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Financial Institution Letter

Use of Interstate Branches Primarily for Deposit Production

SUBJECT: Proposed Rule to Prohibit Interstate Branching Primarily for Deposit Production

The FDIC, the Federal Reserve Board and the Office of the Comptroller of the Currency are seeking comment on a proposed joint rule to prohibit any bank from establishing or acquiring a branch or branches outside of its home state under the Interstate Act primarily for the purpose of deposit production. The proposed rule also provides guidelines ensuring that covered interstate branches operated by an out-of-state bank are reasonably helping to meet the credit needs of the communities served by the branches.

The proposed rule is attached. Comments are due by May 2, 1997.

For further information, please contact Louise Kotoshirodo, Review Examiner, Division of Compliance and Consumer Affairs, at (202) 942-3599 or Gladys Cruz Gallagher, Counsel, Legal Division, at (202) 898-3833.

Carmen J. Sullivan

Attachment: Federal Register, March 17, 1997, pp 12730-12738

Distribution: FDIC-Supervised Banks (Commercial and Savings)

Note: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th St., N.W., Room 100, Washington, D.C. 20434 (800-276-6003 or (703) 562-2200).

Last Updated: March 27, 1997