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FDIC Federal Register Citations

[Federal Register: April 2, 1997 (Volume 62, Number 63)]
[Page 15706]
From the Federal Register Online via GPO Access []
Eligibility to Make Application to Become an Insured Bank under 
Section 5 of the Federal Deposit Insurance Act; Rescission of Statement 
of Policy
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Rescission of Statement of Policy.
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 Regarding Eligibility to Make Application to 
Become an Insured Bank Under section 5 of the Federal Deposit Insurance 
Act (Statement of Policy). The Statement of Policy describes the 
analysis the FDIC used when carrying out a former statutory directive 
to evaluate certain factors in determining an industrial loan company's 
eligibility for deposit insurance. Since the statute is no longer in 
force, the FDIC is rescinding this outmoded Statement of Policy.
EFFECTIVE DATE: This Statement of Policy is rescinded April 2, 1997.
FOR FURTHER INFORMATION CONTACT: Jesse G. Snyder, Assistant Director 
(202/898-6915), Division of Supervision; Jamey Basham, Counsel, (202/
898-7265), Legal Division, FDIC, 550 17th Street, N.W., Washington, 
D.C. 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 each federal banking agency to 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 
federal banking agency to remove inconsistencies and outmoded and 
duplicative requirements from its regulations and written policies.
    As part of this review, the FDIC has determined that the Statement 
of Policy is outmoded, and that the FDIC's written policies can be 
streamlined by its elimination.
    The FDIC originally adopted the Statement of Policy on February 27, 
1984 (49 FR 7865 (March 2, 1984)). It addresses issues surrounding 
implementation of certain provisions of the Garn-St. Germain Depository 
Institutions Act of 1982, Pub. L. 97-320 (Garn Act), which expanded the 
types of state-chartered depository institutions eligible for FDIC 
insurance, to include industrial banking companies and similar 
institutions. These special-purpose entities, known as industrial 
banks, industrial loan companies, industrial loan and thrift companies, 
or loan and investment companies, extend installment credit to 
consumers and accept some form of savings deposits. Before the Garn 
Act, the only eligible state-chartered entities were banks and trust 
companies with explicit statutory authority to accept deposits other 
than trust deposits.
    The Garn Act amended section 5(a) of the Federal Deposit Insurance 
Act (FDI Act) (12 U.S.C. 1815(a)) to list special procedural 
requirements for the FDIC to fulfill before insuring industrial banking 
companies lacking bank charters. The FDIC was required to determine 
that the industrial banking company was chartered and operating under 
state laws providing for examination, supervision, and liquidation 
comparable to banks.
    In the Federal Deposit Insurance Corporation Improvement Act of 
1991, Pub. L. 102-242 (Improvement Act), section 5(a) of the FDI Act 
was comprehensively rewritten without inclusion of these special 
requirements. As a result, the FDIC is no longer required to apply a 
specialized set of factors in determining the eligibility of industrial 
banking companies as a class for deposit insurance.
    The Statement of Policy presents a mix of the details of the 
section 5(a) analysis and descriptions of the FDIC's approach to 
general eligibility issues relating to industrial banking companies. 
Given the removal of the section 5(a) factors from the FDI Act, the 
former analysis is no longer necessary and these portions of the 
Statement of Policy are outmoded. As for the latter analysis, a 
description of general eligibility issues was salutary during the Garn 
Act's implementation period, when numerous industrial banking companies 
were first presented with the issue of eligibility for such companies 
under the laws of their respective states. However, over a decade 
later, these questions arise rarely, and the FDIC's written policies 
can be streamlined by elimination of the Statement of Policy. For the 
above reasons, the Statement of Policy is rescinded.
    By order of the Board of Directors.
    Dated at Washington, D.C. this 25th day of March, 1997.
Federal Deposit Insurance Corporation
Robert E. Feldman,
Deputy Executive Secretary.
[FR Doc. 97-8342 Filed 4-1-97; 8:45 am]

Last Updated 04/02/1997

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