of time for notifying the FDIC from 30 to
90 days for shares acquired in satisfaction of a debt previously
contracted in good faith or through testate or intestate succession or
a bona fide gift. In the case of shares acquired in satisfaction of a
debt previously contracted, the proposal adds language that reflects
FDIC practice of requiring the acquiror of a defaulted loan secured by
a controlling amount of a state nonmember bank's voting securities to
file a notice before the loan is acquired.
The proposal also would reduce regulatory burden on persons whose
ownership percentage increases as the result of a redemption of voting
shares by the issuing bank or the action of a third party not within
the acquiring person's control. In these situations, the proposal would
permit the person affected by the bank or third party action to file a
notice within 90 calendar days after receiving notice of the
transaction. Currently, these persons must file notice under the Change
in Bank Control Act prior to the action that increases the person's
percentage ownership, and, because these persons cannot control the
third party action that causes the increased percentage ownership, they
are often put in violation of the Change in Bank Control Act and the
FDIC's Rules and Regulations.
The FDIC also proposes to provide more flexible timing for
newspaper announcements of filings under the Change in Bank Control Act
by permitting notificants to publish the announcement as close as
practicable to filing the notice of change in control. The proposed
rule removes the requirement that the notificant have confirmation that
the FDIC has accepted the notice before publishing the announcement.
The FDIC also proposes to delete the provision governing notices
filed in contemplation of a public tender offer which permits an
acquiror to delay publication of the newspaper announcement. None of
the other federal banking agencies has such a provision.
The FDIC invites comment on all of its proposed revisions to the
regulation implementing the Change in Bank Control Act. In particular,
the FDIC requests comment on whether the definition of ``acting in
concert'' is appropriate, and whether there is reason to retain the
public tender offer provision.
F. Subpart F--Change of Director or Senior Executive Officer
Section 32 of the FDI Act (12 U.S.C. 1831i) requires certain
insured depository institutions and their depository institution
holding companies to provide at least 30 days' prior notice to the
appropriate federal banking agency before adding any individual to the
board of directors or employing any individual as a senior executive
officer. The agency may issue a notice of disapproval prior to
expiration of the 30-day period if it determines, based upon the
proposed individual's competence, experience, character or integrity,
that it would not be in the best interests of the depositors or the
public to permit the individual to be employed by, or associated with,
the institution. Section 32 permits the agency to waive the prior
notice requirement, but the agency may still disapprove an individual's
association with the institution within 30 days after granting such a
waiver.
Until recently, section 32 required prior notice from a depository
institution or holding company that was chartered less than two years;
had undergone a change in control within the preceding two years; or
was not in compliance with minimum capital requirements or was
otherwise in ``troubled condition.'' Section 2209 of EGRPRA amended
section 32 by eliminating the prior notice requirement for institutions
and holding companies that are chartered for less than two years or
that have undergone a change in control within the preceding two years.
However, institutions and holding companies that are not in compliance
with minimum capital requirements or are otherwise in ``troubled
condition'' remain subject to the prior notice requirement. In
addition, EGRPRA provides that prior notice will be required if the
agency determines, in connection with its review of a capital
restoration plan required under section 38 of the FDI Act (governing
prompt corrective action) or otherwise, that such prior notice is
appropriate. Also, the EGRPRA amendments provide the agencies with more
latitude to determine the prior notice period and allow the agencies up
to 90 days to issue a notice of disapproval.
The FDIC published an interim rule implementing section 32 as
applied to insured state nonmember banks on December 27, 1989 (54 FR
53040) and requested comments. The interim rule, which added a new
Sec. 303.14 to part 303 of the FDIC's regulations, remains in effect.
Only seven commenters responded, and the principal issues raised
concerned the definitions of ``change in control'' and ``troubled
condition.'' Objections to the definition of change in control have
been rendered moot by the EGRPRA amendments since a change of control
within the preceding two years is no longer a triggering event for a
section 32 notice. Two commenters objected to the definition of
``troubled condition.'' One objected to an insured
[[Page 52821]]
state nonmember bank being considered in troubled condition if it is
subject to a cease-and-desist order on the grounds that not all such
orders result from safety and soundness concerns and/or financial
difficulties. The other commenter objected to the fact that an insured
state nonmember bank can be designated in troubled condition based upon
a visitation, examination, or report of condition. The proposed rule
clearly indicates that only a cease and desist order or written
agreement that requires action to improve financial condition of the
bank triggers the designation of troubled condition. However, such
designation may also be made based upon an examination or report of
condition. The FDIC believes that it is appropriate to use all
information it deems reliable in making such a designation.
The proposed regulation reflects the EGRPRA amendments to section
32 and reorganizes, clarifies, and simplifies notice procedures. The
proposal also strives to harmonize the procedural requirements of the
FDIC's regulation with those of the other federal banking agencies and
to reduce any unnecessary regulatory burden.
Although the EGRPRA amendments appear to provide the agencies with
authority to increase the prior notice period to 90 days, the FDIC
proposes to retain the 30-day prior notice currently required by
Sec. 303.14. This established 30-day regulatory period has proven
sufficient to process the majority of filings, and reflects the FDIC's
time line for processing section 32 notices adopted in FDIC Financial
Institutions Letter 26-96 dated May 6, 1996. However, the agency
proposes to amend the regulation to allow the agency to take an
additional period of up to 60 days, if necessary, to issue a notice of
disapproval. It is anticipated that this additional 60-day period would
be used infrequently. In all such cases, the notificant will be advised
in writing prior to expiration of the 30-day prior notice period of the
reason the FDIC could not take action and of the projected additional
time needed.
Other than the revisions prompted by the EGRPRA amendments, there
is little substantive change to the FDIC's regulation. Current
Sec. 303.14(c)(2)(ii) provides that if a new member of a bank's board
of directors is elected at a shareholder's meeting, prior notice is
automatically waived. However, notice must be filed with the
appropriate regional director (DOS) within 48 hours after the election.
Proposed Sec. 303.103(c)(2) modifies this provision slightly to clarify
that the automatic waiver applies to new board members not proposed by
management and to state that the notice must be submitted within two
business days, rather than 48 hours. Section 308.12 of the FDIC's
regulations, which governs computation of processing time for purposes
of part 303, refers to time in increments of days and not hours. This
modification results in a more liberal computation of processing time
in that intervening Saturdays, Sundays and federal holidays are not
counted.
The FDIC invites public comment on retention of the 30-day
processing timeframe (subject to a possible 60-day extension) and the
change in the automatic waiver filing period. The agency also welcomes
suggestions for further reducing unnecessary burden on insured state
nonmember banks when reviewing changes in officers and directors,
consistent with the requirements of section 32.
G. Activities and Investments of Insured State Banks
Subpart G is reserved for filing procedures related to activities
and equity investments of insured state banks which are currently
contained in part 362 (12 CFR part 362). Part 362 implements section 24
of the FDI Act (12 U.S.C. 1831a), which was created by the Federal
Deposit Insurance Corporation Improvement Act of 1991 (Pub. L. 102-242,
105 Stat. 2236), and governs the circumstances in which insured state
banks may engage in activities which are not permissible for national
banks.
The FDIC recently issued a notice of proposed rulemaking to make
comprehensive revisions to part 362. 62 FR 47969, Sept. 12, 1997. In
connection with these revisions, the FDIC proposes to eliminate certain
application procedures which are outdated, and also to authorize
certain activities to be approved by the FDIC on an expedited basis.
The FDIC cannot determine at this time whether its 362 proposal or this
notice of proposed rulemaking to revise part 303 will be finalized
first, but it is the FDIC's intent to place the part 362 application
procedures relating to state bank activities in subpart G of part 303
at such time as both rules are final. In order to deal with this
problem, the application procedures which implement the proposed
revisions to part 362 concerning state bank activities are contained in
subpart E of the 362 proposal. If the 362 proposal is finalized before
this 303 proposal, insured state banks operating under the revised part
362 will look to subpart E of part 362 for application procedures until
such time as part 303 is finalized, at which point the FDIC will
transfer the application procedures from subpart E of part 362 to
subpart G of part 303. If the 303 proposal is finalized first, insured
state banks operating under the current version of part 362 will
continue to look to the current version of part 362 itself for
application procedures until the revisions to part 362 are finalized,
and the application procedures which are proposed as subpart E of part
362 will be finalized as subpart G of part 303. Members of the public
taking an interest in the FDIC's application procedures for the
activities of insured state banks under part 362 should review the part
362 proposal for the specifics of such application procedures.
H. Subpart H--Filings by Savings Associations
The FDIC is also reserving subpart H for filing procedures related
to activities of insured state savings associations and subsidiaries of
insured savings associations, which are currently contained in
Sec. 303.13 of part 303 (12 CFR 303.13). Section 303.13 implements
sections 28 and 18(m) of the FDI Act (12 U.S.C. 1831(e) and 12 U.S.C.
1828(m)), which were both created by the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (Pub. L. 101-73, 103 Stat. 484).
Section 303.13 governs the circumstances in which a state savings
association may engage in activities which are not permissible for a
federal savings association, and also requires all insured savings
associations to notify the FDIC prior to establishing a subsidiary or
engaging in new activities through a subsidiary.
As part of the FDIC's recently-issued notice of proposed rulemaking
to revise part 362, discussed above, the FDIC has proposed to address
the substantive issues covered by Sec. 303.13 as subparts C and D of a
revised part 362. The proposal harmonizes, to the extent possible given
the underlying statutes, the treatment of activities of insured state
banks and the activities of insured state savings associations. In
connection with these revisions, the FDIC proposes to eliminate certain
application procedures which are outdated, and also to authorize
certain activities to be approved by the FDIC on an expedited basis.
The FDIC cannot determine at this time whether its 362 proposal or this
notice of proposed rulemaking to revise part 303 will be finalized
first, but it is the FDIC's intent to place the part 362 application
procedures relating to savings associations in subpart H of part 303 at
such time as both rules are final. In order to deal with this problem,
the application procedures which implement the proposed revisions to
[[Page 52822]]
part 362 concerning savings associations are contained in subpart F of
the 362 proposal. If the 362 proposal is finalized before this 303
proposal, existing Sec. 303.13 will be rescinded in connection with
finalizing part 362. Savings associations operating under the revised
part 362 will look to subpart F of part 362 for application procedures
until such time as part 303 is finalized, at which point the FDIC will
transfer the application procedures from subpart F of part 362 to
subpart H of part 303. If the 303 proposal is finalized first, existing
Sec. 303.13 will be preserved without substantive change on an interim
basis in connection with finalizing part 303. Savings associations
operating under Sec. 303.13 will continue to look to Sec. 303.13 for
application procedures until the revisions to part 362 are finalized.
In connection with finalizing part 362, Sec. 303.13 will be rescinded,
and the application procedures which are proposed as subpart F of part
362 will be finalized as subpart H of part 303. Members of the public
taking an interest in the FDIC's application procedures for the
activities of insured savings associations and their subsidiaries
should review the part 362 proposal for the specifics of such
application procedures.
I. Subpart I--Mutual-to-Stock Conversions
The FDIC is proposing to move the notice requirements for mutually
owned state-chartered savings banks that propose to convert to stock
form from Sec. 303.15 to a separate subpart I. These notice
requirements were adopted in final form on January 1, 1995. The
intended effect of the rules is to ensure that mutual-to-stock
conversions of FDIC regulated institutions do not raise safety and
soundness concerns, breaches of fiduciary duty, or other violations of
law. The substantive regulation regarding mutual-to-stock conversions
would remain in Sec. 333.4 of this chapter.
The FDIC also is proposing to provide for delegated authority in
its mutual-to-stock conversion regulations. Some members of the
industry have commented that the FDIC takes longer than necessary to
act on conversion transactions. At the present time, all conversion
notices are reviewed by the FDIC Board of Directors. The FDIC has
gained considerable experience in reviewing notices to convert and the
Board believes it is now appropriate to delegate authority to the
Director and the Deputy Director (DOS) to issue notices of intent not
to object. Such a delegation would apply only when the proposed
conversion is determined not to pose a risk to the converting
institution's safety and soundness, violate any law or regulation,
present a breach of fiduciary duty, or raise any unique legal or policy
issues. The Board believes that this delegation will allow the FDIC to
act more promptly on routine notices and ease regulatory burden.
No other changes in procedures are being proposed. The public is
invited to comment on any changes the FDIC could make to ease
regulatory burden while ensuring that conversions do not raise
supervisory concerns.
J. Subpart J--Foreign Bank Activities
Proposed subpart J addresses application requirements relating to
the foreign activities of insured state nonmember banks and the U.S.
activities of insured branches of foreign banks. The FDIC is proposing
to make these application requirements easier to use and more
streamlined by centralizing them in subpart J. Under the FDIC's current
rules, these application requirements are located in various
subsections of three different regulations: 12 CFR part 303, 12 CFR
part 346, and 12 CFR part 347. The FDIC also is proposing to further
streamline processing for several of these application requirements.
On July 15, 1997, the FDIC published a Notice of Proposed
Rulemaking (part 347 NPR) which requests public comment on an FDIC
proposal to revise the FDIC's rules on the foreign activities of
insured state nonmember banks and the U.S. activities of insured
branches of foreign banks. 62 FR 37748. Subpart D of the part 347 NPR
includes four proposed application procedures designed to work with the
substantive revisions made to the FDIC's international banking
regulations under the part 347 NPR.3 The FDIC cannot
determine at this time whether the part 347 NPR or this notice of
proposed rulemaking to revise part 303 (part 303 NPR) will be finalized
first. To deal with the possibility that the part 303 NPR may be
finalized before the part 347 NPR is finalized, this part 303 NPR
contains interim versions of the same application procedures contained
in subpart D of the part 347 NPR. The interim versions proposed here
are designed to work with the existing versions of the FDIC's
international banking regulations, and are different in several
respects from the application procedures contained in subpart D of the
part 347 NPR. Therefore, members of the public taking an interest in
the FDIC's application procedures for international banking issues
should review the part 347 NPR as well as this part 303 NPR.
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\3\ These are the procedures for: (1) Establishing, moving, or
closing a foreign branch of a state nonmember bank; (2) investment
by state nonmember banks in foreign organizations; (3) exemptions
from the insurance requirement for a state branch of a foreign bank;
and (4) approval for an insured state branch of a foreign bank to
conduct activities not permissible for federal branches.
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If this part 303 NPR is finalized first, the four interim
application procedures will remain in effect only until the part 347
NPR is finalized. In connection with finalizing the part 347 NPR, the
FDIC will transfer the application procedures in subpart D of the part
347 NPR to subpart J of part 303 and rescind the interim procedures. If
the part 347 NPR is finalized first, the interim procedures in this
part 303 NPR will never be finalized, and the FDIC will make necessary
technical amendments to transfer the application procedures in subpart
D of the part 347 NPR to subpart J of part 303.
This part 303 NPR also contains two application procedures which
are not of an interim nature: the procedure for moving an insured
branch of a foreign bank, and the procedure for mergers involving an
insured branch of a foreign bank. These two procedures are not impacted
by the part 347 NPR.
Interim Application Procedures
Establishing, moving, or closing a foreign branch of a state
nonmember bank. Section 18(d)(2) of the FDI Act (12 U.S.C. 1828(d)(2))
and Sec. 347.3 require an insured state nonmember bank to obtain the
FDIC's prior written consent before establishing a branch located
outside the United States, its territories, Puerto Rico, Guam, American
Samoa, the Trust Territory of the Pacific Islands, or the Virgin
Islands. Applications for these foreign branches are currently treated
under the same process applicable for domestic branches under
Sec. 303.2. The FDIC proposes to treat foreign branches separately,
since foreign branch applications are not legally required to be
subjected to analysis under the CRA or factors under section 6 of the
FDI Act, as is the case for domestic branches.
Under Sec. 303.182 as proposed, the FDIC would give its general
consent for an eligible depository institution (as defined by
Sec. 303.2(r)) to establish additional foreign branches in any
jurisdiction in which the bank already operates a branch, or to move a
branch within the jurisdiction.4 Also, an
[[Page 52823]]
eligible depository institution that operates branches in two or more
foreign jurisdictions may establish additional branches conducting
approved activities in additional foreign jurisdictions under expedited
processing procedures permitting the eligible depository institution to
establish the branch 45 days after submitting its application to the
FDIC.
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\4\ An application to establish a foreign branch is not an
``application for a deposit facility'' covered by the CRA, and the
FDIC will therefore only take the insured state nonmember bank's CRA
rating into account for purposes of determining whether the
application receives expedited processing under the general consent
and expedited processing procedures.
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The FDIC is proposing these general consent and expedited
processing procedures because an insured state nonmember bank meeting
the requirements of the provisions ordinarily should have sufficient
familiarity with the implications of foreign branching, and be of
sufficiently sound overall condition, that extensive FDIC review is not
required. The FDIC retains the option to suspend these procedures as to
any institutions for which this is not the case. For applicants seeking
to establish a branch in an additional jurisdiction, the FDIC may also
remove an applicant from expedited processing for any of the grounds
specified in Sec. 303.11(c) follows: (1) If the FDIC determines the
filing presents a significant supervisory concern; (2) raises a
significant legal or policy issue; or (3) if the FDIC determines other
good cause exists for removal. The FDIC will promptly provide the
applicant with a written explanation if the FDIC decides to remove a
filing from expedited processing.
General consent and expedited processing are also inapplicable in
any case presenting either of two special circumstances. Since the FDIC
must have access to information about a foreign branch's activities in
order to effectively supervise the institution, general consent or
expedited processing do not apply if the law or practice of the foreign
jurisdiction would limit the FDIC's access to information for
supervisory purposes. In such cases, the FDIC must have an opportunity
to fully analyze the extent of the confidentiality conferred under
foreign law and whether it would, in light of all the circumstances,
impair the FDIC's ability to carry out its responsibilities as a bank
supervisor. In addition, if the proposed foreign branch has a direct
adverse impact on a site which is on the World Heritage List
5 or the foreign jurisdiction's equivalent of the National
Register of Historic Places (National Register), the FDIC may need an
opportunity to evaluate the proposal in light of section 402 of the
National Historic Preservation Act Amendments of 1989 (NHPA Amendments
Act) (16 U.S.C. 470a-2).
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\5\ The World Heritage List was established under the terms of
The Convention Concerning the Protection of World Culture and
Natural Heritage adopted in November, 1972 at a General Conference
of the United Nations Education, Scientific and Cultural
Organization. Current versions of the list are on the Internet at
http://www.unesco.org/whc/heritage.htm, or may be obtained from the
FDIC Public Information Center, Room 100, 801 17th Street, NW,
Washington, DC 20429.
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Proposed Sec. 303.182 also requires an insured state nonmember bank
which closes a foreign branch to notify the appropriate regional
director (DOS) that it has done so. This notice stems from the current
requirement for such notice under Sec. 347.3. The FDIC has previously
determined that Congress did not intend section 42 of the FDI Act on
branch closings to apply to foreign branches. Finally, proposed
Sec. 303.182 sets out the procedures for applications which are not
eligible for the general consent or expedited processing procedures.
Acquisition of stock of foreign banks or other financial entities
by an insured state nonmember bank. Section 18(l) of the FDI Act (12
U.S.C. 1828(l)) and Sec. 347.4 require an insured state nonmember bank
to obtain the FDIC's prior written consent before acquiring an
ownership interest in a foreign bank or other financial entity. The
current application procedures are set out in Sec. 303.5(d). Since the
current substantive provisions governing foreign investment at
Sec. 347.4 provide only relatively general guidance about the conduct
of such activities, it is not possible for the FDIC to implement
general consent and expedited processing procedures on an interim
basis, and proposed Sec. 303.183 contains no substantive changes from
the current procedures. However, in connection with the FDIC's
revisions of the foreign investment rules in the part 347 NPR, the FDIC
has proposed general consent and expedited processing procedures.
Exemptions from the insurance requirement for a state branch of a
foreign bank. Section 346.6 requires an uninsured state branch of a
foreign bank to obtain the FDIC's consent if the branch proposes to
accept initial deposits of less than $100,000 and such deposits are not
otherwise exempted from the definition of retail deposit taking
activity under Sec. 346.6(a). The current application procedures are
set out in Sec. 346.6(b). These procedures need no substantive revision
at this time, because the procedures were recently reviewed and amended
by the FDIC as a result of amendments to the International Banking Act
of 1978, Pub. L. 95-369, 92 Stat. 607 (12 U.S.C. 310l et seq.) made by
the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994, Pub. L. 103-328, 108 Stat. 2338 (Interstate Act). 61 FR 5671
(Feb. 14, 1996).
Approval for an insured state branch of a foreign bank to conduct
activities not permissible for a federal branch. Section 346.101
requires an insured state branch of a foreign bank to obtain the FDIC's
permission to conduct any type of activity which is not permissible for
a federal branch of a foreign bank. The current application procedures
are set out in Sec. 346.101 itself, which was recently adopted. 59 FR
60703 (Nov. 28, 1994). Thus, proposed Sec. 303.187 does not make any
substantive changes from the current procedures on an interim basis.
Noninterim Application Procedures
Moving an insured branch of a foreign bank. Section 18(d)(1) of the
FDI Act requires any insured branch of a foreign bank which wishes to
move from one location to another to obtain the FDIC's prior written
consent. Applications for these insured branches currently are treated
under the same process applicable to domestic branches of insured state
nonmember banks under Sec. 303.2. Since the FDIC's consent to these
applications is legally subject to the same statutory considerations as
applications to establish or relocate a domestic branch or to relocate
the main office of an insured state nonmember bank, the FDIC is
proposing an application process in Sec. 303.184 which parallels
proposed subpart C. This includes expedited processing for an eligible
insured branch. Subpart J contains a proposed definition of ``eligible
insured branch'' which parallels the general Sec. 303.2(r) definition
of ``eligible depository institution,'' with appropriate changes to
take into account the different supervisory rating system and capital
requirements applicable to insured branches.
Mergers involving an insured branch of a foreign bank. An insured
branch of a foreign bank meets the definition of an insured depository
institution under section 3 of the FDI Act (12 U.S.C. 1813) and is
therefore subject to the Bank Merger Act. The FDIC's current rules and
regulations do not include a specific application process for approvals
of merger transactions involving an insured branch. In order to give
insured branches conducting merger transactions which are subject to
FDIC approval the benefit of the same streamlined application
processing proposed for domestic institutions in subpart D, proposed
Sec. 303.185 contains appropriate cross-references to subpart
[[Page 52824]]
D. Section 303.185 clarifies that an eligible insured branch as defined
in subpart J generally is eligible for the expedited processing
available to an eligible depository institution in subpart D.
Similarly, Sec. 303.185 clarifies that a transaction in which an
insured branch is merged with other branches, agencies, or subsidiaries
in the United States of the same foreign bank parent is eligible for
disposition under the enhanced delegations applicable to corporate
reorganizations.6
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\6\ If the foreign bank parent itself is not primarily engaged
in business in the United States, and is involved in some merger or
other combination outside the United States which does not result in
a corresponding merger transaction in the United States with respect
to an insured branch, section 18(c)(11) provides that no approval is
required, since no party to the transaction is primarily engaged in
business in the United States.
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Section 303.185 also incorporates a point explained in Advisory
Opinion FDIC-96-12 (May 13, 1996) concerning the treatment of an
insured branch under section 44 of the FDI Act (12 U.S.C. 1831u) as
added by section 102 of the Interstate Act. Section 44 permits the
responsible federal regulator to approve an interstate merger
transaction involving the acquisition of a branch of an insured bank
without the acquisition of the entire bank, but approval is possible
only if the state in which the branch is located expressly permits out-
of-state banks to acquire a branch of the bank without acquiring an
entire bank. In contrast, section 44 permits the responsible federal
regulator to approve an interstate merger transaction involving the
acquisition of an entire bank if the state in which the bank is located
has not adopted legislation to opt out of interstate mergers. Section
303.185 treats interstate mergers involving an insured branch under the
latter approach. Express state authority permitting out-of-state banks
to acquire a branch of the bank without acquiring the entire bank is
required only if a foreign bank has more than one insured branch in the
affected state and proposes to sell fewer than all of them to the same
acquiror. If such state authority does not exist, the FDIC requires the
foreign bank to sell all of its insured branches in that state to the
same affiliated or unaffiliated acquiror. As is explained in Advisory
Opinion FDIC-96-12, the statute and definitions used in section 44 do
not provide a conclusive answer to this issue, but the FDIC's approach
gives effect to all of the language and purposes of the Interstate Act.
K. Subpart K--Prompt Corrective Action
Section 38 of the FDI Act, which governs prompt corrective action,
restricts or prohibits certain activities based on an institution's
capital category, and requires an insured institution to submit a
capital restoration plan when it becomes undercapitalized. On September
15, 1992, the FDIC approved a final interagency rule implementing the
requirements of prompt corrective action. The final rule, which became
effective December 19, 1992, amended part 325 of the agency's
regulations by defining five capital categories for purposes of
implementing the prompt corrective action requirements. 57 FR 44900
(Sept. 29, 1992).
In conjunction with interagency action, the FDIC on January 26,
1993, approved amendments to part 303 to implement certain application
procedures relating to prompt corrective action. The application
procedures outlined in Sec. 303.5(e) relate solely to activities that
are prohibited unless prior written consent is granted by the
appropriate agency. In addition, a new Sec. 303.7(f)(1)(ix) was added
to part 303 which provides delegation of authority to act on
applications seeking prior consent to engage in certain restricted
activities which are filed pursuant to the prompt corrective action
regulations. These revisions to part 303 became effective on February
12, 1993. 58 FR 8219 (Feb. 12, 1993).
Subpart K does not substantially amend current procedures. The only
substantive change is that a new paragraph has been added as
Sec. 303.207. This new section is derived from section 38(i)(2)(G) of
the FDI Act, and relates to paying interest on new or renewed
liabilities at a rate that would increase the institution's weighted
average cost of funds to a level significantly exceeding the prevailing
rates of interest on insured deposits in the institution's normal
market area. Current Sec. 303.5(e) contains a reference to activities
listed in sections 38(i)(2) (A) through (F) of section 38, and the
addition of item G completes the list of the seven activities which are
prohibited for critically undercapitalized institutions unless prior
FDIC approval has been granted.
As part of the reorganization of part 303, delegations previously
contained in Sec. 303.7(f)(ix) have been consolidated into subpart K
and delegations previously contained in Sec. 303.9(h), regarding
directives and capital plans pursuant to section 38 of the FDI Act,
have been consolidated with enforcement related delegations in subpart
N. As subpart K applies only to the application process, it does not
affect the general prompt corrective action regulations adopted as a
part of the interagency rulemaking process.
L. Subpart L--Section 19 of the FDI Act (Consent to Service of Persons
Convicted of Certain Criminal Offenses)
Section 19 of the FDI Act prohibits any person convicted of any
crime involving dishonesty, breach of trust, or money laundering, or
who has agreed to enter into a pretrial diversion or similar program in
connection with a prosecution for any such offense, from (i) continuing
as or becoming an institution-affiliated party, (ii) owning or
controlling directly or indirectly an insured depository institution,
or (iii) otherwise participating in the conduct of the affairs of FDIC-
insured depository institutions, without the FDIC's prior written
consent.
Proposed subpart L does not substantially amend current section 19
application procedures, but rather brings together in one place
information on section 19 which was previously contained in various
sections of part 303. However, proposed Sec. 303.222 has been added to
clarify the FDIC's position that the prior consent of the FDIC is
required before a person approved under section 19 to participate in
the affairs of a particular institution may participate in the affairs
of another insured institution. Delegations of authority to act upon
applications filed pursuant to section 19 remains unchanged.
On July 24, 1997, the FDIC Board of Directors published for comment
a proposed Statement of Policy on Section 19 which contains
interpretations of the statutory language (62 FR 39840). Issues
addressed in the statement of policy include what constitutes
participation, who is a ``person'' under the statute, the meaning of
``own'' or ``control,'' procedures for filing a section 19 application,
and the standards for granting consent to a section 19 application. The
proposed rule should be read in conjunction with the proposed policy
statement for a fuller understanding of the FDIC's position on section
19.
M. Subpart M--Other Filings
This subpart contains the procedural requirements and delegations
of authority for miscellaneous filings which do not warrant treatment
as separate subparts. In many instances, there were no regulations or
guidelines established regarding procedures or content for submitting a
filing to the FDIC. In addition, it was often unclear when the filing
requirements were
[[Page 52825]]
applicable. Under proposed subpart M, all information relating to a
particular filing has been brought together in a self-contained section
under a standardized format. The FDIC believes that this will simplify
the filing process for prospective applicants by setting forth this
information in a single location.
Under the proposal, new expedited review procedures will be offered
for applications to reduce or retire capital stock or capital debt
instruments and applications to exercise trust powers. Expedited
processing for brokered deposit waivers has been retained yet modified
to parallel the requirements for an ``eligible depository institution''
in proposed Sec. 303.2(r), with the exception of the well-capitalized
criteria.
Application procedures currently found in part 359 (golden
parachutes and indemnification payments) are being moved to subpart M.
In addition, procedures for requesting a conditional waiver of cross-
guaranty liability are being moved from the FDIC's Statement of Policy
Regarding Liability of Commonly Controlled Depository Institutions to
proposed subpart M. Finally, specific procedures are being added to
address requests for relief from reimbursement under the Truth in
Lending Act and Regulation Z.
Reduce or retire capital stock or capital debt instruments. Section
303.241 reorganizes, clarifies and simplifies procedures for
applications to reduce or retire capital stock, notes or debentures
pursuant to section 18(i)(1) of the FDI Act (12 U.S.C. 1828(i)(1)).
Filing instructions are currently contained in the standard
instructions for all applications for which no form of application has
been prescribed (12 CFR 303.5(b)). Authority to approve or deny such
applications is currently delegated at Sec. 303.7(f)(1)(iii).
Under expedited processing, an application by an eligible
depository institution (as defined in proposed Sec. 303.2(r)) will be
deemed approved 20 days after receipt by the appropriate FDIC regional
director (DOS), unless the applicant is notified that the FDIC has
removed the application from expedited processing. A recent increase in
the number of applications to reduce or retire capital stock, notes or
debt indicates to the FDIC that expedited processing will simplify and
streamline the process for and be of benefit to state nonmember banks.
The 20-day automatic approval period is based upon the processing time
established in the FDIC's Application Processing Time Lines (FIL-26-96,
May 6, 1996) and is supported by the average processing time for
approval of these types of requests during 1996.
The information requested under the proposal is the basic
information that is necessary to process a request pursuant to section
18(i)(1) of the FDI Act and is included to provide guidance to
prospective applicants. The filing procedures and information requested
do not impose additional requirements upon applicants but simply
clarify existing practice.
Exercise of trust powers. Currently, Secs. 303.5(b) and 303.7(a)(2)
contain the general application procedures for the FDIC's prior
approval to exercise trust powers. Sections 333.1, 333.2 and 333.101
provide the substantive basis for requesting such applications.
The FDIC proposes to amend part 303 to create a new section
relating to trust applications that would bring together all the trust
application procedures as well as the related delegations of authority
into one centralized location. The proposal contains two exceptions to
the application requirements. The first exception allows a state
nonmember bank that received authority to exercise trust powers from
its chartering authorities prior to December 1, 1950 to exercise trust
powers without the FDIC's consent. The second exception permits an
insured depository institution to continue to conduct trust activities
pursuant to authority granted by its chartering authority following a
charter conversion or withdrawal from membership in the Federal Reserve
System.
The proposed procedures would require applicants to complete a
trust application form obtained from any FDIC regional office and
provides expedited processing for eligible depository institutions as
defined in proposed Sec. 303.2(r). Under expedited processing, an
eligible institution's trust application will be deemed approved 30
days after receipt by the appropriate FDIC regional director, unless
the applicant is advised in writing that its filing has been removed
from expedited processing. For applications not processed pursuant to
the expedited processing procedures, the FDIC will provide written
notification of the final action taken with regard to the filing.
Brokered deposit waivers. The FDIC is proposing to reorganize its
regulations regarding applications to accept brokered deposits by
adequately capitalized insured depository institutions. The application
procedures would be placed in this subpart M and the substantive rules
regarding the acceptance of brokered deposits would remain in
Sec. 337.6. Procedures would not be substantially altered.
Applicants for a brokered deposit waiver cannot meet the strict
definition of an ``eligible depository institution'' set forth in
proposed Sec. 303.2(r), regarding institutions eligible for expedited
processing. The definition in Sec. 303.2(r) requires eligible
depository institutions to be ``well capitalized.'' Well capitalized
institutions are not required to apply for a waiver prior to accepting
brokered deposits. Therefore, for the purpose of determining
eligibility for expedited processing for this subsection only, an
adequately capitalized institution which otherwise meets the standards
of Sec. 303.2(r) will be deemed to be an eligible depository
institution. Under the current regulation, any institution with a
composite rating of 1 or 2 is eligible for expedited processing. The
definition contained in Sec. 303.2(r) contains additional
qualifications for eligibility. The FDIC does not believe that there is
a compelling reason to use a substantially different definition of
eligibility for this subsection than that used for all other types of
applications for which expedited procedures are available.
In moving the application procedures to part 303, the proposal
would amend paragraph (c) of Sec. 337.6 by referring the applicant to
Sec. 303.243 for filing instructions. Paragraphs (d) and (e) of
Sec. 337.6 would be deleted because the information in those paragraphs
(involving filing procedures, delegations of authority, and expedited
processing procedures) would appear in Sec. 303.243.
Golden parachutes and severance plan payments. The FDIC is
proposing to revise its regulations regarding applications to make
excess nondiscriminatory severance plan payments and golden parachute
payments by insured depository institutions or depository institution
holding companies. The FDIC's regulations with respect to such payments
are codified at part 359. Generally, troubled depository institutions
as defined in the regulations are prohibited under part 359 from making
severance plan payments and golden parachute payments, unless the
institution obtains the consent of its primary federal regulator and,
in certain circumstances, the FDIC.
Under the proposal, the substantive rules with respect to making
such payments would remain unchanged in part 359 of the FDIC's
regulations. The only changes to part 359 would appear in Sec. 359.6,
which involves ``Filing instructions.'' First, a reference to new
Sec. 303.244 of the FDIC's regulations would be added. Second, a
sentence specifying the necessary elements of an
[[Page 52826]]
application would be deleted from Sec. 359.6. These elements and the
procedures for obtaining the consent of the FDIC would be set forth in
the new Sec. 303.244. The necessary elements would be expanded from two
items to five items in Sec. 303.244 in order to assist an applicant in
preparing a complete filing. The filing procedures and information
requested do not impose additional requirements upon applicants, but
simply clarify existing requirements.
Waiver of liability for commonly controlled depository
institutions. The application procedures for an insured depository
institution to request a waiver of liability pursuant to section 5(e)
of the FDI Act are new (12 U.S.C. 1815(e)). The FDIC Board of Directors
recently approved revisions to the Statement of Policy Regarding
Liability of Commonly Controlled Depository Institutions (62 FR 15480,
April 1, 1997), which provides guidance to the industry as to the
manner in which the FDIC will administer the provisions of section 5(e)
of the FDI Act. The statement of policy is being further revised
elsewhere in today's Federal Register to move the procedures for
requesting a conditional waiver of the cross-guaranty liability to
proposed Sec. 303.245 and to include a cross-reference to Sec. 303.245.
Insurance fund conversions. The FDIC is proposing to revise its
regulations regarding filings for insurance fund conversions at
Sec. 303.246. The proposed revisions would reformat the filing
requirements and delete references to and procedures regarding
insurance fund conversions qualifying as exceptions to the insurance
fund conversion moratorium imposed in section 5(d) of the FDI Act (12
U.S.C. 1815(d)(2)(A)(ii)). Such references and procedures are no longer
necessary because the insurance fund conversion moratorium expired in
the last quarter of l996 when the Savings Association Insurance Fund
reached its designated reserve ratio.
Conversion with diminution of capital. Section 303.247 reorganizes
and clarifies filing procedures 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 a state nonmember 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 shareholder's meeting approving such conversion. Filing
instructions are currently contained in Sec. 303.3(c) and
Sec. 303.5(b).
The information requested of the applicant under the proposal is
the basic information that is necessary to process a request pursuant
to section 18(i)(2) of the FDI Act. The filing procedures and
information requested do not impose additional requirements upon
applicants but simply clarify existing requirements.
A delegation of authority has been added to Sec. 303.247 to allow
the Director, Deputy Director, or where confirmed in writing, an
associate director, regional director or deputy regional director (DOS)
to approve conversions with diminution of capital. Authority to deny is
delegated only to the Director and Deputy Director (DOS). At present,
there is no delegated authority.
Continue or resume status as an insured institution following
termination under section 8 of the FDI Act. Proposed Sec. 303.248
covers applications by depository institutions for permission to
continue or resume their insured status after termination of insurance
under section 8 of the FDI Act (12 U.S.C. 1818). 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. However, it does not cover any operating
non-insured depository institution which was previously insured by the
FDIC or any non-insured, non-operating depository institution whose
charter has not been surrendered or revoked. Institutions not covered
by this section would be required to file a de novo application for
FDIC insurance. The contents of the filing under this section have been
streamlined to require all relevant facts and reasons for the request
and a certified copy of the resolution authorizing the request by the
institution's board of directors.
Truth in Lending Act--Requests for relief from reimbursement and
reconsiderations of denials. Proposed Sec. 303.249 is intended to apply
to requests for relief from reimbursement involving the Truth in
Lending Act (15 U.S.C. 1601 et seq.) and Regulation Z (12 CFR 226)
(Truth in Lending cases). Currently, no specific procedures or
timeframes are provided for Truth in Lending cases in part 303.
Requests for relief from reimbursement are addressed pursuant to the
procedures in Sec. 303.6 which apply generally to applications, and
requests for reconsideration of a request for relief following denial
must be filed within 15 days under Sec. 303.6(e), which governs
petitions for reconsideration. Proposed Sec. 303.249 sets forth new
procedures specifically for Truth in Lending cases and provides that
applicants may file initial requests for relief 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.
Requests for reconsideration following denial will continue to be
handled under the FDIC's general petition for reconsideration
provision, located at proposed Sec. 303.11(f), which requires filing
within 15 days of receipt of denial.
Modifications of conditions. Section 303.250 reorganizes and
clarifies the procedures for requests to modify a previously issued
FDIC approval of a filing. The instructions for these requests are
currently contained in Sec. 303.5(b). The relevant delegation of
authority to approve or to deny such filings is contained in existing
Sec. 303.7(f)(l)(iv).
The information requested of the applicant under the proposal is
the basic information that is necessary to process a request of this
nature. The filing procedures and information requested do not impose
additional requirements upon applicants, but simply clarify existing
requirements. However, a new criteria for exercise of delegated
authority by DOS officials is being added requiring Legal Division
consultation to modify conditions if Legal Division consultation was
required in connection with the original filing.
During 1995, the FDIC approved 15 requests to modify a prior
approval, with an average processing time of 11 days. During 1996, the
FDIC approved 14 such requests, with an average processing time of 15
days. Given the low volume of activity and the prompt processing of
those requests, the FDIC believes that the creation of special
expedited procedures is not warranted.
Extensions of time. Section 303.251 reorganizes and clarifies the
procedures for requests seeking an extension of time to fulfill a
condition required in an approval issued by the FDIC, or to consummate
a transaction which was the subject of an approval by the FDIC. The
instructions for these requests are currently contained in
Sec. 303.5(b). The relevant delegation of authority to approve or to
deny such filings is contained in existing Sec. 303.8(a).
The information requested of the applicant under the proposal is
the basic information that is necessary to process a request of this
nature. The filing procedures and information requested do not impose
additional requirements upon applicants, but simply clarify existing
requirements.
During 1995, the FDIC approved 31 requests for an extension of
time, with an average processing time of 10 days.
[[Page 52827]]
During 1996, the FDIC approved 31 such requests, with an average
processing time of 13 days. Given the low volume of activity and the
prompt processing of those requests, the FDIC believes that the
creation of special expedited procedures is not warranted.
N. Subpart N--Enforcement Delegations
Subpart N makes several significant changes to the FDIC's
enforcement delegations of authority, as described below.
Section 8(a) notices of intention to terminate insured status.
Under current Sec. 303.9(a), authority has been delegated to the
Director of DOS to issue notifications to primary regulator (NPRs)
under section 8(a) of the FDI Act (12 U.S.C. 1818(a)), with Legal
Division concurrence. If unsafe or unsound conditions or practices and
violations of law cited in an NPR are not corrected, a notice of
intention to terminate insured status (NIT) may be issued.
The Director of DOS, pursuant to an agreement with the Board of
Directors, has not exercised delegated authority to issue NPRs, and has
brought all such cases to the Board of Directors. Currently, when the
Board issues an NPR, it also authorizes the Executive Secretary, with
Legal Division concurrence, to issue an NIT, after being informed by
DOS that an institution has not corrected the conditions, practices
and/or violations of law cited in the NPR. Proposed Sec. 303.262 would
largely codify existing FDIC practice by delegating authority to issue
NITs, but would modify existing FDIC practice by allowing the Director
of DOS to issue NITs with Legal Division concurrence. This would speed
matters since the Executive Secretary now relies on information
received from DOS prior to issuing NITs.
Section 8(g) suspension and removal actions. Currently, authority
is delegated to the Director and Deputy Director (DOS and DCA) and,
when confirmed in writing by the Director, to an associate director, to
issue orders of suspension or prohibition to any institution-affiliated
party who is charged in any information, indictment or complaint, or
who is convicted of or enters into a pretrial diversion or similar
program, regarding any criminal offense cited in or covered by section
8(g) of the FDI Act, when such institution-affiliated party consents to
the suspension or prohibition. Proposed Sec. 303.266(b) contains a new
delegation to issue orders of prohibition or suspension under section
8(g), regardless of whether or not the institution-affiliated party
consents to the order, if the criminal offense is one for which section
8(g) mandates suspension or prohibition. The FDIC believes that such a
delegation is appropriate since no discretion to issue this type of
order is provided in the statute.
Consent section 8(q) orders terminating insured status. Section
8(q) of the FDI Act, 12 U.S.C. 1818(q), authorizes the issuance of
consent orders terminating deposit insurance of an institution whose
deposits have been assumed by another institution, whether by way of
merger, consolidation, statutory assumption, or contract. Proposed
Sec. 303.268 codifies the current delegation of authority to the
Executive Secretary of the FDIC to issue consent orders pursuant to
section 8(q) of the Act. This authority was contained in a June 13,
1989 resolution of the Board of Directors and was not previously
codified in part 303.
Civil money penalties. Proposed Sec. 303.269 clarifies the FDIC's
delegations of authority relating to the issuance of final orders to
pay civil money penalties, whether or not a notice of charges has been
issued in a case. Proposed Sec. 303.269 also authorizes the Director
(DOS) and Director (DCA) to take joint action where violations for
which civil money penalties are authorized involved both safety and
soundness and consumer compliance matters. The proposal further
delegates the authority to levy and enforce civil money penalties for
the late, inaccurate, false or misleading filing of Reports of
Condition and Income, Home Mortgage Disclosure Act Reports, CRA loan
data reports (see 12 CFR 345.42), and all other required reports.
Section 5(e) assessments of commonly-controlled institutions.
Section 5(e) of the FDI Act, 12 U.S.C. 1815(e), permits the FDIC to
recoup the amount of loss to the deposit insurance funds resulting from
the failure of affiliated institutions or assistance provided to
affiliated institutions. Proposed Sec. 303.270 sets forth the authority
to issue notices of assessment under section 5(e) of the Act, also
known as cross-guaranty assessments.. This authority was not previously
codified in 12 CFR part 303. The addition of this provision and the
delegations of authority to the Director, Deputy Director and, where
confirmed in writing, to an associate director of DOS to issue notices
of assessment of liability, reflect the actual practice of the Board of
Directors. Additionally, proposed Sec. 303.278(j) provides that the
Board expressly retains authority on whether or not to waive cross-
guaranty assessments. This provision is new and was not previously
codified in part 303.
Section 10(c) investigations. The legal authority of the General
Counsel to issue orders of investigation pursuant to section 10(c) of
the FDI Act contained in proposed Sec. 303.272(b) is being expanded to
include sections 8 through 13 of the FDI Act (12 U.S.C. 1818-1823) in
order to cover post-conservatorship or post-receivership investigations
conducted by the FDIC in connection with the possible liability of
directors, officers, and other institution-affiliated parties. The
requirement of the concurrent certification of the General Counsel for
certain orders of investigation issued by the Director and Deputy
Director of the Division of Resolutions and Receiverships is being
added to be consistent with the current requirement for orders issued
in certain specified situations by the Directors and Deputy Directors
of DOS and DCA.
Acceptance of written agreements. Proposed Sec. 303.274 continues
in effect FDIC delegations of authority on acceptance of written
agreements in lieu of orders to terminate deposit insurance and to
issue cease-and-desist orders under sections 8 (a) and (b) of the Act
(12 U.S.C. 1818 (a) and (b)). The Director (DOS) has delegated
authority to enter into written agreements relating to section 8(a) of
the Act and relating to safety and soundness matters under section 8(b)
of the Act, while the Director (DCA) has authority to enter into
written agreements under section 8(b) of the Act relating to consumer
compliance matters. Proposed Sec. 303.274(c) adds a new provision not
previously codified in part 303, giving authority to the Director and
Deputy Director (DOS) and (DCA) and, where confirmed in writing by the
appropriate Director, to an associate director, or to the appropriate
regional director or deputy regional director to enter into written
agreements with insured institutions and institution-affiliated parties
that contain conditions that must exist before the FDIC may issue a
statement of non-objection to a filing under part 303.
Termination of pending actions--general. Proposed Sec. 303.275 adds
a new paragraph (h) which clarifies the time frames in which pending
enforcement actions may be terminated or dismissed pursuant to
delegated authority. The section provides that any pending enforcement
action may be terminated or dismissed by the Director or Deputy
Director of DOS or DCA, as appropriate, before the commencement of a
hearing on the merits by an administrative law judge. Once a hearing on
the merits has begun, the pending action may be dismissed or terminated
by stipulation or consent of the affected parties no
[[Page 52828]]
later than 14 days after the administrative law judge has closed the
record of the hearing. After this time, only the FDIC Board of
Directors may terminate or dismiss an enforcement action. This
provision was not previously codified in part 303.
Standards governing modification and termination of section 8(e)
prohibition orders. The delegation of authority to the Director and
Deputy Director (DOS) and (DCA), as appropriate and if confirmed in
writing, to the associate director to modify and terminate orders of
removal or prohibition under section 8(e) of the FDI Act (12 U.S.C.
1818(e)) may be found in proposed Sec. 303.276(e). Proposed
Sec. 303.276(e) adds the standards articulated by the Board in FDIC
enforcement decisions under which a removal or prohibition order may be
modified or terminated. Those standards are as follows: (1) The
respondent has demonstrated his/her fitness to participate in any
manner in the conduct of the affairs of an insured depository
institution, (2) the respondent has shown that his/her participation
would not pose a risk to the institution's safety and soundness, and
(3) the respondent has proven that his/her participation would not
erode public confidence in the institution. Proposed Sec. 303.276(e)
also delegates authority to grant consent pursuant to section
8(e)(7)(B) of the Act for the modification of termination of
outstanding section 8(e) orders issued by another federal financial
regulator. These provisions are new and were not previously codified in
part 303.
Enforcement authority vested in General Counsel. Proposed subpart N
would vest authority in the General Counsel or, where confirmed in
writing by the General Counsel, his or her designee, to provide Legal
Division concurrence regarding all enforcement actions. This change
reflects the General Counsel's position as the head of the Legal
Division with ultimate prosecutorial authority over all enforcement
actions.
IV. Other Regulatory Changes
A. Part 337 (Unsafe and Unsound Banking Practices)
The FDIC is proposing to amend Sec. 337.6, which governs the
acceptance of brokered deposits by insured depository institutions. A
well capitalized insured depository institution may accept brokered
deposits without restriction by Sec. 337.6 while an undercapitalized
institution may not accept brokered deposits under any circumstances.
In the case of an adequately capitalized insured depository
institution, a brokered deposit can be accepted but only if the
institution has obtained a waiver from the FDIC. Under the proposal,
the procedures for obtaining a waiver would be moved from Sec. 337.6 to
12 CFR part 303. An institution seeking a waiver would be referred by
Sec. 337.6(c) to Sec. 303.243. Paragraphs (d) and (e) of Sec. 337.6
would be deleted because the information in those paragraphs (involving
filing procedures, delegations of authority and expedited processing
procedures) would appear in Sec. 303.243. Paragraph (f) would be
deleted because the 60-day transition rule prescribed by that paragraph
(for the period beginning on June 16, 1992) is obsolete.
Additionally, Sec. 337.6 would be amended to reflect certain
changes in the statutory definition of ``deposit broker.'' Prior to
these changes, the term ``deposit broker'' included ``any insured
depository institution'' that solicits deposits by offering interest
rates that significantly exceed the prevailing rates offered by other
insured depository institutions in the same market area ``having the
same type of charter.'' Through the Riegle Community Development and
Regulatory Improvement Act of 1994 (see Pub. L. 103-325, 108 Stat.
2160, Sec. 337), Congress made two changes to this statutory
definition. First, Congress changed ``any insured depository
institution'' to ``any insured depository institution that is not well
capitalized.'' The effect of this change was to relieve well
capitalized institutions of the burden of reporting deposits with high
interest rates as brokered deposits. Second, Congress removed the
phrase, ``having the same type of charter.'' The effect of this change
was to require a comparison between the interest rates of all insured
depository institutions within a market area (as opposed to insured
depository institutions with a particular type of charter). See 12
U.S.C. 1831f(g)(3). Under the proposal, the amended statutory language
would be incorporated in the FDIC's regulatory definition of ``deposit
broker'' at Sec. 337.6(a)(5)(iii).
B. Part 346 (Foreign Banks)
The FDIC is proposing to move current Sec. 303.8(f) from part 303
to part 346, without substantive change. Section 303.8(f) contains
delegations for the Division of Supervision to accept the pledge
agreements by which insured branches of foreign banks pledge assets for
the benefit of the FDIC, to be used in the event the FDIC becomes
obligated to pay the insured deposits of the insured branch. Section
303.8(f) also authorizes the General Counsel or designee to alter the
model deposit agreement used. The FDIC is proposing to move the
delegation to part 346 for ease of reference, in order to locate the
delegation with the substantive pledge requirements to which the
delegation applies. The delegation would be added as a new paragraph at
the end of Sec. 346.19 on pledge of assets.
C. Part 359 (Golden Parachute and Indemnification Payments)
The FDIC is proposing to amend 12 CFR part 359 by moving certain
information from Sec. 359.6 (``Filing instructions'') to 12 CFR part
303. The substantive rules in part 359 would remain unchanged. These
rules govern the making of excess nondiscriminatory severance plan
payments and golden parachute payments by insured depository
institutions or depository institution holding companies. Generally,
troubled depository institutions are prohibited under part 359 from
making such payments unless the institution obtains the consent of the
FDIC and/or the institution's primary federal regulator. Under the
proposal, an institution seeking the consent of the FDIC would be
referred by Sec. 359.6 to Sec. 303.244. Also, a listing of the
necessary elements of an application would be moved from Sec. 359.6 to
Sec. 303.244. These elements would be expanded in order to assist an
applicant in preparing a complete filing.
V. Regulatory Text Deleted From Proposed Part 303
Some matters currently addressed in part 303 are not being included
in the proposed revisions to part 303 because these matters will be
covered elsewhere or are no longer needed. Those items are summarized
below:
Section 303.2(c)--Special procedures for remote service facilities.
Notice procedures for remote service facilities, along with related
delegations of authority and the definition of ``remote service
facility'' have been deleted because EGRPRA excludes such facilities
from the definition of a branch.
Section 303.11(c)--Request for review. This section merely states
that an aggrieved party may request the Board of Directors to review
any action taken under authority delegated under Secs. 303.7, 303.8,
and 303.9. Numerous avenues already exist for appeal, such as those
found under proposed Sec. 303.11(f) (Appeals and petitions for
reconsideration) and part 308 (Uniform Rules of Practice and
Procedure). Broad authority to challenge delegations of authority seems
unnecessary and is not in keeping with the Board's recent
[[Page 52829]]
resolution on delegations of authority which has been codified in part
in proposed Sec. 303.12 (General rules governing delegations of
authority).
Section 303.12--OMB control number assigned pursuant to the
Paperwork Reduction Act. This section is being deleted in its entirety
because this same material also appears in Sec. 304.7, Display of
control numbers, of this chapter.
Several delegations of authority are also being eliminated:
Sections 303.7(f)(1)(vii) and 303.7(f)(2)(i)--Delegations regarding
the Depository Institutions Management Interlocks Act. These
delegations are being moved to part 348 (Management Official
Interlocks) of this chapter.
Section 303.8(b)--Disclosure laws and regulations. The delegations
related to part 335 (Securities of nonmember insured banks) are now
contained in part 335 of this chapter. The delegations to administer
part 341 (Registration of Securities Transfer Agents) are being moved
to part 341 of this chapter.
Section 303.8(c)--Security devices and procedures and bank service
arrangements. This is a delegation to administer the provisions of part
326 (Minimum Security Devices and Procedures). There are no longer any
application procedures related to part 326, so therefore no delegations
of authority are required.
Section 303.8(d)--In emergencies. This is a delegation to staff to
manage the FDIC's affairs in the event an enemy attack renders the
Board of Directors unable to perform its normal management functions.
This delegation is being transferred to an internal Board resolution.
Section 303.8(h)--Application or notices for membership or
resumption of business. This delegation permits DOS officials to
provide comments to other federal regulators on applications or notices
for membership in the Federal Reserve System, or for conversion of a
state bank to a national bank. This delegation is being deleted as
unnecessary since it is done as a matter of practice.
Section 303.8(i)--Depository Institutions Disaster Relief Act of
1992 (DIDRA). The provisions of DIDRA that were the subject of these
delegations have expired.
VI. Initial Regulatory Flexibility Analysis
The Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA) requires an
agency to publish an initial regulatory flexibility analysis, except to
the extent provided in 5 U.S.C. 605(b), whenever the agency is required
to publish a general notice of proposed rulemaking for a proposed rule.
Pursuant to subsections 603 (b) and (c) of the RFA, the FDIC provides
the following initial regulatory flexibility analysis:
Reasons why agency action is being considered. The ``Supplementary
Information'' section above contains this information.
Statement of objectives of and legal basis for proposed rule. The
``Supplementary Information'' section above contains this information.
Description and estimate of the number of small entities to which
the proposed rule applies. The proposed rule applies generally to the
approximately 6,300 state nonmember banks for which the FDIC is the
primary federal regulator, regardless of size. As of June 26, 1997,
there were 6,265 such institutions, 4,316 of which were small entities
as defined by the RFA.7 In addition, as indicated in the
Scope paragraphs of the pertinent subparts, certain of the subparts
apply to all depository institutions insured by the FDIC, regardless of
size. As of June 26, 1997, there were 11,220 such institutions, 6,926
of which were small entities as defined by the RFA. Subpart B (Deposit
Insurance) also applies to proposed depository institutions and
operating noninsured institutions that seek to apply for FDIC deposit
insurance, regardless of size. Based upon recent experience, the FDIC
estimates that the proposed rule will affect a total of approximately
200 such entities per year, nearly all of which the FDIC would expect
to be small entities as defined by the RFA. In limited circumstances,
certain subparts apply more generally to other entities or persons, as
defined by the respective subparts, making applications to the FDIC,
regardless of size. Quantification of the number of such persons or
small entities who will be affected by the proposed rule is not
practicable. The FDIC believes that any economic impact on such small
entities will be beneficial because the proposed rule serves to reduce
regulatory burden. The FDIC invites the public to comment on this
conclusion and will carefully review all comments received prior to
issuing the final regulation.
---------------------------------------------------------------------------
\7\ The RFA defines the term ``small entity'' in 5 U.S.C. 601 by
reference to definitions published by the Small Business
Administration. The Small Business Administration has defined a
``small entity'' for banking purposes as a national or commercial
bank, savings institution or credit union with less than $100
million in assets. See 13 CFR 121.201.
---------------------------------------------------------------------------
Projected reporting, recordkeeping and other compliance
requirements of the proposed rule. The proposed rule reorganizes,
clarifies and simplifies the rules applicable to the processing of
applications, notices and requests, and updates the regulation to
reflect recent statutory changes. The FDIC expects that these proposed
changes will reduce industry costs associated with regulatory filings
and will decrease processing time associated with such filings. For
example, branch applications for eligible institutions generally will
be deemed approved 21 days after filing and expedited procedures have
been introduced for certain merger and deposit insurance applications.
Consistent with statutory amendments, the proposed rule eliminates the
need for banks that have undergone a recent change in control or have
been operating less than two years to file notices to add a director or
senior executive officer, thus substantially reducing the number of
required filings. Reorganization of part 303 so that all information
relevant to the filing and processing of each particular application
type in one concise subpart also serves to lessen burden. The proposed
rule also more closely aligns the procedural requirements of the FDIC's
regulations with those of the other federal banking agencies, thus
reducing the burden which may be associated with interpreting the rules
of more than one federal banking agency.
Identification of federal rules which may duplicate, overlap or
conflict with the proposed rule. The ``Supplementary Information''
above contains this information.
Discussion of significant alternatives to proposed rule. The FDIC
believes that the proposed rule is an alternative to the existing part
303 and provides economic benefits to small entities. The proposed rule
reorganizes and consolidates the existing rule to make it easier for
affected small entities to use. The reporting requirements have been
clarified and simplified as a result of the FDIC's experience in
administering the existing part 303. By streamlining application
procedures and granting eligible depository institutions expedited
processing of certain filings, the proposed rule enables small entities
that qualify as eligible depository institutions to operate more
efficiently. By reducing the regulatory burden associated with
application procedures, the proposed rule reduces the resources small
entities will have to devote to regulatory compliance. Because the
majority of the filings required by the proposed rule are required by
statute, elimination of the rule is not a viable alternative. The FDIC
has carefully reviewed each of the existing filing and processing
procedures and, where the applicable statutes provide some
[[Page 52830]]
flexibility, the FDIC proposes to revise existing part 303 in a way it
believes best serves to reduce regulatory burden and streamline
processing without compromising the safety and soundness of the banking
industry.
The FDIC invites the public to comment on whether the proposed rule
reduces regulatory burden and to provide the FDIC with suggested
alternatives to those set forth in the proposed rule. The FDIC will
carefully review all comments received prior to issuing the final
regulation.
VII. Paperwork Reduction Act
The collections of information contained in this proposed rule and
identified below have been submitted to the Office of Management and
Budget (OMB) for review and approval in accordance with the
requirements of the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C.
3501 et seq.). Comments are invited on: (a) Whether the collection of
information is necessary for the proper performance of the FDIC's
functions, including whether the information has practical utility; (b)
the accuracy of the estimates of the burden of the information
collection; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; and (d) ways to minimize the burden of
the information collection on respondents, including through the use of
automated collection techniques or other forms of information
technology.
Comments should be addressed to the Office of Information and
Regulatory Affairs, Office of Management and Budget, Attention: Desk
Officer Alexander Hunt, New Executive Office Building, Room 3208,
Washington, DC 20503, with copies of such comments to Steven F. Hanft,
Assistant Executive Secretary (Regulatory Analysis), Federal Deposit
Insurance Corporation, Room F-4080, 550 17th Street NW, Washington, DC
20429. All comments should refer to ``Part 303.'' OMB is required to
make a decision concerning the collections of information contained in
the proposed regulations between 30 and 60 days after the publication
of this document in the Federal Register. Therefore, a comment to OMB
is best assured of having its full effect if OMB receives it within 30
days of this publication. This does not affect the deadline for the
public to comment to the FDIC on the proposed regulation.
Subpart C (Establishment and Relocation of Domestic Branches and
Offices)
Section 18(d)(1) of the FDI Act (12 U.S.C. 1828(d)(1)) provides
that no state nonmember insured bank shall establish and operate any
new domestic branch or move its main office or any such branch from one
location to another without the prior written consent of the FDIC after
considering the factors enumerated in section 6 of the FDI Act (12
U.S.C. 1816). Subpart C of the proposed regulation sets forth the
application requirements and procedures for insured state nonmember
banks to establish a branch, relocate a main office, and relocate a
branch subject to the approval by the FDIC. The information collected
is used by the FDIC to evaluate the statutory factors and determine
whether to grant consent. This collection of information has been
approved by OMB under clearance number 3064-0070 through May 31, 1998.
Public comment regarding this collection is being solicited because the
proposed regulation would modify the OMB-approved collection by
addressing the establishment and relocation of interstate branches and
deleting remote service facilities from the section 18(d) application
requirements.
Estimate of Annual Burden
Number of applications: 1,750.
Number of hours to prepare an application: 5.
Total annual burden hours: 8,750.
Subpart M (Other Filings); Section 303.242 (Exercise Trust Powers)
Section 333.2 of the FDIC's regulations (12 CFR 333.2) prohibits
any insured state nonmember bank from changing the general character of
its business without the prior written consent of the FDIC. The
exercise of trust powers by a bank is usually considered to be a change
in the general character of a bank's business if the bank did not
exercise those powers previously because trust powers create a new
fiduciary relationship. Therefore, unless a bank is currently
exercising trust powers, it must file a formal application to obtain
the FDIC's written consent to exercise trust powers. Section 303.242 of
the proposed regulation sets forth the application procedures relating
to the FDIC's prior approval to exercise trust powers. Each application
submitted by a bank is evaluated by the FDIC to verify the
qualifications of bank management to administer a trust department to
ensure that the bank's financial condition will not be jeopardized as a
result of trust operations. This collection of information has been
approved by OMB under clearance number 3064-0025 through December 31,
1997. Public comment is being solicited because the collection is being
modified to simplify and clarify the ``Application for Consent to
Exercise Trust Powers'' form, and to eliminate a number of items of
information required under the current form. In addition, the
collection is being modified so that an ``eligible depository
institution'' as defined in Sec. 303.2(r) of the proposal will file an
abbreviated application and will receive expedited processing by the
FDIC.
Estimate of Annual Burden
Number of applications from ``eligible depository institutions'':
31.
Average number of hours to prepare an application: 8.
Annual burden hours: 248.
Number of applications from institutions that do not qualify as
``eligible depository institutions'': 5.
Average number of hours to prepare an application: 24.
Annual burden hours: 120.
Total number of applications: 36.
Total annual burden hours: 368.
Other Collections of Information
Proposed part 303 addresses collections of information in addition
to subpart C and subpart M collections discussed above. Subpart B
(Deposit Insurance) addresses a collection approved by OMB under
clearance number 3064-0001 which expires on July 31, 2000. Subpart D
(Mergers) addresses a collection approved by OMB under clearance number
3064-0015 which expires on September 30, 1998. The merger application
collection will be the subject of an interagency solicitation of public
comment concerning the PRA aspects of a single, interagency form for
affiliated and nonaffiliated mergers. Subpart E (Change in Bank
Control) addresses a collection approved by OMB under clearance number
3064-0019 which expires on January 31, 2000. Subpart F (Change of
Director or Senior Executive Officer) addresses a collection approved
by OMB under clearance number 3064-0097 which expires on January 31,
2000. Subpart G (Activities and Investments of Insured State Banks),
addresses a collection approved by OMB under clearance number 3064-
0111, and Subpart H (Filings by Savings Associations), addresses a
collection approved under clearance number 3064-0104. Public comment
about these two collections was sought in a notice of proposed
rulemaking regarding 12 CFR part 362, ``Activities of Insured State
Banks and Insured Savings Associations.'' 62 FR 47969, Sept. 12, 1997.
Subpart I (Mutual-to-Stock Conversions) addresses a collection
approved by OMB under clearance number 3064-0117 which expires on
[[Page 52831]]
July 31, 2000. Subpart J (Foreign Bank Activities) addresses two
collections approved by OMB under clearance numbers 3064-0114 and 3064-
0125, both of which expire on July 31, 2000. Subpart K (Prompt
Corrective Action) addresses a collection approved by OMB under
clearance number 3064-0115 which expires on July 31, 1999. Subpart L
(Section 19) addresses a collection approved by OMB under clearance
number 3064-0018 which expires on July 31, 2000. Subpart M (Other
Filings) Sec. 303.241 (Reduce or retire capital stock or capital debt
instruments) addresses a collection approved by OMB under clearance
number 3064-0079 which expires on October 31, 1997. Public comment was
sought about this collection on July 29, 1997 (62 FR 40525). A
submission to renew 3064-0079 without change will be made to OMB in
early October, 1997 at which time further comment will be solicited.
Subpart M (Other Filings) Sec. 303.243 (Brokered deposits) addresses a
collection approved by OMB under clearance number 3064-0099 which
expires on August 31, 1998.
The FDIC has reviewed these other collections of information and
has concluded that either the proposed part 303 does not change the
collection of information as approved by OMB in a way that requires
that public comment be solicited or that the proposed changes have
already been incorporated into recent OMB PRA submissions. Public
comment and OMB review of these collections will occur as part of the
regular cycle of review under the PRA. Nonetheless, the FDIC welcomes
comment about the PRA aspects of this proposed regulation or any
subpart of it. Comment specifically about PRA related issues should
identify the Paperwork Reduction Act and any particular subpart and/or
collection for which consideration is desired.
VIII. Derivation Table
This table directs readers to the provision(s) of the former
regulation, if any, upon which the provision in the proposed rule is
based.
------------------------------------------------------------------------
Proposed Provision Original Provision Comments
------------------------------------------------------------------------
303.1......................... 303.0(a)............. Revised.
303.2......................... 303.0(b)............. No change.
(a)........................... 303.0(b)(13)......... No change.
(b)........................... 303.0(b)(29)......... No change.
(c)........................... 303.0(b)(30)......... Revised.
(d)........................... 303.0(b)(25)......... No change.
(e)........................... ..................... Added.
(f)........................... ..................... Added.
(g)........................... 303.0(b)(12)......... Revised.
(h)........................... 303.0(b)(6).......... No change.
(i)........................... 303.0(b)(26)......... No change.
(j)........................... ..................... Added.
(k)........................... 303.0(b)(1).......... No change.
(l)........................... 303.0(b)(30)......... Revised.
(m)........................... ..................... Added.
(n)........................... 303.0(b)(8).......... Revised.
(o)........................... 303.0(b)(3).......... No change.
(p)........................... 303.0(b)(2).......... No change.
(q)........................... 303.0(b) (4), (5).... No change.
(r)........................... ..................... Added.
(s)........................... ..................... Added.
(t)........................... ..................... Added.
(u)........................... ..................... Added.
(v)........................... 303.0(b)(14)......... No change.
(w)........................... ..................... Added.
303.2(x)...................... ..................... Added.
(y)........................... ..................... Added.
(z)........................... 303.0(b)(24)......... No change.
(aa).......................... 303.0(b)(17)......... No change.
(bb).......................... 303.0(b)(15)......... No change.
(cc).......................... 303.0(b)(11)......... No change.
(dd).......................... 303.0(b)(7), (9)..... Revised.
(ee)(1)....................... 303.0(b)(16)......... No change.
(2)........................... 303.0(b)(18)......... No change.
(3)........................... 303.0(b)(19)......... No change.
(4)........................... 303.0(b)(20)......... No change.
(5)........................... 303.0 b(21).......... No change.
(6)........................... 303.0 b(22).......... No change.
(ff).......................... 303.0(b)(31)......... No change.
(gg).......................... 303.0(b)(27)......... Amended.
(hh).......................... 303.0(b)(28)......... Amended.
303.3......................... 303.0(a)............. Revised.
303.4......................... 303.6(l)............. Added.
303.5......................... ..................... Added.
303.6......................... 303.6(b)............. Revised.
303.7(a)...................... 303.6 (a), (c)....... Revised.
(b)........................... 303.6(f)............. Revised.
(c)........................... ..................... Added.
(d)........................... ..................... Added.
303.8(a)...................... 303.6(g)(1), (2)..... Revised.
(b)........................... 303.6(g)(3).......... Revised.
303.9(a)...................... 303.6(f)(3).......... Revised.
[[Page 52832]]
303.9(b)(1)................... ..................... Added.
(2)........................... 303.6(f)(4).......... Revised.
(3)........................... 303.6(f)(5).......... No change.
(4)........................... ..................... Added.
303.10(a)..................... ..................... Added.
(b), (c)...................... 303.6(h)............. Revised.
(d)........................... ..................... Added.
(e)........................... 303.6(i)............. Revised.
(f)........................... 303.6(i)(2).......... Revised.
(g)........................... 303.6(j)(5).......... Revised.
(h)........................... 303.6(j)(1-4)........ Revised.
(i)........................... 303.6(j)(6).......... Revised.
(j)........................... 303.6(h)(3).......... Revised.
(k)........................... 303.6(k)............. Revised.
(l)........................... 303.6(l)............. Revised.
(m)........................... 303.6(m)............. Revised.
303.11(a)..................... 303.6(d)............. Revised.
(b)........................... ..................... Added.
(c)........................... ..................... Added.
(d)........................... ..................... Added.
(e)........................... ..................... Added.
(f)........................... 303.6(e)............. Revised.
(g)........................... ..................... Added.
303.12(a)..................... 303.11(a)............ Added.
(b)........................... ..................... Revised.
(c), (d)...................... 303.10(a)............ Revised.
(e), (f)...................... 303.11(a)(1)......... Revised.
(g)........................... ..................... Added.
303.13........................ 303.8(g)............. No change.
303.20........................ 303.1................ Revised.
303.21........................ 303.1................ Revised.
303.22........................ ..................... Added.
303.23(a)..................... 303.6(f)(1).......... Revised.
(b)........................... 303.6(f)(1)(ii)...... No change.
303.24........................ ..................... Added.
303.25........................ ..................... Added.
303.26(a)(1).................. 303.7(d)(1).......... Revised.
303.26(a)(2).................. 303.7(f)(1)(vi)...... Revised.
303.26(b)..................... 303.7(d)(2).......... Revised.
(c)........................... 303.7(d)(3).......... Revised.
(d)........................... 303.7(b)(4).......... Revised.
303.27........................ 303.10(b)(2)......... Revised.
303.40(a)..................... 303.2................ Amended
(b),(c),(d)................... ..................... Added.
303.41(a)..................... 303.2(a) (footnote 2) Revised.
(b)........................... 303.2(a)............. No change.
(c),(d),(e)................... ..................... Added.
303.42(a), (b), (c), (d)...... 303.2(a)............. Revised.
303.43(a), (b)................ ..................... Added.
303.44(a)..................... 303.6(f)(1).......... Revised.
(b)........................... 303.6(f)(3), (4)..... Revised.
(c)........................... 303.6(f)(2).......... Revised.
303.45(a), (b), (c)........... ..................... Added.
303.46(a), (b), (c), (d)...... 303.7(a)............. Revised.
303.60........................ ..................... Added.
303.61(a)..................... 303.3(a), (b)........ Revised.
(b)........................... 303.7(f)(1)(v)....... Revised.
(c)........................... 303.7(f)(1)(v)....... Revised.
(d)........................... 303.3(d)............. Revised.
(e)........................... ..................... Added.
303.62(a)..................... 303.3................ Revised.
(b)........................... ..................... Added.
303.63(a)..................... 303.3(a), (e)........ Revised.
(b)........................... 303.3(a)............. Revised.
(c)........................... ..................... Added.
(d)........................... 303.3(d)............. Revised.
303.64(a), (b)................ ..................... Added.
303.65(a), (b), (c), (d)...... 303.6(f)(1), (3)..... Revised.
303.66(a)(1)................. 303.7(b), (f)........ Revised.
(2), (3)...................... ..................... Added.
(b)........................... 303.7(b)............. Revised.
(c)........................... 303.7(b)(2), (5)..... Revised.
(d)........................... 303.7(f)(v), (vi).... Revised.
(e)........................... 303.10(b)(i), (iii), Revised.
(iv).
[[Page 52833]]
(f)........................... 303.7(b)(3).......... Revised.
(g)........................... 303.8(e)............. Revised.
303.67........................ 303.10(b)(1)......... Revised.
303.80........................ ..................... Added.
303.81(a)..................... 303.4(a)............. Revised.
(b)........................... ..................... Added.
(c)........................... 303.4(a) footnote 3.. No change.
(d)........................... 303.4(a) footnote 4.. No change.
303.82(a)..................... ..................... Added.
(b)........................... 303.4(a)............. Revised.
(c)........................... ..................... Added.
(e), (d)...................... 303.4(a)............. Revised.
303.83(a)(1) thru (b)(1)...... 303.4(c)............. Revised.
(b)(2), (3)................... ..................... Added.
303.84(a)..................... 303.4(b)(1).......... Revised.
(b)........................... 303.4(b)(5).......... No change.
303.85(a), (b), (c)........... ..................... Added.
303.86(a)(1), (2)............. 303.4(b)(2)(i)....... Revised.
(a)(3)........................ ..................... Added.
(a)(4), (5)................... 303.4(b)(3)(ii)...... Revised.
(a)(6)........................ 303.4(b)(6).......... Revised.
303.87(a)..................... 303.7(c)............. Revised.
303.100....................... ..................... Added.
303.101(a).................... ..................... Added.
(b)........................... 303.14(a)(3)......... Revised.
(c)........................... 303.14(a)(4)......... Revised.
303.102(a).................... 303.14(b)............ Revised.
(b)........................... 303.14(b)............ No change.
(c)........................... 303.14(c)(2)......... No change.
303.103(a).................... 303.14(c)(1)......... Revised.
(b)........................... 303.14(c)(4)......... Revised.
(c)........................... 303.14(c)(2)......... Revised.
(d)........................... 303.14(d)............ Revised.
303.104....................... 303.14(e)............ Revised.
303.160....................... ..................... Added.
303.161....................... 303.15(a)............ Revised.
303.162....................... 303.15(a), (b)....... Revised.
303.163(a).................... 303.15(c)(1)......... No change.
(b)........................... 303.15(c)(2)......... No change.
(c), (d),(e),(f).............. 303.15(d)............ No change.
303.164....................... ..................... Added.
303.180....................... ..................... Added.
303.181....................... ..................... Added.
303.182....................... 303.2................ Revised.
303.183....................... 303.5(d), Revised.
303.7(f)(2)(ii).
303.184....................... 303.2, 303.6, 303.7.. Revised.
303.185....................... ..................... Added.
303.186....................... 346.6(b)............. Revised.
303.187....................... 346.101.............. Revised.
303.200....................... ..................... Added.
303.201....................... 303.5(e)............. No change.
303.202....................... 303.5(e)............. No change.
303.203....................... 303.5(e)(1).......... No change.
303.204....................... 303.5(e)(2).......... No change.
303.205....................... 303.5(e)(3).......... No change.
303.206....................... 303.5(e)(4).......... No change.
303.207....................... 303.5(e)(5).......... Amended.
303.208....................... 303.7(f)(ix)......... No change.
303.220....................... ..................... Added.
303.221....................... ..................... Added.
303.222....................... ..................... Added.
303.223....................... ..................... Added.
303.224(a),(b),(c),(d)........ 303.7(e)............. Amended.
(e)........................... 303.10(b)(3)......... No change.
303.240....................... ..................... Added.
303.241(a).................... ..................... Added.
(b),(c),(d)................... 303.5(b)............. Revised.
(e),(f),(g)................... ..................... Added.
(h)........................... 303.7(f)(1)(iii)..... No change
303.242(a).................... ..................... Added.
(b),(c),(d)................... 303.5(b)............. Revised.
(e)(f)........................ ..................... Added
(g)(h)........................ 303.7(a)(2).......... No change
303.243(a),(b),(c)............ 337.6(d),(e)......... No change.
[[Page 52834]]
(d),(e),(f)................... ..................... Added.
(g)........................... 337.6 (c),(e)........ No change.
(h)........................... 337.6 (e), Revised.
303.7(f)(1)(viii).
303.244(a), (b), (c), (d), (e) 359.................. Revised.
(f)........................... 303.7(g)............. No change.
303.245....................... ..................... Added.
303.246(a),(b),(c),(d)........ 303.5(a)............. Revised.
(e)........................... ..................... Added.
(f)........................... 303.7(f)(4).......... Revised.
303.247....................... 303.3(c)............. Revised.
303.248....................... 303.5(c)............. Revised.
303.249....................... ..................... Added.
303.250(a),(b),(c),(d),(e).... ..................... Added.
(f)........................... 303.7(f)(14)(iv)..... Revised.
303.251(a),(b),(c),(d),(e).... ..................... Added.
(f)........................... 303.8(a)............. No change.
303.260....................... ..................... Added.
303.261....................... 303.9(a)............. Revised.
303.262....................... ..................... Added.
303.263....................... 303.9(b)............. Revised.
303.264....................... 303.9(c)............. Revised.
303.265....................... 303.9(d)............. Revised.
303.266....................... 303.9(e)............. Revised.
303.267....................... 303.9(f)............. Revised.
303.268....................... ..................... Added.
303.269....................... 303.9(g)............. Revised.
303.270....................... ..................... Added.
303.271....................... 303.9(h)............. Revised.
303.272....................... 303.9(i)............. Revised.
303.273....................... 303.9(k)............. Revised.
303.274....................... 303.9(l)............. Revised.
303.275....................... 303.9(m)............. Revised.
303.276....................... 303.9(n)............. Revised.
303.277....................... 303.9(o)............. Revised.
303.278....................... 303.10(c)............ Revised.
------------------------------------------------------------------------
List of Subjects
12 CFR Part 303
Administrative practice and procedure, Authority delegations
(Government agencies), Bank deposit insurance, Banks, banking, Bank
merger, Branching, Foreign branches, Foreign investments, Golden
parachute payments, Insured branches, Interstate branching, Reporting
and recordkeeping requirements.
12 CFR Part 337
Banks, banking, Reporting and recordkeeping requirements, Savings
associations, Securities.
12 CFR Part 341
Banks, banking, Reporting and recordkeeping requirements,
Securities.
12 CFR Part 346
Bank deposit insurance, Foreign banking, Reporting and
recordkeeping requirements.
12 CFR Part 348
Antitrust, Banks, banking, Holding companies.
12 CFR Part 359
Banks, banking, Golden parachute payments, Indemnity payments.
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
proposes to amend 12 CFR chapter III as follows:
1. Part 303 is revised to read as follows:
PART 303--FILING PROCEDURES AND DELEGATIONS OF AUTHORITY
Sec.
303.0 Scope.
Subpart A--Rules of General Applicability
Sec.
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 General rules governing delegations of authority.
303.13 Delegations of authority to officials in the Division of
Supervision and the Division of Compliance and Consumer Affairs.
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 Delegation of authority.
303.27 Authority retained by the FDIC Board of Directors.
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 Delegation of authority.
Subpart D--Mergers
303.60 Scope.
303.61 Definitions.
303.62 Transactions requiring prior approval.
303.63 Filing procedures.
303.64 Processing.
[[Page 52835]]
303.65 Public notice requirements.
303.66 Delegation of authority.
303.67 Authority retained by the FDIC Board of Directors.
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 Delegation of authority.
Subpart F--Change of Director or Senior Executive Officer
303.100 Scope.
303.101 Definitions.
303.102 Filing procedures.
303.103 Processing and waiver of prior notice.
303.104 Delegation of authority.
Subpart G--Activities and Investments of Insured State Banks [Reserved]
Subpart H--Filings by Savings Associations [Reserved]
Subpart I--Mutual-to-Stock Conversions
303.160 Scope.
303.161 Filing procedures.
303.162 Content of notice.
303.163 Processing.
303.164 Delegation of authority.
Subpart J--Foreign Bank Activities
303.180 Scope.
303.181 Definitions.
303.182 Establishing, moving or closing a foreign branch of a state
nonmember bank.
303.183 Acquisition of stock of foreign banks or other financial
entities by an insured state nonmember bank.
303.184 Moving an insured branch of a foreign bank.
303.185 Mergers involving an insured branch of a foreign bank.
303.186 Exemptions from insurance requirement for a state branch of
a foreign bank.
303.187 Approval of an insured state branch of a foreign bank to
conduct activities not permissible for federal branches.
Subpart K--Prompt Corrective Action
303.200 Scope.
303.201 Filing procedures.
303.202 Processing.
303.203 Applications for capital distribution.
303.204 Applications for 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 Delegation of authority.
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 Delegation of authority.
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 Modification of conditions.
303.251 Extension of time.
Subpart N--Enforcement Delegations
303.260 Scope.
303.261 Issuance of notification to primary regulator under section
8(a) of the FDI Act (12 U.S.C. 1818(a)).
303.262 Issuance of notice of intention to terminate insured status
under section 8(a) of the FDI Act (12 U.S.C. 1818(a)).
303.263 Cease-and-desist actions under section 8(b) of the FDI Act
(12 U.S.C. 1818(b)).
303.264 Temporary cease-and-desist orders under section 8(c) of the
FDI Act (12 U.S.C. 1818(c)).
303.265 Removal and prohibition actions under section 8(e) of the
FDI Act (12 U.S.C. 1818(e)).
303.266 Suspension and removal action under section 8(g) of the FDI
Act (12 U.S.C. 1818(g)).
303.267 Termination of insured status under section 8(p) of the FDI
Act (12 U.S.C. 1818(p)).
303.268 Termination of insured status under section 8(q) of the FDI
Act (12 U.S.C. 1818(q)).
303.269 Civil money penalties.
303.270 Notices of assessment under section 5(e) of the FDI Act (12
U.S.C. 1815(e)).
303.271 Prompt corrective action directives and capital plans under
section 38 of the FDI Act (12 U.S.C. 1831o) and part 325 of this
chapter.
303.272 Investigations under section 10(c) of the FDI Act (12
U.S.C. 1820(c)).
303.273 Unilateral settlement offers.
303.274 Acceptance of written agreements.
303.275 Modifications and terminations of enforcement actions and
orders.
303.276 Enforcement of outstanding enforcement orders.
303.277 Compliance plans under section 39 of the FDI Act (12 U.S.C.
1831p-1) (standards for safety and soundness) and part 308 of this
chapter.
303.278 Enforcement matters where authority is not delegated.
Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817, 1818, 1819,
(Seventh and Tenth), 1820, 1828, 1831e, 1831p-l, 1835a, 3104, 3105,
3108; 15 U.S.C. 1601-1607.
Sec. 303.0 Scope.
(a) This part generally describes the procedures to be followed by
both the FDIC and applicants with respect to applications, requests, or
notices required to be filed by statute or regulation. Additional
details concerning processing are explained in related FDIC statements
of policy. This part also sets forth delegations of authority from the
FDIC's Board of Directors to the Directors of the Division of
Supervision (DOS), the Division of Compliance and Consumer Affairs
(DCA), the General Counsel of the Legal Division, the Executive
Secretary, and, in some cases, their designees to act on certain
applications, notices, requests, and enforcement matters.
(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);
(4) 12 CFR part 348--Management Official Interlocks (Exemption
request).
Subpart A--Rules of General Applicability
Sec. 303.1 Scope.
Subpart A prescribes the general procedures for submitting
applications, notices, and requests (collectively, ``filings'') to the
FDIC which are required by statute or regulation. This subpart also
prescribes the procedures to be followed by the FDIC, applicants and
interested parties during the process of considering a filing,
including public notice and comment. This subpart further explains the
availability of expedited processing for eligible depository
institutions (defined in Sec. 303.2(r)). Finally, this subpart sets
forth general principles governing delegations of authority by the
FDIC's Board of Directors.
Sec. 303.2 Definitions.
For purposes of this part:
[[Page 52836]]
(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 Reports 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
deputy regional director (DCA) 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 deputy regional
director (DOS) 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, appropriate FDIC regional office,
appropriate regional director, appropriate deputy regional director,
appropriate regional counsel mean, respectively, the FDIC region, and
the FDIC regional office, regional director, deputy regional director,
and regional counsel, 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 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; 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 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.
(h) Associate director means any associate director of the Division
of Supervision (DOS) or the Division of Compliance and Consumer Affairs
(DCA) or, in the event such titles become obsolete, any official of
equivalent authority within the respective divisions.
(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, 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 (DOS) or the Deputy Director of the Division of Compliance
and Consumer Affairs (DCA) or, in the event such titles become
obsolete, any official of equivalent or higher authority within the
respective divisions.
(n) Deputy regional director means any deputy regional director of
the Division of Supervision (DOS) or the Division of Compliance and
Consumer Affairs (DCA) or, in the event such titles become obsolete,
any official of equivalent authority within the same FDIC region of DOS
or DCA.
(o) DCA means the Division of Compliance and Consumer Affairs or,
in the event the Division of Compliance and Consumer Affairs is
reorganized, such successor division.
(p) DOS means the Division of Supervision or, in the event the
Division of Supervision is reorganized, such successor division.
(q) Director means the Director of the Division of Supervision
(DOS) or the Director of the Division of Compliance and Consumer
Affairs (DCA) or, in the event such titles become obsolete, any
official of equivalent or higher authority within the respective
divisions.
(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;
(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, 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 of assessment of civil money penalties means a notice of
assessment of civil money penalties, findings of fact and conclusions
of law, and order to pay issued pursuant to sections 7(a)(1), 7(j)(15),
8(i) or 18(h) of the Act (12 U.S.C. 1817(a)(1), 1817(j)(15), 1818(i),
or 1828(h)), section 106(b) of the Bank Holding Company Act (12 U.S.C.
1972), section 910(d) of the International Lending Supervision Act of
1983 (12 U.S.C. 3909), or any other provision of law providing for the
assessment of civil money penalties by the FDIC.
[[Page 52837]]
(aa) Notice of charges means a notice of charges and of hearing
setting forth the allegations of unsafe or unsound practices or
violations and fixing the time and place of the hearing issued under
section 8(b) of the Act (12 U.S.C. 1818(b)).
(bb) 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)).
(cc) Regional counsel means a regional counsel of the Legal
Division or, in the event the title becomes obsolete, any official of
equivalent authority within the Legal Division. The authority delegated
to a regional counsel may be exercised, when confirmed in writing by
the regional counsel, by a deputy regional counsel, or any official of
equivalent or higher authority in the Supervision and Legislation
Branch of the Legal Division.
(dd) Regional director means any regional director in the Division
of Supervision (DOS) or the Division of Compliance and Consumer Affairs
(DCA), or in the event such titles become obsolete, any official of
equivalent authority within the respective divisions.
(ee) Section 8 orders:
(1) Section 8(a) order means an order terminating the insured
status of a depository institution under section 8(a) of the Act (12
U.S.C. 1818(a)).
(2) Section 8(b) order, cease-and-desist order means a final order
to cease and desist issued under section 8(b) of the Act (12 U.S.C.
1818(b)).
(3) Section 8(c) order, temporary cease-and-desist order means a
temporary order to cease and desist issued under section 8(c) of the
Act (12 U.S.C. 1818(c)).
(4) Section 8(e) order means a final order of removal or
prohibition issued under section 8(e) of the Act (12 U.S.C. 1818(e)).
(5) Section 8(e)(3) order, temporary order of suspension means a
temporary order of suspension or prohibition issued under section
8(e)(3) of the Act (12 U.S.C. 1818(e)(3)).
(6) Section 8(g) order means an order of suspension or order of
prohibition issued under section 8(g) of the Act (12 U.S.C. 1818(g)).
(ff) Standard conditions means the conditions that any FDIC
official acting under delegated authority may impose as a matter of
routine 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
applicable 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 said 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
Sec. 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.
(gg) Tier 1 capital shall have the same meaning as provided in
Sec. 325.2(t) of this chapter (12 CFR 325.2(t)).
(hh) Total assets shall have the same meaning as provided in
Sec. 325.2(v) of this chapter (12 CFR 325.2(v)).
Sec. 303.3 General filing procedures.
Unless stated otherwise, filings should be submitted to the
appropriate regional director (DOS). Forms and instructions for
submitting filings may be obtained from any FDIC regional office (DOS).
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 specific 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 Board of Directors, Directors of (DOS) or (DCA), their
associate directors, or the appropriate regional director or
appropriate deputy regional director (DOS) or (DCA) acting under
delegated authority 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 or other business combination, 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 (mergers), E (change in bank control), and J (foreign
bank activities).
(b) Confirmation of publication. The applicant shall mail or
otherwise deliver a copy of the newspaper notice to the appropriate
regional director (DOS) 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, 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, include the current and
proposed address of the branch. 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, the name(s) of the acquiring parties.
In the case of an application to relocate an insured branch of a
foreign bank, include the
[[Page 52838]]
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 (DOS);
(v) The address of the appropriate FDIC regional office (DOS) where
comments may be sent (the same location as that 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 regional office and are available for public inspection
during regular business hours.
(2) Alternatively, paragraphs (b)(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 (DOS) of the
Federal Deposit Insurance Corporation at its regional office [insert
address of regional office]. If any person desires to protest the
granting of this application, he or she has a right to do so if he
or she files a written comment with the regional director by the
[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 in the regional office and are available
for public inspection during regular business hours.
(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 and state the closing date of the longest public comment period
that shall apply to all of the related transactions.
(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 both the FDIC and, if
applicable, the other federal or state banking authority.
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. 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 regional director. The public
file will be produced for review not more than one business day after
receipt by the regional office. The FDIC may impose a fee for
photocopying in accordance with Sec. 309.5(c) of this chapter and with
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
would 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. 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) to
the FDIC, Office of the Executive Secretary, 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 (DOS) during the comment period.
(b) Comment period. (1) General. Consult specific subparts of this
part for the comment period applicable to a particular filing.
(2) Extension. The appropriate regional director or deputy regional
director (DOS) 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 appropriate regional director or deputy regional director
(DOS) determines that other good cause exists.
(3) Solicitation of comments. Whenever appropriate, the regional
director (DOS) 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 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 or consolidation 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 default 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)); and
(5) Any other purpose or matter which the FDIC Board of Directors
in its sole discretion deems appropriate.
(b) Hearing requests. Before the end of the comment period, any
person may submit to the appropriate regional director (DOS) a written
request for a hearing on a filing. The request must describe the nature
of the issues or facts to be presented and the reasons why written
submissions would be
[[Page 52839]]
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 regional director (DOS) 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 regional director (DOS)
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 that is not appealable to
the Board of Directors.
(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 the applicant, to the
person requesting the hearing, and to anyone else requesting a copy.
(2) Presiding officer. The FDIC shall appoint a presiding officer
to conduct the hearing, who will usually be the appropriate regional
director (DOS). The presiding officer is responsible for all procedural
questions not governed by this Sec. 303.10.
(f) Participation in the hearing. Any person who wishes to appear
(participant) shall notify the appropriate regional director (DOS) 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 (DOS), 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 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) 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 (DOS) 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 appropriate regional
director (DOS) or (DCA) may hold separate meetings with each of the
participants.
(k) Disposition and notice thereof. 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.
(l) 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.
(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. Such
resolution shall be made available for public inspection and copying in
the Office of the Executive Secretary 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. Such resolution shall be made available for public
inspection and copying in the Office of the Executive Secretary 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) of this part will
receive expedited processing as specified in the appropriate subparts
of this part unless the appropriate regional director or deputy
regional director (DOS) chooses to remove the filing from expedited
processing for the reasons set forth in paragraph (c)(2) of this
section. Except for filings made pursuant to subpart J (foreign bank
activities), expedited processing will not be available for any filing
that the appropriate regional director (DOS) does not have delegated
authority to approve.
(2) Removal of filing from expedited processing. The appropriate
regional director or deputy regional director (DOS) may remove a filing
from expedited procedures 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 (DCA)
determines that the filing presents a significant CRA or compliance
concern;
(iii) For any filing, the appropriate regional director (DOS)
determines that the filing presents a significant supervisory concern,
or raises a significant legal or policy issue; or
[[Page 52840]]
(iv) For any filing, the appropriate regional director (DOS)
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 (DCA) that, although a depository institution may
have an institution-wide rating of satisfactory, a depository
institution's CRA rating is less than satisfactory in a state or multi-
state metropolitan statistical area (MSA), or a depository
institution's CRA performance is less than satisfactory in an 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 review procedures 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 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 petitions 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) through (5) of this section
shall apply. A decision to deny a request for a hearing is a final
agency determination that is not appealable to the Board of Directors
pursuant to Sec. 303.10(d) of this part.
(2) Filing procedures. Within 15 days of receipt of notice from the
FDIC that its filing has been denied, any applicant may file a petition
for reconsideration with the appropriate regional director (DOS), if
the filing initially was submitted to DOS, or the appropriate regional
director (DCA), if the filing initially was submitted to DCA.
(3) Content of filing. A petition for reconsideration must contain
the following information:
(i) A resolution of the board of directors of the applicant
authorizing filing of the petition, if the applicant is a corporation
or other entity, or a letter signed by the individual(s) filing the
petition, if the applicant is not a corporation or other entity;
(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) Delegation of authority. (i) Authority is delegated to the
Director and Deputy Director (DOS) and (DCA), as appropriate and, where
confirmed in writing by the appropriate Director, to an associate
director and the appropriate regional director and deputy regional
director, to grant a petition for reconsideration, after consultation
with the Legal Division.
(ii) Authority is delegated to the Director and Deputy Director
(DOS) and (DCA), as appropriate, to deny a petition for
reconsideration, after consultation with the Legal Division.
(iii) Notwithstanding paragraphs (F)(4) (i) and (ii) of
Sec. 303.11, no reconsideration of a filing that originally required
Legal Division concurrence may be acted upon without Legal Division
concurrence.
(5) Procedures for reconsideration of filings. If a petition for
reconsideration is granted, the filing will be reconsidered by:
(i) The Board of Directors, if the filing was originally denied by
the Board of Directors or denied by the Director or Deputy Director or
an associate director (DOS) or (DCA); or
(ii) The Director or Deputy Director (DOS) or (DCA), if the filing
was originally denied by a regional director or deputy regional
director.
(6) Final decision. Decisions made on a petition for
reconsideration by the Director or Deputy Director (DOS) or (DCA) are
final agency decisions and are not appealable to the Board of
Directors.
(g) Nullification of decision--(1) Material misrepresentation or
omission. If the FDIC subsequently becomes aware of any material
misrepresentation or omission after the agency has rendered a decision
on a filing, the FDIC may nullify its decision by providing written
notification to the applicant of the determination and the reason
therefor. Any person responsible for any 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) Material change in circumstances. If the FDIC is not informed
by the applicant of a subsequent material change in circumstances prior
to rendering a decision on a filing (for example, a material change in
a business plan, or the financial condition of the depository
institution), the FDIC may nullify its decision in the manner described
in paragraph (g)(1) of this section.
(3) Other nullifications. The FDIC may nullify any decision on a
filing that is contrary to law, regulation or FDIC policy, or granted
due to clerical or administrative error, or a material mistake of law
or fact.
Sec. 303.12 General rules governing delegations of authority.
(a) Scope. This section contains general rules governing the FDIC
Board of Director's delegations of authority under this chapter. These
principles are procedural in nature only and are not substantive
standards. All delegations of authority, confirmations, limitations,
revisions, and rescissions under this chapter must be in writing and
maintained with the Office of the Executive Secretary.
(b) Authority not delegated. Except as otherwise expressly
provided, the FDIC Board of Directors does not delegate its authority.
(1) The FDIC Board of Directors retains and does not delegate the
authority to act on agreements with foreign regulatory or supervisory
authorities, matters that would establish or change existing
Corporation policy, matters that might attract unusual attention or
publicity, or involve an issue of first impression notwithstanding any
existing delegation of authority.
(2) The FDIC Board of Directors retains the authority to act on any
filing or enforcement matter upon which any member of the Board of
Directors wishes to act, even if the authority to act on such filing or
enforcement matter has been delegated.
(c) Exercise of delegated authority not mandated. Any FDIC official
with delegated authority under this chapter may elect not to exercise
that authority.
(d) Action by FDIC officials. In matters where the FDIC Board of
Directors has neither specifically delegated nor retained authority,
FDIC officials may take action with respect to matters
[[Page 52841]]
which generally involve conditions or circumstances requiring prompt
action to protect the interests of the FDIC and to achieve flexibility
and expedition in its operations and the exercise of FDIC functions
under this part.
(e) Construction. The delegations of authority contained in this
chapter are to be broadly construed in favor of the existence of
authority in FDIC officials who act under delegated authority. Any
exercise of delegated authority by an FDIC official is conclusive
evidence of that official's authority.
(f) Written confirmations, limitations, revisions or rescissions.
Where the FDIC Board of Directors has delegated authority to the
Director (DOS), Director (DCA) or the General Counsel, or their
respective designees, each shall have the right to confirm, limit,
revise, or rescind any delegation of authority issued or approved by
them, respectively, to any subordinate official(s).
Sec. 303.13 Delegations of authority to officials in the Division of
Supervision and the Division of Compliance and Consumer Affairs.
(a) CRA protests. Where a CRA protest is filed and remains
unresolved, authority is delegated to the Director and Deputy Director
(DCA) and, where confirmed in writing by the Director, to an associate
director or the appropriate regional director or deputy regional
director to concur that approval of any filing subject to CRA is
consistent with the purposes of CRA.
(b) Adequacy of filings. Authority is delegated to the Director and
Deputy Director (DOS) and, where confirmed in writing by the Director,
to an associate director and the appropriate regional director and
deputy regional director, to determine whether a filing is
substantially complete for purposes of commencing processing.
(c) National Historic Preservation Act. Authority is delegated to
the Director and Deputy Director (DOS) and, where confirmed in writing
by the Director, to an associate director and the appropriate regional
director and deputy regional director, to enter into memoranda of
agreement pursuant to regulations of the Advisory Council on Historic
Preservation which implement the National Historic Preservation Act of
1966 (16 U.S.C. 470).
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 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 bank withdrawing from
membership in the Federal Reserve System and for interim institutions
chartered to facilitate a merger transaction. Related delegations of
authority are also set forth.
Sec. 303.21 Filing procedures.
(a) Applications for deposit insurance shall be filed with the
appropriate regional director (DOS). 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
office (DOS).
(b) 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 of this subpart. An interim
depository institution is defined as an institution formed or organized
solely for the purpose of facilitating a merger transaction which will
be reviewed by a responsible agency as defined in section 18(c)(2) of
the FDI Act.
(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
of this subpart.
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) of this part 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) of
this part.
(2) Under expedited processing, the FDIC will take action on an
application within 60 days of receipt of a substantially complete
application, or 20 days after publication, 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 as soon as
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 of this
part, 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 regional director (DOS). Comments by interested parties must be
received by the appropriate regional director (DOS) within 15 days
following the date of publication, unless the comment period has been
extended or reopened in accordance with Sec. 303.9(b)(2) of this part.
(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
failed depository institution, or to an interim depository institution
formed or organized solely to facilitate a merger transaction, or for a
request for continuation of federal deposit insurance by a state bank
withdrawing from membership in the Federal Reserve System.
Sec. 303.24 Application for deposit insurance for an interim
institution.
(a) Content of 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
regional director. The letter application should briefly describe the
transaction and contain a statement that deposit insurance is being
requested for an interim institution formed or organized solely for the
purpose of facilitating a merger transaction which will be reviewed by
a federal banking agency other than the FDIC and that the institution
will not open for business.
(b) Processing. An application for deposit insurance for an interim
depository institution will be
[[Page 52842]]
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 bank
must submit a letter application to the appropriate regional director
(DOS). A complete application shall consist of the following
information:
(1) A copy of the letter, and any attachments thereto, sent to the
Federal Reserve setting forth the bank's intention to terminate its
membership;
(2) A copy of the letter from the Federal Reserve 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 applicant
that its Board of Directors is willing to enter into a similar
supervisory agreement 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 appropriate
regional director (DOS) 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 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. 303.26 Delegation of authority.
(a) Proposed depository institutions. (1) Authority is delegated to
the Director and the Deputy Director (DOS) and, where confirmed in
writing by the Director, to an associate director and the appropriate
regional director and deputy regional director, to approve applications
for deposit insurance for proposed depository institutions. For the
Director, Deputy Director or associate director (DOS) to exercise this
authority, paragraphs (a)(1)(i) through (a)(1)(iv) of this section must
be satisfied and the applicant shall have agreed in writing to comply
with any conditions imposed by the delegate, other than those listed in
paragraph (d) of this section which may be imposed without the
applicant's consent. For the regional director or deputy regional
director (DOS) to exercise this authority, paragraphs (a)(1)(i) through
(a)(1)(v) of this section must be satisfied and the applicant shall
have agreed in writing to comply with any conditions imposed by the
delegate, other than those listed in paragraph (d) of this section
which may be imposed without the applicant's consent.
(i) The factors set forth in section 6 of the Act (12 U.S.C. 1816)
have been considered and favorably resolved;
(ii) No unresolved management interlocks, as prohibited by the
Depository Institution Management Interlocks Act (12 U.S.C. 3201 et
seq.), part 348 of this chapter or any other applicable implementing
regulation, exist;
(iii) The application is in conformity with the standards and
guidelines for the granting of deposit insurance established in the
FDIC statement of policy ``Applications for Deposit Insurance'' (2 FDIC
Law, Regulations and Related Acts (FDIC) 5349); and
(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; and
(v) No CRA protest as defined in Sec. 303.2(l) of this part has
been filed which remains unresolved or, where such a protest has been
filed and remains unresolved, the Director (DCA), Deputy Director
(DCA), an associate director (DCA) or the appropriate regional director
(DCA) or deputy regional director (DCA) concurs that approval is
consistent with the purposes of the CRA and the applicant agrees in
writing to any conditions imposed regarding the CRA.
(2) Authority is delegated to the Director and Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director and the appropriate regional director and deputy regional
director, to approve applications for deposit insurance filed by or on
behalf of proposed interim depository institutions formed or organized
solely for the purpose of facilitating a merger transaction which will
be reviewed by a responsible agency as defined in section 18(c)(2) of
the FDI Act.
(b) Operating noninsured depository institutions. Authority is
delegated to the Director and the Deputy Director (DOS) and, where
confirmed in writing by the Director, to an associate director and the
appropriate regional director and deputy regional director, to approve
applications for deposit insurance by operating noninsured depository
institutions. For the delegate to exercise this authority, the
following criteria must be satisfied and the applicant shall have
agreed in writing to comply with any condition imposed by the delegate,
other than those listed in paragraph (d) of this section which may be
imposed without the applicant's consent:
(1) The applicant is determined to be eligible for federal deposit
insurance for the class of institution to which the applicant belongs
in the state (as defined in 12 U.S.C. 1813(a)) in which the applicant
is located;
(2) The factors set forth in section 6 of the Act (12 U.S.C. 1816)
have been considered and favorably resolved;
(3) No unresolved management interlocks, as prohibited by the
Depository Institution Management Interlocks Act (12 U.S.C. 3201 et
seq.), part 348 of this chapter or any other applicable implementing
regulation, exist;
(4) The application is in conformity with the standards and
guidelines for the granting of deposit insurance to operating
noninsured depository institutions established in the FDIC policy
statement ``Applications for Deposit Insurance'' (2 FDIC Law,
Regulations and Related Acts (FDIC) 5349);
(5) Compliance with the CRA, the NEPA, the NHPA, and any applicable
related regulations, including 12 CFR part 345, has been considered and
favorably resolved; and
(6) No CRA protest as defined in Sec. 303.2(l) of this part has
been filed which remains unresolved or, where such a protest has been
filed and remains unresolved, the Director (DCA), Deputy Director
(DCA), an associate director (DCA) or the appropriate regional director
(DCA) or deputy regional director (DCA) concurs that approval is
consistent with the purposes of the CRA and the applicant agrees in
writing to any conditions imposed regarding the CRA.
(c) Continuation of deposit insurance upon withdrawing from
membership in the Federal Reserve System. Authority is delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate
[[Page 52843]]
director and the appropriate regional director and deputy regional
director to approve continuation of federal deposit insurance where the
applicant has agreed in writing to comply with any conditions imposed
by the delegate, other than the standard conditions defined in
Sec. 303.2(ff) of this part which may be imposed without the
applicant's written consent.
(d) Conditions that may be imposed under delegated authority.
Following are conditions which may be imposed by a delegate in
approving applications for deposit insurance without affecting the
authority granted under paragraphs (a) and (b) of this section:
(1) The applicant will provide a specific amount of initial paid-in
capital;
(2) With respect to a proposed depository institution that has
applied for deposit insurance pursuant to this subpart, the Tier 1
capital to assets leverage ratio (as defined in the appropriate capital
regulation and guidance of the institution's primary federal regulator)
will be maintained at not less than eight percent throughout the first
three years of operation and that an adequate allowance for loan and
lease losses will be provided;
(3) Any changes in proposed management or proposed ownership to the
extent of 10 or more percent of stock, including new acquisitions of or
subscriptions to 10 or more percent of stock shall be approved by the
FDIC prior to the opening of the depository institution;
(4) The applicant will adopt an accrual accounting system for
maintaining the books of the depository institution;
(5) Where applicable, deposit insurance will not become effective
until the applicant has been granted a charter as a depository
institution, has authority to conduct a depository institution
business, and its establishment and operation as a depository
institution have been fully approved by the appropriate state and/or
federal supervisory authority;
(6) Where deposit insurance is granted to an interim institution
formed or organized solely to facilitate a related transaction, deposit
insurance will only become effective in conjunction with consummation
of the related transaction;
(7) Where applicable, a registered or proposed bank holding
company, or a registered or proposed thrift holding company, has
obtained approval of the Board of Governors of the Federal Reserve
System or the Office of Thrift Supervision to acquire voting stock
control of the proposed depository institution prior to its opening;
(8) Where applicable, the applicant has submitted any proposed
contracts, leases, or agreements relating to construction or rental of
permanent quarters to the appropriate regional director for review and
comment;
(9) Where applicable, full disclosure has been made to all proposed
directors and stockholders of the facts concerning the interest of any
insider in any transactions being effected or then contemplated,
including the identity of the parties to the transaction and the terms
and costs involved. An insider is one who is or is proposed to be a
director, officer, or incorporator of an applicant; a shareholder who
directly or indirectly controls 10 or more percent of any class of the
applicant's outstanding voting stock; or the associates or interests of
any such person;
(10) The person(s) selected to serve as the principal operating
officer(s) shall be acceptable to the regional director;
(11) The applicant will have adequate fidelity coverage;
(12) The depository institution will obtain an audit of its
financial statements by an independent public accountant annually for
at least the first three years after deposit insurance is effective,
furnish a copy of any reports by the independent auditor (including any
management letters) to the appropriate FDIC regional office within 15
days after their receipt by the depository institution and notify the
appropriate FDIC regional office within 15 days when a change in its
independent auditor occurs; and
(13) Any standard condition defined in Sec. 303.2(ff) of this part.
Sec. 303.27 Authority retained by the FDIC Board of Directors.
Without limiting the Board of Director's authority, the Board of
Directors retains authority to deny applications for deposit insurance
and approve applications for deposit insurance where the applicant does
not agree in writing to comply with any condition imposed by the FDIC,
other than the standard conditions listed in Secs. 303.2(ff) and
303.26(d) of this part, which may be imposed without the applicant's
written consent.
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 and the delegation of authority for insured state
nonmember banks to establish a branch, relocate a main office, and
relocate a branch subject to the approval by the FDIC pursuant to
sections 13(f), 13(k), 18(d) and 44 of the FDI Act.
(b) Mergers. 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 (Mergers) 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 (Foreign Bank Activities) 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
(Mergers) 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 appropriate regional director (DOS) 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
[[Page 52844]]
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.
(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 regional director (DOS) on the date the notice required by
Sec. 303.44 of this subpart 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 intention to:
(i) Serve defined locations on a regular schedule; or
(ii) Be open at varying times and locations; or
(iii) A combination of paragraphs (b)(2)(i) and (b)(2)(ii) of this
section;
(3) Details concerning any involvement in the proposal by an
insider of the bank as defined in Sec. 303.2(u) of this part, 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;
(5) A statement as to whether or not the site is included in or is
eligible for inclusion in the National Register of Historic Places,
including a statement that clearance has been or will be obtained from
the State Historic Preservation Officer for purposes of complying with
applicable provisions of the NHPA;
(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 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, a statement that the
applicant has requested that the host state provide to the appropriate
regional director (DOS) written confirmation:
(i) That the applicant has complied with that state's filing
requirements; and
(ii) That the applicant has also submitted to the host state bank
supervisor a copy of the filing with the FDIC to establish and operate
a de novo branch.
(9) 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 of
this part. Applications pursuant to sections 38 and 18(d) of the FDI
Act (12 U.S.C. 1831o and 1828(d)) may be filed concurrently or as a
single application.
(d) Additional information. The appropriate regional director (DOS)
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) of this part 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) of this part. 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 in
Sec. 303.44 of this part; 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 application 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 as soon as
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(b) of this part
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 the main
office proposes to relocate.
(3) To relocate a branch. In the community in which the branch is
located.
[[Page 52845]]
(b) Public comments. Comments by interested parties must be
received by the appropriate regional director (DOS) 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) of this part.
(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 with 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 regional director (DOS) 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 regional director (DOS), 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 appropriate regional
director (DOS) 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, an application
shall be submitted to relocate the main office and to relocate or
establish a branch as appropriate. The appropriate regional director
(DOS) may waive the public notice requirements in instances where an
application presents no significant or novel policy, supervisory, CRA,
compliance or legal concerns. Such waiver will be granted only to a
redesignation within the applicant's home state.
(c) Expiration of approval. Approval of an application expires if a
branch has not commenced business or if a relocation has not been
completed within 18 months after date of approval.
Sec. 303.46 Delegation of authority.
(a) Approval of applications. (1) Where the applicant agrees in
writing to comply with any conditions imposed by the delegate, other
than the standard conditions defined in Sec. 303.2(ff) of this part
which may be imposed without the applicant's written consent, authority
is delegated to the Director and Deputy Director (DOS) and, where
confirmed in writing by the Director, to an associate director and the
appropriate regional director and deputy regional director, to approve
the applications listed in this paragraph (a)(1). For the Director,
Deputy Director or associate director (DOS) to exercise this authority,
paragraphs (c)(1) through (c)(4) and (c)(6) through (c)(7) of this
section must be satisfied. For the regional director or deputy regional
director (DOS) to exercise this authority, criteria in paragraphs (c)
(1)-(7) of this section must be satisfied.
(i) Establish a branch;
(ii) 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;
(iii) Relocate a main office; and
(iv) Relocate a branch; or
(2) Where the applicant does not agree in writing to comply with
any condition imposed by the delegate, authority is delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate director to approve the applications
listed in paragraph (a)(1) of this section.
(b) Denial of applications. (1) Authority is delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate director and the appropriate regional
director and deputy regional director, to deny an application to
establish a temporary branch.
(2) Authority is delegated to the Director and Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director to deny applications for consent to:
(i) Establish a branch;
(ii) 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;
(iii) Relocate a main office; and
(iv) Relocate a branch.
(c) Criteria for delegated authority. The following criteria must
be satisfied before the authority delegated in paragraph (a) of this
section may be exercised:
(1) The factors set forth in section 6 of the FDI Act (12 U.S.C.
1816) have been considered and favorably resolved except that this
criterion does not apply to applications to establish messenger
services and temporary branches;
(2) The applicant meets the capital requirements set forth in 12
CFR part 325 and the FDIC's ``Statement of Policy on Capital Adequacy''
(12 CFR part 325, appendix B) or agrees in writing to increase capital
so as to be in compliance with the requirements of 12 CFR part 325
before or at the consummation of the transaction which is the subject
of the filing, except that this criterion does not apply to
applications to establish messenger services and temporary branches, or
to relocate branches or main offices;
(3) Any financial arrangements which have been made in connection
with the proposed branch or relocation and which involve the
applicant's insiders are fair and reasonable in comparison to similar
arrangements that could have been made with independent third parties;
(4) Compliance with the CRA, the NEPA, the NHPA, and any applicable
related regulations, including 12 CFR part 345, has been considered and
favorably resolved;
(5) No CRA protest as defined in Sec. 303.2(l) of this part has
been filed which remains unresolved or, where such a protest has been
filed and remains unresolved, the Director (DCA), Deputy Director
(DCA), an associate director (DCA) or the appropriate regional director
(DCA) or deputy regional director (DCA) concurs that approval is
consistent with the purposes of the CRA and the applicant agrees in
writing to any conditions imposed regarding the CRA;
(6) An applicant with one or more existing branches in a state
other than the applicant's home state has not failed the credit needs
test in a host state under section 109 of the Riegle-Neal Interstate
Banking and Branching Efficiency Act of 1994 (12 U.S.C. 1835a).
(7) Additionally, for applications submitted 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:
(i) Receipt by the appropriate regional director (DOS) of the host
state's written confirmation that the applicant has complied with that
state's filing requirements and that the applicant also has submitted
to the host state bank supervisor a copy of its FDIC filing to
establish and operate a de novo branch;
(ii) Determination by the FDIC that the applicant is adequately
capitalized as of the date of the filing and will continue to be
adequately capitalized and adequately managed upon consummation of the
transaction;
(iii) Confirmation that the host state has in effect a law that
meets the requirements of section 18(d)(4)(A) of
[[Page 52846]]
the FDI Act (12 U.S.C. 1828(d)(4)(A)); and
(iv) Compliance with section 44(b)(3) of the FDI Act (12 U.S.C.
1831u(b)(3)); and
(8) Additionally, for applications submitted to relocate a main
office from one state to another where the applicant seeks to retain
branches in the state where the applicant's main office exists prior to
an interstate relocation of the main office, confirmation that the
filing meets the requirements of section 18(d)(3)(B) of the FDI Act (12
U.S.C. 1828(d)(3)(B)).
Subpart D--Mergers
Sec. 303.60 Scope.
This subpart sets forth the application requirements, procedures,
and delegations of authority for transactions subject to FDIC approval
under the Bank Merger Act, section 18(c) of the FDI Act (12 U.S.C.
1828(c)).
Sec. 303.61 Definitions.
For purposes of this subpart:
(a) Merger includes any transaction in which an insured depository
institution:
(1) 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) 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 transfers assets
to any noninsured bank or institution in consideration of the
assumption of liability for any portion of the deposits made in such
insured depository institution.
(b) Corporate reorganization means a merger 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 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 means a merger (other than a purchase and
assumption transaction) between an operating depository institution and
a newly-formed depository institution or corporation that will not open
for business and that exists solely for the purpose of facilitating a
corporate reorganization.
(d) Optional conversion (Oakar transaction) means a merger 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 surviving institution upon
consummation of a merger.
Sec. 303.62 Transactions requiring prior approval.
(a) Mergers. The following transactions require the prior written
approval of the FDIC under this subpart:
(1) Any merger, including any corporate reorganization, interim
merger, or optional conversion, in which the resulting institution is
to be an insured state nonmember bank; and
(2) Any merger, including any corporate reorganization or interim
merger, 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 mergers. Interstate mergers between insured banks
are subject to the provisions of section 44 of the FDI Act (12 U.S.C.
1831u). In the case of a merger that consists of the acquisition 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 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 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
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 (2 FDIC Law,
Regulations and Related Acts (FDIC) 5391).
(5) Undercapitalized institutions. Applications for a merger 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 of this
part. 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 regional director (DOS). The appropriate
forms and instructions, including instructions concerning notice to
depositors where applicable, may be obtained upon request from any DOS
regional office.
(b) Mergers. Applications for approval of mergers shall be
accompanied by copies of all agreements or proposed agreements relating
to the merger and any other information requested by the FDIC.
(c) Interim mergers. Applications for approval of interim mergers
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. Applications for optional conversions
shall include a statement that the proposed merger is a transaction
covered by section 5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)).
[[Page 52847]]
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) of this part 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) of this part.
(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 subject to the provisions of section
44 of the FDI Act (12 U.S.C. 1831u), 5 days after the FDIC confirms
that the applicant has satisfactorily complied with the filing
requirements of the resulting institution's host state.
(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) Qualifications.--(i) Criteria. The FDIC will process an
application using expedited procedures if:
(A) All parties to the merger are eligible depository institutions
as defined in Sec. 303.2(r) of this part; and
(B) Immediately following the merger, the resulting institution
will be ``well capitalized'' pursuant to subpart B of part 325 of this
chapter (12 CFR part 325).
(b) Standard processing. For those applications not processed
pursuant to the expedited procedures, the FDIC will provide the
applicant with written notification of the final action taken by the
FDIC on the application as soon as 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 must publish notice of the
proposed transaction on at least three occasions at approximately two-
week 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 30th day after the first publication or, if the newspaper does
not publish on the 30th day, on the newspaper's publication date that
is closest to the 30th day.
(b) Exceptions.--(1) Emergency requiring expeditious action. If the
FDIC determines that an emergency exists requiring expeditious action,
notice shall be published twice during a 10-day period. 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 10th day after the first publication or, if the
newspaper does not publish on the 10th day, on the newspaper's
publication date that is closest to the 10th 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, 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 of this part.
(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 section
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 regional
director (DOS) within 35 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 regional director within 10 days after the first
publication.
Sec. 303.66 Delegation of authority.
(a) General.--(1) Bank Merger Act approval. Subject to paragraphs
(a)(3) and (e) of this section, authority is delegated in paragraphs
(b), (c), and (d) of this section to the designated FDIC officials to
approve under the Bank Merger Act any application filed under this
subpart for approval of a merger for which the specified criteria are
satisfied.
(2) Interstate merger approval. With respect to an interstate
merger covered by section 44 of the FDI Act (12 U.S.C. 1831u), in
addition to the authority delegated to any official in paragraph (b),
(c), or (d) of this section to approve the merger under the Bank Merger
Act, authority is also delegated to such official to approve the merger
under section 44. This delegation is subject to paragraph (a)(3) of
this section and to the condition that the merger is eligible for FDIC
approval under section 44.
(3) Combined approvals. The delegations in paragraphs (a)(2), (b),
(c), and (d) of this section do not apply to an interstate bank merger
covered both by section 44 and by the Bank Merger Act, unless the
merger is being approved pursuant to delegated authority under both
section 44 and the Bank Merger Act.
(b) Basic delegation. Authority is delegated to the Director and
Deputy Director (DOS) and, where confirmed in writing by the Director,
to an associate director, and the appropriate regional director and
deputy regional director to approve applications under the Bank Merger
Act. For the Director, Deputy Director or associate director (DOS) to
exercise this authority, paragraphs (b) (1) through (4) and (b)(6) of
this section must be satisfied. For the regional director or deputy
regional director (DOS) to exercise this authority, paragraphs (b)(1)
through (b)(6) of this section must be satisfied.
(1) The resulting institution would meet all applicable capital
requirements upon consummation of the transaction (or, where the
resulting entity is an insured branch of a foreign bank, would be in
compliance with 12 CFR 346.20 upon consummation of the transaction);
and
(2) The factors set forth in section 18(c)(5) of the Act (12 U.S.C.
1828(c)(5)) have been considered and favorably resolved; and
(3)(i) The merging institutions do not operate in the same relevant
geographic market(s); or
(ii) In each relevant geographic market in which more than one of
the merging
[[Page 52848]]
institutions operate, the resulting institution upon consummation of
the merger would hold no more than 15 percent of the total deposits
held by banks and/or other depository institutions (as appropriate) in
the market; or
(iii) In each relevant geographic market in which more than one of
the merging institutions operate, the resulting institution upon
consummation of the merger would hold no more than 25 percent of the
total deposits held by banks and/or other depository institutions (as
appropriate) in the market, and the Attorney General has notified the
FDIC in writing that the proposed merger would not have a significantly
adverse effect on competition; and
(4) Compliance with the CRA and any applicable related regulations,
including 12 CFR part 345, has been considered and favorably resolved;
and
(5) No CRA protest as defined in Sec. 303.2(l) of this part has
been filed which remains unresolved or, where such a protest has been
filed and remains unresolved, the Director (DCA), Deputy Director
(DCA), associate director (DCA), the appropriate regional director
(DCA), or deputy regional director (DCA) 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
(6) The applicant agrees in writing to comply with any conditions
imposed by the delegate, other than the standard conditions defined in
Sec. 303.2(ff) of this part, which may be imposed without the
applicant's written consent.
(c) Additional delegations. In addition to the delegations
otherwise provided for in this section, and subject to the criteria set
forth in paragraphs (b)(1), (2), (4) and (6) of this section, authority
is delegated to the Director and to the Deputy Director (DOS) and,
where confirmed in writing by the Director, to an associate director,
to approve an application for a merger upon the consummation of which
the resulting institution would hold not more than 35 percent of the
total deposits held by banks and/or other depository institutions (as
appropriate) in any relevant geographic market in which more than one
of the merging institutions operate, and the Attorney General has
notified the FDIC in writing that the merger would not have a
significantly adverse effect on competition.
(d) Corporate reorganizations; interim mergers.--(1) Basic
delegation. In addition to the delegations otherwise provided for in
this section, authority is delegated to the Director and to the Deputy
Director (DOS) and, where confirmed in writing by the Director, to an
associate director and the appropriate regional director and deputy
regional director, to approve:
(i) An application for a corporate reorganization that satisfies
the criteria set forth in paragraphs (b) (5) and (6) of this section;
and
(ii) Any related application for deposit insurance.
(2) Additional delegation. Authority is further delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate director to approve:
(i) An application for corporate reorganization that satisfies the
criteria set forth in paragraphs (b)(6) of this section and as to which
a CRA protest as defined in Sec. 303.2(l) of this part has been filed
which remains unresolved; and
(ii) Any related application for deposit insurance.
(e) Limitations. The delegations in paragraphs (b) through (d) of
this section do not apply if:
(1) The Attorney General of the United States has determined that
the merger would have a significantly adverse effect on competition; or
(2) The FDIC has made a determination pursuant to section (c)(6) of
the Bank Merger Act (12 U.S.C. 1828(c)(6)) that an emergency exists
requiring expeditious action or that the transaction must be
consummated immediately in order to avoid a probable failure.
(f) Review of competitive factors reports. In deciding whether to
approve a merger under the authority delegated by this section, the
delegate shall review any reports provided by the Attorney General of
the United States, the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System, or the Director of the Office
of Thrift Supervision in response to a request by the FDIC for reports
on the competitive factors involved in the proposed merger. If the
Attorney General has not provided a competitive factors report and if
the delegation criterion specified in either paragraph (b)(3) (i) or
(ii) of this section is satisfied, the delegate may request from the
FDIC's General Counsel or designee a written opinion as to whether the
proposed merger may have a significantly adverse effect on competition.
(g) Competitive factor reports provided by the FDIC. Authority is
delegated to the Director and the Deputy Director (DOS) and, where
confirmed in writing by the Director, to an associate director and the
appropriate regional director and deputy regional director, to furnish
requested reports to the Board of Governors of the Federal Reserve
System, the Comptroller of the Currency, or the Director of the Office
of Thrift Supervision on the competitive factors involved in any merger
subject to approval by one of those agencies, if the delegate is of the
view that the proposed merger would not have a substantially adverse
effect on competition.
Sec. 303.67 Authority retained by the FDIC Board of Directors
Without limiting the authority of the Board of Directors, the Board
of Directors retains authority to act on applications covered by this
subpart if the criteria or other conditions for delegation are not
satisfied. This includes the retention of authority to deny
applications for merger transactions. It further includes retention of
authority to approve applications for merger transactions where:
(a) The limitations specified in Sec. 303.66(e) preclude action
under delegated authority;
(b) The applicant does not agree in writing to comply with any
conditions imposed by the delegate, other than the standard conditions
defined in Sec. 303.2(ff) of this part, which may be imposed without
the applicant's written consent; or
(c) The resulting institution, upon consummation of a merger other
than a corporate reorganization, would have more than 35 percent of the
total deposits held by banks and/or other depository institutions (as
appropriate) in any relevant geographic market in which more than one
of the merging institutions operate.
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)), and delegations of authority regarding such filings.
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
[[Page 52849]]
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
of this subpart, 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.
(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 conference.
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 March 9, 1979, or
since that institution commenced business, whichever is later; or
(ii) Is presumed, under Sec. 303.82(b)(2) of this subpart, 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 of this subpart) 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
regional director (DOS) within 90 calendar days after the acquisition
and provides any relevant information requested by the regional
director (DOS):
(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 regional director (DOS)
within 90 calendar days after receiving notice of the acquisition and
provides any relevant information requested by the regional director
(DOS):
(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)
of this subpart.
Sec. 303.84 Filing procedures.
(a) Filing notice. (1) A notice required under this subpart shall
be filed with the appropriate regional director (DOS)
[[Page 52850]]
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 office.
(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 regional director
(DOS) immediately of any material changes in a notice submitted to the
regional director (DOS), 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 regional director
(DOS), nevertheless, may request additional information if appropriate.
(b) Other laws. Nothing in this regulation 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 of this subpart shall commence on the date of receipt of a
substantially complete notice. The regional director (DOS) 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 relevant information at any time.
(b) Time period for FDIC action.--(1) Consummation of acquisition.
(i) The notificant(s) may consummate the proposed acquisition 60 days
after submission to the regional director (DOS) 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.
(ii) 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 regional director
(DOS), 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
of this part.
(3) Delay of publication. The FDIC may permit delay in the
publication required by this section if the FDIC determines, for good
cause shown, that it is in the public interest to grant such a delay.
Requests for delay of publication may be submitted to the appropriate
regional director (DOS).
(4) 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 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.
(5) 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 (a)(4) of this section, within such shorter
period.
(6) Publication if filing is subsequent to acquisition of control.
(i) 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.
(ii) 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 (DOS)
of the FDIC (give address of regional office) within 20 days following
the required newspaper publication.
Sec. 303.87 Delegation of authority.
(a) Authority is delegated to the Director and the Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director and the appropriate regional director and deputy regional
director, to issue a written notice of the FDIC's intent not to
disapprove an acquisition of control of an insured state nonmember
bank.
(b) The authority delegated by paragraph (a) of this section shall
include the power to:
(1) Act in situations where information is submitted on
acquisitions arising out of events beyond the person's control, as set
forth in Sec. 303.83(b) of this subpart;
(2) Extend notice periods;
(3) Determine whether a notice should be filed under section 7(j)
of the Act (12 U.S.C. 1817(j)) by a person acquiring less than 25
percent of any class of voting shares of an insured state nonmember
bank; and
(4) Delay or waive publication, waive or shorten the public comment
period, or act on a proposed acquisition of control prior to the
expiration of the public comment period, as provided in Secs. 303.86(a)
(3) and (4) of this subpart.
(c) Authority is delegated to the Director and Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director, to disapprove an acquisition of control of an insured state
nonmember bank.
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, as well as applicable delegations of
authority. This regulation implements section 32 of the FDI Act (12
U.S.C. 1831i).
Sec. 303.101 Definitions.
For purposes of this subpart:
[[Page 52851]]
(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;
(2) Is subject to a proceeding initiated by the FDIC for
termination or suspension of deposit insurance;
(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.
(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)(1) Content of filing. The notice required by paragraph (a) of
this section shall be filed with the appropriate regional director
(DOS) 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 office. The
regional director or his or her designee may require additional
information.
(2) Modification. The FDIC may modify or accept other information
in place of the requirements of paragraph (c)(1) of this section for a
notice filed under this subpart.
Sec. 303.103 Processing and waiver of prior notice.
(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 regional director
(DOS). The regional director 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) Waiver of prior notice. (1) Waiver requests. The FDIC may
permit an individual, upon petition by the bank to the appropriate
regional director (DOS), 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 regional director (DOS)
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) 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
[[Page 52852]]
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. 303.104 Delegation of authority.
The following authority is delegated to the Director and Deputy
Director (DOS) and, where confirmed in writing by the Director, to an
associate director and the appropriate regional director or deputy
regional director to:
(a) Designate an insured state nonmember bank as being in troubled
condition;
(b) Grant waivers of the prior notice requirement;
(c) Extend the 30-day processing period for an additional period of
up to 60 days in the event of extenuating circumstances; and
(d) Issue notices of disapproval or notices of intent not to
disapprove under this subpart.
Subpart G--Activities and Investments of Insured State Banks
[Reserved]
Subpart H--Filings by Savings Associations [Reserved]
Subpart I--Mutual-to-Stock Conversions
Sec. 303.160 Scope.
This subpart sets forth the notice requirements which must be met
by mutually owned state-chartered savings banks that propose to convert
to stock form, and the related delegations of authority. The
substantive requirements governing such conversions are contained in
Sec. 333.4 of this chapter.
Sec. 303.161 Filing procedures.
A notice shall be filed in letter form with the appropriate
regional director (DOS) at the same time as the conversion application
materials are filed with the institution's primary state regulator.
Sec. 303.162 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. Copies of all agreements entered into as part of the mutual-
to-stock conversion between the institution and its officers, directors
or trustees, and any agreements entered into with any other institution
and/or its successors must be provided. An insured mutual savings bank
chartered by a state that does not require the filing of an application
to convert from mutual to stock form that proposes to convert to stock
form shall notify the FDIC of the proposed conversion and provide any
materials requested by the FDIC.
Sec. 303.163 Processing.
(a) The FDIC shall review the materials submitted by the
institution seeking to convert from mutual to stock form. The FDIC, in
its discretion, may request any additional information it deems
necessary to evaluate the proposed conversion and the institution
promptly shall provide such information to the FDIC. Among the factors
to be reviewed by the FDIC are:
(1) The 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 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 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. In reviewing the materials required
to be submitted under this section, the FDIC will take into account the
extent to which the proposed conversion 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 FDIC reviews the required materials related to the
proposed conversion. Any non-conformity with those provisions will be
closely reviewed. Conformity with the OTS requirements will not be
sufficient for FDIC regulatory purposes if the FDIC determines that the
proposed conversion would pose a risk to the institution's safety or
soundness, violate any law or regulation or present a breach of
fiduciary duty.
(c) Notification of completed filing of materials. The FDIC shall
notify the institution when all the required materials related to the
proposed conversion have been filed with the FDIC and the notice is
thereby complete for purposes of computing the time periods designated
in paragraphs (d) and (f) of this section.
(d) Notice of intent not to object. If the FDIC determines, in its
discretion, that the proposed conversion 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
bank seeking to convert, within 60 days of receipt of a substantially
complete notice of proposed conversion or within 20 days after the last
applicable state or other federal regulator has approved the proposed
conversion, whichever is later, a notice of intent not to object to the
proposed conversion. The FDIC may, in its discretion, extend by written
notice to the institution the initial 60-day period by an additional 60
days.
(e) Letter of objection. If the FDIC determines, in its discretion,
that the proposed conversion 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 that the conversion shall not be consummated 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. The letter of objection shall
advise the institution of its right to petition the FDIC for
reconsideration under Sec. 303.11(f) of this part. Such action shall
not, in any way, prohibit the FDIC from taking any other action(s) that
it may deem necessary.
(f) Consummation of the conversion. An institution may consummate
the proposed conversion upon either:
(1) The receipt of a notice of intent not to object; or
(2) The expiration of the 60-day period following receipt of a
substantially complete notice by the FDIC or the 20-day period after
the last applicable state or other federal regulator has approved the
proposed conversion, whichever is later, unless the FDIC issues a
notice of objection before the end of that period. If a notice of
objection is issued, the conversion shall not be consummated until such
letter is rescinded. The FDIC may, in its discretion, extend by written
notice to the institution the initial 60-day period by an additional 60
days.
[[Page 52853]]
Sec. 303.164 Delegation of authority.
(a) Authority is delegated to the Director and Deputy Director
(DOS) to issue a notice of intent not to object to a proposed
conversion transaction that is determined not to pose a risk to the
institution's safety or soundness, violate any law or regulation,
present a breach of fiduciary duty, and not to raise any unique legal
or policy issues. Such authority will be exercised in accordance with
the time periods contained in Sec. 303.163(d) of this subpart, unless
the bank seeking to convert agrees to a longer time period.
(b) Authority is delegated to the Director and Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director and the appropriate regional director and deputy regional
director to accept notices of intent to convert to stock form and to
extend the initial 60-day period within which FDIC may object by an
additional 60 days.
Subpart J--Foreign Bank Activities
Sec. 303.180 Scope.
This subpart sets forth procedures for complying with application
requirements relating to the foreign activities of insured state
nonmember banks and the U.S. activities of insured branches of foreign
banks and delegations of authority.
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 the meaning of Sec. 303.2(r)
of this part if the insured branch:
(1) Received an FDIC-assigned composite ROCA rating 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;
(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. 346.1 of this chapter.
(e) Foreign bank means a foreign bank as defined by Sec. 346.1 of
this chapter.
(f) Foreign branch means a foreign branch of an insured state
nonmember bank as defined by Sec. 347.2 of this chapter.
(g) Insured branch means an insured branch of a foreign bank as
defined by Sec. 346.1 of this chapter.
(h) State branch means a state branch of a foreign bank as defined
by Sec. 346.1 of this chapter.
Sec. 303.182 Establishing, moving or closing a foreign branch of a
state nonmember bank.
(a) General consent to expand within a country. (1) General consent
of the FDIC is granted under Sec. 347.3 of this chapter for an eligible
depository institution to establish additional foreign branches
conducting activities authorized by Sec. 347.3 in any foreign country
in which the bank already operates one or more foreign branches, or to
move an existing foreign branch within a foreign country.
(2) Notice procedures for general consent. The eligible depository
institution must provide the appropriate regional director (DOS)
written notice within 30 days of 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 appropriate
regional director will provide written acknowledgment of receipt of the
notice.
(b) Filing procedures for other branch establishments. (1) Where to
file. An insured state nonmember bank seeking to establish a foreign
branch other than under paragraph (a) of this section must submit an
application to the appropriate regional director (DOS).
(2) Content of filing. A complete letter filing must contain the
following information:
(i) The exact location of the foreign branch, including a 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, 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. 347.3 of this
chapter, the applicant's reasons why they should be approved.
(3) Additional information. The appropriate regional director (DOS)
may request additional information to complete processing.
(c) Processing.--(1) Expedited processing for eligible depository
institutions. An application filed by an eligible depository
institution as defined in Sec. 303.2(r) of this part that operates
foreign branches in two or more territories or foreign countries to
establish a foreign branch that conducts activities authorized by
Sec. 347.3 of this chapter in an additional foreign country 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) of this part. Absent such removal, an application
processed under expedited processing is deemed approved 45 days after
the FDIC's receipt of a substantially complete application.
(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 taken as
soon as the decision is rendered.
(d) Exceptions to general consent and expedited processing. (1)
Upon notice to an insured state nonmember bank, the FDIC may modify or
suspend the availability of its general consent or expedited processing
under this section.
(2) General consent or expedited processing under this section does
not apply in any case in which:
(i) The foreign branch would 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; or
[[Page 52854]]
(ii) Any applicable law or practice in the relevant foreign country
would limit the FDIC's access to information for supervisory purposes.
(e) Closing. Within 30 days after it closes a foreign branch, an
insured state nonmember bank must advise the appropriate regional
director (DOS) by letter of the name, location, and date of closing of
the closed branch.
(f) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional
director and deputy regional director to approve an application under
paragraph (c) of this section if the following criteria are satisfied:
(1) The requirements of section 402 the NHPA Amendments Act have
been favorably resolved; and
(2) The applicant will only conduct activities authorized by
Sec. 347.3 of this chapter.
Sec. 303.183 Acquisition of stock of foreign banks or other financial
entities by an insured state nonmember bank.
(a) Definition. For purposes of this section only, a foreign bank
or other financial entity means a foreign bank or other financial
entity as defined by Sec. 347.2 of this chapter.
(b) Filing procedures.--(1) Where to file. An application by an
insured state nonmember bank to acquire or hold an ownership interest
in a foreign bank or other financial entity, as required by Sec. 347.4
of this chapter, must be filed in writing with the appropriate regional
director (DOS).
(2) Content of filing. A complete letter filing must contain full
information concerning the foreign bank or other financial entity,
including the following information:
(i) The cost, number, class of shares to be acquired, and the
proposed carrying value of such shares on the books of the insured
state nonmember bank;
(ii) A recent balance sheet and income statement of the foreign
bank or other financial entity;
(iii) A brief description of the foreign bank's or other financial
entity's business (including full information concerning any direct or
indirect business transacted in the United States);
(iv) Lists of directors and principal officers (with address and
principal business affiliation of each) and of all shareholders known
to hold 10 percent or more of any class of the foreign bank's or other
financial entity's stock or other evidence of ownership, and the amount
held by each; and
(v) Information concerning the rights and privileges of the various
classes of shares outstanding.
(3) Additional information. The appropriate regional director (DOS)
may request additional information to complete processing.
(c) Processing. The FDIC will provide the applicant with written
notification of the final action taken.
(d) Delegations of authority. Authority is delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate director, to approve or deny applications
submitted under this section for the acquisition and holding of stock
or other evidences of ownership of a foreign bank or other financial
entity that result in the state nonmember bank having a less than 25
percent ownership interest in such bank or other financial entity.
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)), must be submitted in writing to the
appropriate regional director (DOS) 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 filing must 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 insured branch, 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;
(iv) A statement as to whether the site is included in or is
eligible for inclusion in the National Register of Historic Places,
including a statement that clearance has been or will be obtained from
the State Historic Preservation Officer, for purposes of complying with
the applicable provisions of the NHPA;
(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 appropriate regional director (DOS)
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) of this part 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) of this part. 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 must 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 must include the insured branch's
current and proposed addresses.
(2) Public comments. All public comments must be received by the
appropriate regional director (DOS) 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).
[[Page 52855]]
(3) Lobby notices. If the insured branch has a public lobby, a copy
of the newspaper publication must 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) Delegation of authority. (1) Authority is delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate director and the appropriate regional
director and deputy regional director to approve an application under
this section. For the Director, Deputy Director or associate director
(DOS) to exercise this authority, paragraphs (d)(1)(i) through
(d)(1)(iv) and (d)(1)(vi) of this section must be satisfied. For the
regional director or deputy regional director (DOS) to exercise this
authority, paragraphs (d)(1)(i) through (d)(1)(vi) of this section must
be 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) of this part has
been filed which remains unresolved or, where such a protest has been
filed and remains unresolved, the Director (DCA), Deputy Director
(DCA), an associate director (DCA) or the appropriate regional director
or deputy regional director (DCA) 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 delegate, other than the standard conditions defined in
Sec. 303.2(ff) of this part which may be imposed without the
applicant's written consent.
(2) Authority is delegated to the Director and Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director, to approve applications under this section which meet all
criteria in paragraph (d)(1) of this section except that the applicant
does not agree in writing to comply with any condition imposed by the
delegate, other than the standard conditions defined in Sec. 303.2(ff)
which may be imposed without the applicant's written consent; or
(3) Authority is delegated to the Director and Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director, to deny applications under this section.
Sec. 303.185 Mergers involving an insured branch of a foreign bank.
(a) Applicability of subpart D. Mergers requiring the FDIC's prior
approval as set forth in Sec. 303.62 of this part include any merger in
which the resulting institution is an insured branch of a foreign bank
which is not a federal branch, or any merger 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 of this subpart;
(2) The definition of a corporate reorganization in Sec. 303.61(b)
of this part includes a merger 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) of this part 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.
Sec. 303.186 Exemptions from insurance requirement for a state branch
of a foreign bank.
(a) Filing procedures.--(1) Where to file. An application by a
state branch for consent to operate as a noninsured state branch, as
required by Sec. 346.6(b) of this chapter, must be submitted in writing
to the appropriate regional director (DOS).
(2) Content of filing. A complete letter filing must 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.
(2) Additional information. The appropriate regional director (DOS)
may request additional information to complete processing.
(b) 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.
(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. 346.101(a) of
this chapter, must be submitted in writing to the appropriate regional
director (DOS).
(2) Content of filing. A complete letter filing must 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 Secs. 346.19 and 346.20 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
[[Page 52856]]
(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 appropriate regional director (DOS)
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. 346.101(f) of this chapter, must be submitted in writing to the
appropriate regional director (DOS).
(2) Content of filing. A complete letter filing must 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 appropriate regional director (DOS)
may request additional information to complete processing.
(c) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional
director and deputy regional director, to approve plans of divestiture
and cessation submitted pursuant to paragraph (b) of this section.
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 for the capital categories referenced in this
Prompt Corrective Action subpart may be found in subpart B of part 325
of this chapter, Sec. 325.103(b) for 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 regional director
(DOS). 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 of this part. 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 distribution.
(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
toward 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.
[[Page 52857]]
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 instead of 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 359 of this chapter
provides guidance for determining excessive compensation. The FDIC will
consider the existing compensation levels of an institution's executive
officers directors and principal shareholders (as defined in Regulation
O, 12 CFR part 215) on a case-by-case basis, and will require prior
written approval for any change in their compensation levels; or
(7) Pay interest on new or renewed liabilities at a rate that would
increase the institution's weighted average cost 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. 303.208 Delegation of authority.
Authority is delegated to the Director and Deputy Director (DOS)
and, where confirmed in writing by the Director, to an associate
director and the appropriate regional director and deputy regional
director, to approve or deny the following applications, requests or
petitions submitted pursuant to this subpart:
(a) Applications filed pursuant to section 38 of the FDI Act (12
U.S.C. 1831o) (prompt corrective action), including applications to
make a capital distribution;
(b) Applications for acquisitions, branching, and new lines of
business (except that the delegation is limited to the authority as
delegated to approve or deny any concurrent application filed pursuant
to section 18(c) or (d) of the FDI Act (12 U.S.C. 1828(c) or (d));
(c) Applications to pay a bonus or increase compensation;
(d) Applications for an exception to pay principal or interest on
subordinated debt; and
(e) Applications by critically undercapitalized insured depository
institutions to engage in any restricted activity listed in this
subpart.
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) Regional office. An application under section 19 shall be filed
with the appropriate FDIC regional director (DOS).
(b) Contents of filing. Application forms may be obtained from any
FDIC regional office. The FDIC may require additional information
beyond that sought in the form or questionnaire, 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 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. 303.224 Delegation of authority.
(a) Approvals. Authority is delegated to the Director and Deputy
Director (DOS) or, where confirmed in writing by the Director, to an
associate director or to the appropriate regional director or deputy
regional director, to approve applications made by insured depository
institutions pursuant to section 19 of the FDI Act, after consultation
with the Legal Division; provided however, that authority may not be
delegated to the regional director or deputy regional director where
the applicant's primary supervisory authority interposes any objection
to such application.
(b) Denials. Authority is delegated to the Director and Deputy
Director (DOS) or, where confirmed in writing by the Director, to an
associate director, to deny applications made by insured depository
institutions pursuant to section 19 of the Act.
(c) Concurrent legal certification. The authority to deny
applications delegated under this section shall be exercised only upon
the concurrent certification by the General Counsel or, where confirmed
in writing by the General Counsel, his or her designee, that the action
taken is not inconsistent with section 19 of the FDI Act.
[[Page 52858]]
(d) Conditions on application approvals. Regional directors and
deputy regional directors acting under delegated authority under this
subpart may impose any of the following conditions on the approval of
applications, as appropriate in individual cases:
(1) A participant or institution-affiliated party of an institution
shall be bonded to the same extent as others in similar positions; and/
or
(2) When deemed necessary, the prior consent of the appropriate
regional director (DOS) shall be required for any proposed significant
changes in duties and/or responsibilities of the person who is the
subject of the application.
(e) Authority not delegated by FDIC Board of Directors. The FDIC
Board of Directors has not delegated its authority to consider and act
upon an application under section 19 of the FDI Act after a hearing
held in accordance with the provisions of part 308 of this chapter.
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) Filing procedures. Applicants shall submit a letter application
to the appropriate regional director (DOS).
(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 12 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 of this part. Applications pursuant to
section 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 in Sec. 303.2(r) of this part 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) of this part. 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.
(h) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional
director and deputy regional director, to approve or deny an
application pursuant to section 18(i)(1) of the FDI Act (12 U.S.C.
1828(i)) to reduce the amount or retire any part of common or preferred
capital stock, or to retire any part of capital notes or debentures.
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) Filing procedures. Applicants should submit to the appropriate
regional director (DOS) a completed form, ``Application for Consent To
Exercise Trust Powers.'' This form may be obtained from any FDIC
regional office.
(c) Content of filing. The filing should consist of the completed
trust application form.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(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) of this part 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) of this part. 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 as soon as
the decision is rendered.
(g) Delegation of authority. (1) Where the criteria listed in
paragraph (g)(2) of this section are satisfied and the applicant agrees
in writing to comply with any conditions imposed by the approving FDIC
official, other than the standard conditions defined in Sec. 303.2(ff)
of this part, which may be imposed without the applicant's written
[[Page 52859]]
consent, authority is delegated to the Director and Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director and the appropriate regional director and deputy regional
director, to approve applications for the FDIC's consent to exercise
trust powers.
(2) The following criteria must be satisfied before the authority
delegated in paragraph (g)(1) of this section may be exercised:
(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 proposed management of the trust business is determined to
be capable of satisfactorily handling the anticipated business; and
(iii) The applicant's board of directors formally has adopted the
FDIC Statement of Principles of Trust Department Management available
from any FDIC regional office.
(h) Denials and certain conditional approvals. Authority is
delegated to the Director and Deputy Director (DOS) and, where
confirmed in writing by the Director, to an associate director to:
(1) Deny applications for trust powers; and
(2) Approve applications for trust powers where the criteria listed
in paragraph (g)(2) of this section are satisfied but the applicant
does not agree in writing to comply with any condition imposed by the
delegate, other than the standard conditions defined in Sec. 303.2(ff)
of this part which may be imposed without the applicant's written
consent.
Sec. 303.243 Brokered deposit waivers.
(a) Scope. Pursuant to section 29 of the FDI Act (12 U.S.C. 1831f)
and Sec. 337.6 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) Filing procedures. Applicants should submit a letter
application to the appropriate regional director (DOS).
(c) Content of filing. The application should 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 Sec. 303.243(e) 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) of this part. 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.
(h) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional
director and deputy regional director, to approve or deny brokered
deposit waiver applications. Based upon a preliminary review, any
delegate may grant a temporary waiver for a short period in order to
facilitate the orderly processing of a filing for a waiver.
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 (12 CFR part 359), 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, as described below:
(1) Golden parachute payments. A golden parachute payment is
defined in Sec. 359.1(f)(1) of this chapter as a payment by a troubled
insured depository institution or troubled depository institution
holding company. A troubled insured depository institution or a
troubled depository institution holding company is prohibited from
making golden parachute payments 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
[[Page 52860]]
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) Filing procedures. Applicants should submit a letter
application to the appropriate FDIC regional director (DOS).
(c) Content of filing. The application should 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.
(f) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional
director and deputy regional director, to approve or to deny filings to
make:
(1) Excess nondiscriminatory severance plan payments as provided by
12 CFR 359.1(f)(2)(v); and
(2) Golden parachute payments permitted by 12 CFR 359.4.
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 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) Filing procedures. Applicants should submit a letter
application to the appropriate regional director (DOS).
(d) Content of filing. The application should contain the following
information:
(1) The basis for requesting a waiver;
(2) The existence of any significant events (e.g., change of
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.
(h) Authority retained by FDIC Board of Directors. The FDIC Board
of Directors retains the authority to act on any application for waiver
of liability of commonly controlled depository institutions.
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) Filing procedures. Applicants should submit a letter
application to the appropriate FDIC regional director (DOS). The filing
should be signed by representatives of each institution participating
in the transaction. Insurance fund conversions which are proposed in
conjunction with a merger application filed 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 should 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.
(f) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional
director and deputy regional director, to approve or deny filings for
insurance fund conversions involving the transfers of deposits between
the Savings Association Insurance Fund and the Bank Insurance Fund.
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) Filing procedures. Applicants should submit a letter
application to the appropriate regional director (DOS).
[[Page 52861]]
(c) Content of filing. The application should 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 as soon as the decision is rendered.
(f) Delegation of authority--(1) Approvals. Authority is delegated
to the Director and Deputy Director (DOS) and, where confirmed in
writing by the Director, to an associate director and the appropriate
regional director and deputy regional director, to approve applications
to convert with diminution of capital.
(2) Denials. Authority is delegated to the Director and Deputy
Director (DOS) and, where confirmed in writing by the Director, to an
associate director to deny applications to convert with diminution of
capital.
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 applications by depository
institutions 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) Filing procedures. Applicants should submit a letter
application to the appropriate regional director (DOS).
(c) Content of filing. The filing should 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.
(f) Authority retained by FDIC Board of Directors. The FDIC Board
of Directors retains the authority to act on any application to
continue or resume status as an insured institution following
termination under section 8 of the FDI Act.
Sec. 303.249 Truth in Lending Act--Relief from reimbursement.
(a) Scope. This process 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).
(b) Procedures to be followed in filing initial requests for
relief. Requests for relief from reimbursement should be filed with the
appropriate regional director (DCA) 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
should 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
and provide the applicant with a subsequent written notification of its
determination as soon as the decision is rendered.
(e) Delegation of authority--(1) Denial of initial requests for
relief. Authority is delegated to the Director and Deputy Director
(DCA), and where confirmed in writing by the Director, to an associate
director, or to the appropriate regional director or deputy regional
director, to deny requests for relief from the requirements for
reimbursement under section 608(a)(2) of the Truth in Lending
Simplification and Reform Act (15 U.S.C. 1607(e)(2)); provided however,
that a regional director or deputy regional director is not authorized
to deny any request where the estimated amount of reimbursement is
greater than $25,000.
(2) Approval of initial requests for relief. Authority is delegated
to the Director and Deputy Director (DCA), and where confirmed in
writing by the director, to a deputy director or an associate director
to approve requests for relief from the requirements for reimbursement
under section 608(a)(2) of the Truth in Lending Simplification and
Reform Act (15 U.S.C. 1607(a)(2)).
(f) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his
or her designee, or, in cases where a regional director or deputy
regional director denies requests for relief, by the appropriate
regional counsel, that the action taken is not inconsistent with the
Truth in Lending Simplification and Reform Act.
(g) 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 regional director (DCA) for reconsideration of such request
in accordance with the procedures set forth in Sec. 303.11(f) of this
part.
Sec. 303.250 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 requirements of a prior approval of a filing issued by
the FDIC.
(b) Filing procedures. Applicants should submit a letter
application to the appropriate FDIC regional director (DOS).
(c) Content of filing. The application should contain the following
information:
(1) A description of the original approval;
(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
subsequent written notification of the final action as soon as the
decision is rendered.
(f) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional
director and deputy regional director, to approve or deny requests to
modify the requirements of a prior approval of a filing issued by the
FDIC subject to the following criteria:
(1) The Legal Division is consulted to the same extent as was
required for approval of the original filing; and
(2) The approving delegate had the authority to approve the
original filing.
Sec. 303.251 Extension of time.
(a) Scope. This section contains the procedures to be followed by
an insured
[[Page 52862]]
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) Filing procedures. Applicants should submit a letter
application to the appropriate regional director (DOS).
(c) Content of filing. The application should contain the following
information:
(1) A description of the original approval;
(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.
(f) Delegation of authority. (1) Except as provided in paragraph
(f)(2) of this section, authority is delegated to the Director and
Deputy Director (DOS) and, where confirmed in writing by the Director,
to an associate director and the appropriate regional director and
deputy regional director, to approve or deny requests for extensions of
time within which to perform acts or fulfill conditions required by a
prior FDIC action on a filing of the insured depository institution.
(2) Limits on exercise of delegated authority. (i) Extensions of
time approved may not exceed one year.
(ii) Notwithstanding the delegations in paragraph (f)(1) of this
section, no delegate shall have the authority to deny an extension of
time request unless that delegate has the authority under this part to
deny the original filing upon which the extension of time is
predicated.
Subpart N--Enforcement Delegations
Sec. 303.260 Scope.
This subpart contains delegations of authority relating to the
initiation, prosecution, and settlement of administrative enforcement
actions under the FDI Act and other laws and regulations enforced by
the FDIC, including investigations and subpoenas.
Sec. 303.261 Issuance of notification to primary regulator under
section 8(a) of the FDI Act (12 U.S.C. 1818(a)).
(a) Book capital less than 2 percent. Authority is delegated to the
Director and Deputy Director (DOS), and where confirmed in writing by
the Director, to an associate director or to the appropriate regional
director or deputy regional director, to issue notifications to primary
regulator when the respondent depository institution's book capital is
less than 2 percent of total assets; provided that authority may not be
delegated to the regional director or deputy regional director whenever
the respondent depository institution has issued any mandatory
convertible debt or any form of Tier 2 capital (such as limited life
preferred stock, subordinated notes and debentures).
(b) Tier 1 capital less than 2 percent. Authority is delegated to
the Director and Deputy Director (DOS) and, where confirmed in writing
by the Director, to an associate director, to issue notifications to
primary regulator when the respondent depository institution's adjusted
Tier 1 capital is less than 2 percent of adjusted part 325 total assets
as defined in Sec. 303.2(b) of this part.
(c) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his
or her designee, or, in cases where a regional director or deputy
regional director issues notifications to primary regulator, by the
appropriate regional counsel, that the allegations contained in the
findings of violations of law or regulation and/or unsafe or unsound
practices and/or unsafe or unsound condition, if proven, constitute a
basis for the issuance of a notification to primary regulator pursuant
to section 8(a) of the FDI Act (12 U.S.C. 1818(a)).
Sec. 303.262 Issuance of notice of intention to terminate insured
status under section 8(a) of the FDI Act (12 U.S.C. 1818(a)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS), and where confirmed in writing by the Director, to an
associate director, to issue notices of intent to terminate insured
status when the respondent depository institution has failed to correct
any violations of law or regulation and/or unsafe or unsound practices
and/or unsafe or unsound condition as specified in the relevant
notification to primary regulator.
(b) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his
or her designee, that the allegations contained in the findings in the
notice of intention to terminate insured status of violations of law or
regulation and/or unsafe or unsound practices and/or unsafe or unsound
condition, if proven, constitute a basis for termination of the insured
status of the respondent depository institution pursuant to section
8(a) of the FDI Act (12 U.S.C. 1818(a)).
Sec. 303.263 Cease-and-desist actions under section 8(b) of the FDI
Act (12 U.S.C. 1818(b)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS), to the Director and Deputy Director (DCA), and where
confirmed in writing by the appropriate Director, to an associate
director or to the appropriate regional director or deputy regional
director to issue:
(1) Notices of charges; and
(2) Cease-and-desist orders (with or without a prior notice of
charges) where the respondent depository institution or individual
respondent consents to the issuance of the cease-and-desist order prior
to the filing by an administrative law judge of proposed findings of
fact, conclusions of law and recommended decision with the Executive
Secretary of the FDIC.
(b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA)
may issue a joint notice of charges or cease-and-desist order under
this section, where such notice or order addresses both safety and
soundness and consumer compliance matters. A joint notice or order will
require the signatures of both Directors or their Deputy Directors or
associate directors, regional directors or deputy regional directors.
(c) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his
or her designee, or, in cases where a regional director or deputy
regional director issues the notice of charges or the stipulated cease-
and-desist order, by the appropriate regional counsel, that the
allegations contained in the notice of charges, if proven, constitute a
basis for the issuance of a section 8(b) order, or that the stipulated
cease-and-desist order is authorized under section 8(b) of the FDI Act,
and, upon its effective date, shall be a cease-and-desist order which
has become final for purposes of enforcement pursuant to the FDI Act.
Sec. 303.264 Temporary cease-and-desist orders under section 8(c) of
the FDI Act (12 U.S.C. 1818(c)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS) and to the Director and Deputy Director (DCA), and where
confirmed in writing
[[Page 52863]]
by the appropriate Director, to an associate director, to issue
temporary cease-and-desist orders.
(b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA)
may issue a joint temporary cease-and-desist order where such order
addresses both safety and soundness and consumer compliance matters. A
joint notice or order will require the signatures of both Directors or
their Deputy Directors or associate directors.
(c) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his
or her designee, that the action is not inconsistent with section 8(c)
of the FDI Act (12 U.S.C. 1818(c)) and the temporary cease-and-desist
order is enforceable in a United States District Court.
Sec. 303.265 Removal and prohibition actions under section 8(e) of the
FDI Act (12 U.S.C. 1818(e)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS) or the Director and Deputy Director (DCA) and, where
confirmed in writing by the appropriate Director, to an associate
director, to issue:
(1) Notices of intention to remove an institution-affiliated party
from office or to prohibit an institution-affiliated party from further
participation in the conduct of the affairs of an insured depository
institution pursuant to sections 8(e)(1) and (2) of the FDI Act (12
U.S.C. 1818(e)(1) and (2)), and temporary orders of suspension pursuant
to section 8(e)(3) of the FDI Act (12 U.S.C. 1818(e)(3)); and
(2) Orders of removal, suspension or prohibition from participation
in the conduct of the affairs of an insured depository institution
where the institution-affiliated party consents to the issuance of such
orders prior to the filing by an administrative law judge of proposed
findings of fact, conclusions of law and a recommended decision with
the Executive Secretary of the FDIC.
(b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA)
may issue joint notices and orders pursuant to this section where such
notice or order addresses both safety and soundness and consumer
compliance matters. A joint notice or order will require the signatures
of both directors or their deputy directors or associate directors.
(c) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his
or her designee, that the allegations contained in the notice of
intent, if proven, constitute a basis for the issuance of a notice of
intent pursuant to section 8(e) of the FDI Act, or that the stipulated
section 8(e) order is not inconsistent with section 8(e) of the FDI
Act, and, upon issuance, shall be an order which has become final for
purposes of enforcement pursuant to the FDI Act.
Sec. 303.266 Suspension and removal action under section 8(g) of the
FDI Act (12 U.S.C. 1818(g)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS), to the Director and Deputy Director (DCA), and where
confirmed in writing by the appropriate Director, to an associate
director, to issue orders of suspension or prohibition to an
institution-affiliated party who is charged in any information,
indictment, or complaint, or who is convicted of or enters a pretrial
diversion or similar program, as to any criminal offense cited in or
covered by section 8(g) of the FDI Act, when such institution-
affiliated party consents to the suspension or prohibition.
(b) Delegation of authority where suspension or prohibition
mandated. Authority is delegated to the Director and Deputy Director
(DOS), to the Director and Deputy Director (DCA), and where confirmed
in writing by the appropriate Director, to an associate director, to
issue orders of suspension and prohibition to any institution-
affiliated party who is charged in any information, indictment, or
complaint, or who is convicted or enters a pretrial diversion or
similar program, as to any criminal offense involving mandatory
suspension or prohibition under sections 8(g)(1)(A)(ii) and (C)(ii) of
the FDI Act (12 U.S.C. 1818(g)(1)(A)(ii) and (C)(ii)), whether or not
such institution-affiliated party consents to the suspension or
prohibition.
(c) Joint DOS-DCA action. The Director (DOS) and the Director (DCA)
may issue joint orders pursuant to this section where such order
addresses both safety and soundness and consumer compliance matters. A
joint order will require the signatures of both Directors or their
Deputy Directors or associate directors.
(d) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his
or her designee, that the action taken is not inconsistent with section
8(g) of the FDI Act (12 U.S.C. 1818(g)) and the order is enforceable in
a United States District Court pursuant to sections 8(i) and 8(j) of
the FDI Act (12 U.S.C. 1818(i) and (j)).
Sec. 303.267 Termination of insured status under section 8(p) of the
FDI Act (12 U.S.C. 1818(p)).
(a) General. Authority is delegated to the Executive Secretary to
issue consent orders terminating the insured status of insured
depository institutions that have ceased to engage in the business of
receiving deposits other than trust funds pursuant to section 8(p) of
the FDI Act (12 U.S.C. 1818(p)).
(b) DOS and legal concurrence. The authority delegated under this
section shall be exercised only upon the recommendation and concurrence
of the Director or Deputy Director (DOS) or, when confirmed in writing
by the Director, an associate director, and upon the certification of
the General Counsel or, where confirmed in writing by the General
Counsel, by his or her designee, that the action taken is not
inconsistent with section 8(p) of the FDI Act (12 U.S.C. 1818(p)).
Sec. 303.268 Termination of insured status under section 8(q) of the
FDI Act (12 U.S.C. 1818(q)).
(a) General. Authority is delegated to the Executive Secretary to
issue consent orders terminating the insured status of an insured
depository institution where the liabilities of the insured institution
for deposits shall have been assumed by another insured depository
institution or depository institutions, whether by way of merger,
consolidation, or other statutory assumption, or pursuant to contract,
pursuant to section 8(q) of the FDI Act (12 U.S.C. 1818(q)).
(b) DOS and legal concurrence. The authority delegated under this
section shall be exercised only upon the recommendation and concurrence
of the Director or Deputy Director (DOS) or, when confirmed in writing
by the Director, an associate director, and upon the certification of
the General Counsel or, where confirmed in writing by the General
Counsel, by his or her designee, that the action taken is not
inconsistent with section 8(q) of the FDI Act (12 U.S.C. 1818(q)).
Sec. 303.269 Civil money penalties.
(a) General. Except as provided otherwise in this section,
authority is delegated to the Director and Deputy Director (DOS), to
the Director and Deputy Director (DCA), and where confirmed in writing
by the appropriate Director, to an associate director, to issue:
(1) Notice of assessment of civil money penalties; and
[[Page 52864]]
(2) Final orders to pay (with or without a prior notice of
assessment of civil money penalty) where the insured depository
institution or institution-affiliated party consents to the issuance of
the order to pay and waives, as applicable, receipt of a notice of
assessment of civil money penalty and the right to an administrative
hearing.
(b) Legal concurrence. The authority delegated under paragraph (a)
of this section shall be exercised only upon concurrent certification
by the General Counsel or, where confirmed in writing by the General
Counsel, by his or her designee, that the allegations contained in the
notice of assessment, if proven, constitute a basis for assessment of
civil money penalties, or that the stipulated final order to pay is
authorized under the FDI Act, and upon its effective date, shall be an
order to pay which has become final for purposes of enforcement
pursuant to the FDI Act.
(c) Joint DOS-DCA action. The Director (DOS) and the Director (DCA)
may issue joint notices pursuant to paragraph (a) of this section where
such notice addresses both safety and soundness and consumer compliance
matters. A joint notice will require the signatures of both Directors
or their Deputy Directors or associate directors.
(d) Required reports. (1) Authority is delegated to the General
Counsel or his or her designee for the levying and enforcement of civil
money penalties under:
(i) Section 7(a)(1) of the FDI Act (12 U.S.C. 1817(a)(1)) for the
late, inaccurate, false or misleading filing of Reports of Condition
and Reports of Income;
(ii) Section 8(i) of the FDI Act (12 U.S.C. 1818(i)) for the late,
inaccurate, false or misleading filing of Home Mortgage Disclosure Act
(HMDA) reports;
(iii) Section 8(i) of the FDI Act (12 U.S.C. 1818(i)) for the late,
inaccurate, false or misleading filing of Community Reinvestment Act
(CRA) loan data reports; and
(iv) Such other reports as the Board of Directors may require.
(2) In the exercise of this delegated authority, the General
Counsel or his or her designee shall consult with the appropriate
Director, Deputy Director, or associate director before imposing any
penalty.
Sec. 303.270 Notices of assessment under section 5(e) of the FDI Act
(12 U.S.C. 1815(e)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS), and where confirmed in writing by the Director, to an
associate director, to issue notices of assessment of liability to
commonly controlled insured depository institutions for the estimated
amount of loss to the deposit insurance funds.
(b) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his
or her designee, that the action taken is not inconsistent with section
5(e) of the FDI Act (12 U.S.C. 1815(e)).
Sec. 303.271 Prompt corrective action directives and capital plans
under section 38 of the FDI Act (12 U.S.C. 1831o) and part 325 of this
chapter.
(a) General--Notices, directives and orders. Authority is delegated
to the Director and Deputy Director (DOS), and where confirmed in
writing by the Director, to an associate director, or to the
appropriate regional director or deputy regional director, to accept,
reject, require new or revised capital restoration plans, or make any
other determinations with respect to the implementation of capital
restoration plans and, in accordance with subpart Q of part 308 of this
chapter, to issue:
(1) Notices of intent to issue capital directives;
(2) Directives to insured state nonmember banks that fail to
maintain capital in accordance with the requirements contained in part
325 of this chapter;
(3) Notices of intent to issue prompt corrective action directives,
except directives issued pursuant to section 38(f)(2)(F)(ii) of the FDI
Act (12 U.S.C. 1831(f)(2)(F)(ii));
(4) Directives to insured depository institutions pursuant to
section 38 of the FDI Act (12 U.S.C. 1831o), with or without the
consent of the respondent bank to the issuance of the directive, except
directives issued pursuant to section 38(f)(2)(F)(ii) of the FDI Act
(12 U.S.C. 1831o(f)(2)(F)(ii));
(5) Directives to insured depository institutions requiring
immediate action or imposing proscriptions pursuant to section 38 of
the FDI Act (12 U.S.C. 1831o) and part 325 of this chapter, and in
accordance with the requirements contained in Sec. 308.201(a)(2) of
this chapter;
(6) Notices of intent to reclassify insured banks pursuant to
Secs. 325.103(d) and 308.202 of this chapter;
(7) Directives to reclassify insured banks pursuant to
Secs. 325.103(d) and 308.202 of this chapter with the consent of the
respondent bank to the issuance of the directive; and
(8) Orders on request for informal hearings to reconsider
reclassifications and designate the presiding officer at the hearing
pursuant to Sec. 308.202 of this chapter.
(b) Notices--Dismissal of director and officer. Authority is
delegated to the Director and Deputy Director (DOS) and, where
confirmed in writing by the Director, to an associate director, to:
(1) Issue notices of intent to issue a prompt corrective action
directive ordering the dismissal from office of a director or senior
executive officer pursuant to section 38(f)(2)(F)(ii) of the FDI Act
(12 U.S.C. 1831o(f)(2)(F)(ii)) and in accordance with the requirements
contained in Sec. 308.203 of this chapter;
(2) Issue directives ordering the dismissal from office of a
director or senior executive officer pursuant to section
38(f)(2)(F)(ii) of the FDI Act (12 U.S.C. 1831o(f)(2)(F)(ii)); and
(3) Issue orders of dismissal from office of a director or senior
executive officer pursuant to section 38(f)(2)(F)(ii) of the FDI Act
(12 U.S.C. 1831o(f)(2)(F)(ii)) where the individual consents to the
issuance of such order prior to the filing of a recommendation by the
presiding officer with the FDIC.
(c) Reclassification of institution other than on basis of capital.
Authority is delegated to the Director and Deputy Director (DOS), and
where confirmed in writing by the Director, to an associate director,
to:
(1) Act on recommended decisions of presiding officers pursuant to
a request for reconsideration of a reclassification in accordance with
the requirements contained in Sec. 308.202 of this chapter; and
(2) Act on requests for rescission of a reclassification.
(d) Appeals of immediately effective PCA directives. Authority is
delegated to the Director and Deputy Director (DOS), and where
confirmed in writing by the Director, to an associate director, to act
on appeals from immediately effective directives issued pursuant to
section 38 of the FDI Act (12 U.S.C. 1831o) and Sec. 308.201 of this
chapter.
(e) Informal hearings. Authority is delegated to the Executive
Secretary of the FDIC to issue orders for informal hearings and
designate presiding officers on directives issued pursuant to section
38(f)(2)(F)(ii) of the FDI Act (12 U.S.C. 1831o(f)(2)(F)(ii)).
(f) Legal concurrence. The authority delegated under this section
shall be exercised only upon the concurrent certification by the
General Counsel or, where confirmed in writing by the General Counsel,
by his or her designee, or, in cases where a regional director or
deputy regional director issues a notice, directive, or order, by the
appropriate regional counsel, that the action taken is
[[Page 52865]]
not inconsistent with section 38 of the FDI Act (12 U.S.C. 1831o) and
part 325 of this chapter.
Sec. 303.272 Investigations under section 10(c) of the FDI Act (12
U.S.C. 1820(c)).
(a) Authority of division directors. Authority is delegated to the
Director and Deputy Director (DOS), to the Director and Deputy Director
(DCA), to the Director and Deputy Director of the Division of
Resolutions and Receiverships, and where confirmed in writing by the
appropriate Director, to an associate director, or to the appropriate
regional director and deputy regional director, to issue an order of
investigation pursuant to section 10(c) of the FDI Act (12 U.S.C.
1820(c)) and subpart K of part 308 of this chapter (12 CFR 308.144
through 308.150).
(b) Authority of General Counsel. Authority is delegated to the
General Counsel, and where confirmed in writing by the General Counsel,
to his or her designee, to issue an order of investigation pursuant to
sections 8 through 13 of the FDI Act (12 U.S.C. 1818-1823), as
appropriate, and subpart K of part 308 of this chapter (12 CFR 308.144
through 308.150).
(c) Concurrence in certain situations. In issuing an order of
investigation that pertains to an open insured depository institution
or an institution making application to become an insured depository
institution, or a post-conservatorship or post-receivership order of
investigation, the authority delegated under this section shall be
exercised only upon the concurrent execution of the order of
investigation by the Director or Deputy Director (DOS), or the Director
or Deputy Director (DCA), or the Director or Deputy Director of the
Division of Resolutions and Receiverships, their respective associate
directors, and the General Counsel or his or her designee. In the case
of a joint order of investigation, such authority shall be exercised
only upon the concurrent execution of the order of investigation by
both Directors or Deputy Directors, or their associate directors, and
upon the certification and execution of the order by the General
Counsel or his or her designee.
Sec. 303.273 Unilateral settlement offers.
(a) General. Authority is delegated to the Director and Deputy
Director (DOS), to the Director and Deputy Director (DCA), and where
confirmed in writing by the appropriate Director, to an associate
director, to accept, deny or enter into negotiations for or regarding
settlement and settlement offers with insured depository institutions,
or with an institution-affiliated party, pertaining to or arising in
connection with a proceeding under part 308 of this chapter. In cases
where a proceeding under part 308 of this chapter was issued jointly by
DOS and DCA, both Directors or Deputy Directors, or their associate
directors, must agree to accept, deny or enter into negotiations
regarding settlement and settlement offers with insured depository
institutions or with an institution-affiliated party.
(b) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his
or her designee, that the action taken is not inconsistent with the FDI
Act.
Sec. 303.274 Acceptance of written agreements.
(a) Written agreements under section 8(a) of the FDI Act. Authority
is delegated to the Director and Deputy Director (DOS), and where
confirmed in writing by the Director, to an associate director, to
accept or enter into any written agreements with insured depository
institutions, or any institution-affiliated party pertaining to any
matter which may be addressed by the FDIC pursuant to section 8(a) of
the FDI Act (12 U.S.C. 1818(a)).
(b) Written agreements in lieu of cease-and-desist orders.
Authority is delegated to the Director and Deputy Director (DOS) and to
the Director and Deputy Director (DCA), and where confirmed in writing
by the appropriate Director, to an associate director, to accept or
enter into any written agreements with insured depository institutions,
or any institution-affiliated party pertaining to any safety and
soundness or consumer compliance matter which may be addressed by the
FDIC pursuant to section 8(b) of the FDI Act (12 U.S.C. 1818(b)) or any
other provision of the FDI Act which addresses safety and soundness or
consumer compliance matters. In cases which would address both safety
and soundness and consumer compliance matters, the Directors, or their
designees, may accept or enter into joint written agreements with
insured depository institutions or any institution-affiliated party.
(c) Written agreements as conditions attendant to FDIC filings
contained in this part. Authority is delegated to the Director and
Deputy Director (DOS), and to the Director and Deputy Director (DCA)
and, where confirmed in writing by the appropriate Director, to an
associate director, or to the appropriate regional director or deputy
regional director, to accept or enter into any written agreements with
insured depository institutions, any institution-affiliated party or
any other petitioner which contains conditions precedent to the FDIC's
non-objection to a filing pursuant to this part.
(d) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his
or her designee, that the action taken is not inconsistent with the FDI
Act.
Sec. 303.275 Modifications and terminations of enforcement actions and
orders.
(a) Termination of section 8(a) (12 U.S.C. 1818(a)) orders and
agreements. Authority is delegated to the Director and Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director, or to the appropriate regional director or deputy regional
director, to terminate outstanding section 8(a) orders and agreements
and to terminate actions and agreements which are pending pursuant to
section 8(a) of the FDI Act when the depository institution is closed
by a federal or state authority or merges into another institution.
(b) Termination of section 8(a) (12 U.S.C. 1818(a)) notification to
primary regulator issued by Board of Directors. Authority is delegated
to the Director and Deputy Director (DOS), and where confirmed in
writing by the Director, to an associate director, or to the
appropriate regional director or deputy regional director, to terminate
notifications to primary regulator issued by the Board of Directors
pursuant to section 8(a) of the FDI Act where the respondent depository
institution is in material compliance with such notification or for
good cause shown.
(c) Termination of section 8(a) (12 U.S.C. 1818(a)) notice of
intent to terminate insured status. In cases where the Board of
Directors has issued a notice of intent to terminate insured status
pursuant to section 8(a) of the FDI Act, authority is delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate director, or to the appropriate regional
director or deputy regional director, to terminate the actions pending
pursuant to such notice of intent to terminate insured status where the
respondent depository institution is in material compliance with the
applicable notification to primary regulator or for good cause shown.
[[Page 52866]]
(d) Sections 8(b) and 8(c)(12 U.S.C. 1818(b) and (c)) actions and
orders. (1) Authority is delegated to the Director and Deputy Director
(DOS) and to the Director and Deputy Director (DCA), as appropriate
and, where confirmed in writing by the appropriate Director, to an
associate director, or to the appropriate regional director or deputy
regional director, to terminate outstanding section 8(b) and section
8(c) orders and agreements and to terminate actions and agreements
which are pending pursuant to sections 8(b) and 8(c) of the FDI Act
when the depository institution is closed by a federal or state
authority or merges into another institution. In cases where a joint
order was issued by DOS and DCA, both Directors, or their Deputy
Directors or associate directors, or the appropriate regional directors
or deputy regional directors, must execute the order of termination.
(2) Authority is delegated to the Director and Deputy Director
(DOS) and to the Director and Deputy Director (DCA), as appropriate,
and where confirmed in writing by the appropriate Director, to an
associate director, or to the appropriate regional director or deputy
regional director, to terminate outstanding section 8(b) orders issued
by the Board of Directors either where material compliance with the
section 8(b) order has been achieved by the respondent depository
institution or individual respondent or for good cause shown. In cases
where an order issued by the Board of Directors addresses both safety
and soundness and consumer compliance matters, both Directors or Deputy
Director, or the designees of the Directors, must execute the order of
termination.
(e) Modification and termination of section 8(e) (12 U.S.C.
1818(e)) orders and actions. Authority is delegated to the Director and
Deputy Director (DOS) and the Director and Deputy Director (DCA), as
appropriate, and where confirmed in writing by the appropriate
Director, to an associate director, to modify or terminate outstanding
section 8(e) orders and pending actions and to grant consent under
section 8(e)(7)(B) of the Act (12 U.S.C. 1818(e)(7)(B)) for the
modification or termination of an outstanding section 8(e) order issued
by another Federal financial institution regulatory agency where:
(1) The respondent has demonstrated his or her fitness to
participate in any manner in the conduct of the affairs of an insured
depository institution;
(2) The respondent has shown that his or her participation would
not pose a risk to the institution's safety and soundness; or
(3) The respondent has proven that his or her participation would
not erode public confidence in the institution.
(f) Modification and termination of section 8(g) (12 U.S.C.
1818(g)) orders and actions. Pursuant to section 8(j) of the FDI Act
(12 U.S.C. 1818(j)), authority is delegated to the Director and Deputy
Director (DOS) and the Director and Deputy Director (DCA), as
appropriate, and where confirmed in writing by the appropriate
Director, to an associate director, to approve requests for
modifications or terminations of section 8(g) orders issued by either
the Board of Directors or under delegated authority.
(g) Other matters not specifically addressed. For all outstanding
or pending notices, actions, orders, directives and agreements not
specifically addressed in this subpart, the delegations of authority
contained in this subpart shall include the authority to modify or
terminate any outstanding or pending notice, order, directive or
agreement issued pursuant to delegated authority, as may be
appropriate.
(h) Termination of pending actions--general. Any pending
enforcement action may be dismissed or terminated by the Director or
Deputy Director of DOS or DCA, as appropriate, at any time prior to the
commencement of a hearing on the merits by an administrative law judge.
Once a hearing on the merits has been convened by an administrative law
judge, a pending enforcement action may be dismissed or terminated by
stipulation or consent of the affected parties no later than 14 days
after the administrative law judge has closed the record of the
hearing. Only the FDIC Board of Directors may terminate or dismiss an
enforcement action more than 14 days after the record has been closed
by an administrative law judge.
(i) Legal concurrence. Any dismissals, modifications or
terminations pursuant to this section shall be exercised only upon
concurrent certification by the General Counsel or, where confirmed in
writing by the General Counsel, by his or her designee, or, in cases
where a regional director or deputy regional director acts under
delegated authority, by the appropriate regional counsel, that the
action taken is not inconsistent with the FDI Act.
Sec. 303.276 Enforcement of outstanding enforcement orders.
After consultation with the Director (DOS) or the Director (DCA),
or a Deputy Director or an associate director, or the appropriate
regional director or deputy regional director, as may be appropriate,
the General Counsel or designee is authorized to initiate and prosecute
any action to enforce any effective and outstanding order or temporary
order issued under 12 U.S.C. 1817, 1818, 1820, 1828, 1829, 1831l,
1831o, 1972, or 3909, or any provision thereof, in the appropriate
United States District Court.
Sec. 303.277 Compliance plans under section 39 of the FDI Act (12
U.S.C. 1831p-1) (standards for safety and soundness) and part 308 of
this chapter.
(a) Compliance plans. Authority is delegated to the Director and
Deputy Director (DOS), and where confirmed in writing by the Director,
to an associate director, or to the appropriate regional director or
deputy regional director, to accept, to reject, to require new or
revised compliance plans, or to make any other determinations with
respect to the implementation of compliance plans pursuant to subpart R
of part 308 of this chapter.
(b) Notices, orders, and other action. Authority is delegated to
the Director and Deputy Director (DOS) and, where confirmed in writing
by the Director, to an associate director, to:
(1) Issue notices of intent to issue an order requiring the bank to
correct a safety and soundness deficiency or to take or refrain from
taking other actions pursuant to section 39 of the FDI Act (12 U.S.C.
1831p-1) and in accordance with the requirements contained in
Sec. 308.304(a)(1) of this chapter;
(2) Issue an order requiring the bank immediately to correct a
safety and soundness deficiency or to take or refrain from taking other
actions pursuant to section 39 of the FDI Act (12 U.S.C. 1831p-1) and
in accordance with the requirements contained in Sec. 308.304(a)(2) of
this chapter; and
(3) Act on requests for modification or rescission of an order.
(c) Legal concurrence--compliance plans. The authority delegated
under this section as to compliance plans shall be exercised only upon
the concurrent certification by the General Counsel or, where confirmed
in writing by the General Counsel, by his or her designee, or, in cases
where a regional director or deputy regional director accepts, rejects
or requires new or revised compliance plans or makes any other
determinations with respect to compliance plans, by the appropriate
regional counsel, that the action taken is not inconsistent with the
FDI Act.
(d) Legal concurrence--notices and orders. The authority delegated
under this section as to notices and orders shall be exercised only
upon the concurrent certification by the General Counsel or, where
confirmed in writing by the General Counsel, by his or her
[[Page 52867]]
designee that the allegations contained in the notice of intent, if
proven, constitute a basis for the issuance of a final order pursuant
to section 39 of the FDI Act or that the issuance of a final order is
not inconsistent with section 39 of the FDI Act or that the stipulated
section 39 order is not inconsistent with section 39 of the FDI Act and
is an order which has become final for purposes of enforcement pursuant
to the FDI Act.
Sec. 303.278 Enforcement matters where authority is not delegated.
Without limiting the Board of Directors' authority, the Board of
Directors has retained the authority to act upon the following
enforcement matters:
(a) Notifications to primary regulator under section 8(a) of the
FDI Act (12 U.S.C. 1818(a)) when the respondent bank's book capital is
at or above 2 percent of total assets and adjusted Tier 1 capital is at
or above 2 percent of adjusted part 325 total assets as defined in
Sec. 303.2(b) of this part;
(b) Orders terminating insured status under section 8(a) of the FDI
Act (12 U.S.C. 1818(a));
(c) Cease-and-desist orders under section 8(b) of the FDI Act (12
U.S.C. 1818(b)) when the respondent depository institution or
individual does not consent to the issuance of such orders;
(d) Temporary orders of suspension and prohibition under section
8(e) of the FDI Act (12 U.S.C. 1818(e));
(e) Orders of removal, suspension or prohibition from participation
in the conduct of the affairs of an insured depository institution
under section 8(e) of the FDI Act (12 U.S.C. 1818(e)) when the
individual does not consent to the issuance of such orders;
(f) Orders of suspension or prohibition to an indicted director,
officer or person participating in the conduct of the affairs of an
insured depository institution and orders of removal or prohibition to
a convicted director, officer or person participating in the conduct of
the affairs of an insured depository institution under section 8(g) of
the FDI Act (12 U.S.C. 1818(g)) when such director, officer or person
does not consent to the suspension or removal;
(g) Final orders to pay civil money penalties where respondents do
not consent to the assessment of civil money penalties and hearings
have been held;
(h) Denials of requests for modifications or terminations of orders
issued pursuant to section 8(g) of the FDI Act;
(i) Grants or denials of requests for reinstatement to office,
whether or not an informal hearing has been requested, pursuant to
Sec. 308.203 of this chapter; and
(j) Grants or denials of requests for waivers of liability of
commonly controlled insured depository institutions as to assessments
under section 5(e) of the FDI Act (12 U.S.C. 1815(e)).
PART 337--UNSAFE AND UNSOUND BANKING PRACTICES
2. The authority citation for part 337 is revised to read as
follows:
Authority: 12 U.S.C. 375a(4), 375b, 1816, 1818(a), 1818(b),
1819, 1820(d)(10), 1821f, 1828(j)(2), 1831, 1831f-l.
3. Section 337.6 is amended by revising paragraph (a)(5)(iii),
adding a sentence at the end of paragraph (c), removing paragraphs (d)
and (e), and redesignating paragraphs (g) and (h) as (d) and (e),
respectively, to read as follows:
Sec. 337.6 Brokered deposits.
(a) * * *
(5) * * *
(iii) Notwithstanding paragraph (a)(5)(ii) of this section, the
term deposit broker includes any insured depository institution that is
not well capitalized, and any employee of any such insured depository
institution, which engages, directly or indirectly, in the solicitation
of deposits by offering rates of interest (with respect to such
deposits) which are significantly higher than the prevailing rates of
interest on deposits offered by other insured depository institutions
in such depository institution's normal market area.
* * * * *
(c) * * * For filing requirements, consult 12 CFR 303.243.
* * * * *
PART 341--REGISTRATION OF TRANSFER AGENTS
4. The authority citation for part 341 continues to read as
follows:
Authority: Secs. 2, 3, 17, 17A and 23(a), Securities Exchange
Act of 1934, as amended (15 U.S.C. 78b, 78c, 78q, 78q-1 and 78w(a)).
5. Section 341.7 is added to read as follows:
Sec. 341.7 Delegation of authority.
(a) Except as provided in paragraph (b) of this section, authority
is delegated to the Director and Deputy Director (DOS) and, where
confirmed in writing by the Director, to an associate director and
appropriate regional director and deputy regional director, to act on
disclosure matters under and pursuant to sections 17 and 17A of the
Securities Exchange Act of 1934 (15 U.S.C. 78).
(b) Authority to act on disclosure matters is retained by the Board
of Directors when such matters involve exemption from registration
requirements pursuant to section 17A(c)(1) of the Securities Exchange
Act of 1934 (15 U.S.C. 78q-1(c)(1)).
PART 346--FOREIGN BANKS
6. 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.
7. Section 346.19 of subpart C is amended by adding a new paragraph
(e)(14) to read as follows:
Sec. 346.19 Pledge of assets.
* * * * *
(e) * * *
(14) Delegation of authority. (i) Authority is delegated to the
Director and Deputy Director of the Division of Supervision and, where
confirmed in writing by the Director, to an associate director and the
appropriate regional director and deputy regional director of the
region in which the insured branch is located, to enter into pledge
agreements with foreign banks and depositories under this section. This
authority also shall extend to the power to revoke such approval and
require the dismissal of the depository.
(ii) Authority is delegated to the General Counsel or designee to
modify the terms of the model deposit agreement used under this
section.
* * * * *
PART 348--MANAGEMENT OFFICIAL INTERLOCKS
8. The authority citation for part 348 continues to read as
follows:
Authority: 12 U.S.C. 3207, 12 U.S.C. 1823(k).
9. Section 348.9 is added to read as follows:
Sec. 348.9 Delegation of authority.
(a) Authority is delegated to the Director and Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director and appropriate regional director and deputy regional
director, to approve or deny requests to establish management official
interlocks pursuant to Sec. 348.6 or section 205(8) of the Depository
Institutions Management Interlocks Act (except that a regional director
or deputy regional director may deny such a request only if the request
was made pursuant to 348.6(b)(4)); and
[[Page 52868]]
(b) Authority is delegated to the Director and Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director to deny a request to establish a management official interlock
pursuant to any provision of either Sec. 348.6 or section 205(8) of the
Depository Institutions Management Interlocks Act.
PART 359--GOLDEN PARACHUTE AND INDEMNIFICATION PAYMENTS
10. The authority citation for part 359 continues to read as
follows:
Authority: 12 U.S.C. 1828(k).
11. Section 359.6 is revised to read as follows:
Sec. 359.6 Filing instructions.
Requests to make excess nondiscriminatory severance plan payments
pursuant to Sec. 359.1(f)(2)(v) and golden parachute payments permitted
by Sec. 359.4 shall be submitted in writing to the appropriate regional
director (DOS). For filing requirements, consult 12 CFR 303.244. In the
event that the consent of the institution's primary federal regulator
is required in addition to that of the FDIC, the requesting party shall
submit a copy of its letter to the FDIC to the institution's primary
federal regulator. In the case of national banks, such written requests
shall be submitted to the OCC. In the case of state member banks and
bank holding companies, such written requests shall be submitted to the
Federal Reserve district bank where the institution or holding company,
respectively, is located. In the case of savings associations and
savings association holding companies, such written requests shall be
submitted to the OTS regional office where the institution or holding
company, respectively, is located. In cases where only the prior
consent of the institution's primary federal regulator is required and
that agency is not the FDIC, a written request satisfying the
requirements of this section shall be submitted to the primary federal
regulator as described in this section.
By order of the Board of Directors.
Dated at Washington, DC., this 23rd day of September, 1997.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 97-26235 Filed 10-8-97; 8:45 am]
BILLING CODE 6714-01-P