SUMMARY: As part of the FDIC's systematic review of its regulations and
written policies under section 303(a) of the Riegle Community
Development and Regulatory Improvement Act of 1994 (CDRI), the FDIC is
rescinding its statement of policy concerning applications, legal fees,
and other expenses (Statement of Policy). The Statement of Policy
addresses unreasonable or excessive fees, insider fees, and contingency
fee arrangements incidental to certain applications filed with the
FDIC. The FDIC is rescinding the Statement of Policy because portions
are now considered outmoded and similar information is duplicated or
cross-referenced in other Statements of Policy. Remaining information
that is relevant will be placed, in condensed form, into Statements of
Policy regarding Applications for Deposit Insurance, and Bank Merger
Transactions. The rescission does not reflect any substantive change in
the FDIC's supervisory attitude toward excessive or unwarranted fees
incident to an application.
EFFECTIVE DATE: This Statement of Policy is rescinded effective April
FOR FURTHER INFORMATION CONTACT: Jesse G. Snyder, Assistant Director,
(202/ 898-6915), Division of Supervision; Susan van den Toorn, Counsel,
Division, FDIC, 550 17th Street, N.W., Washington, DC 20429.
SUPPLEMENTARY INFORMATION: The FDIC is conducting a systematic
review of its regulations and written policies. Section 303(a) of
the CDRI (12 U.S.C. 4803(a)) requires the FDIC, the Office of the
Comptroller of the Currency, the Board of Governors of the Federal
Reserve System, and the Office of Thrift Supervision (Federal
banking agencies) to each streamline and modify its regulations and
written policies in order to improve efficiency, reduce unnecessary
costs, and eliminate unwarranted constraints on credit
availability. Section 303(a) also requires each of the Federal
banking agencies to remove inconsistencies and outmoded and
duplicative requirements from its regulations and written policies.
As a part of this review, the FDIC has determined that the
Statement of Policy contains a substantial amount of information that
is outmoded, and duplicated or cross-referenced elsewhere. The FDIC's
written policies can be streamlined by eliminating the Statement of
Policy. The relevant information contained in the Policy Statement will
be condensed and placed into Statements of Policy regarding
Applications for Deposit Insurance, and Bank Merger Transactions.
On September 8, 1980, the Statement of Policy was adopted by the
Board of the FDIC and was published on September 15, 1980 (45 FR
61025). The Statement of Policy addresses unreasonable or excessive
fees, insider fees, and contingency fee arrangements incidental to
applications filed with the FDIC. Some of the information contained in
the Statement of Policy is now also in other Statements of Policy
addressing specific applications and, as a result, it is no longer
necessary to have a Statement of Policy dealing specifically with legal
fees and other expenses.
Issues formerly dealt with in the Statement of Policy have now been
condensed and placed into other application specific ``Statements of
Policy''. The following specific statements are now included in
relevant ``Statements of Policy'' published concurrently herein.
``The commitment to or payment of unreasonable or excessive fees
and other expenses incident to an application reflects adversely
upon the management of the applicant institution. Fees and other
organizational expenses incurred or committed to should be fully
Expenses for professional or other services rendered by
organizers, present or prospective board members, major shareholders
or executive officers will receive special review for any indication
of self-dealing to the detriment of the bank and its other
shareholders. As a matter of practice, the FDIC expects full
disclosure to all directors and shareholders of any material
arrangement with an insider.
In no case will an FDIC application be approved where the
payment of a fee, in whole or in part, is contingent upon any act or
forbearance by the FDIC or by any other federal or state agency or
The rescission does not reflect any substantive change in the
FDIC's supervisory attitude toward excessive, unwarranted, or otherwise
inappropriate fees incident to an application, and the relevant issues
will continue to be addressed.
For the above reasons, the Statement of Policy is hereby rescinded.
By order of the Board of Directors.
Dated at Washington, DC, this 25th day of March, 1997.
Federal Deposit Insurance Corporation
Robert E. Feldman,
Deputy Executive Secretary.
[FR Doc. 97-8171 Filed 3-31-97; 8:45 am]
BILLING CODE 6714-01-P