Federal Deposit Insurance Corporation

fede

ral r

egiste

r

52809

ThursdayOctober 9, 1997

Part II

Federal DepositInsuranceCorporation12 CFR Parts 303, 337, et al.Practice and Procedure: GoldenParachute and Indemnification Payments;Proposed RuleDeposit Insurance Applications; NoticeBank Merger Transactions; NoticeDomestic Branch EstablishmentApplications; NoticeMain Office or Branch RelocationApplications; NoticeLiability of Commonly ControlledDepository Institutions; Notice

52810 Federal Register / Vol. 62, No. 196 / Thursday, October 9, 1997 / Proposed Rules

FEDERAL DEPOSIT INSURANCECORPORATION

12 CFR Parts 303, 337, 341, 346, 348,and 359

RIN 3064–AC02

Applications, Requests, Submittals,Delegations of Authority, and NoticesRequired To Be Filed by Statute orRegulation; Unsafe and UnsoundBanking Practices; Registration ofTransfer Agents; Foreign Banks;Management Official Interlocks;Golden Parachute and IndemnificationPayments

AGENCY: Federal Deposit InsuranceCorporation (FDIC).ACTION: Proposed rule.

SUMMARY: The FDIC is proposing toamend its regulations governingapplication, notice and requestprocedures and delegations of authorityby streamlining, modernizing andclarifying current policies and practices.Specifically, the FDIC proposes to offerqualifying well-capitalized and well-managed insured depository institutionsand their holding companies expeditedreview procedures for several majortypes of filings, including depositinsurance, merger and branchapplications. The agency also proposesto centralize substantially all filingprocedures found throughout its ruleswithin the regulation for ease ofreference. Furthermore, the FDICproposes to reorganize the requirementsfor each major application or notice typeinto a separate regulatory subpart thatwill contain all information necessary tosubmit a filing to the agency, as well asany relevant internal agency delegationsof authority to approve or denysubmissions. In addition, the agency isincorporating statutory changes to itsapplication procedures made by theEconomic Growth and RegulatoryPaperwork Reduction Act of 1996.Finally, the FDIC is proposing technicalamendments to related regulations toconform these changes.

This action is being taken inaccordance with section 303(a) of theRiegle Community Development andRegulatory Improvement Act of 1994which requires the federal bankingagencies to review and streamline theirregulations and policies in order toimprove efficiency, reduce unnecessarycosts, eliminate unwarranted constraintson credit availability, and removeinconsistencies and outmoded andduplicative requirements.

The proposal seeks to reduce burdenon insured depository institutions byimposing regulatory requirements only

where needed to address safety andsoundness concerns or accomplish otherstatutory responsibilities of the FDIC.The proposed rule also strives to moreclosely align the FDIC’s applicationprocessing regulations with those of theother federal banking agencies.DATES: Comments must be received byJanuary 7, 1998.ADDRESSES: Send written comments toRobert E. Feldman, Executive Secretary,Attention: Comments/OES, FederalDeposit Insurance Corporation, 550 17thStreet, NW., Washington, DC 20429.Comments may be hand-delivered to theguard station at the rear of the 17thStreet building (located on F Street), onbusiness days between 7 a.m. and 5 p.m.(Fax number (202) 898–3838; Internetaddress: [email protected]).Comments may be inspected andphotocopied in the FDIC PublicInformation Center, Room 100, 801 17thStreet, NW., Washington, DC 20429,between 9 a.m. and 4:30 p.m. onbusiness 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 ConsumerAffairs: Steven D. Fritts, AssociateDirector, (202) 942–3454, and Louise N.Kotoshirodo, Review Examiner, (202)942–3599. Legal Division: Susan vanden Toorn, Counsel, Regulation andLegislation Section, (202) 898–8707, andNancy Schucker Recchia, Counsel,Regulation and Legislation Section,(202) 898–8885. For administrativeenforcement issues: Grovetta N.Gardineer, Counsel, Compliance andEnforcement Section, (202) 736–0665,and Philip P. Houle, Counsel,Compliance and Enforcement Section,(202) 736–0758. For foreign bankactivities (Subpart J): Jamey G. Basham,Counsel, Regulation and LegislationSection, Legal Division (202) 898–7265,and Christie A. Sciacca, AssistantDirector, Division of Supervision (202)898–3671, Federal Deposit InsuranceCorporation, 550 17th Street, NW.,Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. BackgroundPart 303 of the FDIC’s regulations (12

CFR part 303) generally describes theprocedures to be followed by both theFDIC and applicants with respect toapplications, notices, or requestsrequired to be filed by statute orregulation. Additional informationconcerning processing is contained inrelated FDIC statements of policy. Part

303 also sets forth delegations ofauthority from the FDIC’s Board ofDirectors to the Directors of the Divisionof Supervision (DOS), the Division ofCompliance and Consumer Affairs(DCA), the General Counsel of the LegalDivision, the Executive Secretary, and,in some cases, their designees to act oncertain applications, notices, requests,and enforcement matters.

The FDIC is proposing comprehensiverevisions to part 303 as part of asystematic review of its regulations andpolicy statements undertaken inaccordance with section 303(a) of theRiegle Community Development andRegulatory Improvement Act of 1994(CDRIA) (12 U.S.C. 4803(a)). Section303(a) of CDRIA requires the FDIC, theOffice of the Comptroller of theCurrency, the Board of Governors of theFederal Reserve System, and the Officeof Thrift Supervision (federal bankingagencies) to streamline and modify theirregulations and written policies in orderto improve efficiency, reduceunnecessary costs, and eliminateunwarranted constraints on creditavailability. The statute also requireseach of the federal banking agencies toremove inconsistencies and outmodedand duplicative requirements from theirregulations and written policies.

To initiate its CDRIA review, the FDICpublished in the Federal Register anotice soliciting comment on itsregulations and written policies. 60 FR62345, December 6, 1995. In response tothat request, the FDIC received fourcomments regarding part 303 and onecomment concerning a related policystatement.

One commenter wrote that electronicfiling of various reports and documentshas the potential to reduce burdenarising from compliance with filingrequirements. In particular, thecommenter noted that othergovernmental agencies already haverecognized the benefits of electronicfiling and that certain applicationprocedures, such as applications toestablish or relocate an office andapplications relating to mergers arewell-suited for electronic filing. TheFDIC is working the other federalbanking agencies in an attempt to adoptuniform filing forms for commonapplications and to have such formsfiled electronically where possible.

Another commenter suggested thatwith regard to applications by insuredstate nonmember banks to establish abranch, move its main office, or relocatea branch pursuant to § 303.2(c), theregulations should reduce the regulatoryburden of setting up shared automatedteller machines (ATMs). Applicationsare no longer required for ATMs and

52811Federal Register / Vol. 62, No. 196 / Thursday, October 9, 1997 / Proposed Rules

remote service units (RSUs) as a resultof section 2205 of the Economic Growthand Regulatory Paperwork ReductionAct of 1996 (EGRPRA) (Pub. L. 104–208,110 Stat. 3009), which excluded ATMsand RSUs from the definition of a‘‘domestic branch’’ under section 3(o) ofthe FDI Act (12 U.S.C. 1831(o)).Therefore, the definition of ‘‘branch’’ inproposed § 303.41 excludes ATMs andRSUs.

With regard to section 32 notices(change in director or senior executiveofficer), a commenter suggested thatexceptions be carved out for two of thethree statutory triggering events. Section32 of the Federal Deposit Insurance Act(FDI Act) required prior notice from adepository institution or holdingcompany that (1) was chartered lessthan two years; (2) had undergone achange in control within the precedingtwo years; or (3) was not in compliancewith minimum capital requirements orwas otherwise in ‘‘troubled condition.’’Section 2209 of EGRPRA subsequentlyamended section 32 by eliminating theprior notice requirement for institutionsand holding companies that arechartered for less than two years or thathave undergone a change in controlwithin the preceding two years.However, institutions and holdingcompanies that are not in compliancewith minimum capital requirements orare otherwise in ‘‘troubled condition’’remain subject to the prior noticerequirement. As a result, this commenthas been rendered moot.

One commenter questioned whycurrent § 303.2(a)(4) includes arequirement that an application by aninsured state nonmember bank toestablish a branch, move its main officeor relocate a branch contain a statementas to whether or not the site is includedin or is eligible for inclusion in theNational Register of Historic Places,including evidence that clearance hasbeen obtained from the State HistoricPreservation Officer (SHPO). As afederal agency, the FDIC is subject to theNational Historic Preservation Act(NHPA) (16 U.S.C. 470 et seq.) whichcreates a mandatory review andconsultation process for Federalundertakings that may affect propertiesincluded in or eligible for inclusion inthe National Register of Historic Placesmaintained by the Secretary of theInterior. In order to comply with NHPA,the FDIC currently requests applicantsto state whether the site is included in,or eligible for inclusion in the NationalRegister and to provide evidence thatclearance has been obtained from theSHPO. See 12 CFR § 303.2(a)(4).However, the proposed filingprocedures at § 303.42(b)(5) modify the

current requirements to provide thatapplicants submit a statement thatclearance has been or will be obtainedfrom the SHPO. In addition, the FDIC isundertaking a review of its statement ofpolicy on the National HistoricPreservation Act of 1966 as part of theCDRIA review process and is exploringthe possibility of entering into aprogrammatic agreement with theAdvisory Council on HistoricPreservation which would greatlystreamline the historic preservationreview process, especially for thoseapplications which do not involve ahistoric site. The FDIC expects to issuea revised statement of policy on NHPAin 1998.

Finally, the comment received on theFDIC’s written policies concerned thestatement of policy on Applications forDeposit Insurance. Discussion of thecomment is contained in the revisedstatement of policy on Applications forDeposit Insurance published elsewherein today’s Federal Register.

The proposed revisions to part 303seek to reduce regulatory burden oninsured depository institutions,particularly upon state nonmemberbanks supervised by the FDIC. Theproposed rule also strives to moreclosely align the FDIC’s applicationprocessing regulations with those of theother federal banking agencies.Furthermore, the proposal reflectschanges to the FDIC’s applicationprocedures made by EGRPRA.

II. DiscussionThe proposed regulation meets the

goals of section 303(a) of CDRIA inseveral important ways.

• New expedited processingprocedures have been introduced for sixapplication types which represent themajority of all filings (applications fordeposit insurance, mergers, branches,consent to exercise trust powers,retirement of capital, and certain foreignbanking activities).

During the first six months of 1997,the FDIC acted on 1615 applications,notices and requests. Approximately1500 or 93 percent of these filings wereof the type for which expeditedprocessing or notice procedures wouldbe available under this proposal. Underpresent regulations, only 130 of thefilings acted upon during the first sixmonths of 1997 actually took the formof notices with clear time frames forregulatory action. In addition toreducing processing time for filingssubmitted by well managed and wellcapitalized banks, the proposedexpedited procedures will add morecertainty to the timing of regulatorydecision. This new approach will allow

the FDIC to focus its resources onapplications that do not fall within thenew expedited review procedure andare therefore more likely to presentsafety and soundness risks or raise CRAor compliance concerns.

• The processing of someapplications has been structured to actlike notices. For example, applicationsto establish a branch or to relocate amain office or branch processed underexpedited procedures will generally bedeemed approved 21 days after receiptof a substantially complete application.Branch related applications representedmore than 50 percent of all applicationsacted upon by the FDIC in the first sixmonths of 1997.

• Regulations and guidelines issuedby the federal banking agenciesimplementing common statutes havebeen made more uniform. This isparticularly true for filings regardingmergers, changes in bank control, andchanges in director or senior executiveofficer.

• Filing contents have been clarifiedand streamlined wherever practical.Examples include applications for amerger which qualifies as a corporatereorganization, a temporary office in anemergency or disaster situation,applications for deposit insurance for aninterim institution in connection with arelated merger transaction, andapplications for continuation for depositinsurance by a state bank withdrawingfrom the Federal Reserve System.

• The procedural requirements forvirtually all applications and noticeshave been centralized in part 303.Subpart A of the proposed regulationcontains the general rules applicable toall filings. Each subpart that followscontains all of the proceduralrequirements for a particular applicationtype. For example, subpart C onbranching contains definitionsapplicable to that subpart, filingprocedures, processing procedures,public notice provisions and delegationsof authority. Subpart M containsmiscellaneous filings that do not meritseparate subparts. Subpart N containsall administrative enforcement actiondelegations.

• Delegations of authority from theFDIC’s Board of Directors to theDirectors of DOS, DCA, the GeneralCounsel of the Legal Division, and theExecutive Secretary to act on certainapplications, notices, requests, andenforcement matters have beenreviewed and updated.

• Duplicative and outdated materialhas been deleted from existing part 303.An example is eliminating applicationprocedures for the establishment orrelocation of a remote service facility,


1 An FDIC-assigned composite UFIRS rating maybe based on the FDIC’s own examination, or basedon the review of examination reports prepared bystate banking authorities or the other federalbanking agencies.

which is no longer required pursuant tosection 2205 of EGRPRA.

Concurrently with this proposal toamend part 303, the FDIC is publishingelsewhere in today’s Federal Registertwo revised statements of policy onApplications for Deposit Insurance andBank Merger Transactions for comment.The FDIC is also proposing elsewhere intoday’s Federal Register to rescind itsstatements of policy on Applications toEstablish a Domestic Branch andApplications to Relocate Main Office orBranch, and to amend its statement ofpolicy on Liability of CommonlyControlled Depository Institutions. Thelatter policy statement is being amendedto move the application procedures torequest a waiver of cross-guarantyliability from the policy statement toproposed part 303. It is recommendedthat interested parties read those policystatements in conjunction with theproposed regulatory text of part 303 andsubmit combined comments to theagency, if practicable.

In addition, the FDIC has alreadyrescinded the following policystatements related to part 303 asunnecessary or duplicative:

• Changes in Control in Insured StateNonmember Banks (62 FR 24927, May7, 1997)

• Applications, Legal Fees, and OtherExpenses (62 FR 15479, April 1, 1997)

• Eligibility to Make Application toBecome an Insured Bank Under Section5 of the Federal Deposit Insurance Act(62 FR 15706, April 2, 1997)

The FDIC rescinded the first twostatements of policy because anynecessary substantive informationcontained in them has been moved tothe proposed regulation or other policystatements. The third statement ofpolicy was rescinded because theanalysis was based on a provision of theFDI Act that was repealed by theFederal Deposit Insurance CorporationImprovement Act of 1991 (Pub. L. 102–242, 105 Stat. 2236).

III. Proposed Rule

The discussion below identifies andexplains significant proposed changes topart 303. The FDIC requests generalcomments on all aspects of the proposedregulation as well as specific commentson certain issues as noted throughoutthe preamble. To aid the reader, aderivation table follows the preamblewhich relates the sections of proposedpart 303 to current part 303, as well asother sections of the FDIC regulationswhich are being relocated to part 303.

A. Subpart A—Rules of GeneralApplicability

Subpart A of part 303 clarifies andsimplifies the rules generally applicableto processing of applications, noticesand requests (filings) required byregulation or statute by reorganizing thedefinitions and general rules ofprocedure currently found in § 303.0and § 303.6, respectively, into onesubpart. Subpart A also explains theavailability of expedited processing foran ‘‘eligible depository institution’’(defined in proposed § 303.2(r)) and thecriteria under which the FDIC mayremove a filing from expeditedprocessing. Further, subpart A containsgeneral principles governing delegationsof authority from the Board of Directorsto certain FDIC officials, most of whichare currently contained in § 303.10(a)and § 303.11 (a) and (b).

The availability of expeditedprocedures for several major types offilings (deposit insurance, branches, andmergers) as well as some other filings(for example, consent to exercise trustpowers and reduce/retire capital stockor capital debt instruments) will reduceburden upon the banking industry byenabling banks and thrifts to undertakecorporate activities more quickly.Expedited processing will alsointroduce more certainty into theapplication process for both applicantsand interested parties by establishingfixed timeframes for decision andreceipt of comment letters. Furthermore,centralizing in one subpart generalinformation that was previouslyscattered throughout part 303 will makepart 303 much easier to use for thepublic, bankers, attorneys andregulators.

In addition to reorganizing existingregulatory text into one subpart, subpartA also updates terminology, streamlinesprocedures, and reflects current FDICpolicies and practices.

Definitions. Subpart A alphabetizesthe definitions currently set forth in§ 303.0 and adds several newdefinitions.

New definitions of ‘‘applicant’’ and‘‘filing’’ were added for ease of draftingregulatory text and to add clarity andconsistency. ‘‘Applicant’’ is intended toreplace the terms ‘‘insured depositoryinstitution,’’ ‘‘state nonmember bank’’ or‘‘individual’’ where they appearthroughout part 303. The scope sectionof each subpart will explain whetherparticular filing procedures areapplicable to all insured depositoryinstitutions or only to state nonmemberbanks. The term ‘‘filing’’ is intended toprovide a convenient way to collectivelyrefer to applications, notices, or

requests, where appropriate throughoutpart 303. New definitions were alsoadded for ‘‘application’’ and ‘‘notice’’ toclarify the distinctions between thosetypes of filings.

A definition of ‘‘insider’’ was addedto avoid duplication in several subparts.The current definition of ‘‘protest’’found in § 303.0(b)(30) has beenreplaced with three terms (‘‘comment,’’‘‘adverse comment,’’ and ‘‘CRAprotest’’) to distinguish among the typesof comments that DOS and DCA mayreceive in connection with a pendingfiling. The term ‘‘deputy director’’ hasbeen defined to include deputydirectors of both DOS and DCA toreflect those positions. Also, a definitionhas been added for ‘‘General Counsel’’of the FDIC. Further, the various typesof Section 8 enforcement orders havebeen grouped under one category‘‘Section 8 orders’’.

A new definition of ‘‘eligibledepository institution’’ has been addedto establish criteria that institutionsmust meet to qualify for expeditedprocessing, as discussed below.

Definitions of ‘‘Associate GeneralCounsel for Compliance andEnforcement,’’ ‘‘regional manager,’’ and‘‘remote service facility’’ are beingremoved as obsolete or no longernecessary.

Expedited processing. Subpart A setsforth the general procedures forexpedited processing, for which only aneligible depository institution qualifies.Proposed § 303.2(r) of subpart A definesthe term ‘‘eligible depositoryinstitution’’ as a depository institutionthat meets the following five criteria: (1)Received an FDIC-assigned compositeUniform Financial Institutions RatingSystem (UFIRS) rating of 1 or 2 as aresult of its most recent federal or stateexamination; 1 (2) received at least asatisfactory CRA rating from its primaryfederal regulator at its last examination;(3) received a compliance rating of 1 or2 from its primary federal regulator at itslast examination; (4) is well-capitalized;and (5) is not subject to any correctiveor supervisory order or agreement.Although an institution must have asatisfactory or better CRA rating in orderto qualify for expedited processing forany filing, the CRA performance of aninstitution will serve as a basis fordecision only in connection with‘‘applications for a deposit facility’’ asrequired by section 2903(2) of theCommunity Reinvestment Act (12U.S.C. 2903(2)). Proposed § 303.5 sets


forth those relevant filings for which aninstitution’s CRA record will be takeninto account (deposit insurance,mergers, and establishment or relocationof a branch or main office, including therelocation of an insured branch of aforeign bank). The FDIC believes thatthese five criteria for eligibility areappropriate to ensure that only well-capitalized, well-managed institutionsthat do not present any supervisory,compliance or CRA concerns receiveexpedited processing. The FDICspecifically requests comment onwhether these standards for eligibilityare appropriate.

It should be noted that the FDICrecently issued two proposed rules forcomment which would revise andconsolidate its international bankingregulations (12 CFR part 347) andregulations governing the activities andinvestments of insured state banks andsavings associations (12 CFR part 362).62 FR 37748, July 16, 1997; 62 FR47969, Sept. 12, 1997. These proposalsalso contain expedited procedures anddefinitions of an ‘‘eligible’’ type ofinstitution which generally parallelproposed § 303.2(r) of subpart A, butadd two additional criteria: (1) That theinstitution has been chartered andoperating for at least three years; and (2)that the institution received a rating of1 or 2 under the ‘‘management’’component rating of the UFIRS at itsmost recent examination. The additionalcriteria may be appropriate inconnection with the part 347 and 362proposals to the extent that theeligibility criteria govern substantiveissues beyond the question of whetheran application should receive expeditedprocessing. The FDIC will evaluate thenecessity of the additional criteria in thecontext of parts 347 and 362 as it goesforward with those rulemakings.

Under § 303.11(c) of the proposedrule, expedited processing will beautomatically given to institutionsmeeting the definition of an ‘‘eligibledepository institution’’ (with a fewexceptions where other conditionsapply) upon determination by theappropriate regional director (DOS).Therefore, an applicant need not requestexpedited processing or even identifyitself as an eligible institution. A filingmay be removed from expeditedprocessing pursuant to proposed§ 303.11(c)(2) if: (1) For filings subject topublic notice, an adverse comment isreceived that warrants additionalinvestigation or review; (2) for filingssubject to evaluation of CRAperformance, a CRA protest is receivedthat warrants additional investigation orreview, or the appropriate regionaldirector (DCA) determines that the filing

presents a significant CRA orcompliance concern; (3) for any filing,the appropriate regional director (DOS)determines that the filing presents asignificant supervisory concern, orraises a significant legal or policy issue;or (4) for any filing, the appropriateregional director (DOS) determines thatother good cause exists for removal. Ifa filing is removed from expeditedprocessing, the applicant will bepromptly informed in writing of thereason. For filings which theappropriate regional director has notbeen delegated authority to approve, thefiling will generally be removed fromexpedited processing.

Computation of time. Previously, part303 simply contained a cross-referenceto § 308.12, which governs computationof time for purposes of the FDIC’s rulesof administrative procedure. Theproposed rule clarifies that the FDICuses a calendar day rule and beginscomputing the relevant period on theday after an event occurs (for example,the day after receipt of a filing ornewspaper publication).

Effect of CRA performance on filings.This new section clearly states that CRAperformance will be considered inconnection with applications toestablish a domestic branch or relocatea domestic branch or main office,merger applications, and depositinsurance applications, and clarifiesthat CRA applies to applications torelocate an insured branch of a foreignbank. Although this information iscurrently contained in part 345(Community Reinvestment Act), theFDIC believes that an explicit statementconcerning the filings covered by CRAbetter serves the public and the bankingindustry than providing a cross-reference.

Public notice. Current § 303.6(f)(4)reproduces a notice that institutions arerequired to use when publishing noticeof a filing in a local newspaper. Under§ 303.7(c) of the proposed rule,applicants are offered the choice of asample notice or a list of contents whichmay be used to draft a notice tailored tothe needs of the institution. This choiceis designed to reduce burden on thebanking industry by providing moreflexibility.

Proposed § 303.7(b) adds a newprovision requiring confirmation ofpublication. Promptly after publication,the applicant must mail or otherwisedeliver a copy of the newspaper noticeto the appropriate regional director(DOS). This is designed to avoidpossible delays in processing if adefective notice is discovered.

Proposed § 303.7(d) reduces burdenby providing that an applicant may

publish a single public notice formultiple transactions provided that thenotice includes an explanation of howthe transactions are related and statesthe closing date of the longest publiccomment period that will apply.Further, § 303.7(e) of the proposed rulestates that the FDIC may accept thepublication of a single joint noticecontaining information required by boththe FDIC and another federal bankingagency or state banking authorityprovided that the notice states thatcomments must be submitted to bothagencies.

Public comments. Current§ 303.6(f)(3) permits interested parties tocomment upon a pending filing untilthe date of final disposition. Proposed§ 303.9(a) provides that commentswould be accepted only during adefined comment period in order to addcertainty to the filing process for boththe public and the applicant. Closingthe comment period on a date certaineliminates the risk of final action beingdelayed due to a late comment or offinal action being taken while acomment is in the process of beingtransmitted to the FDIC.

In order to provide the public withadequate time to submit meaningfulcomments, proposed § 303.9(b)(2) grantsthe appropriate regional director (DOS)three bases upon which to extend orreopen the public comment period: (1)If the applicant fails to file all requiredinformation on a timely basis to permitreview by the public or makes a requestfor confidential treatment not granted bythe FDIC that delays the publicavailability of that information; (2) ifany person requesting an extension oftime satisfactorily demonstrates to theFDIC that additional time is necessary todevelop factual information that maymaterially affect the application; or (3)for good cause. Good cause is currentlythe only basis for extension of thecomment period under § 303.6(f)(3).

Further, proposed § 303.9(b)(4)clarifies that the FDIC will providecopies of all comments to the applicantand that the applicant will be given anopportunity to respond.

Hearings and other meetings.Proposed § 303.10 simplifies the currentrules concerning hearing procedurescontained in § 303.6 (h), (i), and (j) andupdates those provisions to reflectcurrent FDIC practices.

Decisions on filings. Proposed§ 303.11 sets forth new provisionsconcerning multiple transactions,abandonment of filings, andnullification of decisions. With regard tomultiple transactions, if all relatedtransactions have been grantedexpedited processing, then the longest


expedited processing time will governfor all transactions. The proposed rulealso codifies current FDIC practiceconcerning abandonment of filings. If anapplicant does not provide additionalinformation requested by the FDICwithin the time period specified, theFDIC may notify the applicant that thefiling has been deemed abandoned andprocessing has been discontinued. Theproposal also contains threenullification provisions. The FDIC maynullify a decision on a filing if: (1) Theagency becomes aware of any materialmisrepresentation or omission afterrendering a decision; (2) the agency isnot informed by the applicant of asubsequent material change incircumstances prior to rendering adecision; or (3) the decision is contraryto law, regulation, or FDIC policy, orgranted due to clerical or administrativeerror, or a material mistake of law orfact. The FDIC believes these provisionsare useful additions to part 303.

Appeals and petitions forreconsideration. Current § 303.6(e)contains the FDIC’s proceduresgoverning petitions for reconsiderationof a denied filing. Proposed § 303.11(f)would clarify that these procedurescover only requests for reconsiderationof filings that do not otherwise haveappeal procedures provided by otherregulation or written guidance, and thatdecisions to deny a hearing request arenonappealable.

As proposed, § 303.11(f)(2) providesthat within 15 days of receipt of noticefrom the FDIC that its filing has beendenied, an applicant may file a petitionwith the appropriate regional directorcontaining either a resolution of theboard of directors of the applicantauthorizing filing, if the applicant is acorporation or other entity, or a lettersigned by the individual(s) filing thepetition, if the applicant is not acorporation or other entity. As under theexisting rule, the filing must containsubstantive information that for goodcause was not previously set forth in thefiling and specific reasons why the FDICshould reconsider its prior decision.

A regional director or deputy regionaldirector (DOS or DCA) may approve, butnot deny, a petition for reconsideration.However, the Director or DeputyDirector (DOS or DCA) may approve ordeny a petition. If the petition isgranted, the filing will be reconsideredby the Board of Directors if the filingwas originally denied by the Board ofDirectors or denied by the Director,Deputy Director, or an associate director(DOS or DCA). The Director or DeputyDirector (DOS or DCA) will reconsiderthe filing if the filing was originallydenied by a regional director or deputy

regional director. Proposed § 303.11(f)also clarifies that a decision on apetition for reconsideration by theDirector or Deputy Director (DOS orDCA) is a final agency decision and isnot appealable to the Board of Directors.

The FDIC specifically seeks commenton its new petition for reconsiderationprocedures, which are designed toprovide a more objective review. Itshould be noted that the FDIC hasseparate appeal procedures regardingmaterial supervisory determinationssuch as examination ratings, materialdisputed asset classifications,determinations regarding violations oflaws and regulations, etc. which werepublished in the Federal Register onMarch 25, 1995. 60 FR 15923. Inaddition, procedures for requesting areview of assessment risk classificationand for revision of computation ofquarterly assessment payments arecontained in part 327. Therefore,proposed § 303.11(f) applies only tofilings as that term is defined in part303.

General delegations of authority.Proposed § 303.12 contains the generalprinciples governing delegations ofauthority from the Board of Directors toFDIC officials. Some, but not all, ofthese principles are currently containedin §§ 303.10(a) and 303.11 (a) and (b).This proposed section states that theBoard does not delegate its authorityregarding matters covered in the FDIC’sregulations unless such a delegation isspecifically made. However, in matterswhere the Board has neither specificallydelegated nor retained authority, FDICofficials may take action with respect tomatters which generally involveconditions or circumstances requiringprompt action to protect the interests ofthe FDIC and to achieve flexibility andexpedition in the exercise of FDICfunctions under part 303. Delegationsare to be broadly construed in favor ofthe existence of authority in FDICofficials who act under delegatedauthority, and any exercise of delegatedauthority by an official is conclusiveevidence of that official’s authority. Thepurpose of this broad construction is topromote the efficient operation of theFDIC, to allow the public to rely onactions of FDIC officials, and todiscourage frivolous challenges to theexercise of delegated authority.

Delegations of authority to DOS andDCA officials. Proposed § 303.13contains delegations of authority to DOSand DCA officials to enable them tocarry out the FDIC’s applicationsfunction.

Where a CRA protest is filed andremains unresolved, proposed§ 303.13(a) delegates authority to the

regional director or deputy regionaldirector (DCA) to concur that approvalof any filing subject to CRA is consistentwith the purposes of CRA. Previously,receipt of a CRA protest caused a filingto be forwarded to Washington forreview. This change in policy isexpected to improve and expeditedecision making by placing it closer tothe source.

For purposes of determining when tocommence processing of a filing,proposed § 303.13(b) delegates authorityto DOS officials to determine whether afiling is substantially complete. Thisprovision also is intended to clarify thatthe standard to initiate the processingperiod is the receipt of a substantiallycomplete filing.

Proposed § 303.13(c) contains adelegation of authority permitting DOSofficials to enter into memoranda ofagreement pursuant to regulations of theAdvisory Council on HistoricPreservation which implement theNational Historic Preservation Act(NHPA). This provision is currentlyfound in § 303.8(g) of the FDIC’sregulations and facilitates the agency’sability to comply with NHPA.

B. Subpart B—Deposit Insurance

Since passage of the Federal DepositInsurance Corporation Improvement Actof 1991 (Pub. L. 102–242, 105 Stat.2236), all proposed depositoryinstitutions or existing noninsureddepository institutions that desirefederal deposit insurance have beenrequired to apply to the FDIC. Thisincludes all nationally chartered banks,state or federally chartered savingsassociations, and state chartered banks,including state member banks.

Subpart B reorganizes and clarifiesthe filing and processing procedures foran applicant to follow in applying fordeposit insurance for a proposed orexisting noninsured depositoryinstitution, for an interim depositoryinstitution (when required), and forcontinuation of deposit insurance for astate bank upon withdrawing frommembership in the Federal ReserveSystem. The proposal updates theregulation to reflect current statutoryrequirements and current FDIC policyfor processing such applications.Subpart B also sets forth the delegationsof authority and criteria under whichDOS may approve such applications.The proposed rule should be read inconjunction with the FDIC’s revisedpolicy statement on Applications forDeposit Insurance found elsewhere intoday’s Federal Register. Substantivechanges to the regulatory text arediscussed below.


Expedited processing. Underexpedited processing, an application fordeposit insurance for a proposeddepository institution which will be asubsidiary of an ‘‘eligible depositoryinstitution’’ or an ‘‘eligible holdingcompany’’ will be processed within 60days of receipt of a substantiallycomplete application or 20 days afterpublication, whichever is later.Currently, deposit insuranceapplications are processed within 120days. See FDIC Financial InstitutionsLetter 26–96 dated May 6, 1996. Aneligible depository institution is definedin proposed § 303.2(r). An eligibleholding company is defined in proposed§ 303.22(a) as a bank or thrift holdingcompany which has consolidated assetsof $150 million or more; has an assignedcomposite rating of 2 or better; and hasat least 75 percent of its consolidateddepository institution assets in eligibledepository institutions. If the FDIC doesnot act within the expedited processingperiod, it does not constitute anautomatic or default approval. Publiccomment is invited on the definition ofeligible holding company and the timeframe for processing applications fordeposit insurance under expeditedreview.

Public notice and comment period.Current regulations state that noticeshall be published on the date theapplication is mailed or delivered to theregional director or not more than 30days prior to that date. Under proposed§ 303.23(a), notice would be publishedas close as practicable to the filing datebut not more than five days before thefiling date. This provides assurance thatthe public portion of the application filewill be available for inspection duringthe comment period.

Currently, the notice informs thepublic that comments may be filed withthe regional director at any time beforeprocessing of the application has beencompleted and that processing will notbe completed earlier than the 15th dayfollowing either the date of publicationor date of receipt of the application,whichever is later. Proposed § 303.23(a)would require that interested parties filecomments with the regional director onor before the 15th day following the dateof publication. Closing the commentperiod eliminates the risk of final actionbeing delayed due to a late comment orof final action being taken while acomment is in the mail to the FDIC. Theproposed 15-day comment period isconsidered adequate time for aninterested party to provide comments.Also, the regional director may extendor reopen the comment period for goodcause, such as when an interested partycannot provide comments within the 15

days for reasons beyond the party’scontrol. Comment is invited on theadequacy of the 15 day comment period,especially in light of the ability ofregional directors to extend or reopenthe comment period under § 303.9(b)(2).

Application for deposit insurance foran interim depository institution. Aninterim depository institution is definedin proposed § 303.24(a) as an institutionformed or organized solely to facilitatea merger transaction which will bereviewed by one of the four federalbanking agencies and that theinstitution will not open for business.The filing will consist of a brief letterapplication and a copy of the relatedmerger transaction. Also, newspaperpublication requirements concerningthe application for deposit insurance foran interim is being eliminated asunnecessary since public notice wouldbe required for the merger transaction,which is considered to be the primarytransaction. It is anticipated that theFDIC will consult with the federalbanking agency reviewing the mergerapplication and that final action on thedeposit insurance application will betaken within 21 days after receipt of asubstantially complete application. Ifadditional review by the FDIC iswarranted, the applicant will be soadvised in writing.

Continuation of deposit insuranceupon withdrawing from membership inthe Federal Reserve System. Proceduresare being simplified. Under § 303.25 ofthe proposal, the applicant would file aletter application containing theinformation specified in the regulation,including a new requirement that theapplication must contain a statement bythe bank’s management that there are nocurrent outstanding or proposedcorrective programs or supervisoryagreements with the Federal ReserveSystem. If such programs or agreementsexist, the application must contain astatement that the bank’s board ofdirectors is willing to enter into asimilar agreement with the FDIC whichwould become effective upon the date ofwithdrawal from the Federal ReserveSystem. The regional director wouldnotify the applicant in writing within 15days of the date a substantially completeapplication is received that depositinsurance will continue upontermination of membership in theFederal Reserve System or thatadditional review will be necessary. Ifadditional review is warranted, theregional director would inform theapplicant in writing of the reasons andinform the applicant that it will benotified in writing of the FDIC’s finaldecision regarding continuation ofdeposit insurance. Upon further review,

the regional director may approve thecontinuation of deposit insurance or, ifdenial is deemed warranted, forward arecommendation for action by the FDICBoard of Directors.

Other changes. Current§ 303.7(d)(1)(ii) lists a number ofspecific criteria that must be met beforedelegated authority can be exercised.The criteria relate to initialcapitalization, legal fees and otherexpenses, projected profitability,investment in fixed assets and financialarrangements involving insiders,including stock financing arrangements.These criteria, which have been updatedto reflect current policy, are discussedin the revised policy statement onApplications for Deposit Insurancewhich is simply cross-referenced in theproposed rule to avoid duplication.

Current § 303.7(d)(1)(iii)(A) states thatauthority to approve an application fordeposit insurance may not be delegatedto the regional director or deputyregional director where a protest underthe Community Reinvestment Act (CRA)is filed. This provision is being revisedto permit approval of a CRA-protestedapplication by the regional director(DOS) or deputy regional director (DOS)where the protest has been reviewed byDCA, the regional director (DCA) ordeputy regional director (DCA) concursthat approval is consistent with thepurposes of the CRA, and the applicantagrees in writing to any conditionsimposed regarding the CRA.

Section 303.7(d)(1)(iii)(B) of thecurrent regulation states that theauthority to approve an application maynot be delegated to a regional director ordeputy regional director where: (1)There is direct or indirect financing byproposed directors, officers or 5 percentor more shareholders of more than 75percent of the purchase price of thestock subscribed by any oneshareholder; (2) there is aggregatefinancing of stock subscriptions inexcess of 50 percent of the total capitaloffered; or (3) warehoused or trusteedstock exceeds 10 percent of initialcapital funds. This provision is beingeliminated because the revised policystatement contains a comprehensivediscussion of financing that the FDICbelieves provides adequate guidance. Ifproposed financing is not within theestablished guidelines, the regionaldirector will forward a recommendationto the Director (DOS).

A new provision found at§ 303.26(d)(2) would permit DOS toimpose a condition which requires themaintenance of a leverage capital ratioof at least 8 percent throughout the firstthree years of operation of a depositoryinstitution while also providing an


adequate allowance for loan and leaselosses. This clarifies the FDIC’s long-standing position that the minimumratio of 8 percent is to be maintainedthroughout the first three years ofoperation rather than only requiring thatthe ratio be at least 8 percent at the endof the third year of operation.

Under current § 303.7(d)(2)(i),authority to approve applications fordeposit insurance by operatingnoninsured institutions is delegated tothe regional director (DOS) or deputyregional director (DOS) only for thoseapplicant institutions with total assetsof less than $250 million. There is nosuch restriction on the authority of theDirector or Deputy Director (DOS).Accordingly, this size limitation is beingeliminated from the proposedregulation.

Other minor changes are made withinthe subpart to facilitate reorganizationand clarification to produce a moreconcise and user-friendly regulation.

C. Subpart C—Establishment andRelocation of Domestic Branches andOffices

Subpart C reorganizes and clarifiesthe portion of part 303 that implementssection 18(d) of the FDI Act whichrequires insured state nonmember banksto obtain the prior written consent of theFDIC in order to establish a domesticbranch, relocate the main office, orrelocate a branch. The most significantchanges from the current regulation areprovisions implementing expeditedprocessing for eligible depositoryinstitutions, the addition of several newdefinitions, and the exclusion of remoteservice units, including automated tellermachines and automated loanmachines, from the definition of abranch. As proposed, applications filedby eligible depository institutions willbe deemed approved 21 days afterreceipt of a substantially completeapplication, or 5 days after theexpiration of the comment period,whichever is later. Additional technicalrequirements regarding the expeditedprocedure apply to interstate branchapplications. The average processingtime for branch applications during thefirst six months of 1997 was 30 days. Inaddition to expedited processing, theproposed subpart contains two specialprovisions which provide furtherregulatory relief. One of theseprovisions gives advance consent for therelocation of a branch or main office inthe event of a disaster or emergency andthe other provision allows the regionaldirector to waive publication requiredin the case of a redesignation of a mainoffice and existing branch.

A section has also been added toallow the regional director (DOS) toapprove an application under thissubpart that is the subject of anunresolved CRA protest, provided theregional director (DCA) finds thatapproval of the application would beconsistent with the purposes of CRAand the applicant agrees in writing toany nonstandard conditions imposedregarding CRA. This provision isexpected improve decision making byplacing it closer to the actual decisionmaker and avoiding unnecessary delays.In addition, the subpart adds provisionswhich implement relevant portions ofthe FDI Act regarding the establishmentof interstate branches and implementschanges contained in section 2205 ofEGRPRA.

Finally, as part of the systematicreview of its written policies pursuantto CDRIA, the FDIC is proposingelsewhere in today’s Federal Register torescind its Statement of Policy ofApplications to Relocate a Main Officeor Branch and Statement of Policy onApplications to Establish a DomesticBranch. Both statements are consideredobsolete and unnecessary in view of thecomprehensive approach taken insubpart C.

Scope. Proposed § 303.40 limits thescope of this subpart to applicationsregarding the establishment of domesticbranches, and the relocation of a mainoffice or domestic branch, includingprovisions regarding interstatebranching. Excluded from the scope ofthe subpart are filings for the approvalof the acquisition and establishment ofbranches in connection with a bankmerger transaction. Proposedregulations for such filings are found insubpart D. The scope of the subpart alsodoes not include filings by insuredbranches of foreign banks to relocate abranch or filings by state nonmemberbanks to establish a foreign branch.Proposed regulations regarding foreignbanks and branches are contained insubpart J.

Interstate branching. The Riegle-NealInterstate Banking and BranchingEfficiency Act of 1994 (Interstate Act)(Pub. L. 103–328, 108 Stat. 2338)became effective on September 29, 1994,and, among other things, amended theFDI Act to establish a federal frameworkfor interstate branching effective June 1,1997. Among the new interstatebranching authorities added by theInterstate Act are a provision regardingthe retention of branches after aninterstate relocation of a main office anda provision regarding interstatebranching through de novo branches.

Section 102(b)(3) of the Interstate Actadds a new paragraph (3) to section

18(d) of the FDI Act that permits a statenonmember bank, after the relocation ofits main office to another state, to retainbranches in its former home state. Homestate means the state by which a statebank is chartered. This authority is,however, subject to certain limitations.A bank relocating its main office fromone state to another may retain itsbranches in the original state only to theextent that the bank would beauthorized, as a bank chartered in thenew state, to establish or acquire thosebranches. As of June 1, 1997, an out-of-state bank may establish branches inanother state only if it is authorized toestablish such branches (i) as de novobranches under section 18(d)(4)(A) ofthe FDI Act, (ii) as a result of aninterstate merger transaction undersection 44 of the FDI Act, or (iii) as aresult of an emergency assistedtransaction under section 13(f) or 13(k)of the FDI Act. In effect, this provisionmeans that a state nonmember bank canrelocate its main office to another stateand retain its existing branches in theoriginal state if it could, as a bankchartered in the new state, establishthose branches in the original state.Therefore, if the bank were consideredto be chartered in such new state andcould, with such other-state charter,establish those branches in the originalstate by means of an interstate de novobranch transaction, an interstate merger,or an emergency assisted transaction,then it can retain those branches.Accordingly, the proposed rule includesa requirement that an applicant seekingto relocate its main office interstateindicate whether the applicant intendsto retain its existing home statebranches.

Section 103(b) of the Interstate Actadds a new paragraph (4) to section18(d) of the FDI Act that permits,subject to certain requirements andconditions, interstate branching throughde novo branches. Under this authoritythe FDIC may approve an application bya state nonmember bank to establish andoperate a de novo branch in a state thatis not the bank’s home state and inwhich the bank does not currentlymaintain a branch. In order to grantsuch approval, the FDIC must: (i)Determine that the host state (the statein which the bank seeks to establish abranch) has in effect a law that appliesequally to all banks and expresslypermits all out-of-state banks toestablish de novo branches in suchstate, (ii) determine that the applicanthas complied with the host state’s filingrequirements and has submitted to thehost state a copy of the application itfiled with the FDIC, (iii) determine that


the applicant is adequately capitalizedand will continue to be adequatelycapitalized and adequately managedupon consummation of the transaction,and (iv) take the applicant’s CRA recordinto consideration. Except for item (ii)in the foregoing listing, the FDICgenerally has the resources needed tomake the determinations required.Accordingly, among the applicationprocedures included in this proposedrule is the requirement that theapplicant request that the host stateconfirm in writing to the FDIC that theapplicant has complied with the hoststate’s filing requirements and hassubmitted a copy of its application withthe FDIC to the host state supervisor.

Definitions. In § 303.41 of theproposal, the FDIC has addeddefinitions for ‘‘messenger service,’’‘‘mobile,’’ ‘‘temporary,’’ and ‘‘seasonalbranches’’ and, as noted above, ‘‘denovo’’ branches as well as definitions of‘‘home state’’ and ‘‘host state’’ . In aneffort to promote uniformity andincrease the use of common terms, thedefinitions used in this subpart aresimilar to those used by other federalbanking agencies.

With regard to the definition of‘‘branches,’’ the proposed regulation at§ 303.41(a) clarifies that remote serviceunits, including automated loanmachines, are not branches. Theexclusion of automated teller machinesand remote service units is a result ofstatutory changes contained in section2205 of EGRPRA.

The definition of ‘‘messengerservices’’ in § 303.41(a)(1) provides thatbranch applications will be requiredonly for those messenger servicesoperated by a bank or an affiliate thatpicks up and delivers items relating totransactions between the bank and itscustomer in which deposits arereceived, checks paid or money lent. Amessenger service established andoperated by a non-affiliated third partygenerally does not constitute a branchfor purposes of this subpart. Bankscontracting with third parties for suchservices should consult with theappropriate regional director (DOS) todetermine if the messenger serviceconstitutes a branch.

Section 303.41(a)(2) defines ‘‘mobilebranch’’ as a branch service that doesnot have a permanent site and includesa vehicle that travels to various publiclocations and enables the applicantbank to conduct banking business withits customers. Because of the mobilityinherent in such branches, they mayserve regularly scheduled locations ormay be open at irregular times andlocations.

The definition of ‘‘temporary branch’’contained in § 303.41(a)(3) clarifies thata bank may operate such a branch as apublic service such as during anemergency or disaster to providenecessary banking services. A temporarybranch can be approved for a period notto exceed one year. Such a time periodshould provide sufficient time for theapplicant to restore appropriate servicesto the community.

The definition of ‘‘seasonal branch’’in § 303.41(a)(4) provides that such abranch operate at periodically recurringintervals, such as during state fairs. Thisdefinition differs from the temporarybranch in that once an application isapproved for a seasonal branch, theapplicant bank may return to that siteon a recurring basis without the need toreapply.

‘‘Branch relocation’’ is defined in§ 303.41(b) as a move within the sameimmediate neighborhood of the existingbranch that does not substantially affectthe nature of the business of the branchor the customers of the branch. Movinga branch to another location outside itsimmediate neighborhood is consideredthe establishment of a new branch andthe closing of an existing branch.

The proposed regulation at § 303.41(c)defines a ‘‘de novo branch’’ to mean abranch of a bank which is originallyestablished by the bank and which doesnot become a branch of such bank as aresult of the acquisition, conversion,merger, or consolidation of an insureddepository institution or a branch of aninsured depository institution.

Definitions are also proposed for‘‘home state’’ and ‘‘host state’’ at§ 303.41 (d) and (e). A home state meansthe state by which the bank is charteredand host state means a state, other thanthe home state of the bank, in which thebank maintains, or seeks to establishand maintain, a branch.

Filing procedures. The proposedregulation also changes variousapplication requirements. Changesaddress the timing of filing, thesubmission of copies of the publication,the inclusion of the geographic area inwhich a messenger service will operate,the inclusion of the community orcommunities in which a mobile branchwill operate, and whether the mobilebranch will serve various regularlyscheduled locations or be open atirregular times and locations.

As proposed in § 303.42, an applicantmust submit a letter application on thedate the notice required by proposed§ 303.44 is published or within 5 daysafter the date of the last requiredpublication. Previously, applicantscould file up to 30 days subsequent tothe first publication date. By filing

applications 5 days after the date of thelast newspaper publication, banks areable to submit all copies of thenewspaper publications required by theproposed regulation and the public willhave the assurance that the applicationwill be on file during the commentperiod.

Proposed § 303.42(b)(7) has beenadded to require applicants to submit acopy of each newspaper publication inaddition to providing the date ofpublication and the name and addressof the newspaper. In the past, applicantshave been required to immediatelynotify the FDIC after the publication.Submitting a copy of the newspapernotice allows FDIC to verify publicationand the contents of the notice.

The proposed regulation at§ 303.42(b)(2) clarifies the filingprocedures for messenger services andmobile branches. Since messengerservices by their very nature are notserving a fixed location, the designationof a specific site for operation is notpractical. Rather these types of brancheswill operate in defined geographic areas,such as a neighborhood, city or county.By approving such applications on ageographic area, banks will be able tooperate freely without reapplying forchanges to schedules. Filings relative tomobile branches however must disclosethe community or communities to beserved and the intention to servedefined locations on a regular scheduleor to be open at varing times andlocations. Knowledge of the communityor communities to be served assists theFDIC in determining compliance withthe applicable statutory and regulatoryprovisions relating to branch filings.Applicants must, however, reapplywhen the geographic area to be servedchanges.

Processing. Pursuant to proposed§ 303.43(a), the FDIC proposes toexpedite processing for eligibledepository institutions. It is the FDIC’sintent to reduce regulatory burden forwell-run, well-managed institutions byproviding expeditious approvals ofroutine applications to establish abranch or to relocate the main office orbranch.

Pursuant to expedited processingprocedures contained in proposed§ 303.11(c), an application submitted byan eligible depository institution asdefined in proposed § 303.2(r) will beacknowledged in writing by the FDICand will receive expedited processingunless the FDIC removes the applicationfrom expedited processing for any of thereasons set forth in § 303.11(c)(2).Section 303.43(a) provides that the FDICmay remove an application fromexpedited processing at any time before


the approval date and will promptlynotify the applicant in writing of thereason for such action. Absent suchremoval, an application processedunder expedited processing will bedeemed approved on the latest of thefollowing: (1) The 21st day after receiptof a substantially complete applicationby the FDIC, (2) the 5th day afterexpiration of the comment perioddescribed in § 303.44 of this proposal, or(3) in the case of an application toestablish and operate a de novo branchin a state that is not the applicant’shome state and in which the applicantdoes not maintain a branch, the 5th dayafter the FDIC receives from the hoststate confirmation that the applicant hasboth complied with the filingrequirements of the host state andsubmitted a copy of the application withthe FDIC to the host state banksupervisor.

The automatic approval date for anapplication under expedited proceduresprovides an applicant with a firm dateby which its application will beapproved. Under the existing regulation,the FDIC can approve applicationsimmediately after expiration of thecomment period, but applications canalso be approved much later.

For applicants not eligible forexpedited processing, the FDIC willprovide the applicant with writtennotification of the final action takenwith regard to the particular applicationas soon as a decision is rendered.

Public notice requirements. Theproposed regulation at § 303.44generally would amend and clarify thepublication requirements relating torelocating a main office and establishingor relocating branch offices. It alsoprovides for a specific time frame inwhich comments must be received.

The proposed section retains currentnewspaper publication requirementscontained in § 303.6(f)(1)(ii) of theexisting regulation, except for relocationof branches which will now requirepublication only in the communitywhich the branch serves. A branchrelocation can only occur in the sameimmediate neighborhood; hence,publication is needed in only onenewspaper since it is likely that the onenewspaper will cover all of the affectedcommunity. In such cases, the FDIC hasdeemed publication in the communityin which the home office is locatedunnecessary. Furthermore, a singlepublication is consistent with therequirements of the other federalbanking agencies. Section 303.44(a)continues the existing requirement thatfor applications to relocate a mainoffice, publication must be made at least

once each week on the same day for twoconsecutive weeks.

Currently in § 303.6, individuals maycomment until processing of theapplication is completed. In order toeliminate the uncertainty regarding theclose of the comment period, it isproposed that the comment period belimited as specified in § 303.44.Proposed § 303.44 provides thatcomments must be received by theappropriate regional director (DOS)within 15 days of the date of the lastnewspaper publication. Proposed§ 303.9 provides for extension orreopening of the comment period incertain situations.

Special provisions. Section 303.45 ofthe proposed regulation adds severalnew provisions regarding procedures foropening temporary branches inemergency or disaster situations, re-designating a main office, and providingfor the expiration of approvedapplications.

The proposed regulation at § 303.45(a)clarifies procedures relating toestablishing temporary branches inemergency or disaster situations. Thecurrent regulation on branchingcontains no specific guidance on thisissue. The FDIC recognizes the need inlimited circumstances, such asemergency or disaster situations, wherethere exists a clear public need tocontinue banking services, thatapplicants may not be in a position tofollow the normal applicationprocedures for relocation of a mainoffice or branch. As a result, theproposed regulation provides that in thecase of an emergency or disaster at amain office or branch which requiresthat an office be immediately relocatedto a temporary location, the applicantnotify the appropriate regional director(DOS) within 3 days of such temporarylocation. In such limited cases, the FDICwill accept initial notification bywhatever means appropriate. The FDICis making this limited exception toallow for the public’s need to haveuninterrupted access to bankingservices. Such prior consent to relocatethe office is appropriate because it maynot always be possible for a bank tocomply with the normal applicationprocedures for relocating a main officeor branch in such circumstances.

The proposal further provides thatwithin 10 days of the temporaryrelocation resulting from the emergencyor disaster, the bank shall submit awritten filing to the appropriate regionaldirector (DOS) that identifies the natureof the emergency or disaster, specifiesthe location of the temporary branch,and provides an estimate of the durationthe bank plans to operate the temporary

branch. Finally, depending on theparticular circumstances, as part of thereview process, the appropriate regionaldirector (DOS) may waive public noticerequirements.

Section 303.45(b) of the proposedregulation provides that in cases wherean applicant desires to designate anexisting branch as its main office andredesignate its main office as a branch,an application must be submitted torelocate the main office and to establishor relocate a branch, as appropriate. Theappropriate regional director (DOS) maywaive the public notice requirements ininstances where an application presentsno significant or novel policy,supervisory, CRA, compliance, or legalconcern. Such waiver will be grantedonly within the applicant’s home state.

With regard to the expiration ofapprovals, applications which havebeen approved by the FDIC to establishbranches and to relocate main officesand branches currently have noexpiration date. The FDIC believes thatapprovals should not remain in effectindefinitely because circumstancessurrounding an application may changeover time. Therefore, proposed§ 303.45(c) provides that approval of anapplication expires if a branch has notcommenced business or if a relocationhas not been completed within 18months of approval.

Delegation of authority. Section303.46 of the proposed regulations addsa delegation for the appropriate regionaldirector to approve interstate branches.Additionally, the proposed regulationprovides for a delegation to permitapproval of a CRA-protested applicationby the regional director (DOS) or deputyregional director (DOS) where theprotest has been reviewed by DCA, andthe regional director (DCA) or deputyregional director (DCA) concurs thatapproval is consistent with the purposesof the CRA, and the applicant agrees inwriting to any conditions imposedregarding CRA.

New § 303.46(c)(8) makes clear thatthe Board of Directors has not delegatedauthority to approve a branchapplication by a bank which the FDIChas determined is not reasonablyhelping to meet the credit needs of thecommunity served by the bank in a hoststate pursuant to section 109 of theRiegle-Neal Interstate Banking andBranching Efficiency Act of 1994 (12U.S.C. 1835a).

The proposed regulation provides thatappropriate regional directors mayexercise delegated authority to act onapplications for establishment oftemporary branches or messengerservices without a favorable resolutionof the statutory factors in section 6 of


2 The Board does not believe that it is consistentwith the language or intent of the FDI Act to insurewithout FDIC approval an institution resulting froma combination of institutions that themselves havenever been granted deposit insurance by the FDIC.

the FDI Act. This delegation recognizesthe limited nature of these types ofbranches.

The proposed regulation eliminatesan obsolete delegation of authorityrelating to applications to establish andoperate new teller’s windows, drive-infacilities, or any like office, as anadjunct to the main office or branch(including offices not consideredbranches under state law). Applicationsto establish a new teller’s window,drive-in facility, or any like offices arerequired when such a facility is abranch office. If such facilities areextensions of already approved mainoffice and branches, no application toestablish the facility is necessary.

Other changes. Several other changesare proposed that affect the new subpartC. These modifications involvechanging the term ‘‘move a main office’’to ‘‘relocate the main office,’’ changingthe term ‘‘courier service’’ to‘‘messenger service,’’ and deletingprovisions relating to remote servicefacilities.

Public comment. In addition toseeking public comments on the aboverevisions to subpart C associated withthe establishment of branches andrelocation of branches and the mainoffice, the FDIC also seeks specificpublic comments on the followingissues.

Comment period: Since the FDIC isproposing in § 303.44(b) to change froma comment period that was essentiallyopen-ended in current § 303.6 to aspecific time frame (i.e., 15 days), theFDIC seeks comment on whether a 30-day comment period is moreappropriate than the proposed 15 daysand if so, the reasons why 15 dayswould not be a feasible period of timewithin which to submit comments.

Mobile branch applications: The FDICis proposing that the geographiclocation for a mobile branch bedesignated as to which community orcommunities are to be served. The FDICseeks comment on whether such adesignation is appropriate. The FDICalso seeks comment on whether a newapplication should be required if achange is made in the community orcommunities to be served.

D. Subpart D—MergersSubpart D covers transactions subject

to FDIC approval under the Bank MergerAct (12 U.S.C. 1828(c)). This includesmergers, consolidations, and similartransactions involving insureddepository institutions (collectively,‘‘mergers’’). This subpart gatherstogether from various sections of part303 the existing provisions governingmerger applications and reorganizes

them to make the regulatoryrequirements easier to understand.Substantive changes have been made inprocessing procedures to reduceregulatory burden.

The principal changes proposed insubpart D include the addition of anexpedited processing procedure(proposed § 303.64(a)); the modificationand centralization of various definitionsapplicable to merger transactions, suchas replacement of the term ‘‘phantommerger’’ used only by the FDIC with themore commonly-used ‘‘interim merger’’(proposed § 303.61(c)); and the additionof references to other statutory orregulatory provisions often applicable tomerger transactions. These references,included at § 303.62(b), are to theinterstate merger provisions of section44 of the FDI Act (12 U.S.C. 1831u),applications for deposit insurance,insurance fund conversion transactions,branch closings, prompt correctiveaction considerations, and certificationof assumption of deposit liabilities.

The most significant change from theexisting merger approval regulations isthe proposed expedited processingprocedure. This procedure would beavailable for transactions to which allparties are eligible depositoryinstitutions (as defined in proposed§ 303.2(r)), and immediately followingwhich the resulting institution would bewell-capitalized. Under expeditedprocessing, which is generallyapplicable only to merger applicationsthat can be approved under delegatedauthority, the application would beacted upon by the latest of 45 days afterthe FDIC receives a substantiallycomplete application; 10 days after thelast newspaper publication of the noticeof the proposed merger; 5 days after theFDIC receives the Attorney General’scomments on the competitive impact ofthe merger; or, for an interstate merger,5 days after the FDIC confirms that theapplicant has satisfactorily compliedwith the filing requirements of theresulting institution’s host state. Anapplication that otherwise qualifies forexpedited processing may be removedfrom such treatment for the reasonsstated in subpart A, at proposed§ 303.11(c)(2).

Among the new references mentionedabove, the reference to depositinsurance applications at proposed§ 303.62(b)(2) clarifies that the FDIC willnot require a deposit insuranceapplication to secure insurance coveragefor an institution resulting from astatutory merger between a federally-chartered interim institution and anFDIC-insured institution, even if theresulting institution will operate underthe interim federal charter. However,

the FDIC will continue to require anapplication for deposit insurance if theentity merging with the interim federalinstitution is not insured and the partieswish the resulting institution to beinsured.2

In addition to reorganizing andenhancing the merger applicationprovisions to make them easier to use,the proposal reduces the proceduralburden on applicants. For example, inaddition to establishing an expeditedprocessing procedure, the proposalwould no longer call for copies of thecharter or articles of incorporation of theresulting institution to be routinelysubmitted with a merger application.The proposal also simplifies theapplication requirements for mergersbetween institutions that are commonly-owned outside of a bank holdingcompany structure by treating suchtransactions as ‘‘corporatereorganizations’’ (proposed § 303.61(b)).

Further, in order to add predictabilityto the procedure for receiving andreviewing public comment on proposedmergers, the proposal provides that thecomment period for non-emergencytransactions will end on the 35th dayafter the applicant’s first newspaperpublication of notice of the merger(proposed § 303.65(d)). This periodprovides additional time for interestedparties to respond to the finalpublication which occurs approximatelyon the 30th day. No change is beingmade to the public notice requirementsfor transactions determined to be anemergency requiring expeditious action.

The proposal also relaxes the FDIC’scurrent practice of requiring that thefirst newspaper notice of the merger notbe published until after the mergerapplication is filed with the FDIC.Under the proposal, the applicant maypublish its first notice up to 5 daysbefore filing with the FDIC (proposed§ 303.65(a)(1)).

With regard to CRA considerations,the proposal would expand the existingdelegation to permit approval of a CRA-protested application by the regionaldirector (DOS) or deputy regionaldirector (DOS) where the protest hasbeen reviewed by DCA, the regionaldirector (DCA) or deputy regionaldirector (DCA) concurs that approval isconsistent with the purposes of theCRA, and the applicant agrees in writingto any conditions imposed regarding theCRA (proposed § 303.66(b)(5)). Thiswould modify the existing mergerregulations, which provide that mergers


that are the subject of an unresolvedCRA protest may be approved underdelegated authority by seniorsupervisory officials in Washington, butmay not be acted upon at the regionallevel.

The proposed rule eliminatesconsideration and favorable resolutionof compliance with the NationalEnvironmental Policy Act (NEPA) (42U.S.C. 4321 et seq.) as a criteria for DOSofficials to exercise delegated authorityto approve a merger transaction. Thisprovision is currently found in§ 303.7(b)(7)(ii). The FDIC has foundthat the physical environment isunlikely to be affected by the FDIC’sconsideration of bank mergertransactions and that, typically, theprovisions of the NEPA would not beimplicated. Since the FDIC is in theprocess of reviewing its policystatement on NEPA, the agency believesit is not advisable to include a referenceto NEPA in the proposed regulatory text.

The FDIC invites comment on allaspects of the proposed revisions to themerger provisions of part 303.Comments are more specifically invitedregarding the expansion of the term‘‘corporate reorganization,’’ elements ofthe expedited processing procedures asproposed for merger applications, andthe inclusion of cross-references torelated provisions. In addition,comment is sought on the proposal torequire that comments regarding aparticular merger application be filedwith the FDIC no later than the 35th dayafter the first publication of notice of themerger.

E. Subpart E—Change in Bank ControlThe FDIC proposes to reorganize,

clarify, and simplify its regulationimplementing the Change in BankControl Act of 1978. The proposedchanges, developed in consultation withthe other federal banking agencies,attempt to harmonize the scope andprocedural requirements of the FDIC’sregulation with those of the otherfederal banking agencies and to reduceunnecessary burden.

The proposal defines the previouslyundefined term ‘‘acting in concert’’ toclarify the scope of the regulation. Italso incorporates the current FDICposition that the acquisition of a loan indefault that is secured by voting sharesof an insured state nonmember bank ispresumed to be an acquisition of theunderlying shares. Further, the proposallengthens the period of time fornotifying the FDIC from 30 to 90 daysfor shares acquired in satisfaction of adebt previously contracted in good faithor through testate or intestate successionor a bona fide gift. In the case of shares

acquired in satisfaction of a debtpreviously contracted, the proposaladds language that reflects FDICpractice of requiring the acquiror of adefaulted loan secured by a controllingamount of a state nonmember bank’svoting securities to file a notice beforethe loan is acquired.

The proposal also would reduceregulatory burden on persons whoseownership percentage increases as theresult of a redemption of voting sharesby the issuing bank or the action of athird party not within the acquiringperson’s control. In these situations, theproposal would permit the personaffected by the bank or third partyaction to file a notice within 90 calendardays after receiving notice of thetransaction. Currently, these personsmust file notice under the Change inBank Control Act prior to the action thatincreases the person’s percentageownership, and, because these personscannot control the third party actionthat causes the increased percentageownership, they are often put inviolation of the Change in Bank ControlAct and the FDIC’s Rules andRegulations.

The FDIC also proposes to providemore flexible timing for newspaperannouncements of filings under theChange in Bank Control Act bypermitting notificants to publish theannouncement as close as practicable tofiling the notice of change in control.The proposed rule removes therequirement that the notificant haveconfirmation that the FDIC has acceptedthe notice before publishing theannouncement.

The FDIC also proposes to delete theprovision governing notices filed incontemplation of a public tender offerwhich permits an acquiror to delaypublication of the newspaperannouncement. None of the otherfederal banking agencies has such aprovision.

The FDIC invites comment on all ofits proposed revisions to the regulationimplementing the Change in BankControl Act. In particular, the FDICrequests comment on whether thedefinition of ‘‘acting in concert’’ isappropriate, and whether there is reasonto retain the public tender offerprovision.

F. Subpart F—Change of Director orSenior Executive Officer

Section 32 of the FDI Act (12 U.S.C.1831i) requires certain insureddepository institutions and theirdepository institution holdingcompanies to provide at least 30 days’prior notice to the appropriate federalbanking agency before adding any

individual to the board of directors oremploying any individual as a seniorexecutive officer. The agency may issuea notice of disapproval prior toexpiration of the 30-day period if itdetermines, based upon the proposedindividual’s competence, experience,character or integrity, that it would notbe in the best interests of the depositorsor the public to permit the individual tobe employed by, or associated with, theinstitution. Section 32 permits theagency to waive the prior noticerequirement, but the agency may stilldisapprove an individual’s associationwith the institution within 30 days aftergranting such a waiver.

Until recently, section 32 requiredprior notice from a depositoryinstitution or holding company that waschartered less than two years; hadundergone a change in control withinthe preceding two years; or was not incompliance with minimum capitalrequirements or was otherwise in‘‘troubled condition.’’ Section 2209 ofEGRPRA amended section 32 byeliminating the prior notice requirementfor institutions and holding companiesthat are chartered for less than two yearsor that have undergone a change incontrol within the preceding two years.However, institutions and holdingcompanies that are not in compliancewith minimum capital requirements orare otherwise in ‘‘troubled condition’’remain subject to the prior noticerequirement. In addition, EGRPRAprovides that prior notice will berequired if the agency determines, inconnection with its review of a capitalrestoration plan required under section38 of the FDI Act (governing promptcorrective action) or otherwise, thatsuch prior notice is appropriate. Also,the EGRPRA amendments provide theagencies with more latitude todetermine the prior notice period andallow the agencies up to 90 days to issuea notice of disapproval.

The FDIC published an interim ruleimplementing section 32 as applied toinsured state nonmember banks onDecember 27, 1989 (54 FR 53040) andrequested comments. The interim rule,which added a new § 303.14 to part 303of the FDIC’s regulations, remains ineffect. Only seven commentersresponded, and the principal issuesraised concerned the definitions of‘‘change in control’’ and ‘‘troubledcondition.’’ Objections to the definitionof change in control have been renderedmoot by the EGRPRA amendments sincea change of control within the precedingtwo years is no longer a triggering eventfor a section 32 notice. Two commentersobjected to the definition of ‘‘troubledcondition.’’ One objected to an insured


state nonmember bank being consideredin troubled condition if it is subject toa cease-and-desist order on the groundsthat not all such orders result fromsafety and soundness concerns and/orfinancial difficulties. The othercommenter objected to the fact that aninsured state nonmember bank can bedesignated in troubled condition basedupon a visitation, examination, or reportof condition. The proposed rule clearlyindicates that only a cease and desistorder or written agreement that requiresaction to improve financial condition ofthe bank triggers the designation oftroubled condition. However, suchdesignation may also be made basedupon an examination or report ofcondition. The FDIC believes that it isappropriate to use all information itdeems reliable in making such adesignation.

The proposed regulation reflects theEGRPRA amendments to section 32 andreorganizes, clarifies, and simplifiesnotice procedures. The proposal alsostrives to harmonize the proceduralrequirements of the FDIC’s regulationwith those of the other federal bankingagencies and to reduce any unnecessaryregulatory burden.

Although the EGRPRA amendmentsappear to provide the agencies withauthority to increase the prior noticeperiod to 90 days, the FDIC proposes toretain the 30-day prior notice currentlyrequired by § 303.14. This established30-day regulatory period has provensufficient to process the majority offilings, and reflects the FDIC’s time linefor processing section 32 noticesadopted in FDIC Financial InstitutionsLetter 26–96 dated May 6, 1996.However, the agency proposes to amendthe regulation to allow the agency totake an additional period of up to 60days, if necessary, to issue a notice ofdisapproval. It is anticipated that thisadditional 60-day period would be usedinfrequently. In all such cases, thenotificant will be advised in writingprior to expiration of the 30-day priornotice period of the reason the FDICcould not take action and of theprojected additional time needed.

Other than the revisions prompted bythe EGRPRA amendments, there is littlesubstantive change to the FDIC’sregulation. Current § 303.14(c)(2)(ii)provides that if a new member of abank’s board of directors is elected at ashareholder’s meeting, prior notice isautomatically waived. However, noticemust be filed with the appropriateregional director (DOS) within 48 hoursafter the election. Proposed§ 303.103(c)(2) modifies this provisionslightly to clarify that the automaticwaiver applies to new board members

not proposed by management and tostate that the notice must be submittedwithin two business days, rather than 48hours. Section 308.12 of the FDIC’sregulations, which governs computationof processing time for purposes of part303, refers to time in increments of daysand not hours. This modification resultsin a more liberal computation ofprocessing time in that interveningSaturdays, Sundays and federalholidays are not counted.

The FDIC invites public comment onretention of the 30-day processingtimeframe (subject to a possible 60-dayextension) and the change in theautomatic waiver filing period. Theagency also welcomes suggestions forfurther reducing unnecessary burden oninsured state nonmember banks whenreviewing changes in officers anddirectors, consistent with therequirements of section 32.

G. Activities and Investments of InsuredState Banks

Subpart G is reserved for filingprocedures related to activities andequity investments of insured statebanks which are currently contained inpart 362 (12 CFR part 362). Part 362implements section 24 of the FDI Act(12 U.S.C. 1831a), which was created bythe Federal Deposit InsuranceCorporation Improvement Act of 1991(Pub. L. 102–242, 105 Stat. 2236), andgoverns the circumstances in whichinsured state banks may engage inactivities which are not permissible fornational banks.

The FDIC recently issued a notice ofproposed rulemaking to makecomprehensive revisions to part 362. 62FR 47969, Sept. 12, 1997. In connectionwith these revisions, the FDIC proposesto eliminate certain applicationprocedures which are outdated, and alsoto authorize certain activities to beapproved by the FDIC on an expeditedbasis. The FDIC cannot determine at thistime whether its 362 proposal or thisnotice of proposed rulemaking to revisepart 303 will be finalized first, but it isthe FDIC’s intent to place the part 362application procedures relating to statebank activities in subpart G of part 303at such time as both rules are final. Inorder to deal with this problem, theapplication procedures whichimplement the proposed revisions topart 362 concerning state bank activitiesare contained in subpart E of the 362proposal. If the 362 proposal is finalizedbefore this 303 proposal, insured statebanks operating under the revised part362 will look to subpart E of part 362for application procedures until suchtime as part 303 is finalized, at whichpoint the FDIC will transfer the

application procedures from subpart Eof part 362 to subpart G of part 303. Ifthe 303 proposal is finalized first,insured state banks operating under thecurrent version of part 362 will continueto look to the current version of part 362itself for application procedures untilthe revisions to part 362 are finalized,and the application procedures whichare proposed as subpart E of part 362will be finalized as subpart G of part303. Members of the public taking aninterest in the FDIC’s applicationprocedures for the activities of insuredstate banks under part 362 shouldreview the part 362 proposal for thespecifics of such applicationprocedures.

H. Subpart H—Filings by SavingsAssociations

The FDIC is also reserving subpart Hfor filing procedures related to activitiesof insured state savings associations andsubsidiaries of insured savingsassociations, which are currentlycontained in § 303.13 of part 303 (12CFR 303.13). Section 303.13 implementssections 28 and 18(m) of the FDI Act (12U.S.C. 1831(e) and 12 U.S.C. 1828(m)),which were both created by theFinancial Institutions Reform, Recovery,and Enforcement Act of 1989 (Pub. L.101–73, 103 Stat. 484). Section 303.13governs the circumstances in which astate savings association may engage inactivities which are not permissible fora federal savings association, and alsorequires all insured savings associationsto notify the FDIC prior to establishinga subsidiary or engaging in newactivities through a subsidiary.

As part of the FDIC’s recently-issuednotice of proposed rulemaking to revisepart 362, discussed above, the FDIC hasproposed to address the substantiveissues covered by § 303.13 as subparts Cand D of a revised part 362. Theproposal harmonizes, to the extentpossible given the underlying statutes,the treatment of activities of insuredstate banks and the activities of insuredstate savings associations. In connectionwith these revisions, the FDIC proposesto eliminate certain applicationprocedures which are outdated, and alsoto authorize certain activities to beapproved by the FDIC on an expeditedbasis. The FDIC cannot determine at thistime whether its 362 proposal or thisnotice of proposed rulemaking to revisepart 303 will be finalized first, but it isthe FDIC’s intent to place the part 362application procedures relating tosavings associations in subpart H of part303 at such time as both rules are final.In order to deal with this problem, theapplication procedures whichimplement the proposed revisions to


3 These are the procedures for: (1) Establishing,moving, or closing a foreign branch of a statenonmember bank; (2) investment by statenonmember banks in foreign organizations; (3)exemptions from the insurance requirement for astate branch of a foreign bank; and (4) approval foran insured state branch of a foreign bank to conductactivities not permissible for federal branches.

4 An application to establish a foreign branch isnot an ‘‘application for a deposit facility’’ coveredby the CRA, and the FDIC will therefore only takethe insured state nonmember bank’s CRA ratinginto account for purposes of determining whetherthe application receives expedited processing under

part 362 concerning savings associationsare contained in subpart F of the 362proposal. If the 362 proposal is finalizedbefore this 303 proposal, existing§ 303.13 will be rescinded in connectionwith finalizing part 362. Savingsassociations operating under the revisedpart 362 will look to subpart F of part362 for application procedures untilsuch time as part 303 is finalized, atwhich point the FDIC will transfer theapplication procedures from subpart Fof part 362 to subpart H of part 303. Ifthe 303 proposal is finalized first,existing § 303.13 will be preservedwithout substantive change on aninterim basis in connection withfinalizing part 303. Savings associationsoperating under § 303.13 will continueto look to § 303.13 for applicationprocedures until the revisions to part362 are finalized. In connection withfinalizing part 362, § 303.13 will berescinded, and the applicationprocedures which are proposed assubpart F of part 362 will be finalizedas subpart H of part 303. Members of thepublic taking an interest in the FDIC’sapplication procedures for the activitiesof insured savings associations and theirsubsidiaries should review the part 362proposal for the specifics of suchapplication procedures.

I. Subpart I—Mutual-to-StockConversions

The FDIC is proposing to move thenotice requirements for mutually ownedstate-chartered savings banks thatpropose to convert to stock form from§ 303.15 to a separate subpart I. Thesenotice requirements were adopted infinal form on January 1, 1995. Theintended effect of the rules is to ensurethat mutual-to-stock conversions ofFDIC regulated institutions do not raisesafety and soundness concerns,breaches of fiduciary duty, or otherviolations of law. The substantiveregulation regarding mutual-to-stockconversions would remain in § 333.4 ofthis chapter.

The FDIC also is proposing to providefor delegated authority in its mutual-to-stock conversion regulations. Somemembers of the industry havecommented that the FDIC takes longerthan necessary to act on conversiontransactions. At the present time, allconversion notices are reviewed by theFDIC Board of Directors. The FDIC hasgained considerable experience inreviewing notices to convert and theBoard believes it is now appropriate todelegate authority to the Director andthe Deputy Director (DOS) to issuenotices of intent not to object. Such adelegation would apply only when theproposed conversion is determined not

to pose a risk to the convertinginstitution’s safety and soundness,violate any law or regulation, present abreach of fiduciary duty, or raise anyunique legal or policy issues. The Boardbelieves that this delegation will allowthe FDIC to act more promptly onroutine notices and ease regulatoryburden.

No other changes in procedures arebeing proposed. The public is invited tocomment on any changes the FDICcould make to ease regulatory burdenwhile ensuring that conversions do notraise supervisory concerns.

J. Subpart J—Foreign Bank ActivitiesProposed subpart J addresses

application requirements relating to theforeign activities of insured statenonmember banks and the U.S.activities of insured branches of foreignbanks. The FDIC is proposing to makethese application requirements easier touse and more streamlined bycentralizing them in subpart J. Underthe FDIC’s current rules, theseapplication requirements are located invarious subsections of three differentregulations: 12 CFR part 303, 12 CFRpart 346, and 12 CFR part 347. The FDICalso is proposing to further streamlineprocessing for several of theseapplication requirements.

On July 15, 1997, the FDIC publisheda Notice of Proposed Rulemaking (part347 NPR) which requests publiccomment on an FDIC proposal to revisethe FDIC’s rules on the foreign activitiesof insured state nonmember banks andthe U.S. activities of insured branches offoreign banks. 62 FR 37748. Subpart Dof the part 347 NPR includes fourproposed application proceduresdesigned to work with the substantiverevisions made to the FDIC’sinternational banking regulations underthe part 347 NPR.3 The FDIC cannotdetermine at this time whether the part347 NPR or this notice of proposedrulemaking to revise part 303 (part 303NPR) will be finalized first. To deal withthe possibility that the part 303 NPRmay be finalized before the part 347NPR is finalized, this part 303 NPRcontains interim versions of the sameapplication procedures contained insubpart D of the part 347 NPR. Theinterim versions proposed here aredesigned to work with the existingversions of the FDIC’s international

banking regulations, and are different inseveral respects from the applicationprocedures contained in subpart D ofthe part 347 NPR. Therefore, membersof the public taking an interest in theFDIC’s application procedures forinternational banking issues shouldreview the part 347 NPR as well as thispart 303 NPR.

If this part 303 NPR is finalized first,the four interim application procedureswill remain in effect only until the part347 NPR is finalized. In connection withfinalizing the part 347 NPR, the FDICwill transfer the application proceduresin subpart D of the part 347 NPR tosubpart J of part 303 and rescind theinterim procedures. If the part 347 NPRis finalized first, the interim proceduresin this part 303 NPR will never befinalized, and the FDIC will makenecessary technical amendments totransfer the application procedures insubpart D of the part 347 NPR to subpartJ of part 303.

This part 303 NPR also contains twoapplication procedures which are not ofan interim nature: the procedure formoving an insured branch of a foreignbank, and the procedure for mergersinvolving an insured branch of a foreignbank. These two procedures are notimpacted by the part 347 NPR.

Interim Application ProceduresEstablishing, moving, or closing a

foreign branch of a state nonmemberbank. Section 18(d)(2) of the FDI Act (12U.S.C. 1828(d)(2)) and § 347.3 require aninsured state nonmember bank to obtainthe FDIC’s prior written consent beforeestablishing a branch located outsidethe United States, its territories, PuertoRico, Guam, American Samoa, the TrustTerritory of the Pacific Islands, or theVirgin Islands. Applications for theseforeign branches are currently treatedunder the same process applicable fordomestic branches under § 303.2. TheFDIC proposes to treat foreign branchesseparately, since foreign branchapplications are not legally required tobe subjected to analysis under the CRAor factors under section 6 of the FDI Act,as is the case for domestic branches.

Under § 303.182 as proposed, theFDIC would give its general consent foran eligible depository institution (asdefined by § 303.2(r)) to establishadditional foreign branches in anyjurisdiction in which the bank alreadyoperates a branch, or to move a branchwithin the jurisdiction.4 Also, an


the general consent and expedited processingprocedures.

5 The World Heritage List was established underthe terms of The Convention Concerning theProtection of World Culture and Natural Heritageadopted in November, 1972 at a General Conferenceof the United Nations Education, Scientific andCultural Organization. Current versions of the listare on the Internet at http://www.unesco.org/whc/

heritage.htm, or may be obtained from the FDICPublic Information Center, Room 100, 801 17thStreet, NW, Washington, DC 20429.

eligible depository institution thatoperates branches in two or moreforeign jurisdictions may establishadditional branches conductingapproved activities in additional foreignjurisdictions under expeditedprocessing procedures permitting theeligible depository institution toestablish the branch 45 days aftersubmitting its application to the FDIC.

The FDIC is proposing these generalconsent and expedited processingprocedures because an insured statenonmember bank meeting therequirements of the provisionsordinarily should have sufficientfamiliarity with the implications offoreign branching, and be of sufficientlysound overall condition, that extensiveFDIC review is not required. The FDICretains the option to suspend theseprocedures as to any institutions forwhich this is not the case. Forapplicants seeking to establish a branchin an additional jurisdiction, the FDICmay also remove an applicant fromexpedited processing for any of thegrounds specified in § 303.11(c) follows:(1) If the FDIC determines the filingpresents a significant supervisoryconcern; (2) raises a significant legal orpolicy issue; or (3) if the FDICdetermines other good cause exists forremoval. The FDIC will promptlyprovide the applicant with a writtenexplanation if the FDIC decides toremove a filing from expeditedprocessing.

General consent and expeditedprocessing are also inapplicable in anycase presenting either of two specialcircumstances. Since the FDIC musthave access to information about aforeign branch’s activities in order toeffectively supervise the institution,general consent or expedited processingdo not apply if the law or practice of theforeign jurisdiction would limit theFDIC’s access to information forsupervisory purposes. In such cases, theFDIC must have an opportunity to fullyanalyze the extent of the confidentialityconferred under foreign law andwhether it would, in light of all thecircumstances, impair the FDIC’s abilityto carry out its responsibilities as a banksupervisor. In addition, if the proposedforeign branch has a direct adverseimpact on a site which is on the WorldHeritage List 5 or the foreign

jurisdiction’s equivalent of the NationalRegister of Historic Places (NationalRegister), the FDIC may need anopportunity to evaluate the proposal inlight of section 402 of the NationalHistoric Preservation Act Amendmentsof 1989 (NHPA Amendments Act) (16U.S.C. 470a–2).

Proposed § 303.182 also requires aninsured state nonmember bank whichcloses a foreign branch to notify theappropriate regional director (DOS) thatit has done so. This notice stems fromthe current requirement for such noticeunder § 347.3. The FDIC has previouslydetermined that Congress did not intendsection 42 of the FDI Act on branchclosings to apply to foreign branches.Finally, proposed § 303.182 sets out theprocedures for applications which arenot eligible for the general consent orexpedited processing procedures.

Acquisition of stock of foreign banksor other financial entities by an insuredstate nonmember bank. Section 18(l) ofthe FDI Act (12 U.S.C. 1828(l)) and§ 347.4 require an insured statenonmember bank to obtain the FDIC’sprior written consent before acquiringan ownership interest in a foreign bankor other financial entity. The currentapplication procedures are set out in§ 303.5(d). Since the current substantiveprovisions governing foreign investmentat § 347.4 provide only relativelygeneral guidance about the conduct ofsuch activities, it is not possible for theFDIC to implement general consent andexpedited processing procedures on aninterim basis, and proposed § 303.183contains no substantive changes fromthe current procedures. However, inconnection with the FDIC’s revisions ofthe foreign investment rules in the part347 NPR, the FDIC has proposed generalconsent and expedited processingprocedures.

Exemptions from the insurancerequirement for a state branch of aforeign bank. Section 346.6 requires anuninsured state branch of a foreign bankto obtain the FDIC’s consent if thebranch proposes to accept initialdeposits of less than $100,000 and suchdeposits are not otherwise exemptedfrom the definition of retail deposittaking activity under § 346.6(a). Thecurrent application procedures are setout in § 346.6(b). These procedures needno substantive revision at this time,because the procedures were recentlyreviewed and amended by the FDIC asa result of amendments to theInternational Banking Act of 1978, Pub.L. 95–369, 92 Stat. 607 (12 U.S.C. 310l

et seq.) made by the Riegle-NealInterstate Banking and BranchingEfficiency Act of 1994, Pub. L. 103–328,108 Stat. 2338 (Interstate Act). 61 FR5671 (Feb. 14, 1996).

Approval for an insured state branchof a foreign bank to conduct activitiesnot permissible for a federal branch.Section 346.101 requires an insuredstate branch of a foreign bank to obtainthe FDIC’s permission to conduct anytype of activity which is not permissiblefor a federal branch of a foreign bank.The current application procedures areset out in § 346.101 itself, which wasrecently adopted. 59 FR 60703 (Nov. 28,1994). Thus, proposed § 303.187 doesnot make any substantive changes fromthe current procedures on an interimbasis.

Noninterim Application ProceduresMoving an insured branch of a foreign

bank. Section 18(d)(1) of the FDI Actrequires any insured branch of a foreignbank which wishes to move from onelocation to another to obtain the FDIC’sprior written consent. Applications forthese insured branches currently aretreated under the same processapplicable to domestic branches ofinsured state nonmember banks under§ 303.2. Since the FDIC’s consent tothese applications is legally subject tothe same statutory considerations asapplications to establish or relocate adomestic branch or to relocate the mainoffice of an insured state nonmemberbank, the FDIC is proposing anapplication process in § 303.184 whichparallels proposed subpart C. Thisincludes expedited processing for aneligible insured branch. Subpart Jcontains a proposed definition of‘‘eligible insured branch’’ whichparallels the general § 303.2(r) definitionof ‘‘eligible depository institution,’’ withappropriate changes to take into accountthe different supervisory rating systemand capital requirements applicable toinsured branches.

Mergers involving an insured branchof a foreign bank. An insured branch ofa foreign bank meets the definition of aninsured depository institution undersection 3 of the FDI Act (12 U.S.C. 1813)and is therefore subject to the BankMerger Act. The FDIC’s current rulesand regulations do not include aspecific application process forapprovals of merger transactionsinvolving an insured branch. In order togive insured branches conductingmerger transactions which are subject toFDIC approval the benefit of the samestreamlined application processingproposed for domestic institutions insubpart D, proposed § 303.185 containsappropriate cross-references to subpart


6 If the foreign bank parent itself is not primarilyengaged in business in the United States, and isinvolved in some merger or other combinationoutside the United States which does not result ina corresponding merger transaction in the UnitedStates with respect to an insured branch, section18(c)(11) provides that no approval is required,since no party to the transaction is primarilyengaged in business in the United States.

D. Section 303.185 clarifies that aneligible insured branch as defined insubpart J generally is eligible for theexpedited processing available to aneligible depository institution in subpartD. Similarly, § 303.185 clarifies that atransaction in which an insured branchis merged with other branches, agencies,or subsidiaries in the United States ofthe same foreign bank parent is eligiblefor disposition under the enhanceddelegations applicable to corporatereorganizations.6

Section 303.185 also incorporates apoint explained in Advisory OpinionFDIC–96–12 (May 13, 1996) concerningthe treatment of an insured branchunder section 44 of the FDI Act (12U.S.C. 1831u) as added by section 102of the Interstate Act. Section 44 permitsthe responsible federal regulator toapprove an interstate merger transactioninvolving the acquisition of a branch ofan insured bank without the acquisitionof the entire bank, but approval ispossible only if the state in which thebranch is located expressly permits out-of-state banks to acquire a branch of thebank without acquiring an entire bank.In contrast, section 44 permits theresponsible federal regulator to approvean interstate merger transactioninvolving the acquisition of an entirebank if the state in which the bank islocated has not adopted legislation toopt out of interstate mergers. Section303.185 treats interstate mergersinvolving an insured branch under thelatter approach. Express state authoritypermitting out-of-state banks to acquirea branch of the bank without acquiringthe entire bank is required only if aforeign bank has more than one insuredbranch in the affected state andproposes to sell fewer than all of themto the same acquiror. If such stateauthority does not exist, the FDICrequires the foreign bank to sell all of itsinsured branches in that state to thesame affiliated or unaffiliated acquiror.As is explained in Advisory OpinionFDIC–96–12, the statute and definitionsused in section 44 do not provide aconclusive answer to this issue, but theFDIC’s approach gives effect to all of thelanguage and purposes of the InterstateAct.

K. Subpart K—Prompt Corrective Action

Section 38 of the FDI Act, whichgoverns prompt corrective action,restricts or prohibits certain activitiesbased on an institution’s capitalcategory, and requires an insuredinstitution to submit a capitalrestoration plan when it becomesundercapitalized. On September 15,1992, the FDIC approved a finalinteragency rule implementing therequirements of prompt correctiveaction. The final rule, which becameeffective December 19, 1992, amendedpart 325 of the agency’s regulations bydefining five capital categories forpurposes of implementing the promptcorrective action requirements. 57 FR44900 (Sept. 29, 1992).

In conjunction with interagencyaction, the FDIC on January 26, 1993,approved amendments to part 303 toimplement certain applicationprocedures relating to prompt correctiveaction. The application proceduresoutlined in § 303.5(e) relate solely toactivities that are prohibited unlessprior written consent is granted by theappropriate agency. In addition, a new§ 303.7(f)(1)(ix) was added to part 303which provides delegation of authorityto act on applications seeking priorconsent to engage in certain restrictedactivities which are filed pursuant to theprompt corrective action regulations.These revisions to part 303 becameeffective on February 12, 1993. 58 FR8219 (Feb. 12, 1993).

Subpart K does not substantiallyamend current procedures. The onlysubstantive change is that a newparagraph has been added as § 303.207.This new section is derived from section38(i)(2)(G) of the FDI Act, and relates topaying interest on new or renewedliabilities at a rate that would increasethe institution’s weighted average costof funds to a level significantlyexceeding the prevailing rates of intereston insured deposits in the institution’snormal market area. Current § 303.5(e)contains a reference to activities listedin sections 38(i)(2) (A) through (F) ofsection 38, and the addition of item Gcompletes the list of the seven activitieswhich are prohibited for criticallyundercapitalized institutions unlessprior FDIC approval has been granted.

As part of the reorganization of part303, delegations previously contained in§ 303.7(f)(ix) have been consolidatedinto subpart K and delegationspreviously contained in § 303.9(h),regarding directives and capital planspursuant to section 38 of the FDI Act,have been consolidated withenforcement related delegations insubpart N. As subpart K applies only to

the application process, it does notaffect the general prompt correctiveaction regulations adopted as a part ofthe interagency rulemaking process.

L. Subpart L—Section 19 of the FDI Act(Consent to Service of PersonsConvicted of Certain Criminal Offenses)

Section 19 of the FDI Act prohibitsany person convicted of any crimeinvolving dishonesty, breach of trust, ormoney laundering, or who has agreed toenter into a pretrial diversion or similarprogram in connection with aprosecution for any such offense, from(i) continuing as or becoming aninstitution-affiliated party, (ii) owningor controlling directly or indirectly aninsured depository institution, or (iii)otherwise participating in the conductof the affairs of FDIC-insured depositoryinstitutions, without the FDIC’s priorwritten consent.

Proposed subpart L does notsubstantially amend current section 19application procedures, but ratherbrings together in one place informationon section 19 which was previouslycontained in various sections of part303. However, proposed § 303.222 hasbeen added to clarify the FDIC’sposition that the prior consent of theFDIC is required before a personapproved under section 19 to participatein the affairs of a particular institutionmay participate in the affairs of anotherinsured institution. Delegations ofauthority to act upon applications filedpursuant to section 19 remainsunchanged.

On July 24, 1997, the FDIC Board ofDirectors published for comment aproposed Statement of Policy on Section19 which contains interpretations of thestatutory language (62 FR 39840). Issuesaddressed in the statement of policyinclude what constitutes participation,who is a ‘‘person’’ under the statute, themeaning of ‘‘own’’ or ‘‘control,’’procedures for filing a section 19application, and the standards forgranting consent to a section 19application. The proposed rule shouldbe read in conjunction with theproposed policy statement for a fullerunderstanding of the FDIC’s position onsection 19.

M. Subpart M—Other FilingsThis subpart contains the procedural

requirements and delegations ofauthority for miscellaneous filingswhich do not warrant treatment asseparate subparts. In many instances,there were no regulations or guidelinesestablished regarding procedures orcontent for submitting a filing to theFDIC. In addition, it was often unclearwhen the filing requirements were


applicable. Under proposed subpart M,all information relating to a particularfiling has been brought together in aself-contained section under astandardized format. The FDIC believesthat this will simplify the filing processfor prospective applicants by settingforth this information in a singlelocation.

Under the proposal, new expeditedreview procedures will be offered forapplications to reduce or retire capitalstock or capital debt instruments andapplications to exercise trust powers.Expedited processing for brokereddeposit waivers has been retained yetmodified to parallel the requirementsfor an ‘‘eligible depository institution’’in proposed § 303.2(r), with theexception of the well-capitalizedcriteria.

Application procedures currentlyfound in part 359 (golden parachutesand indemnification payments) arebeing moved to subpart M. In addition,procedures for requesting a conditionalwaiver of cross-guaranty liability arebeing moved from the FDIC’s Statementof Policy Regarding Liability ofCommonly Controlled DepositoryInstitutions to proposed subpart M.Finally, specific procedures are beingadded to address requests for relief fromreimbursement under the Truth inLending Act and Regulation Z.

Reduce or retire capital stock orcapital debt instruments. Section303.241 reorganizes, clarifies andsimplifies procedures for applications toreduce or retire capital stock, notes ordebentures pursuant to section 18(i)(1)of the FDI Act (12 U.S.C. 1828(i)(1)).Filing instructions are currentlycontained in the standard instructionsfor all applications for which no form ofapplication has been prescribed (12 CFR303.5(b)). Authority to approve or denysuch applications is currently delegatedat § 303.7(f)(1)(iii).

Under expedited processing, anapplication by an eligible depositoryinstitution (as defined in proposed§ 303.2(r)) will be deemed approved 20days after receipt by the appropriateFDIC regional director (DOS), unless theapplicant is notified that the FDIC hasremoved the application from expeditedprocessing. A recent increase in thenumber of applications to reduce orretire capital stock, notes or debtindicates to the FDIC that expeditedprocessing will simplify and streamlinethe process for and be of benefit to statenonmember banks. The 20-dayautomatic approval period is basedupon the processing time established inthe FDIC’s Application Processing TimeLines (FIL–26–96, May 6, 1996) and issupported by the average processing

time for approval of these types ofrequests during 1996.

The information requested under theproposal is the basic information that isnecessary to process a request pursuantto section 18(i)(1) of the FDI Act and isincluded to provide guidance toprospective applicants. The filingprocedures and information requesteddo not impose additional requirementsupon applicants but simply clarifyexisting practice.

Exercise of trust powers. Currently,§§ 303.5(b) and 303.7(a)(2) contain thegeneral application procedures for theFDIC’s prior approval to exercise trustpowers. Sections 333.1, 333.2 and333.101 provide the substantive basisfor requesting such applications.

The FDIC proposes to amend part 303to create a new section relating to trustapplications that would bring togetherall the trust application procedures aswell as the related delegations ofauthority into one centralized location.The proposal contains two exceptions tothe application requirements. The firstexception allows a state nonmemberbank that received authority to exercisetrust powers from its charteringauthorities prior to December 1, 1950 toexercise trust powers without the FDIC’sconsent. The second exception permitsan insured depository institution tocontinue to conduct trust activitiespursuant to authority granted by itschartering authority following a charterconversion or withdrawal frommembership in the Federal ReserveSystem.

The proposed procedures wouldrequire applicants to complete a trustapplication form obtained from anyFDIC regional office and providesexpedited processing for eligibledepository institutions as defined inproposed § 303.2(r). Under expeditedprocessing, an eligible institution’s trustapplication will be deemed approved 30days after receipt by the appropriateFDIC regional director, unless theapplicant is advised in writing that itsfiling has been removed from expeditedprocessing. For applications notprocessed pursuant to the expeditedprocessing procedures, the FDIC willprovide written notification of the finalaction taken with regard to the filing.

Brokered deposit waivers. The FDIC isproposing to reorganize its regulationsregarding applications to acceptbrokered deposits by adequatelycapitalized insured depositoryinstitutions. The application procedureswould be placed in this subpart M andthe substantive rules regarding theacceptance of brokered deposits wouldremain in § 337.6. Procedures would notbe substantially altered.

Applicants for a brokered depositwaiver cannot meet the strict definitionof an ‘‘eligible depository institution’’set forth in proposed § 303.2(r),regarding institutions eligible forexpedited processing. The definition in§ 303.2(r) requires eligible depositoryinstitutions to be ‘‘well capitalized.’’Well capitalized institutions are notrequired to apply for a waiver prior toaccepting brokered deposits. Therefore,for the purpose of determiningeligibility for expedited processing forthis subsection only, an adequatelycapitalized institution which otherwisemeets the standards of § 303.2(r) will bedeemed to be an eligible depositoryinstitution. Under the currentregulation, any institution with acomposite rating of 1 or 2 is eligible forexpedited processing. The definitioncontained in § 303.2(r) containsadditional qualifications for eligibility.The FDIC does not believe that there isa compelling reason to use asubstantially different definition ofeligibility for this subsection than thatused for all other types of applicationsfor which expedited procedures areavailable.

In moving the application proceduresto part 303, the proposal would amendparagraph (c) of § 337.6 by referring theapplicant to § 303.243 for filinginstructions. Paragraphs (d) and (e) of§ 337.6 would be deleted because theinformation in those paragraphs(involving filing procedures, delegationsof authority, and expedited processingprocedures) would appear in § 303.243.

Golden parachutes and severanceplan payments. The FDIC is proposingto revise its regulations regardingapplications to make excessnondiscriminatory severance planpayments and golden parachutepayments by insured depositoryinstitutions or depository institutionholding companies. The FDIC’sregulations with respect to suchpayments are codified at part 359.Generally, troubled depositoryinstitutions as defined in the regulationsare prohibited under part 359 frommaking severance plan payments andgolden parachute payments, unless theinstitution obtains the consent of itsprimary federal regulator and, in certaincircumstances, the FDIC.

Under the proposal, the substantiverules with respect to making suchpayments would remain unchanged inpart 359 of the FDIC’s regulations. Theonly changes to part 359 would appearin § 359.6, which involves ‘‘Filinginstructions.’’ First, a reference to new§ 303.244 of the FDIC’s regulationswould be added. Second, a sentencespecifying the necessary elements of an


application would be deleted from§ 359.6. These elements and theprocedures for obtaining the consent ofthe FDIC would be set forth in the new§ 303.244. The necessary elementswould be expanded from two items tofive items in § 303.244 in order to assistan applicant in preparing a completefiling. The filing procedures andinformation requested do not imposeadditional requirements uponapplicants, but simply clarify existingrequirements.

Waiver of liability for commonlycontrolled depository institutions. Theapplication procedures for an insureddepository institution to request awaiver of liability pursuant to section5(e) of the FDI Act are new (12 U.S.C.1815(e)). The FDIC Board of Directorsrecently approved revisions to theStatement of Policy Regarding Liabilityof Commonly Controlled DepositoryInstitutions (62 FR 15480, April 1,1997), which provides guidance to theindustry as to the manner in which theFDIC will administer the provisions ofsection 5(e) of the FDI Act. Thestatement of policy is being furtherrevised elsewhere in today’s FederalRegister to move the procedures forrequesting a conditional waiver of thecross-guaranty liability to proposed§ 303.245 and to include a cross-reference to § 303.245.

Insurance fund conversions. The FDICis proposing to revise its regulationsregarding filings for insurance fundconversions at § 303.246. The proposedrevisions would reformat the filingrequirements and delete references toand procedures regarding insurancefund conversions qualifying asexceptions to the insurance fundconversion moratorium imposed insection 5(d) of the FDI Act (12 U.S.C.1815(d)(2)(A)(ii)). Such references andprocedures are no longer necessarybecause the insurance fund conversionmoratorium expired in the last quarterof l996 when the Savings AssociationInsurance Fund reached its designatedreserve ratio.

Conversion with diminution ofcapital. Section 303.247 reorganizes andclarifies filing procedures pursuant tosection 18(i)(2) of the FDI Act (12 U.S.C.1828(i)(2)) to convert from an insuredfederal depository institution to a statenonmember bank where the capitalstock or surplus of the resulting bankwill be less than the capital stock orsurplus, respectively, of the convertinginstitution at the time of theshareholder’s meeting approving suchconversion. Filing instructions arecurrently contained in § 303.3(c) and§ 303.5(b).

The information requested of theapplicant under the proposal is thebasic information that is necessary toprocess a request pursuant to section18(i)(2) of the FDI Act. The filingprocedures and information requesteddo not impose additional requirementsupon applicants but simply clarifyexisting requirements.

A delegation of authority has beenadded to § 303.247 to allow the Director,Deputy Director, or where confirmed inwriting, an associate director, regionaldirector or deputy regional director(DOS) to approve conversions withdiminution of capital. Authority to denyis delegated only to the Director andDeputy Director (DOS). At present, thereis no delegated authority.

Continue or resume status as aninsured institution followingtermination under section 8 of the FDIAct. Proposed § 303.248 coversapplications by depository institutionsfor permission to continue or resumetheir insured status after termination ofinsurance under section 8 of the FDI Act(12 U.S.C. 1818). This section coversinstitutions whose deposit insurancecontinues in effect for any purpose orfor any length of time under the termsof an FDIC order terminating depositinsurance. However, it does not coverany operating non-insured depositoryinstitution which was previouslyinsured by the FDIC or any non-insured,non-operating depository institutionwhose charter has not been surrenderedor revoked. Institutions not covered bythis section would be required to file ade novo application for FDIC insurance.The contents of the filing under thissection have been streamlined to requireall relevant facts and reasons for therequest and a certified copy of theresolution authorizing the request by theinstitution’s board of directors.

Truth in Lending Act—Requests forrelief from reimbursement andreconsiderations of denials. Proposed§ 303.249 is intended to apply torequests for relief from reimbursementinvolving the Truth in Lending Act (15U.S.C. 1601 et seq.) and Regulation Z(12 CFR 226) (Truth in Lending cases).Currently, no specific procedures ortimeframes are provided for Truth inLending cases in part 303. Requests forrelief from reimbursement are addressedpursuant to the procedures in § 303.6which apply generally to applications,and requests for reconsideration of arequest for relief following denial mustbe filed within 15 days under § 303.6(e),which governs petitions forreconsideration. Proposed § 303.249 setsforth new procedures specifically forTruth in Lending cases and providesthat applicants may file initial requests

for relief within 60 days after receipt ofthe compliance report of examinationcontaining the request to conduct a filesearch and make restitution to affectedcustomers. Requests for reconsiderationfollowing denial will continue to behandled under the FDIC’s generalpetition for reconsideration provision,located at proposed § 303.11(f), whichrequires filing within 15 days of receiptof denial.

Modifications of conditions. Section303.250 reorganizes and clarifies theprocedures for requests to modify apreviously issued FDIC approval of afiling. The instructions for theserequests are currently contained in§ 303.5(b). The relevant delegation ofauthority to approve or to deny suchfilings is contained in existing§ 303.7(f)(l)(iv).

The information requested of theapplicant under the proposal is thebasic information that is necessary toprocess a request of this nature. Thefiling procedures and informationrequested do not impose additionalrequirements upon applicants, butsimply clarify existing requirements.However, a new criteria for exercise ofdelegated authority by DOS officials isbeing added requiring Legal Divisionconsultation to modify conditions ifLegal Division consultation wasrequired in connection with the originalfiling.

During 1995, the FDIC approved 15requests to modify a prior approval,with an average processing time of 11days. During 1996, the FDIC approved14 such requests, with an averageprocessing time of 15 days. Given thelow volume of activity and the promptprocessing of those requests, the FDICbelieves that the creation of specialexpedited procedures is not warranted.

Extensions of time. Section 303.251reorganizes and clarifies the proceduresfor requests seeking an extension of timeto fulfill a condition required in anapproval issued by the FDIC, or toconsummate a transaction which wasthe subject of an approval by the FDIC.The instructions for these requests arecurrently contained in § 303.5(b). Therelevant delegation of authority toapprove or to deny such filings iscontained in existing § 303.8(a).

The information requested of theapplicant under the proposal is thebasic information that is necessary toprocess a request of this nature. Thefiling procedures and informationrequested do not impose additionalrequirements upon applicants, butsimply clarify existing requirements.

During 1995, the FDIC approved 31requests for an extension of time, withan average processing time of 10 days.


During 1996, the FDIC approved 31such requests, with an averageprocessing time of 13 days. Given thelow volume of activity and the promptprocessing of those requests, the FDICbelieves that the creation of specialexpedited procedures is not warranted.

N. Subpart N—Enforcement DelegationsSubpart N makes several significant

changes to the FDIC’s enforcementdelegations of authority, as describedbelow.

Section 8(a) notices of intention toterminate insured status. Under current§ 303.9(a), authority has been delegatedto the Director of DOS to issuenotifications to primary regulator(NPRs) under section 8(a) of the FDI Act(12 U.S.C. 1818(a)), with Legal Divisionconcurrence. If unsafe or unsoundconditions or practices and violations oflaw cited in an NPR are not corrected,a notice of intention to terminateinsured status (NIT) may be issued.

The Director of DOS, pursuant to anagreement with the Board of Directors,has not exercised delegated authority toissue NPRs, and has brought all suchcases to the Board of Directors.Currently, when the Board issues anNPR, it also authorizes the ExecutiveSecretary, with Legal Divisionconcurrence, to issue an NIT, after beinginformed by DOS that an institution hasnot corrected the conditions, practicesand/or violations of law cited in theNPR. Proposed § 303.262 would largelycodify existing FDIC practice bydelegating authority to issue NITs, butwould modify existing FDIC practice byallowing the Director of DOS to issueNITs with Legal Division concurrence.This would speed matters since theExecutive Secretary now relies oninformation received from DOS prior toissuing NITs.

Section 8(g) suspension and removalactions. Currently, authority isdelegated to the Director and DeputyDirector (DOS and DCA) and, whenconfirmed in writing by the Director, toan associate director, to issue orders ofsuspension or prohibition to anyinstitution-affiliated party who ischarged in any information, indictmentor complaint, or who is convicted of orenters into a pretrial diversion or similarprogram, regarding any criminal offensecited in or covered by section 8(g) of theFDI Act, when such institution-affiliatedparty consents to the suspension orprohibition. Proposed § 303.266(b)contains a new delegation to issueorders of prohibition or suspensionunder section 8(g), regardless of whetheror not the institution-affiliated partyconsents to the order, if the criminaloffense is one for which section 8(g)

mandates suspension or prohibition.The FDIC believes that such adelegation is appropriate since nodiscretion to issue this type of order isprovided in the statute.

Consent section 8(q) ordersterminating insured status. Section 8(q)of the FDI Act, 12 U.S.C. 1818(q),authorizes the issuance of consentorders terminating deposit insurance ofan institution whose deposits have beenassumed by another institution, whetherby way of merger, consolidation,statutory assumption, or contract.Proposed § 303.268 codifies the currentdelegation of authority to the ExecutiveSecretary of the FDIC to issue consentorders pursuant to section 8(q) of theAct. This authority was contained in aJune 13, 1989 resolution of the Board ofDirectors and was not previouslycodified in part 303.

Civil money penalties. Proposed§ 303.269 clarifies the FDIC’sdelegations of authority relating to theissuance of final orders to pay civilmoney penalties, whether or not anotice of charges has been issued in acase. Proposed § 303.269 also authorizesthe Director (DOS) and Director (DCA)to take joint action where violations forwhich civil money penalties areauthorized involved both safety andsoundness and consumer compliancematters. The proposal further delegatesthe authority to levy and enforce civilmoney penalties for the late, inaccurate,false or misleading filing of Reports ofCondition and Income, Home MortgageDisclosure Act Reports, CRA loan datareports (see 12 CFR 345.42), and allother required reports.

Section 5(e) assessments ofcommonly-controlled institutions.Section 5(e) of the FDI Act, 12 U.S.C.1815(e), permits the FDIC to recoup theamount of loss to the deposit insurancefunds resulting from the failure ofaffiliated institutions or assistanceprovided to affiliated institutions.Proposed § 303.270 sets forth theauthority to issue notices of assessmentunder section 5(e) of the Act, alsoknown as cross-guaranty assessments..This authority was not previouslycodified in 12 CFR part 303. Theaddition of this provision and thedelegations of authority to the Director,Deputy Director and, where confirmedin writing, to an associate director ofDOS to issue notices of assessment ofliability, reflect the actual practice of theBoard of Directors. Additionally,proposed § 303.278(j) provides that theBoard expressly retains authority onwhether or not to waive cross-guarantyassessments. This provision is new andwas not previously codified in part 303.

Section 10(c) investigations. The legalauthority of the General Counsel toissue orders of investigation pursuant tosection 10(c) of the FDI Act containedin proposed § 303.272(b) is beingexpanded to include sections 8 through13 of the FDI Act (12 U.S.C. 1818–1823)in order to cover post-conservatorshipor post-receivership investigationsconducted by the FDIC in connectionwith the possible liability of directors,officers, and other institution-affiliatedparties. The requirement of theconcurrent certification of the GeneralCounsel for certain orders ofinvestigation issued by the Director andDeputy Director of the Division ofResolutions and Receiverships is beingadded to be consistent with the currentrequirement for orders issued in certainspecified situations by the Directors andDeputy Directors of DOS and DCA.

Acceptance of written agreements.Proposed § 303.274 continues in effectFDIC delegations of authority onacceptance of written agreements in lieuof orders to terminate deposit insuranceand to issue cease-and-desist ordersunder sections 8 (a) and (b) of the Act(12 U.S.C. 1818 (a) and (b)). TheDirector (DOS) has delegated authorityto enter into written agreements relatingto section 8(a) of the Act and relating tosafety and soundness matters undersection 8(b) of the Act, while theDirector (DCA) has authority to enterinto written agreements under section8(b) of the Act relating to consumercompliance matters. Proposed§ 303.274(c) adds a new provision notpreviously codified in part 303, givingauthority to the Director and DeputyDirector (DOS) and (DCA) and, whereconfirmed in writing by the appropriateDirector, to an associate director, or tothe appropriate regional director ordeputy regional director to enter intowritten agreements with insuredinstitutions and institution-affiliatedparties that contain conditions that mustexist before the FDIC may issue astatement of non-objection to a filingunder part 303.

Termination of pending actions—general. Proposed § 303.275 adds a newparagraph (h) which clarifies the timeframes in which pending enforcementactions may be terminated or dismissedpursuant to delegated authority. Thesection provides that any pendingenforcement action may be terminatedor dismissed by the Director or DeputyDirector of DOS or DCA, as appropriate,before the commencement of a hearingon the merits by an administrative lawjudge. Once a hearing on the merits hasbegun, the pending action may bedismissed or terminated by stipulationor consent of the affected parties no


later than 14 days after theadministrative law judge has closed therecord of the hearing. After this time,only the FDIC Board of Directors mayterminate or dismiss an enforcementaction. This provision was notpreviously codified in part 303.

Standards governing modificationand termination of section 8(e)prohibition orders. The delegation ofauthority to the Director and DeputyDirector (DOS) and (DCA), asappropriate and if confirmed in writing,to the associate director to modify andterminate orders of removal orprohibition under section 8(e) of the FDIAct (12 U.S.C. 1818(e)) may be found inproposed § 303.276(e). Proposed§ 303.276(e) adds the standardsarticulated by the Board in FDICenforcement decisions under which aremoval or prohibition order may bemodified or terminated. Thosestandards are as follows: (1) Therespondent has demonstrated his/herfitness to participate in any manner inthe conduct of the affairs of an insureddepository institution, (2) therespondent has shown that his/herparticipation would not pose a risk tothe institution’s safety and soundness,and (3) the respondent has proven thathis/her participation would not erodepublic confidence in the institution.Proposed § 303.276(e) also delegatesauthority to grant consent pursuant tosection 8(e)(7)(B) of the Act for themodification of termination ofoutstanding section 8(e) orders issuedby another federal financial regulator.These provisions are new and were notpreviously codified in part 303.

Enforcement authority vested inGeneral Counsel. Proposed subpart Nwould vest authority in the GeneralCounsel or, where confirmed in writingby the General Counsel, his or herdesignee, to provide Legal Divisionconcurrence regarding all enforcementactions. This change reflects the GeneralCounsel’s position as the head of theLegal Division with ultimateprosecutorial authority over allenforcement actions.

IV. Other Regulatory Changes

A. Part 337 (Unsafe and UnsoundBanking Practices)

The FDIC is proposing to amend§ 337.6, which governs the acceptanceof brokered deposits by insureddepository institutions. A wellcapitalized insured depositoryinstitution may accept brokereddeposits without restriction by § 337.6while an undercapitalized institutionmay not accept brokered deposits underany circumstances. In the case of an

adequately capitalized insureddepository institution, a brokereddeposit can be accepted but only if theinstitution has obtained a waiver fromthe FDIC. Under the proposal, theprocedures for obtaining a waiver wouldbe moved from § 337.6 to 12 CFR part303. An institution seeking a waiverwould be referred by § 337.6(c) to§ 303.243. Paragraphs (d) and (e) of§ 337.6 would be deleted because theinformation in those paragraphs(involving filing procedures, delegationsof authority and expedited processingprocedures) would appear in § 303.243.Paragraph (f) would be deleted becausethe 60-day transition rule prescribed bythat paragraph (for the period beginningon June 16, 1992) is obsolete.

Additionally, § 337.6 would beamended to reflect certain changes inthe statutory definition of ‘‘depositbroker.’’ Prior to these changes, the term‘‘deposit broker’’ included ‘‘any insureddepository institution’’ that solicitsdeposits by offering interest rates thatsignificantly exceed the prevailing ratesoffered by other insured depositoryinstitutions in the same market area‘‘having the same type of charter.’’Through the Riegle CommunityDevelopment and RegulatoryImprovement Act of 1994 (see Pub. L.103–325, 108 Stat. 2160, Sec. 337),Congress made two changes to thisstatutory definition. First, Congresschanged ‘‘any insured depositoryinstitution’’ to ‘‘any insured depositoryinstitution that is not well capitalized.’’The effect of this change was to relievewell capitalized institutions of theburden of reporting deposits with highinterest rates as brokered deposits.Second, Congress removed the phrase,‘‘having the same type of charter.’’ Theeffect of this change was to require acomparison between the interest rates ofall insured depository institutionswithin a market area (as opposed toinsured depository institutions with aparticular type of charter). See 12 U.S.C.1831f(g)(3). Under the proposal, theamended statutory language would beincorporated in the FDIC’s regulatorydefinition of ‘‘deposit broker’’ at§ 337.6(a)(5)(iii).

B. Part 346 (Foreign Banks)The FDIC is proposing to move

current § 303.8(f) from part 303 to part346, without substantive change.Section 303.8(f) contains delegations forthe Division of Supervision to acceptthe pledge agreements by which insuredbranches of foreign banks pledge assetsfor the benefit of the FDIC, to be usedin the event the FDIC becomes obligatedto pay the insured deposits of theinsured branch. Section 303.8(f) also

authorizes the General Counsel ordesignee to alter the model depositagreement used. The FDIC is proposingto move the delegation to part 346 forease of reference, in order to locate thedelegation with the substantive pledgerequirements to which the delegationapplies. The delegation would be addedas a new paragraph at the end of§ 346.19 on pledge of assets.

C. Part 359 (Golden Parachute andIndemnification Payments)

The FDIC is proposing to amend 12CFR part 359 by moving certaininformation from § 359.6 (‘‘Filinginstructions’’) to 12 CFR part 303. Thesubstantive rules in part 359 wouldremain unchanged. These rules governthe making of excess nondiscriminatoryseverance plan payments and goldenparachute payments by insureddepository institutions or depositoryinstitution holding companies.Generally, troubled depositoryinstitutions are prohibited under part359 from making such payments unlessthe institution obtains the consent of theFDIC and/or the institution’s primaryfederal regulator. Under the proposal, aninstitution seeking the consent of theFDIC would be referred by § 359.6 to§ 303.244. Also, a listing of thenecessary elements of an applicationwould be moved from § 359.6 to§ 303.244. These elements would beexpanded in order to assist an applicantin preparing a complete filing.

V. Regulatory Text Deleted FromProposed Part 303

Some matters currently addressed inpart 303 are not being included in theproposed revisions to part 303 becausethese matters will be covered elsewhereor are no longer needed. Those items aresummarized below:

Section 303.2(c)—Special proceduresfor remote service facilities. Noticeprocedures for remote service facilities,along with related delegations ofauthority and the definition of ‘‘remoteservice facility’’ have been deletedbecause EGRPRA excludes suchfacilities from the definition of a branch.

Section 303.11(c)—Request for review.This section merely states that anaggrieved party may request the Boardof Directors to review any action takenunder authority delegated under§§ 303.7, 303.8, and 303.9. Numerousavenues already exist for appeal, such asthose found under proposed § 303.11(f)(Appeals and petitions forreconsideration) and part 308 (UniformRules of Practice and Procedure). Broadauthority to challenge delegations ofauthority seems unnecessary and is notin keeping with the Board’s recent


7 The RFA defines the term ‘‘small entity’’ in 5U.S.C. 601 by reference to definitions published bythe Small Business Administration. The SmallBusiness Administration has defined a ‘‘smallentity’’ for banking purposes as a national orcommercial bank, savings institution or creditunion with less than $100 million in assets. See 13CFR 121.201.

resolution on delegations of authoritywhich has been codified in part inproposed § 303.12 (General rulesgoverning delegations of authority).

Section 303.12—OMB control numberassigned pursuant to the PaperworkReduction Act. This section is beingdeleted in its entirety because this samematerial also appears in § 304.7, Displayof control numbers, of this chapter.

Several delegations of authority arealso being eliminated:

Sections 303.7(f)(1)(vii) and303.7(f)(2)(i)—Delegations regarding theDepository Institutions ManagementInterlocks Act. These delegations arebeing moved to part 348 (ManagementOfficial Interlocks) of this chapter.

Section 303.8(b)—Disclosure laws andregulations. The delegations related topart 335 (Securities of nonmemberinsured banks) are now contained inpart 335 of this chapter. The delegationsto administer part 341 (Registration ofSecurities Transfer Agents) are beingmoved to part 341 of this chapter.

Section 303.8(c)—Security devicesand procedures and bank servicearrangements. This is a delegation toadminister the provisions of part 326(Minimum Security Devices andProcedures). There are no longer anyapplication procedures related to part326, so therefore no delegations ofauthority are required.

Section 303.8(d)—In emergencies.This is a delegation to staff to managethe FDIC’s affairs in the event an enemyattack renders the Board of Directorsunable to perform its normalmanagement functions. This delegationis being transferred to an internal Boardresolution.

Section 303.8(h)—Application ornotices for membership or resumptionof business. This delegation permitsDOS officials to provide comments toother federal regulators on applicationsor notices for membership in theFederal Reserve System, or forconversion of a state bank to a nationalbank. This delegation is being deleted asunnecessary since it is done as a matterof practice.

Section 303.8(i)—DepositoryInstitutions Disaster Relief Act of 1992(DIDRA). The provisions of DIDRA thatwere the subject of these delegationshave expired.

VI. Initial Regulatory FlexibilityAnalysis

The Regulatory Flexibility Act (5U.S.C. 601–612) (RFA) requires anagency to publish an initial regulatoryflexibility analysis, except to the extentprovided in 5 U.S.C. 605(b), wheneverthe agency is required to publish ageneral notice of proposed rulemaking

for a proposed rule. Pursuant tosubsections 603 (b) and (c) of the RFA,the FDIC provides the following initialregulatory flexibility analysis:

Reasons why agency action is beingconsidered. The ‘‘SupplementaryInformation’’ section above contains thisinformation.

Statement of objectives of and legalbasis for proposed rule. The‘‘Supplementary Information’’ sectionabove contains this information.

Description and estimate of thenumber of small entities to which theproposed rule applies. The proposedrule applies generally to theapproximately 6,300 state nonmemberbanks for which the FDIC is the primaryfederal regulator, regardless of size. Asof June 26, 1997, there were 6,265 suchinstitutions, 4,316 of which were smallentities as defined by the RFA.7 Inaddition, as indicated in the Scopeparagraphs of the pertinent subparts,certain of the subparts apply to alldepository institutions insured by theFDIC, regardless of size. As of June 26,1997, there were 11,220 suchinstitutions, 6,926 of which were smallentities as defined by the RFA. SubpartB (Deposit Insurance) also applies toproposed depository institutions andoperating noninsured institutions thatseek to apply for FDIC depositinsurance, regardless of size. Basedupon recent experience, the FDICestimates that the proposed rule willaffect a total of approximately 200 suchentities per year, nearly all of which theFDIC would expect to be small entitiesas defined by the RFA. In limitedcircumstances, certain subparts applymore generally to other entities orpersons, as defined by the respectivesubparts, making applications to theFDIC, regardless of size. Quantificationof the number of such persons or smallentities who will be affected by theproposed rule is not practicable. TheFDIC believes that any economic impacton such small entities will be beneficialbecause the proposed rule serves toreduce regulatory burden. The FDICinvites the public to comment on thisconclusion and will carefully review allcomments received prior to issuing thefinal regulation.

Projected reporting, recordkeepingand other compliance requirements ofthe proposed rule. The proposed rulereorganizes, clarifies and simplifies the

rules applicable to the processing ofapplications, notices and requests, andupdates the regulation to reflect recentstatutory changes. The FDIC expectsthat these proposed changes will reduceindustry costs associated withregulatory filings and will decreaseprocessing time associated with suchfilings. For example, branchapplications for eligible institutionsgenerally will be deemed approved 21days after filing and expeditedprocedures have been introduced forcertain merger and deposit insuranceapplications. Consistent with statutoryamendments, the proposed ruleeliminates the need for banks that haveundergone a recent change in control orhave been operating less than two yearsto file notices to add a director or seniorexecutive officer, thus substantiallyreducing the number of required filings.Reorganization of part 303 so that allinformation relevant to the filing andprocessing of each particularapplication type in one concise subpartalso serves to lessen burden. Theproposed rule also more closely alignsthe procedural requirements of theFDIC’s regulations with those of theother federal banking agencies, thusreducing the burden which may beassociated with interpreting the rules ofmore than one federal banking agency.

Identification of federal rules whichmay duplicate, overlap or conflict withthe proposed rule. The ‘‘SupplementaryInformation’’ above contains thisinformation.

Discussion of significant alternativesto proposed rule. The FDIC believes thatthe proposed rule is an alternative to theexisting part 303 and provides economicbenefits to small entities. The proposedrule reorganizes and consolidates theexisting rule to make it easier foraffected small entities to use. Thereporting requirements have beenclarified and simplified as a result of theFDIC’s experience in administering theexisting part 303. By streamliningapplication procedures and grantingeligible depository institutionsexpedited processing of certain filings,the proposed rule enables small entitiesthat qualify as eligible depositoryinstitutions to operate more efficiently.By reducing the regulatory burdenassociated with application procedures,the proposed rule reduces the resourcessmall entities will have to devote toregulatory compliance. Because themajority of the filings required by theproposed rule are required by statute,elimination of the rule is not a viablealternative. The FDIC has carefullyreviewed each of the existing filing andprocessing procedures and, where theapplicable statutes provide some


flexibility, the FDIC proposes to reviseexisting part 303 in a way it believesbest serves to reduce regulatory burdenand streamline processing withoutcompromising the safety and soundnessof the banking industry.

The FDIC invites the public tocomment on whether the proposed rulereduces regulatory burden and toprovide the FDIC with suggestedalternatives to those set forth in theproposed rule. The FDIC will carefullyreview all comments received prior toissuing the final regulation.

VII. Paperwork Reduction ActThe collections of information

contained in this proposed rule andidentified below have been submitted tothe Office of Management and Budget(OMB) for review and approval inaccordance with the requirements of thePaperwork Reduction Act of 1995 (PRA)(44 U.S.C. 3501 et seq.). Comments areinvited on: (a) Whether the collection ofinformation is necessary for the properperformance of the FDIC’s functions,including whether the information haspractical utility; (b) the accuracy of theestimates of the burden of theinformation collection; (c) ways toenhance the quality, utility, and clarityof the information to be collected; and(d) ways to minimize the burden of theinformation collection on respondents,including through the use of automatedcollection techniques or other forms ofinformation technology.

Comments should be addressed to theOffice of Information and RegulatoryAffairs, Office of Management andBudget, Attention: Desk OfficerAlexander Hunt, New Executive OfficeBuilding, Room 3208, Washington, DC20503, with copies of such comments toSteven F. Hanft, Assistant ExecutiveSecretary (Regulatory Analysis), FederalDeposit Insurance Corporation, RoomF–4080, 550 17th Street NW,Washington, DC 20429. All commentsshould refer to ‘‘Part 303.’’ OMB isrequired to make a decision concerningthe collections of information containedin the proposed regulations between 30and 60 days after the publication of thisdocument in the Federal Register.Therefore, a comment to OMB is bestassured of having its full effect if OMBreceives it within 30 days of thispublication. This does not affect thedeadline for the public to comment tothe FDIC on the proposed regulation.

Subpart C (Establishment andRelocation of Domestic Branches andOffices)

Section 18(d)(1) of the FDI Act (12U.S.C. 1828(d)(1)) provides that no statenonmember insured bank shall establish

and operate any new domestic branch ormove its main office or any such branchfrom one location to another without theprior written consent of the FDIC afterconsidering the factors enumerated insection 6 of the FDI Act (12 U.S.C.1816). Subpart C of the proposedregulation sets forth the applicationrequirements and procedures forinsured state nonmember banks toestablish a branch, relocate a mainoffice, and relocate a branch subject tothe approval by the FDIC. Theinformation collected is used by theFDIC to evaluate the statutory factorsand determine whether to grant consent.This collection of information has beenapproved by OMB under clearancenumber 3064–0070 through May 31,1998. Public comment regarding thiscollection is being solicited because theproposed regulation would modify theOMB-approved collection by addressingthe establishment and relocation ofinterstate branches and deleting remoteservice facilities from the section 18(d)application requirements.

Estimate of Annual BurdenNumber of applications: 1,750.Number of hours to prepare an

application: 5.Total annual burden hours: 8,750.

Subpart M (Other Filings); Section303.242 (Exercise Trust Powers)

Section 333.2 of the FDIC’sregulations (12 CFR 333.2) prohibits anyinsured state nonmember bank fromchanging the general character of itsbusiness without the prior writtenconsent of the FDIC. The exercise oftrust powers by a bank is usuallyconsidered to be a change in the generalcharacter of a bank’s business if thebank did not exercise those powerspreviously because trust powers create anew fiduciary relationship. Therefore,unless a bank is currently exercisingtrust powers, it must file a formalapplication to obtain the FDIC’s writtenconsent to exercise trust powers.Section 303.242 of the proposedregulation sets forth the applicationprocedures relating to the FDIC’s priorapproval to exercise trust powers. Eachapplication submitted by a bank isevaluated by the FDIC to verify thequalifications of bank management toadminister a trust department to ensurethat the bank’s financial condition willnot be jeopardized as a result of trustoperations. This collection ofinformation has been approved by OMBunder clearance number 3064–0025through December 31, 1997. Publiccomment is being solicited because thecollection is being modified to simplifyand clarify the ‘‘Application for Consent

to Exercise Trust Powers’’ form, and toeliminate a number of items ofinformation required under the currentform. In addition, the collection is beingmodified so that an ‘‘eligible depositoryinstitution’’ as defined in § 303.2(r) ofthe proposal will file an abbreviatedapplication and will receive expeditedprocessing by the FDIC.

Estimate of Annual Burden

Number of applications from ‘‘eligibledepository institutions’’: 31.

Average number of hours to preparean 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 preparean application: 24.

Annual burden hours: 120.Total number of applications: 36.Total annual burden hours: 368.

Other Collections of Information

Proposed part 303 addressescollections of information in addition tosubpart C and subpart M collectionsdiscussed above. Subpart B (DepositInsurance) addresses a collectionapproved by OMB under clearancenumber 3064–0001 which expires onJuly 31, 2000. Subpart D (Mergers)addresses a collection approved byOMB under clearance number 3064–0015 which expires on September 30,1998. The merger application collectionwill be the subject of an interagencysolicitation of public commentconcerning the PRA aspects of a single,interagency form for affiliated andnonaffiliated mergers. Subpart E(Change in Bank Control) addresses acollection approved by OMB underclearance number 3064–0019 whichexpires on January 31, 2000. Subpart F(Change of Director or Senior ExecutiveOfficer) addresses a collection approvedby OMB under clearance number 3064–0097 which expires on January 31, 2000.Subpart G (Activities and Investments ofInsured State Banks), addresses acollection approved by OMB underclearance number 3064–0111, andSubpart H (Filings by SavingsAssociations), addresses a collectionapproved under clearance number3064–0104. Public comment about thesetwo collections was sought in a noticeof proposed rulemaking regarding 12CFR part 362, ‘‘Activities of InsuredState Banks and Insured SavingsAssociations.’’ 62 FR 47969, Sept. 12,1997.

Subpart I (Mutual-to-StockConversions) addresses a collectionapproved by OMB under clearancenumber 3064–0117 which expires on


July 31, 2000. Subpart J (Foreign BankActivities) addresses two collectionsapproved by OMB under clearancenumbers 3064–0114 and 3064–0125,both of which expire on July 31, 2000.Subpart K (Prompt Corrective Action)addresses a collection approved byOMB under clearance number 3064–0115 which expires on July 31, 1999.Subpart L (Section 19) addresses acollection approved by OMB underclearance number 3064–0018 whichexpires on July 31, 2000. Subpart M(Other Filings) § 303.241 (Reduce orretire capital stock or capital debtinstruments) addresses a collectionapproved by OMB under clearancenumber 3064–0079 which expires on

October 31, 1997. Public comment wassought about this collection on July 29,1997 (62 FR 40525). A submission torenew 3064–0079 without change willbe made to OMB in early October, 1997at which time further comment will besolicited. Subpart M (Other Filings)§ 303.243 (Brokered deposits) addressesa collection approved by OMB underclearance number 3064–0099 whichexpires on August 31, 1998.

The FDIC has reviewed these othercollections of information and hasconcluded that either the proposed part303 does not change the collection ofinformation as approved by OMB in away that requires that public commentbe solicited or that the proposedchanges have already been incorporated

into recent OMB PRA submissions.Public comment and OMB review ofthese collections will occur as part ofthe regular cycle of review under thePRA. Nonetheless, the FDIC welcomescomment about the PRA aspects of thisproposed regulation or any subpart of it.Comment specifically about PRA relatedissues should identify the PaperworkReduction Act and any particularsubpart and/or collection for whichconsideration is desired.

VIII. Derivation Table

This table directs readers to theprovision(s) of the former regulation, ifany, upon which the provision in theproposed 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.



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), (iv) .................................................................... Revised.



(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), 303.7(f)(2)(ii) ................................................................ Revised.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 change303.242(a) .................................................................................... ...................................................................................................... Added.(b),(c),(d) ...................................................................................... 303.5(b) ....................................................................................... Revised.(e)(f) ............................................................................................. ...................................................................................................... Added(g)(h) ............................................................................................ 303.7(a)(2) ................................................................................... No change303.243(a),(b),(c) ......................................................................... 337.6(d),(e) .................................................................................. No change.



(d),(e),(f) ....................................................................................... ...................................................................................................... Added.(g) ................................................................................................. 337.6 (c),(e) ................................................................................. No change.(h) ................................................................................................. 337.6 (e), 303.7(f)(1)(viii) ............................................................. Revised.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 andprocedure, Authority delegations(Government agencies), Bank depositinsurance, Banks, banking, Bank merger,Branching, Foreign branches, Foreigninvestments, Golden parachutepayments, Insured branches, Interstatebranching, Reporting and recordkeepingrequirements.

12 CFR Part 337

Banks, banking, Reporting andrecordkeeping requirements, Savingsassociations, Securities.

12 CFR Part 341

Banks, banking, Reporting andrecordkeeping requirements, Securities.

12 CFR Part 346

Bank deposit insurance, Foreignbanking, Reporting and recordkeepingrequirements.

12 CFR Part 348

Antitrust, Banks, banking, Holdingcompanies.

12 CFR Part 359

Banks, banking, Golden parachutepayments, Indemnity payments.

For the reasons set forth in thepreamble and under the authority of 12U.S.C. 1819(a)(Tenth), the FDIC Boardof Directors hereby proposes to amend12 CFR chapter III as follows:

1. Part 303 is revised to read asfollows:

PART 303—FILING PROCEDURESAND 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 officialsin the Division of Supervision and theDivision of Compliance and ConsumerAffairs.

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 inthe Federal Reserve System.

303.26 Delegation of authority.303.27 Authority retained by the FDIC

Board of Directors.

Subpart C—Establishment and Relocationof 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.


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 SeniorExecutive 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 ofInsured State Banks [Reserved]

Subpart H—Filings by SavingsAssociations [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 nonmemberbank.

303.183 Acquisition of stock of foreignbanks or other financial entities by aninsured state nonmember bank.

303.184 Moving an insured branch of aforeign bank.

303.185 Mergers involving an insuredbranch of a foreign bank.

303.186 Exemptions from insurancerequirement for a state branch of aforeign bank.

303.187 Approval of an insured statebranch of a foreign bank to conductactivities not permissible for federalbranches.

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 seniorexecutive officers.

303.206 Application for payment ofprincipal or interest on subordinateddebt.

303.207 Restricted activities for criticallyundercapitalized institutions.

303.208 Delegation of authority.

Subpart L—Section 19 of the FDI Act(Consent to Service of Persons Convictedof 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 terminationunder section 8 of the FDI Act.

303.249 Truth in Lending Act—Relief fromreimbursement.

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 FDIAct (12 U.S.C. 1818(a)).

303.262 Issuance of notice of intention toterminate insured status under section8(a) of the FDI Act (12 U.S.C. 1818(a)).

303.263 Cease-and-desist actions undersection 8(b) of the FDI Act (12 U.S.C.1818(b)).

303.264 Temporary cease-and-desist ordersunder section 8(c) of the FDI Act (12U.S.C. 1818(c)).

303.265 Removal and prohibition actionsunder section 8(e) of the FDI Act (12U.S.C. 1818(e)).

303.266 Suspension and removal actionunder section 8(g) of the FDI Act (12U.S.C. 1818(g)).

303.267 Termination of insured statusunder section 8(p) of the FDI Act (12U.S.C. 1818(p)).

303.268 Termination of insured statusunder section 8(q) of the FDI Act (12U.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 directivesand capital plans under section 38 of theFDI Act (12 U.S.C. 1831o) and part 325of 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 39of the FDI Act (12 U.S.C. 1831p-1)(standards for safety and soundness) andpart 308 of this chapter.

303.278 Enforcement matters whereauthority 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.

§ 303.0 Scope.(a) This part generally describes the

procedures to be followed by both theFDIC and applicants with respect toapplications, requests, or noticesrequired to be filed by statute orregulation. Additional detailsconcerning processing are explained inrelated FDIC statements of policy. Thispart also sets forth delegations ofauthority from the FDIC’s Board ofDirectors to the Directors of the Divisionof Supervision (DOS), the Division ofCompliance and Consumer Affairs(DCA), the General Counsel of the LegalDivision, the Executive Secretary, and,in some cases, their designees to act oncertain applications, notices, requests,and enforcement matters.

(b) Additional application proceduresmay be found in the following FDICregulations:

(1) 12 CFR part 327—Assessments(Request for review of assessment riskclassification);

(2) 12 CFR part 328—Advertisementof Membership (Application fortemporary waiver of advertisingrequirements);

(3) 12 CFR part 345—CommunityReinvestment (CRA strategic plans andrequests for designation as a wholesaleor limited purpose institution);

(4) 12 CFR part 348—ManagementOfficial Interlocks (Exemption request).

Subpart A—Rules of GeneralApplicability

§ 303.1 Scope.Subpart A prescribes the general

procedures for submitting applications,notices, and requests (collectively,‘‘filings’’) to the FDIC which arerequired by statute or regulation. Thissubpart also prescribes the proceduresto be followed by the FDIC, applicantsand interested parties during theprocess of considering a filing,including public notice and comment.This subpart further explains theavailability of expedited processing foreligible depository institutions (definedin § 303.2(r)). Finally, this subpart setsforth general principles governingdelegations of authority by the FDIC’sBoard of Directors.

§ 303.2 Definitions.For purposes of this part:


(a) Act or FDI Act means the FederalDeposit Insurance Act (12 U.S.C. 1811 etseq.).

(b) Adjusted part 325 total assetsmeans adjusted 12 CFR part 325 totalassets as calculated and reflected in theFDIC’s Reports of Examination.

(c) Adverse comment means anyobjection, protest, or other adversewritten statement submitted by aninterested party relative to a filing. Theterm adverse comment shall not includeany comment concerning theCommunity Reinvestment Act (CRA),fair lending, consumer protection, orcivil rights that the appropriate regionaldirector or deputy regional director(DCA) determines to be frivolous (forexample, raising issues between thecommenter and the applicant that havebeen resolved). The term adversecomment also shall not include anyother comment that the appropriateregional director or deputy regionaldirector (DOS) determines to befrivolous (for example, a non-substantive comment submittedprimarily as a means of delaying actionon the filing).

(d) Amended order to pay means anorder to forfeit and pay civil moneypenalties, the amount of which has beenchanged from that assessed in theoriginal notice of assessment of civilmoney penalties.

(e) Applicant means a person or entitythat submits a filing to the FDIC.

(f) Application means a submissionrequesting FDIC approval to engage invarious corporate activities andtransactions.

(g) Appropriate FDIC region,appropriate FDIC regional office,appropriate regional director,appropriate deputy regional director,appropriate regional counsel mean,respectively, the FDIC region, and theFDIC regional office, regional director,deputy regional director, and regionalcounsel, which the FDIC designates asfollows:

(1) When an institution or proposedinstitution that is the subject of a filingor administrative action is not and willnot be part of a group of relatedinstitutions, the appropriate region forthe institution and any individualassociated with the institution is theFDIC region in which the institution orproposed institution is or will belocated; or

(2) When an institution or proposedinstitution that is the subject of a filingor administrative action is or will bepart of a group of related institutions,the appropriate region for the institutionand any individual associated with theinstitution is the FDIC region in whichthe group’s major policy and decision

makers are located, or any other regionthe FDIC designates on a case-by-casebasis.

(h) Associate director means anyassociate director of the Division ofSupervision (DOS) or the Division ofCompliance and Consumer Affairs(DCA) or, in the event such titlesbecome obsolete, any official ofequivalent authority within therespective divisions.

(i) Book capital means total equitycapital which is comprised of perpetualpreferred stock, common stock, surplus,undivided profits and capital reserves,as those items are defined in theinstructions of the Federal FinancialInstitutions Examination Council(FFIEC) for the preparation ofConsolidated Reports of Condition andIncome for insured banks.

(j) Comment means any writtenstatement of fact or opinion submittedby an interested party relative to a filing.

(k) Corporation, FDIC means theFederal Deposit Insurance Corporation.

(l) CRA protest means any adversecomment from the public related to apending filing which raises a negativeissue relative to the CommunityReinvestment Act (CRA) (12 U.S.C. 2901et seq.), whether or not it is labeled aprotest and whether or not a hearing isrequested.

(m) Deputy Director means the DeputyDirector of the Division of Supervision(DOS) or the Deputy Director of theDivision of Compliance and ConsumerAffairs (DCA) or, in the event such titlesbecome obsolete, any official ofequivalent or higher authority withinthe respective divisions.

(n) Deputy regional director meansany deputy regional director of theDivision of Supervision (DOS) or theDivision of Compliance and ConsumerAffairs (DCA) or, in the event such titlesbecome obsolete, any official ofequivalent authority within the sameFDIC region of DOS or DCA.

(o) DCA means the Division ofCompliance and Consumer Affairs or, inthe event the Division of Complianceand Consumer Affairs is reorganized,such successor division.

(p) DOS means the Division ofSupervision or, in the event the Divisionof Supervision is reorganized, suchsuccessor division.

(q) Director means the Director of theDivision of Supervision (DOS) or theDirector of the Division of Complianceand Consumer Affairs (DCA) or, in theevent such titles become obsolete, anyofficial of equivalent or higher authoritywithin the respective divisions.

(r) Eligible depository institutionmeans a depository institution thatmeets the following criteria:

(1) Received an FDIC-assignedcomposite rating of 1 or 2 under theUniform Financial Institutions RatingSystem (UFIRS) as a result of its mostrecent federal or state examination;

(2) Received a satisfactory or betterCommunity Reinvestment Act (CRA)rating from its primary federal regulatorat its most recent examination;

(3) Received a compliance rating of 1or 2 from its primary federal regulatorat its most recent examination;

(4) Is well capitalized as defined inthe appropriate capital regulation andguidance of the institution’s primaryfederal regulator; and

(5) Is not subject to a cease and desistorder, consent order, prompt correctiveaction directive, written agreement,memorandum of understanding, orother administrative agreement with itsprimary federal regulator or charteringauthority.

(s) Filing means an application, noticeor request submitted to the FDIC underthis part.

(t) General Counsel means the head ofthe Legal Division of the FDIC or anyofficial within the Legal Divisionexercising equivalent authority forpurposes of this part.

(u) Insider means a person who is oris proposed to be a director, officer, orincorporator of an applicant; ashareholder who directly or indirectlycontrols 10 percent or more of any classof the applicant’s outstanding votingstock; or the associates or interests ofany such person.

(v) Institution-affiliated party shallhave the same meaning as provided insection 3(u) of the Act (12 U.S.C.1813(u)).

(w) NEPA means the NationalEnvironmental Policy Act of 1969 (42U.S.C. 4321 et seq.)

(x) NHPA means the National HistoricPreservation Act of 1966 (16 U.S.C. 470et seq.)

(y) Notice means a submissionnotifying the FDIC that a depositoryinstitution intends to engage in or hascommenced certain corporate activitiesor transactions.

(z) Notice of assessment of civilmoney penalties means a notice ofassessment of civil money penalties,findings of fact and conclusions of law,and order to pay issued pursuant tosections 7(a)(1), 7(j)(15), 8(i) or 18(h) ofthe Act (12 U.S.C. 1817(a)(1),1817(j)(15), 1818(i), or 1828(h)), section106(b) of the Bank Holding CompanyAct (12 U.S.C. 1972), section 910(d) ofthe International Lending SupervisionAct of 1983 (12 U.S.C. 3909), or anyother provision of law providing for theassessment of civil money penalties bythe FDIC.


(aa) Notice of charges means a noticeof charges and of hearing setting forththe allegations of unsafe or unsoundpractices or violations and fixing thetime and place of the hearing issuedunder section 8(b) of the Act (12 U.S.C.1818(b)).

(bb) Notice to primary regulatormeans the notice described in section8(a)(2)(A) of the Act concerningtermination of deposit insurance (12U.S.C. 1818(a)(2)(A)).

(cc) Regional counsel means aregional counsel of the Legal Divisionor, in the event the title becomesobsolete, any official of equivalentauthority within the Legal Division. Theauthority delegated to a regional counselmay be exercised, when confirmed inwriting by the regional counsel, by adeputy regional counsel, or any officialof equivalent or higher authority in theSupervision and Legislation Branch ofthe Legal Division.

(dd) Regional director means anyregional director in the Division ofSupervision (DOS) or the Division ofCompliance and Consumer Affairs(DCA), or in the event such titlesbecome obsolete, any official ofequivalent authority within therespective divisions.

(ee) Section 8 orders:(1) Section 8(a) order means an order

terminating the insured status of adepository 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 ceaseand desist issued under section 8(b) ofthe Act (12 U.S.C. 1818(b)).

(3) Section 8(c) order, temporarycease-and-desist order means atemporary order to cease and desistissued under section 8(c) of the Act (12U.S.C. 1818(c)).

(4) Section 8(e) order means a finalorder of removal or prohibition issuedunder section 8(e) of the Act (12 U.S.C.1818(e)).

(5) Section 8(e)(3) order, temporaryorder of suspension means a temporaryorder of suspension or prohibitionissued under section 8(e)(3) of the Act(12 U.S.C. 1818(e)(3)).

(6) Section 8(g) order means an orderof suspension or order of prohibitionissued under section 8(g) of the Act (12U.S.C. 1818(g)).

(ff) Standard conditions means theconditions that any FDIC official actingunder delegated authority may imposeas a matter of routine when approvinga filing, whether or not the applicanthas agreed to their inclusion. Thefollowing conditions, or variationsthereof, are standard conditions:

(1) That the applicant has obtained allnecessary and final approvals from the

appropriate federal or state authority orother applicable authority;

(2) That if the transaction does nottake effect within a specified timeperiod, or unless, in the meantime, arequest for an extension of time hasbeen approved, the consent grantedshall expire at the end of the said timeperiod;

(3) That until the conditionalcommitment of the FDIC becomeseffective, the FDIC retains the right toalter, suspend or withdraw itscommitment should any interimdevelopment be deemed to warrant suchaction; and

(4) In the case of a merger transaction(as defined in § 303.61(a) of this part),including a corporate reorganization,that the proposed transaction not beconsummated before the 30th calendarday (or shorter time period as may beprescribed by the FDIC with theconcurrence of the Attorney General)after the date of the order approving themerger.

(gg) Tier 1 capital shall have the samemeaning as provided in § 325.2(t) of thischapter (12 CFR 325.2(t)).

(hh) Total assets shall have the samemeaning as provided in § 325.2(v) ofthis chapter (12 CFR 325.2(v)).

§ 303.3 General filing procedures.Unless stated otherwise, filings

should be submitted to the appropriateregional director (DOS). Forms andinstructions for submitting filings maybe obtained from any FDIC regionaloffice (DOS). If no form is prescribed,the filing should be in writing; be signedby the applicant or a duly authorizedagent; and contain a concise statementof the action requested. For specificfiling and content requirements, consultthe specific subparts of this part. TheFDIC may require the applicant tosubmit additional information.

§ 303.4 Computation of time.For purposes of this part, the FDIC

begins computing the relevant period onthe day after an event occurs (e.g., theday after a substantially complete filingis received by the FDIC or the day afterpublication begins) through the last dayof the relevant period. When the lastday is a Saturday, Sunday or federalholiday, the period runs until the end ofthe next business day.

§ 303.5 Effect of Community ReinvestmentAct performance on filings.

Among other factors, the FDIC takesinto account the record of performanceunder the Community Reinvestment Act(CRA) of each applicant in consideringa filing for approval of:

(a) The establishment of a domesticbranch;

(b) The relocation of the bank’s mainoffice or a domestic branch;

(c) The relocation of an insuredbranch of a foreign bank;

(d) A transaction subject to the BankMerger Act; and

(e) Deposit insurance.

§ 303.6 Investigations and examinations.

The Board of Directors, Directors of(DOS) or (DCA), their associatedirectors, or the appropriate regionaldirector or appropriate deputy regionaldirector (DOS) or (DCA) acting underdelegated authority may examine orinvestigate and evaluate facts related toany filing under this chapter to theextent necessary to reach an informeddecision and take any action necessaryor appropriate under the circumstances.

§ 303.7 Public notice requirements.

(a) General. The public must beprovided with prior notice of a filing toestablish a domestic branch, relocate adomestic branch or the main office,relocate an insured branch of a foreignbank, engage in a merger or otherbusiness combination, initiate a changeof control transaction, or request depositinsurance. The public has the right tocomment on, or to protest, these typesof proposed transactions during therelevant comment period. In order tofully apprise the public of this right, anapplicant shall publish a public noticeof its filing in a newspaper of generalcirculation. For specific publicationrequirements, consult subparts B(deposit insurance), C (branches andrelocations), D (mergers), E (change inbank control), and J (foreign bankactivities).

(b) Confirmation of publication. Theapplicant shall mail or otherwise delivera copy of the newspaper notice to theappropriate regional director (DOS)promptly after publication.

(c) Content of notice. (1) The publicnotice referred to in paragraph (a) of thissection shall consist of the following:

(i) Name and address of theapplicant(s). In the case of anapplication for deposit insurance for ade novo bank, the names of allorganizers or incorporators. In the caseof an application to establish a branch,include the location of the proposedbranch or, in the case of an applicationto relocate a branch, include the currentand proposed address of the branch. Inthe case of a merger application, includethe names of all parties to thetransaction. In the case of a notice ofacquisition of control, the name(s) of theacquiring parties. In the case of anapplication to relocate an insuredbranch of a foreign bank, include the


current and proposed address of thebranch.

(ii) Type of filing being made;(iii) Name of the depository

institution(s) that is the subject matter ofthe filing;

(iv) That the public may submitcomments to the appropriate FDICregional director (DOS);

(v) The address of the appropriateFDIC regional office (DOS) wherecomments may be sent (the samelocation as that where the filing will bemade);

(vi) The closing date of the publiccomment period as specified in theappropriate subpart; and

(vii) That the nonconfidentialportions of the application are on file inthe regional office and are available forpublic inspection during regularbusiness hours.

(2) Alternatively, paragraphs (b)(1)(iv) through (vii) of this section may besatisfied through use of the followingnotice:

Any person wishing to comment on thisapplication may file his or her comments inwriting with the regional director (DOS) ofthe Federal Deposit Insurance Corporation atits regional office [insert address of regionaloffice]. If any person desires to protest thegranting of this application, he or she has aright to do so if he or she files a writtencomment with the regional director by the[insert closing date of the public commentperiod specified in the appropriate subpart ofpart 303]. The non-confidential portions ofthe application are on file in the regionaloffice and are available for public inspectionduring regular business hours.

(d) Multiple transactions. The FDICmay consider more than onetransaction, or a series of transactions,to be a single filing for purposes of thepublication requirements of this section.When publishing a single public noticefor multiple transactions, the applicantshall explain in the public notice howthe transactions are related and state theclosing date of the longest publiccomment period that shall apply to allof the related transactions.

(e) Joint public notices. For atransaction subject to public noticerequirements by the FDIC and anotherfederal or state banking authority, theFDIC will accept publication of a singlejoint notice containing all theinformation required by both the FDICand the other federal agency or statebanking authority, provided that thenotice states that comments must besubmitted to both the FDIC and, ifapplicable, the other federal or statebanking authority.

§ 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 thenon-confidential portions of a filing (thepublic file) until 180 days followingfinal disposition of a filing. The publicfile generally consists of portions of thefiling, supporting data, supplementaryinformation, and comments submittedby interested persons (if any) to theextent that the documents have not beenafforded confidential treatment. To viewor request photocopies of the public file,an oral or written request should besubmitted to the appropriate regionaldirector. The public file will beproduced for review not more than onebusiness day after receipt by theregional office. The FDIC may impose afee for photocopying in accordance with§ 309.5(c) of this chapter and with therates the FDIC publishes annually in theFederal Register.

(b) Confidential treatment. (1) Theapplicant may request that specificinformation be treated as confidential.The following information generally isconsidered confidential:

(i) Personal information, the release ofwhich would constitute a clearlyunwarranted invasion of privacy;

(ii) Commercial or financialinformation, the disclosure of whichwould result in substantial competitiveharm to the submitter; and

(iii) Information the disclosure ofwhich could seriously affect thefinancial condition of any depositoryinstitution.

(2) If an applicant requestsconfidential treatment for informationthat the FDIC does not consider to beconfidential, the FDIC may include thatinformation in the public file afternotifying the applicant. On its owninitiative, the FDIC may determine thatcertain information should be treated asconfidential and withhold thatinformation from the public file. Awritten request for information withheldfrom the public file, or copies of thepublic file following closure of the file180 days after final disposition, shouldbe submitted pursuant to the Freedomof Information Act (5 U.S.C. 552) to theFDIC, Office of the Executive Secretary,550 17th Street, NW., Washington, DC20429.

§ 303.9 Comments.

(a) Submission of comments. Forfilings subject to a public noticerequirement, any person may submitcomments to the appropriate FDICregional director (DOS) during thecomment period.

(b) Comment period. (1) General.Consult specific subparts of this part forthe comment period applicable to aparticular filing.

(2) Extension. The appropriateregional director or deputy regionaldirector (DOS) may extend or reopen thecomment period if:

(i) The applicant fails to file allrequired information on a timely basisto permit review by the public or makesa request for confidential treatment notgranted by the FDIC that delays thepublic availability of that information;

(ii) Any person requesting anextension of time satisfactorilydemonstrates to the FDIC that additionaltime is necessary to develop factualinformation that the FDIC determinesmay materially affect the application; or

(iii) The appropriate regional directoror deputy regional director (DOS)determines that other good cause exists.

(3) Solicitation of comments.Whenever appropriate, the regionaldirector (DOS) may solicit commentsfrom any person or institution whichmight have an interest in or be affectedby the pending filing.

(4) Applicant response. The FDIC willprovide copies of all comments receivedto the applicant and may give theapplicant an opportunity to respond.

§ 303.10 Hearings and other meetings.(a) Matters covered. This section

covers hearings and other proceedingsin connection with filings for or by:

(1) Deposit insurance by a proposednew depository institution or operatingnon-insured institution;

(2) An insured state nonmember bankto establish a domestic branch or torelocate a main office or domesticbranch;

(3) Relocation of an insured branch ofa foreign bank;

(4) (i) Merger or consolidation whichrequires the FDIC’s prior approval underthe Bank Merger Act (12 U.S.C. 1828(c));

(ii) Except as otherwise expresslyprovided, the provisions of this § 303.10shall not be applicable to any proposedmerger transaction which the FDICBoard of Directors determines must beacted upon immediately to prevent theprobable default of one of theinstitutions involved or must behandled with expeditious action due toan existing emergency condition, aspermitted by the Bank Merger Act (12U.S.C. 1828(c)(6)); and

(5) Any other purpose or matterwhich the FDIC Board of Directors in itssole discretion deems appropriate.

(b) Hearing requests. Before the end ofthe comment period, any person maysubmit to the appropriate regionaldirector (DOS) a written request for ahearing on a filing. The request mustdescribe the nature of the issues or factsto be presented and the reasons whywritten submissions would be


insufficient to make an adequatepresentation of those issues or facts tothe FDIC. A person requesting a hearingshall simultaneously submit a copy ofthe request to the applicant.

(c) Action on a hearing request. Theregional director (DOS) may grant ordeny a request for a hearing and maylimit the issues that he or she deemsrelevant or material. The FDIC generallygrants a hearing request only if itdetermines that written submissionswould be insufficient or that a hearingotherwise would be in the publicinterest.

(d) Denial of a hearing request. If theregional director (DOS) denies a hearingrequest, he or she shall notify the personrequesting the hearing of the reason forthe denial. A decision to deny a hearingrequest shall be a final agencydetermination that is not appealable tothe Board of Directors.

(e) FDIC procedures prior to thehearing. (1) Notice of hearing. The FDICshall issue a notice of hearing if it grantsa request for a hearing or orders ahearing because it is in the publicinterest. The notice of hearing shall statethe subject and date of the filing, thetime and place of the hearing, and theissues to be addressed. The FDIC shallsend a copy of the notice of hearing tothe applicant, to the person requestingthe hearing, and to anyone elserequesting a copy.

(2) Presiding officer. The FDIC shallappoint a presiding officer to conductthe hearing, who will usually be theappropriate regional director (DOS). Thepresiding officer is responsible for allprocedural questions not governed bythis § 303.10.

(f) Participation in the hearing. Anyperson who wishes to appear(participant) shall notify the appropriateregional director (DOS) of his or herintent to participate in the hearing nolater than 10 days from the date that theFDIC issues the Notice of Hearing. Atleast 5 days before the hearing, eachparticipant shall submit to theappropriate regional director (DOS), aswell as to the applicant and any otherperson as required by the FDIC, thenames of witnesses, a statementdescribing the proposed testimony ofeach witness, and one copy of eachexhibit the participant intends topresent.

(g) Transcripts. The FDIC shallarrange for a hearing transcript. Theperson requesting the hearing and theapplicant each shall bear the cost of onecopy of the transcript for his or her useunless such cost is waived by thepresiding officer and incurred by theFDIC.

(h) Conduct of the hearing. (1)Presentations. Subject to the rulings ofthe presiding officer, the applicant andparticipants may make opening andclosing statements and presentwitnesses, material, and data.

(2) Information submitted. Anyperson presenting material shall furnishone copy to the FDIC, one copy to theapplicant, and one copy to eachparticipant.

(3) Laws not applicable to hearings.The Administrative Procedure Act (5U.S.C. 551 et seq.), the Federal Rules ofEvidence (28 U.S.C. Appendix), theFederal Rules of Civil Procedure (28U.S.C. Rule 1 et seq.), and the FDIC’sRules of Practice and Procedure (12 CFRpart 308) do not govern hearings underthis § 303.10.

(i) Closing the hearing record. At theapplicant’s or any participant’s request,or at the FDIC’s discretion, the FDICmay keep the hearing record open for upto 10 days following the FDIC’s receiptof the transcript. The FDIC shall resumeprocessing the filing after the recordcloses.

(j) Informal proceedings. The FDICmay arrange for an informal proceedingwith an applicant and other interestedparties in connection with a filing,either upon receipt of a written requestfor such a meeting made during thecomment period, or upon the FDIC’sown initiative. No later than 10 daysprior to an informal proceeding, theappropriate regional director (DOS)shall notify the applicant and eachperson who requested a hearing or oralpresentation of the date, time, and placeof the proceeding. The proceeding mayassume any form, including a meetingwith FDIC representatives at whichparticipants will be asked to presenttheir views orally. The appropriateregional director (DOS) or (DCA) mayhold separate meetings with each of theparticipants.

(k) Disposition and notice thereof.The FDIC shall notify the applicant andall participants of the final dispositionof a filing and shall provide a statementof the reasons for the final disposition.

(l) Computation of time. In computingperiods of time under this section, theprovisions of § 308.12 of the FDIC’sRules of Practice and Procedure (12 CFR308.12) shall apply.

(m) Authority retained by FDIC Boardof Directors to modify procedures. TheFDIC Board of Directors may delegateauthority by resolution on a case-by-case basis to the presiding officer toadopt different procedures in individualmatters and on such terms andconditions as the Board of Directorsdetermines in its discretion. Suchresolution shall be made available for

public inspection and copying in theOffice of the Executive Secretary underthe Freedom of Information Act (5U.S.C. 552(a)(2)).

§ 303.11 Decisions.(a) General procedures. The FDIC may

approve, conditionally approve, deny,or not object to a filing after appropriatereview and consideration of the record.The FDIC will promptly notify theapplicant and any person who makes awritten request of the final dispositionof a filing. If the FDIC denies a filing,the FDIC will immediately notify theapplicant in writing of the reasons forthe denial.

(b) Authority retained by FDIC Boardof Directors to modify procedures. Inacting on any filing under this part, theFDIC Board of Directors may byresolution adopt procedures whichdiffer from those contained in this partwhen it deems it necessary or in thepublic interest to do so. Such resolutionshall be made available for publicinspection and copying in the Office ofthe Executive Secretary under theFreedom of Information Act (5 U.S.C.552(a)(2)).

(c) Expedited processing. (1) A filingsubmitted by an eligible depositoryinstitution as defined in § 303.2(r) ofthis part will receive expeditedprocessing as specified in theappropriate subparts of this part unlessthe appropriate regional director ordeputy regional director (DOS) choosesto remove the filing from expeditedprocessing for the reasons set forth inparagraph (c)(2) of this section. Exceptfor filings made pursuant to subpart J(foreign bank activities), expeditedprocessing will not be available for anyfiling that the appropriate regionaldirector (DOS) does not have delegatedauthority to approve.

(2) Removal of filing from expeditedprocessing. The appropriate regionaldirector or deputy regional director(DOS) may remove a filing fromexpedited procedures at any time priorto final disposition if:

(i) For filings subject to public noticeunder § 303.7, an adverse comment isreceived that warrants additionalinvestigation or review;

(ii) For filings subject to evaluation ofCRA performance under § 303.5, a CRAprotest is received that warrantsadditional investigation or review, orthe appropriate regional director (DCA)determines that the filing presents asignificant CRA or compliance concern;

(iii) For any filing, the appropriateregional director (DOS) determines thatthe filing presents a significantsupervisory concern, or raises asignificant legal or policy issue; or


(iv) For any filing, the appropriateregional director (DOS) determines thatother good cause exists for removal.

(3) For purposes of this section, asignificant CRA concern includes but isnot limited to a determination by theappropriate regional director (DCA) that,although a depository institution mayhave an institution-wide rating ofsatisfactory, a depository institution’sCRA rating is less than satisfactory in astate or multi-state metropolitanstatistical area (MSA), or a depositoryinstitution’s CRA performance is lessthan satisfactory in an MSA or in thenon-MSA portion of a state in which itseeks to expand through approval of anapplication for a deposit facility asdefined in 12 U.S.C. 2902(3).

(4) If the FDIC determines that it isnecessary to remove a filing fromexpedited review procedures pursuantto paragraph (c)(2) of this section, theFDIC promptly will provide theapplicant with a written explanation.

(d) Multiple transactions. If the FDICis considering related transactions, someor all of which have been grantedexpedited processing, then the longestprocessing time for any of the relatedtransactions shall govern for purposes ofapproval.

(e) Abandonment of filing. A filingmust contain all information set forth inthe applicable subpart of this part. Tothe extent necessary to evaluate a filing,the FDIC may require an applicant toprovide additional information. Ifinformation requested by the FDIC isnot provided within the time periodspecified by the agency, the FDIC maydeem the filing abandoned and shallprovide written notification to theapplicant and any interested parties thatsubmitted comments to the FDIC thatthe file has been closed.

(f) Appeals and petitions forreconsideration—(1) General. Appealprocedures for a denial of a change inbank control (subpart E), change insenior executive officer or board ofdirectors (subpart F) or denial of anapplication pursuant to section 19 of theFDI Act (subpart L) are contained in 12CFR part 308, subparts D, L, and M,respectively. For all other filingscovered by this chapter for whichappeal procedures are not provided byregulation or other written guidance, theprocedures specified in paragraphs (f)(2) through (5) of this section shallapply. A decision to deny a request fora hearing is a final agency determinationthat is not appealable to the Board ofDirectors pursuant to § 303.10(d) of thispart.

(2) Filing procedures. Within 15 daysof receipt of notice from the FDIC thatits filing has been denied, any applicant

may file a petition for reconsiderationwith the appropriate regional director(DOS), if the filing initially wassubmitted to DOS, or the appropriateregional director (DCA), if the filinginitially was submitted to DCA.

(3) Content of filing. A petition forreconsideration must contain thefollowing information:

(i) A resolution of the board ofdirectors of the applicant authorizingfiling of the petition, if the applicant isa corporation or other entity, or a lettersigned by the individual(s) filing thepetition, if the applicant is not acorporation or other entity;

(ii) Relevant, substantive informationthat for good cause was not previouslyset forth in the filing; and

(iii) Specific reasons why the FDICshould reconsider its prior decision.

(4) Delegation of authority. (i)Authority is delegated to the Directorand Deputy Director (DOS) and (DCA),as appropriate and, where confirmed inwriting by the appropriate Director, toan associate director and theappropriate regional director anddeputy regional director, to grant apetition for reconsideration, afterconsultation with the Legal Division.

(ii) Authority is delegated to theDirector and Deputy Director (DOS) and(DCA), as appropriate, to deny a petitionfor reconsideration, after consultationwith the Legal Division.

(iii) Notwithstanding paragraphs(F)(4) (i) and (ii) of § 303.11, noreconsideration of a filing that originallyrequired Legal Division concurrencemay be acted upon without LegalDivision concurrence.

(5) Procedures for reconsideration offilings. If a petition for reconsiderationis granted, the filing will bereconsidered by:

(i) The Board of Directors, if the filingwas originally denied by the Board ofDirectors or denied by the Director orDeputy Director or an associate director(DOS) or (DCA); or

(ii) The Director or Deputy Director(DOS) or (DCA), if the filing wasoriginally denied by a regional directoror deputy regional director.

(6) Final decision. Decisions made ona petition for reconsideration by theDirector or Deputy Director (DOS) or(DCA) are final agency decisions and arenot appealable to the Board of Directors.

(g) Nullification of decision—(1)Material misrepresentation or omission.If the FDIC subsequently becomes awareof any material misrepresentation oromission after the agency has rendereda decision on a filing, the FDIC maynullify its decision by providing writtennotification to the applicant of thedetermination and the reason therefor.

Any person responsible for any materialmisrepresentation or omission in a filingor supporting materials may be subjectto an enforcement action and otherpenalties, including criminal penaltiesprovided in Title 18 of the United StatesCode.

(2) Material change in circumstances.If the FDIC is not informed by theapplicant of a subsequent materialchange in circumstances prior torendering a decision on a filing (forexample, a material change in abusiness plan, or the financial conditionof the depository institution), the FDICmay nullify its decision in the mannerdescribed in paragraph (g)(1) of thissection.

(3) Other nullifications. The FDIC maynullify any decision on a filing that iscontrary to law, regulation or FDICpolicy, or granted due to clerical oradministrative error, or a materialmistake of law or fact.

§ 303.12 General rules governingdelegations of authority.

(a) Scope. This section containsgeneral rules governing the FDIC Boardof Director’s delegations of authorityunder this chapter. These principles areprocedural in nature only and are notsubstantive standards. All delegations ofauthority, confirmations, limitations,revisions, and rescissions under thischapter must be in writing andmaintained with the Office of theExecutive Secretary.

(b) Authority not delegated. Except asotherwise expressly provided, the FDICBoard of Directors does not delegate itsauthority.

(1) The FDIC Board of Directorsretains and does not delegate theauthority to act on agreements withforeign regulatory or supervisoryauthorities, matters that would establishor change existing Corporation policy,matters that might attract unusualattention or publicity, or involve anissue of first impressionnotwithstanding any existing delegationof authority.

(2) The FDIC Board of Directorsretains the authority to act on any filingor enforcement matter upon which anymember of the Board of Directors wishesto act, even if the authority to act onsuch filing or enforcement matter hasbeen delegated.

(c) Exercise of delegated authority notmandated. Any FDIC official withdelegated authority under this chaptermay elect not to exercise that authority.

(d) Action by FDIC officials. In matterswhere the FDIC Board of Directors hasneither specifically delegated norretained authority, FDIC officials maytake action with respect to matters


which generally involve conditions orcircumstances requiring prompt actionto protect the interests of the FDIC andto achieve flexibility and expedition inits operations and the exercise of FDICfunctions under this part.

(e) Construction. The delegations ofauthority contained in this chapter areto be broadly construed in favor of theexistence of authority in FDIC officialswho act under delegated authority. Anyexercise of delegated authority by anFDIC official is conclusive evidence ofthat official’s authority.

(f) Written confirmations, limitations,revisions or rescissions. Where the FDICBoard of Directors has delegatedauthority to the Director (DOS), Director(DCA) or the General Counsel, or theirrespective designees, each shall havethe right to confirm, limit, revise, orrescind any delegation of authorityissued or approved by them,respectively, to any subordinateofficial(s).

§ 303.13 Delegations of authority toofficials in the Division of Supervision andthe Division of Compliance and ConsumerAffairs.

(a) CRA protests. Where a CRA protestis filed and remains unresolved,authority is delegated to the Directorand Deputy Director (DCA) and, whereconfirmed in writing by the Director, toan associate director or the appropriateregional director or deputy regionaldirector to concur that approval of anyfiling subject to CRA is consistent withthe purposes of CRA.

(b) Adequacy of filings. Authority isdelegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector and the appropriate regionaldirector and deputy regional director, todetermine whether a filing issubstantially complete for purposes ofcommencing processing.

(c) National Historic Preservation Act.Authority is delegated to the Directorand Deputy Director (DOS) and, whereconfirmed in writing by the Director, toan associate director and theappropriate regional director anddeputy regional director, to enter intomemoranda of agreement pursuant toregulations of the Advisory Council onHistoric Preservation which implementthe National Historic Preservation Act of1966 (16 U.S.C. 470).

Subpart B—Deposit Insurance

§ 303.20 Scope.This subpart sets forth the procedures

for applying for deposit insurance for aproposed depository institution or anoperating noninsured depositoryinstitution under section 5 of the FDI

Act (12 U.S.C. 1815). It also sets forththe procedures for requestingcontinuation of deposit insurance for astate bank withdrawing frommembership in the Federal ReserveSystem and for interim institutionschartered to facilitate a mergertransaction. Related delegations ofauthority are also set forth.

§ 303.21 Filing procedures.(a) Applications for deposit insurance

shall be filed with the appropriateregional director (DOS). The relevantapplication forms and instructions forapplying for deposit insurance for anexisting or proposed depositoryinstitution may be obtained from anyFDIC regional office (DOS).

(b) Application for deposit insurancefor an interim depository institutionshall be filed and processed inaccordance with the procedures setforth in § 303.24 of this subpart. Aninterim depository institution is definedas an institution formed or organizedsolely for the purpose of facilitating amerger transaction which will bereviewed by a responsible agency asdefined in section 18(c)(2) of the FDIAct.

(c) A request for continuation ofdeposit insurance upon withdrawingfrom membership in the Federal ReserveSystem shall be in letter form and shallprovide the information prescribed in§ 303.25 of this subpart.

§ 303.22 Processing.(a) Expedited processing for proposed

institutions. (1) An application fordeposit insurance for a proposedinstitution which will be a subsidiary ofan eligible depository institution asdefined in § 303.2(r) of this part or aneligible holding company will beacknowledged in writing by the FDICand will receive expedited processing,unless the applicant is notified inwriting to the contrary and providedwith the basis for that decision. Aneligible holding company is defined asa bank or thrift holding company thathas consolidated assets of $150 millionor more, has an assigned compositerating of 2 or better, and has at least 75percent of its consolidated depositoryinstitution assets comprised of eligibledepository institutions. The FDIC mayremove an application from expeditedprocessing for any of the reasons setforth in § 303.11(c)(2) of this part.

(2) Under expedited processing, theFDIC will take action on an applicationwithin 60 days of receipt of asubstantially complete application, or20 days after publication, whichever islater. Final action may be withheld untilthe FDIC has assurance that permission

to organize the proposed institution willbe granted by the chartering authority.Notwithstanding paragraph (a)(1) of thissection, if the FDIC does not act withinthe expedited processing period, it doesnot constitute an automatic or defaultapproval.

(b) Standard processing. For thoseapplications that are not processedpursuant to the expedited procedures,the FDIC will provide the applicantwith written notification of the finalaction as soon as the decision isrendered.

§ 303.23 Public notice requirements.(a) De novo institutions and operating

noninsured institutions. The applicantshall publish a notice, as prescribed in§ 303.7 of this part, in a newspaper ofgeneral circulation in the community inwhich the main office of the depositoryinstitution is or will be located. Noticeshall be published as close aspracticable to, but no sooner than fivedays before, the date the application ismailed or delivered to the regionaldirector (DOS). Comments by interestedparties must be received by theappropriate regional director (DOS)within 15 days following the date ofpublication, unless the comment periodhas been extended or reopened inaccordance with § 303.9(b)(2) of thispart.

(b) Exceptions to public noticerequirements. No publication shall berequired in connection with the grantingof insurance to a new depositoryinstitution established pursuant to theresolution of a failed depositoryinstitution, or to an interim depositoryinstitution formed or organized solely tofacilitate a merger transaction, or for arequest for continuation of federaldeposit insurance by a state bankwithdrawing from membership in theFederal Reserve System.

§ 303.24 Application for deposit insurancefor an interim institution.

(a) Content of application. A letterapplication for deposit insurance for aninterim institution, accompanied by acopy of the related merger application,shall be filed with the appropriateregional director. The letter applicationshould briefly describe the transactionand contain a statement that depositinsurance is being requested for aninterim institution formed or organizedsolely for the purpose of facilitating amerger transaction which will bereviewed by a federal banking agencyother than the FDIC and that theinstitution will not open for business.

(b) Processing. An application fordeposit insurance for an interimdepository institution will be


acknowledged in writing by the FDIC.Final action will be taken within 21days after receipt of a substantiallycomplete application, unless theapplicant is notified in writing thatadditional review is warranted. If theFDIC does not act within the expeditedprocessing period, it does not constitutean automatic or default approval.

§ 303.25 Continuation of deposit insuranceupon withdrawing from membership in theFederal Reserve System.

(a) Content of application. Tocontinue its insured status uponwithdrawal from membership in theFederal Reserve System, a state bankmust submit a letter application to theappropriate regional director (DOS). Acomplete application shall consist of thefollowing information:

(1) A copy of the letter, and anyattachments thereto, sent to the FederalReserve setting forth the bank’sintention to terminate its membership;

(2) A copy of the letter from theFederal Reserve acknowledging thebank’s notice to terminate membership;

(3) A statement regarding anyanticipated changes in the bank’sgeneral business plan during the next12-month period; and

(4)(i) A statement by the bank’smanagement that there are nooutstanding or proposed correctiveprograms or supervisory agreementswith the Federal Reserve System.

(ii) If such programs or agreementsexist, a statement by applicant that itsBoard of Directors is willing to enterinto a similar supervisory agreementwith the FDIC which would becomeeffective upon withdrawal from theFederal Reserve System.

(b) Processing. An application fordeposit insurance under this sectionwill be acknowledged in writing by theFDIC. The appropriate regional director(DOS) shall notify the applicant, within15 days of receipt of a substantiallycomplete application, either that federaldeposit insurance will continue upontermination of membership in theFederal Reserve System or thatadditional review is warranted and theapplicant will be notified, in writing, ofthe FDIC’s final decision regardingcontinuation of deposit insurance. If theFDIC does not act within the expeditedprocessing period, it does not constitutean automatic or default approval.

§ 303.26 Delegation of authority.(a) Proposed depository institutions.

(1) Authority is delegated to the Directorand the Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director and theappropriate regional director and

deputy regional director, to approveapplications for deposit insurance forproposed depository institutions. Forthe Director, Deputy Director orassociate director (DOS) to exercise thisauthority, paragraphs (a)(1)(i) through(a)(1)(iv) of this section must be satisfiedand the applicant shall have agreed inwriting to comply with any conditionsimposed by the delegate, other thanthose listed in paragraph (d) of thissection which may be imposed withoutthe applicant’s consent. For the regionaldirector or deputy regional director(DOS) to exercise this authority,paragraphs (a)(1)(i) through (a)(1)(v) ofthis section must be satisfied and theapplicant shall have agreed in writing tocomply with any conditions imposed bythe delegate, other than those listed inparagraph (d) of this section which maybe imposed without the applicant’sconsent.

(i) The factors set forth in section 6 ofthe Act (12 U.S.C. 1816) have beenconsidered and favorably resolved;

(ii) No unresolved managementinterlocks, as prohibited by theDepository Institution ManagementInterlocks Act (12 U.S.C. 3201 et seq.),part 348 of this chapter or any otherapplicable implementing regulation,exist;

(iii) The application is in conformitywith the standards and guidelines forthe granting of deposit insuranceestablished in the FDIC statement ofpolicy ‘‘Applications for DepositInsurance’’ (2 FDIC Law, Regulationsand Related Acts (FDIC) 5349); and

(iv) Compliance with the CRA, theNEPA, the NHPA and any applicablerelated regulations, including 12 CFRpart 345, has been considered andfavorably resolved; and

(v) No CRA protest as defined in§ 303.2(l) of this part has been filedwhich remains unresolved or, wheresuch a protest has been filed andremains unresolved, the Director (DCA),Deputy Director (DCA), an associatedirector (DCA) or the appropriateregional director (DCA) or deputyregional director (DCA) concurs thatapproval is consistent with the purposesof the CRA and the applicant agrees inwriting to any conditions imposedregarding the CRA.

(2) Authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director and theappropriate regional director anddeputy regional director, to approveapplications for deposit insurance filedby or on behalf of proposed interimdepository institutions formed ororganized solely for the purpose offacilitating a merger transaction which

will be reviewed by a responsibleagency as defined in section 18(c)(2) ofthe FDI Act.

(b) Operating noninsured depositoryinstitutions. Authority is delegated tothe Director and the Deputy Director(DOS) and, where confirmed in writingby the Director, to an associate directorand the appropriate regional directorand deputy regional director, to approveapplications for deposit insurance byoperating noninsured depositoryinstitutions. For the delegate to exercisethis authority, the following criteriamust be satisfied and the applicant shallhave agreed in writing to comply withany condition imposed by the delegate,other than those listed in paragraph (d)of this section which may be imposedwithout the applicant’s consent:

(1) The applicant is determined to beeligible for federal deposit insurance forthe class of institution to which theapplicant belongs in the state (asdefined in 12 U.S.C. 1813(a)) in whichthe applicant is located;

(2) The factors set forth in section 6of the Act (12 U.S.C. 1816) have beenconsidered and favorably resolved;

(3) No unresolved managementinterlocks, as prohibited by theDepository Institution ManagementInterlocks Act (12 U.S.C. 3201 et seq.),part 348 of this chapter or any otherapplicable implementing regulation,exist;

(4) The application is in conformitywith the standards and guidelines forthe granting of deposit insurance tooperating noninsured depositoryinstitutions established in the FDICpolicy statement ‘‘Applications forDeposit Insurance’’ (2 FDIC Law,Regulations and Related Acts (FDIC)5349);

(5) Compliance with the CRA, theNEPA, the NHPA, and any applicablerelated regulations, including 12 CFRpart 345, has been considered andfavorably resolved; and

(6) No CRA protest as defined in§ 303.2(l) of this part has been filedwhich remains unresolved or, wheresuch a protest has been filed andremains unresolved, the Director (DCA),Deputy Director (DCA), an associatedirector (DCA) or the appropriateregional director (DCA) or deputyregional director (DCA) concurs thatapproval is consistent with the purposesof the CRA and the applicant agrees inwriting to any conditions imposedregarding the CRA.

(c) Continuation of deposit insuranceupon withdrawing from membership inthe Federal Reserve System. Authority isdelegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associate


director and the appropriate regionaldirector and deputy regional director toapprove continuation of federal depositinsurance where the applicant hasagreed in writing to comply with anyconditions imposed by the delegate,other than the standard conditionsdefined in § 303.2(ff) of this part whichmay be imposed without the applicant’swritten consent.

(d) Conditions that may be imposedunder delegated authority. Followingare conditions which may be imposedby a delegate in approving applicationsfor deposit insurance without affectingthe authority granted under paragraphs(a) and (b) of this section:

(1) The applicant will provide aspecific amount of initial paid-incapital;

(2) With respect to a proposeddepository institution that has appliedfor deposit insurance pursuant to thissubpart, the Tier 1 capital to assetsleverage ratio (as defined in theappropriate capital regulation andguidance of the institution’s primaryfederal regulator) will be maintained atnot less than eight percent throughoutthe first three years of operation andthat an adequate allowance for loan andlease losses will be provided;

(3) Any changes in proposedmanagement or proposed ownership tothe extent of 10 or more percent ofstock, including new acquisitions of orsubscriptions to 10 or more percent ofstock shall be approved by the FDICprior to the opening of the depositoryinstitution;

(4) The applicant will adopt anaccrual accounting system formaintaining the books of the depositoryinstitution;

(5) Where applicable, depositinsurance will not become effectiveuntil the applicant has been granted acharter as a depository institution, hasauthority to conduct a depositoryinstitution business, and itsestablishment and operation as adepository institution have been fullyapproved by the appropriate state and/or federal supervisory authority;

(6) Where deposit insurance isgranted to an interim institution formedor organized solely to facilitate a relatedtransaction, deposit insurance will onlybecome effective in conjunction withconsummation of the relatedtransaction;

(7) Where applicable, a registered orproposed bank holding company, or aregistered or proposed thrift holdingcompany, has obtained approval of theBoard of Governors of the FederalReserve System or the Office of ThriftSupervision to acquire voting stock

control of the proposed depositoryinstitution prior to its opening;

(8) Where applicable, the applicanthas submitted any proposed contracts,leases, or agreements relating toconstruction or rental of permanentquarters to the appropriate regionaldirector for review and comment;

(9) Where applicable, full disclosurehas been made to all proposed directorsand stockholders of the facts concerningthe interest of any insider in anytransactions being effected or thencontemplated, including the identity ofthe parties to the transaction and theterms and costs involved. An insider isone who is or is proposed to be adirector, officer, or incorporator of anapplicant; a shareholder who directly orindirectly controls 10 or more percent ofany class of the applicant’s outstandingvoting stock; or the associates orinterests of any such person;

(10) The person(s) selected to serve asthe principal operating officer(s) shallbe acceptable to the regional director;

(11) The applicant will have adequatefidelity coverage;

(12) The depository institution willobtain an audit of its financialstatements by an independent publicaccountant annually for at least the firstthree years after deposit insurance iseffective, furnish a copy of any reportsby the independent auditor (includingany management letters) to theappropriate FDIC regional office within15 days after their receipt by thedepository institution and notify theappropriate FDIC regional office within15 days when a change in itsindependent auditor occurs; and

(13) Any standard condition definedin § 303.2(ff) of this part.

§ 303.27 Authority retained by the FDICBoard of Directors.

Without limiting the Board ofDirector’s authority, the Board ofDirectors retains authority to denyapplications for deposit insurance andapprove applications for depositinsurance where the applicant does notagree in writing to comply with anycondition imposed by the FDIC, otherthan the standard conditions listed in§§ 303.2(ff) and 303.26(d) of this part,which may be imposed without theapplicant’s written consent.

Subpart C—Establishment andRelocation of Domestic Branches andOffices

§ 303.40 Scope.(a) General. This subpart sets forth the

application requirements andprocedures and the delegation ofauthority for insured state nonmember

banks to establish a branch, relocate amain office, and relocate a branchsubject to the approval by the FDICpursuant to sections 13(f), 13(k), 18(d)and 44 of the FDI Act.

(b) Mergers. Applications for approvalof the acquisition and establishment ofbranches in connection with a mergertransaction under section 18(c) of theFDI Act (12 U.S.C. 1828(c)), areprocessed in accordance with subpart D(Mergers) of this part.

(c) Insured branches of foreign banksand foreign branches of domestic banks.Applications regarding insuredbranches of foreign banks and foreignbranches of domestic banks areprocessed in accordance with subpart J(Foreign Bank Activities) of this part.

(d) Interstate acquisition of individualbranch. Applications requestingapproval of the interstate acquisition ofan individual branch or brancheslocated in a state other than theapplicant’s home state without theacquisition of the whole bank aretreated as interstate bank mergertransactions under section 44 of the FDIAct (12 U.S.C. 1831a(u)), and areprocessed in accordance with subpart D(Mergers) of this part.

§ 303.41 Definitions.For purposes of this subpart:(a) Branch includes any branch bank,

branch office, additional office, or anybranch place of business located in anyState of the United States or in anyterritory of the United States, PuertoRico, Guam, American Samoa, the TrustTerritory of the Pacific Islands, theVirgin Islands, and the NorthernMariana Islands at which deposits arereceived or checks paid or money lent.A branch does not include an automatedteller machine, an automated loanmachine, or a remote service unit. Theterm branch also includes the following:

(1) A messenger service that isoperated by a bank or its affiliate thatpicks up and delivers items relating totransactions in which deposits arereceived or checks paid or money lent.A messenger service established andoperated by a non-affiliated third partygenerally does not constitute a branchfor purposes of this subpart. Bankscontracting with third parties to providemessenger services should consult withthe appropriate regional director (DOS)to determine if the messenger serviceconstitutes a branch.

(2) A mobile branch, other than amessenger service, that does not have asingle, permanent site and uses avehicle that travels to various locationsto enable the public to conduct bankingbusiness. A mobile branch may servedefined locations on a regular schedule


or may serve a defined area at varyingtimes and locations.

(3) A temporary branch that operatesfor a limited period of time not toexceed one year as a public service,such as during an emergency or disastersituation.

(4) A seasonal branch that operates atvarious periodically recurring intervals,such as during state and local fairs,college registration periods, and othersimilar occasions.

(b) Branch relocation means a movewithin the same immediateneighborhood of the existing branch thatdoes not substantially affect the natureof the business of the branch or thecustomers of the branch. Moving abranch to a location outside itsimmediate neighborhood is consideredthe closing of an existing branch and theestablishment of a new branch.

(c) De novo branch means a branch ofa bank which is established by the bankas a branch and does not become abranch of such bank as a result of:

(1) The acquisition by the bank of aninsured depository institution or abranch of an insured depositoryinstitution; or

(2) The conversion, merger, orconsolidation of any such institution orbranch.

(d) Home state means the state bywhich the bank is chartered.

(e) Host state means a state, other thanthe home state of the bank, in which thebank maintains, or seeks to establishand maintain, a branch.

§ 303.42 Filing procedures.(a) General. An applicant shall submit

an application to the appropriateregional director (DOS) on the date thenotice required by § 303.44 of thissubpart is published, or within 5 daysafter the date of the last requiredpublication.

(b) Content of filing. A complete letterapplication shall include the followinginformation:

(1) A statement of intent to establisha branch, or to relocate the main officeor a branch;

(2) The exact location of the proposedsite including the street address. Withregard to messenger services, specify thegeographic area in which the serviceswill be available. With regard to amobile branch, specify the communityor communities in which the vehiclewill operate and the intention to:

(i) Serve defined locations on aregular schedule; or

(ii) Be open at varying times andlocations; or

(iii) A combination of paragraphs(b)(2)(i) and (b)(2)(ii) of this section;

(3) Details concerning anyinvolvement in the proposal by an

insider of the bank as defined in§ 303.2(u) of this part, including anyfinancial arrangements relating to fees,the acquisition of property, leasing ofproperty, and construction contracts;

(4) A statement on the impact of theproposal on the human environment,including, information on compliancewith local zoning laws and regulationsand the effect on traffic patterns, forpurposes of complying with theapplicable provisions of the NEPA;

(5) A statement as to whether or notthe site is included in or is eligible forinclusion in the National Register ofHistoric Places, including a statementthat clearance has been or will beobtained from the State HistoricPreservation Officer for purposes ofcomplying with applicable provisions ofthe NHPA;

(6) Comments on any changes inservices to be offered, the community tobe served, or any other effect theproposal may have on the applicant’scompliance with the CRA;

(7) A copy of each newspaperpublication required by § 303.44 of thissubpart, the name and address of thenewspaper, and date of the publication;

(8) When an application is submittedto establish and operate a de novobranch in a state that is not theapplicant’s home state and in which theapplicant does not maintain a branch, astatement that the applicant hasrequested that the host state provide tothe appropriate regional director (DOS)written confirmation:

(i) That the applicant has compliedwith that state’s filing requirements; and

(ii) That the applicant has alsosubmitted to the host state banksupervisor a copy of the filing with theFDIC to establish and operate a de novobranch.

(9) When an application is submittedto relocate the main office of theapplicant from one state to another, astatement of the applicant’s intentregarding retention of branches in thestate where the main office exists priorto relocation.

(c) Undercapitalized institutions.Applications to establish a branch byapplicants subject to section 38 of theFDI Act (12 U.S.C. 1831o) also shouldprovide the information required by§ 303.204 of this part. Applicationspursuant to sections 38 and 18(d) of theFDI Act (12 U.S.C. 1831o and 1828(d))may be filed concurrently or as a singleapplication.

(d) Additional information. Theappropriate regional director (DOS) mayrequest additional information tocomplete processing.

§ 303.43 Processing.(a) Expedited processing for eligible

depository institutions. An applicationfiled under this subpart by an eligibledepository institution as defined in§ 303.2(r) of this part will beacknowledged in writing by the FDICand will receive expedited processing,unless the applicant is notified inwriting to the contrary and providedwith the basis for that decision. TheFDIC may remove an application fromexpedited processing for any of thereasons set forth in § 303.11(c)(2) of thispart. Absent such removal, anapplication processed under expeditedprocessing will be deemed approved onthe latest of the following:

(1) The 21st day after receipt by theFDIC of a substantially complete filing;

(2) The 5th day after expiration of thecomment period described in § 303.44of this part; or

(3) In the case of an application toestablish and operate a de novo branchin a state that is not the applicant’shome state and in which the applicantdoes not maintain a branch, the 5th dayafter the FDIC receives confirmationfrom the host state that the applicanthas both complied with the applicationrequirements of the host state andsubmitted a copy of the application withthe FDIC to the host state banksupervisor.

(b) Standard processing. For thoseapplications which are not processedpursuant to the expedited procedures,the FDIC will provide the applicantwith written notification of the finalaction as soon as the decision isrendered.

§ 303.44 Public notice requirements.(a) Newspaper publications. For

applications to establish or relocate abranch, a notice as described in§ 303.7(b) of this part shall be publishedonce in a newspaper of generalcirculation. For applications to relocatea main office, notice shall be publishedat least once each week on the same dayfor two consecutive weeks. The requiredpublication shall be made in thefollowing communities:

(1) To establish a branch. In thecommunity in which the main office islocated and in the communities to beserved by the branch (includingmessenger services and mobilebranches).

(2) To relocate a main office. In thecommunity in which the main office iscurrently located and in the communityto which the main office proposes torelocate.

(3) To relocate a branch. In thecommunity in which the branch islocated.


(b) Public comments. Comments byinterested parties must be received bythe appropriate regional director (DOS)within 15 days after the date of the lastnewspaper publication required byparagraph (a) of this section, unless thecomment period has been extended orreopened in accordance with§ 303.9(b)(2) of this part.

(c) Lobby notices. In the case ofapplications to relocate a main office ora branch, a copy of the requirednewspaper publication shall be postedin the public lobby of the office to berelocated for at least 15 days beginningwith the date of the last publishednotice required by paragraph (a) of thissection.

§ 303.45 Special provisions.(a) Emergency or disaster events. (1)

In the case of an emergency or disasterat a main office or a branch whichrequires that an office be immediatelyrelocated to a temporary location,applicants shall notify the appropriateregional director (DOS) within 3 days ofsuch temporary relocation.

(2) Within 10 days of the temporaryrelocation resulting from an emergencyor disaster, the bank shall submit awritten application to the appropriateregional director (DOS), that identifiesthe nature of the emergency or disaster,specifies the location of the temporarybranch, and provides an estimate of theduration the bank plans to operate thetemporary branch.

(3) As part of the review process, theappropriate regional director (DOS) willdetermine on a case by case basiswhether additional information isnecessary and may waive public noticerequirements.

(b) Redesignation of main office andexisting branch. In cases where anapplicant desires to redesignate its mainoffice as a branch and redesignate anexisting branch as the main office, anapplication shall be submitted torelocate the main office and to relocateor establish a branch as appropriate. Theappropriate regional director (DOS) maywaive the public notice requirements ininstances where an application presentsno significant or novel policy,supervisory, CRA, compliance or legalconcerns. Such waiver will be grantedonly to a redesignation within theapplicant’s home state.

(c) Expiration of approval. Approvalof an application expires if a branch hasnot commenced business or if arelocation has not been completedwithin 18 months after date of approval.

§ 303.46 Delegation of authority.(a) Approval of applications. (1)

Where the applicant agrees in writing to

comply with any conditions imposed bythe delegate, other than the standardconditions defined in § 303.2(ff) of thispart which may be imposed without theapplicant’s written consent, authority isdelegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector and the appropriate regionaldirector and deputy regional director, toapprove the applications listed in thisparagraph (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 mustbe satisfied. For the regional director ordeputy regional director (DOS) toexercise this authority, criteria inparagraphs (c) (1)–(7) of this sectionmust be satisfied.

(i) Establish a branch;(ii) Establish and operate a de novo

branch in a state that is not theapplicant’s home state and in which theapplicant 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 conditionimposed by the delegate, authority isdelegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector to approve the applicationslisted in paragraph (a)(1) of this section.

(b) Denial of applications. (1)Authority is delegated to the Directorand Deputy Director (DOS) and, whereconfirmed in writing by the Director, toan associate director and theappropriate regional director anddeputy regional director, to deny anapplication to establish a temporarybranch.

(2) Authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director to denyapplications for consent to:

(i) Establish a branch;(ii) Establish and operate a de novo

branch in a state that is not theapplicant’s home state and in which theapplicant 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 satisfiedbefore the authority delegated inparagraph (a) of this section may beexercised:

(1) The factors set forth in section 6of the FDI Act (12 U.S.C. 1816) havebeen considered and favorably resolvedexcept that this criterion does not applyto applications to establish messengerservices and temporary branches;

(2) The applicant meets the capitalrequirements set forth in 12 CFR part325 and the FDIC’s ‘‘Statement of Policyon Capital Adequacy’’ (12 CFR part 325,appendix B) or agrees in writing toincrease capital so as to be incompliance with the requirements of 12CFR part 325 before or at theconsummation of the transaction whichis the subject of the filing, except thatthis criterion does not apply toapplications to establish messengerservices and temporary branches, or torelocate branches or main offices;

(3) Any financial arrangements whichhave been made in connection with theproposed branch or relocation andwhich involve the applicant’s insidersare fair and reasonable in comparison tosimilar arrangements that could havebeen made with independent thirdparties;

(4) Compliance with the CRA, theNEPA, the NHPA, and any applicablerelated regulations, including 12 CFRpart 345, has been considered andfavorably resolved;

(5) No CRA protest as defined in§ 303.2(l) of this part has been filedwhich remains unresolved or, wheresuch a protest has been filed andremains unresolved, the Director (DCA),Deputy Director (DCA), an associatedirector (DCA) or the appropriateregional director (DCA) or deputyregional director (DCA) concurs thatapproval is consistent with the purposesof the CRA and the applicant agrees inwriting to any conditions imposedregarding the CRA;

(6) An applicant with one or moreexisting branches in a state other thanthe applicant’s home state has not failedthe credit needs test in a host stateunder section 109 of the Riegle-NealInterstate Banking and BranchingEfficiency Act of 1994 (12 U.S.C. 1835a).

(7) Additionally, for applicationssubmitted to establish and operate a denovo branch in a state that is not theapplicant’s home state and in which theapplicant does not maintain a branch:

(i) Receipt by the appropriate regionaldirector (DOS) of the host state’s writtenconfirmation that the applicant hascomplied with that state’s filingrequirements and that the applicant alsohas submitted to the host state banksupervisor a copy of its FDIC filing toestablish and operate a de novo branch;

(ii) Determination by the FDIC thatthe applicant is adequately capitalizedas of the date of the filing and willcontinue to be adequately capitalizedand adequately managed uponconsummation of the transaction;

(iii) Confirmation that the host statehas in effect a law that meets therequirements of section 18(d)(4)(A) of


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 applicationssubmitted to relocate a main office fromone state to another where the applicantseeks to retain branches in the statewhere the applicant’s main office existsprior to an interstate relocation of themain office, confirmation that the filingmeets the requirements of section18(d)(3)(B) of the FDI Act (12 U.S.C.1828(d)(3)(B)).

Subpart D—Mergers

§ 303.60 Scope.This subpart sets forth the application

requirements, procedures, anddelegations of authority for transactionssubject to FDIC approval under the BankMerger Act, section 18(c) of the FDI Act(12 U.S.C. 1828(c)).

§ 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 theassets of, or assumes liability to pay anydeposits made in, any other insureddepository institution; or

(2) Merges or consolidates with anynoninsured bank or institution orassumes liability to pay any depositsmade in, or similar liabilities of, anynoninsured bank or institution, ortransfers assets to any noninsured bankor institution in consideration of theassumption of liability for any portionof the deposits made in such insureddepository institution.

(b) Corporate reorganization means amerger between commonly-ownedinstitutions, between an insureddepository institution and itssubsidiary, or between an insureddepository institution and its holdingcompany, provided that the mergerwould have no effect on competition orotherwise have significance under thestatutory standards set forth in section18(c) of the FDI Act (12 U.S.C. 1828(c)).For purposes of this paragraph,institutions are commonly-owned ifmore than 50 percent of the voting stockof each of the institutions is owned bythe same company, individual, or groupof closely-related individuals acting inconcert.

(c) Interim merger means a merger(other than a purchase and assumptiontransaction) between an operatingdepository institution and a newly-formed depository institution or

corporation that will not open forbusiness and that exists solely for thepurpose of facilitating a corporatereorganization.

(d) Optional conversion (Oakartransaction) means a merger in which aninsured depository institution assumesdeposit liabilities insured by the depositinsurance fund (either the BankInsurance Fund (BIF) or the SavingsAssociation Insurance Fund (SAIF)) ofwhich that assuming institution is not amember, and elects not to convert theinsurance covering the assumeddeposits. Such transactions are coveredby section 5(d)(3) of the FDI Act (12U.S.C. 1815(d)(3)).

(e) Resulting institution refers to thesurviving institution uponconsummation of a merger.

§ 303.62 Transactions requiring priorapproval.

(a) Mergers. The followingtransactions require the prior writtenapproval of the FDIC under this subpart:

(1) Any merger, including anycorporate reorganization, interimmerger, or optional conversion, inwhich the resulting institution is to bean insured state nonmember bank; and

(2) Any merger, including anycorporate reorganization or interimmerger, that involves an uninsured bankor institution.

(b) Related provisions. Transactionscovered by this subpart also may besubject to other provisions orapplication requirements, including thefollowing:

(1) Interstate mergers. Interstatemergers between insured banks aresubject to the provisions of section 44 ofthe FDI Act (12 U.S.C. 1831u). In thecase of a merger that consists of theacquisition of a branch withoutacquisition of the bank, the branch istreated for section 44 purposes as a bankwhose home state is the state in whichthe branch is located.

(2) Deposit insurance. An applicationfor deposit insurance will be required inconnection with a merger between astate-chartered interim institution andan insured depository institution if therelated merger application is being actedupon by a federal banking agency otherthan the FDIC. If the FDIC is the federalbanking agency responsible for actingon the related merger application, aseparate application for depositinsurance is not necessary. Proceduresfor applying for deposit insurance areset forth in subpart B of this part. Anapplication for deposit insurance willnot be required in connection with amerger of a federally-chartered interiminstitution and an insured institution,even if the resulting institution is to

operate under the charter of the federalinterim institution.

(3) Deposit insurance fundconversions. Procedures for conversiontransactions involving the transfer ofdeposits from BIF to SAIF or from SAIFto BIF are set forth in subpart M of thispart at § 303.246.

(4) Branch closings. Branch closingsin connection with a merger are subjectto the notice requirements of section 42of the FDI Act (12 U.S.C. 1831r–1),including requirements for notice tocustomers. These requirements areaddressed in the Interagency PolicyStatement Concerning Branch ClosingsNotices and Policies (2 FDIC Law,Regulations and Related Acts (FDIC)5391).

(5) Undercapitalized institutions.Applications for a merger by applicantssubject to section 38 of the FDI Act (12U.S.C. 1831o) should also provide theinformation required by § 303.204 ofthis part. Applications pursuant tosections 38 and 18(c) of the FDI Act (12U.S.C, 1831o and 1828(c)) may be filedconcurrently or as a single application.

(6) Certification of assumption ofdeposit liability. An insured depositoryinstitution assuming deposit liabilitiesof another insured institution mustprovide certification of assumption ofdeposit liability to the FDIC inaccordance with 12 CFR part 307.

§ 303.63 Filing procedures.

(a) General. Applications requiredunder this subpart shall be filed withthe appropriate regional director (DOS).The appropriate forms and instructions,including instructions concerningnotice to depositors where applicable,may be obtained upon request from anyDOS regional office.

(b) Mergers. Applications for approvalof mergers shall be accompanied bycopies of all agreements or proposedagreements relating to the merger andany other information requested by theFDIC.

(c) Interim mergers. Applications forapproval of interim mergers and anyrelated deposit insurance applicationsshall be made by filing the forms andother documents required by paragraphs(a) and (b) of this section and such otherinformation as may be required by theFDIC for consideration of the request fordeposit insurance.

(d) Optional conversions.Applications for optional conversionsshall include a statement that theproposed merger is a transactioncovered by section 5(d)(3) of the FDI Act(12 U.S.C. 1815(d)(3)).


§ 303.64 Processing.(a) Expedited processing for eligible

depository institutions. (1) General. Anapplication filed under this subpart byan eligible depository institution asdefined in § 303.2(r) of this part andwhich meets the additional criteria inparagraph (a)(4) of this section will beacknowledged by the FDIC in writingand will receive expedited processing,unless the applicant is notified inwriting to the contrary and providedwith the basis for that decision. TheFDIC may remove an application fromexpedited processing for any of thereasons set forth in § 303.11(c)(2) of thispart.

(2) Under expedited processing, theFDIC will take action on an applicationby the date that is the latest of:

(i) 45 days after the date of the FDIC’sreceipt of a substantially completemerger application; or

(ii) 10 days after the date of the lastnotice publication required under§ 303.65 of this subpart; or

(iii) 5 days after receipt of theAttorney General’s report on thecompetitive factors involved in theproposed transaction; or

(iv) For an interstate merger subject tothe provisions of section 44 of the FDIAct (12 U.S.C. 1831u), 5 days after theFDIC confirms that the applicant hassatisfactorily complied with the filingrequirements of the resultinginstitution’s host state.

(3) Notwithstanding paragraph (a)(1)of this section, if the FDIC does not actwithin the expedited processing period,it does not constitute an automatic ordefault approval.

(4) Qualifications.—(i) Criteria. TheFDIC will process an application usingexpedited procedures if:

(A) All parties to the merger areeligible depository institutions asdefined in § 303.2(r) of this part; and

(B) Immediately following the merger,the resulting institution will be ‘‘wellcapitalized’’ pursuant to subpart B ofpart 325 of this chapter (12 CFR part325).

(b) Standard processing. For thoseapplications not processed pursuant tothe expedited procedures, the FDIC willprovide the applicant with writtennotification of the final action taken bythe FDIC on the application as soon asthe decision is rendered.

§ 303.65 Public notice requirements.(a) General. Except as provided in

paragraph (b) of this section, anapplicant for approval of a merger mustpublish notice of the proposedtransaction on at least three occasions atapproximately two-week intervals in anewspaper of general circulation in the

community or communities where themain offices of the merging institutionsare located or, if there is no suchnewspaper in the community, then inthe newspaper of general circulationpublished nearest thereto.

(1) First publication. The firstpublication of the notice should be asclose as practicable to the date on whichthe application is filed with the FDIC,but no more than 5 days prior to thefiling date.

(2) Last publication. The lastpublication of the notice shall be on the30th day after the first publication or, ifthe newspaper does not publish on the30th day, on the newspaper’spublication date that is closest to the30th day.

(b) Exceptions.—(1) Emergencyrequiring expeditious action. If the FDICdetermines that an emergency existsrequiring expeditious action, noticeshall be published twice during a 10-day period. The first notice shall bepublished as soon as possible after theFDIC notifies the applicant of suchdetermination. The second notice shallbe published on the 10th day after thefirst publication or, if the newspaperdoes not publish on the 10th day, on thenewspaper’s publication date that isclosest to the 10th day.

(2) Probable failure. If the FDICdetermines that it must act immediatelyto prevent the probable failure of one ofthe institutions involved in a proposedmerger, publication is not required.

(c) Content of notice.—(1) General.The notice shall conform to the publicnotice requirements set forth in § 303.7of this part.

(2) Branches. If it is contemplated thatthe resulting institution will operateoffices of the other institution(s) asbranches, the following statement shallbe included in the notice required insection § 303.7(b):

It is contemplated that all offices of theabove-named institutions will continue to beoperated (with the exception of [insertidentity and location of each office that willnot be operated]).

(3) Emergency requiring expeditiousaction. If the FDIC determines that anemergency exists requiring expeditiousaction, the notice shall specify as theclosing date of the public commentperiod the date that is the 10th day afterthe date of the first publication.

(d) Public comments. Comments mustbe received by the regional director(DOS) within 35 days after the firstpublication of the notice, unless thecomment period has been extended orreopened in accordance with§ 303.9(b)(2). If the FDIC has determinedthat an emergency exists requiring

expeditious action, comments must bereceived by the regional director within10 days after the first publication.

§ 303.66 Delegation of authority.(a) General.—(1) Bank Merger Act

approval. Subject to paragraphs (a)(3)and (e) of this section, authority isdelegated in paragraphs (b), (c), and (d)of this section to the designated FDICofficials to approve under the BankMerger Act any application filed underthis subpart for approval of a merger forwhich the specified criteria are satisfied.

(2) Interstate merger approval. Withrespect to an interstate merger coveredby section 44 of the FDI Act (12 U.S.C.1831u), in addition to the authoritydelegated to any official in paragraph(b), (c), or (d) of this section to approvethe merger under the Bank Merger Act,authority is also delegated to suchofficial to approve the merger undersection 44. This delegation is subject toparagraph (a)(3) of this section and tothe condition that the merger is eligiblefor FDIC approval under section 44.

(3) Combined approvals. Thedelegations in paragraphs (a)(2), (b), (c),and (d) of this section do not apply toan interstate bank merger covered bothby section 44 and by the Bank MergerAct, unless the merger is beingapproved pursuant to delegatedauthority under both section 44 and theBank Merger Act.

(b) Basic delegation. Authority isdelegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector, and the appropriate regionaldirector and deputy regional director toapprove applications under the BankMerger Act. For the Director, DeputyDirector or associate director (DOS) toexercise this authority, paragraphs (b)(1) through (4) and (b)(6) of this sectionmust be satisfied. For the regionaldirector or deputy regional director(DOS) to exercise this authority,paragraphs (b)(1) through (b)(6) of thissection must be satisfied.

(1) The resulting institution wouldmeet all applicable capital requirementsupon consummation of the transaction(or, where the resulting entity is aninsured branch of a foreign bank, wouldbe in compliance with 12 CFR 346.20upon consummation of the transaction);and

(2) The factors set forth in section18(c)(5) of the Act (12 U.S.C. 1828(c)(5))have been considered and favorablyresolved; and

(3)(i) The merging institutions do notoperate in the same relevant geographicmarket(s); or

(ii) In each relevant geographic marketin which more than one of the merging


institutions operate, the resultinginstitution upon consummation of themerger would hold no more than 15percent of the total deposits held bybanks and/or other depositoryinstitutions (as appropriate) in themarket; or

(iii) In each relevant geographicmarket in which more than one of themerging institutions operate, theresulting institution uponconsummation of the merger wouldhold no more than 25 percent of thetotal deposits held by banks and/orother depository institutions (asappropriate) in the market, and theAttorney General has notified the FDICin writing that the proposed mergerwould not have a significantly adverseeffect on competition; and

(4) Compliance with the CRA and anyapplicable related regulations, including12 CFR part 345, has been consideredand favorably resolved; and

(5) No CRA protest as defined in§ 303.2(l) of this part has been filedwhich remains unresolved or, wheresuch a protest has been filed andremains unresolved, the Director (DCA),Deputy Director (DCA), associatedirector (DCA), the appropriate regionaldirector (DCA), or deputy regionaldirector (DCA) concurs that approval isconsistent with the purposes of theCRA, and the applicant agrees in writingto any conditions imposed regarding theCRA; and

(6) The applicant agrees in writing tocomply with any conditions imposed bythe delegate, other than the standardconditions defined in § 303.2(ff) of thispart, which may be imposed without theapplicant’s written consent.

(c) Additional delegations. In additionto the delegations otherwise providedfor in this section, and subject to thecriteria set forth in paragraphs (b)(1), (2),(4) and (6) of this section, authority isdelegated to the Director and to theDeputy Director (DOS) and, whereconfirmed in writing by the Director, toan associate director, to approve anapplication for a merger upon theconsummation of which the resultinginstitution would hold not more than 35percent of the total deposits held bybanks and/or other depositoryinstitutions (as appropriate) in anyrelevant geographic market in whichmore than one of the merginginstitutions operate, and the AttorneyGeneral has notified the FDIC in writingthat the merger would not have asignificantly adverse effect oncompetition.

(d) Corporate reorganizations; interimmergers.—(1) Basic delegation. Inaddition to the delegations otherwiseprovided for in this section, authority is

delegated to the Director and to theDeputy Director (DOS) and, whereconfirmed in writing by the Director, toan associate director and theappropriate regional director anddeputy regional director, to approve:

(i) An application for a corporatereorganization that satisfies the criteriaset forth in paragraphs (b) (5) and (6) ofthis section; and

(ii) Any related application fordeposit insurance.

(2) Additional delegation. Authority isfurther delegated to the Director andDeputy Director (DOS) and, whereconfirmed in writing by the Director, toan associate director to approve:

(i) An application for corporatereorganization that satisfies the criteriaset forth in paragraphs (b)(6) of thissection and as to which a CRA protestas defined in § 303.2(l) of this part hasbeen filed which remains unresolved;and

(ii) Any related application fordeposit insurance.

(e) Limitations. The delegations inparagraphs (b) through (d) of thissection do not apply if:

(1) The Attorney General of theUnited States has determined that themerger would have a significantlyadverse effect on competition; or

(2) The FDIC has made adetermination pursuant to section (c)(6)of the Bank Merger Act (12 U.S.C.1828(c)(6)) that an emergency existsrequiring expeditious action or that thetransaction must be consummatedimmediately in order to avoid aprobable failure.

(f) Review of competitive factorsreports. In deciding whether to approvea merger under the authority delegatedby this section, the delegate shall reviewany reports provided by the AttorneyGeneral of the United States, theComptroller of the Currency, the Boardof Governors of the Federal ReserveSystem, or the Director of the Office ofThrift Supervision in response to arequest by the FDIC for reports on thecompetitive factors involved in theproposed merger. If the AttorneyGeneral has not provided a competitivefactors report and if the delegationcriterion specified in either paragraph(b)(3) (i) or (ii) of this section issatisfied, the delegate may request fromthe FDIC’s General Counsel or designeea written opinion as to whether theproposed merger may have asignificantly adverse effect oncompetition.

(g) Competitive factor reportsprovided by the FDIC. Authority isdelegated to the Director and the DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associate

director and the appropriate regionaldirector and deputy regional director, tofurnish requested reports to the Board ofGovernors of the Federal ReserveSystem, the Comptroller of theCurrency, or the Director of the Officeof Thrift Supervision on the competitivefactors involved in any merger subject toapproval by one of those agencies, if thedelegate is of the view that the proposedmerger would not have a substantiallyadverse effect on competition.

§ 303.67 Authority retained by the FDICBoard of Directors

Without limiting the authority of theBoard of Directors, the Board ofDirectors retains authority to act onapplications covered by this subpart ifthe criteria or other conditions fordelegation are not satisfied. Thisincludes the retention of authority todeny applications for mergertransactions. It further includesretention of authority to approveapplications for merger transactionswhere:

(a) The limitations specified in§ 303.66(e) preclude action underdelegated authority;

(b) The applicant does not agree inwriting to comply with any conditionsimposed by the delegate, other than thestandard conditions defined in§ 303.2(ff) of this part, which may beimposed without the applicant’s writtenconsent; or

(c) The resulting institution, uponconsummation of a merger other than acorporate reorganization, would havemore than 35 percent of the totaldeposits held by banks and/or otherdepository institutions (as appropriate)in any relevant geographic market inwhich more than one of the merginginstitutions operate.

Subpart E—Change in Bank Control

§ 303.80 Scope.This subpart sets forth the procedures

for submitting a notice to acquirecontrol of an insured state nonmemberbank pursuant to the Change in BankControl Act of 1978, section 7(j) of theFDI Act (12 U.S.C. 1817(j)), anddelegations of authority regarding suchfilings.

§ 303.81 Definitions.For purposes of this subpart:(a) Acquisition means a purchase,

assignment, transfer, pledge or otherdisposition of voting shares, or anincrease in percentage ownership of aninsured state nonmember bank resultingfrom a redemption of voting shares.

(b) Acting in concert means knowingparticipation in a joint activity orparallel action towards a common goal


of acquiring control of an insured statenonmember bank, whether or notpursuant to an express agreement.

(c) Control means the power, directlyor indirectly, to direct the managementor policies of an insured bank or to vote25 percent or more of any class of votingshares of an insured bank.

(d) Person means an individual,corporation, partnership, trust,association, joint venture, pool,syndicate, sole proprietorship,unincorporated organization, and anyother form of entity; and a voting trust,voting agreement, and any group ofpersons acting in concert.

§ 303.82 Transactions requiring priornotice.

(a) Prior notice requirement. Anyperson acting directly or indirectly, orthrough or in concert with one or morepersons, shall give the FDIC 60 daysprior written notice, as specified in§ 303.84 of this subpart, before acquiringcontrol of an insured state nonmemberbank, unless the acquisition is exemptunder § 303.83.

(b) Acquisitions requiring priornotice.—(1) Acquisition of control. Theacquisition of control, unless exempted,requires prior notice to the FDIC.

(2) Rebuttable presumption of control.The FDIC presumes that an acquisitionof voting shares of an insured statenonmember bank constitutes theacquisition of the power to direct themanagement or policies of an insuredbank requiring prior notice to the FDIC,if, immediately after the transaction, theacquiring person (or persons acting inconcert) will own, control, or hold withpower to vote 10 percent or more of anyclass of voting shares of the institution,and if:

(i) The institution has registeredshares under section 12 of the SecuritiesExchange Act of 1934 (15 U.S.C. 78l); or

(ii) No other person will own, controlor hold the power to vote a greaterpercentage of that class of voting sharesimmediately after the transaction. If twoor more persons, not acting in concert,each propose to acquire simultaneouslyequal percentages of 10 percent or moreof a class of voting shares of an insuredstate nonmember bank, each suchperson shall file prior notice with theFDIC.

(c) Acquisitions of loans in default.The FDIC presumes an acquisition of aloan in default that is secured by votingshares of an insured state nonmemberbank to be an acquisition of theunderlying shares for purposes of thissection.

(d) Other transactions. Transactionsother than those set forth in paragraph(b)(2) of this section resulting in a

person’s control of less than 25 percentof a class of voting shares of an insuredstate nonmember bank are not deemedby the FDIC to constitute control forpurposes of the Change in Bank ControlAct.

(e) Rebuttal of presumptions. Priornotice to the FDIC is not required forany acquisition of voting shares underthe presumption of control set forth inthis section, if the FDIC finds that theacquisition will not result in control.The FDIC will afford any person seekingto rebut a presumption in this section anopportunity to present views in writingor, if appropriate, orally before itsdesignated representatives at aninformal conference.

§ 303.83 Transactions not requiring priornotice.

(a) Exempt transactions. Thefollowing transactions do not requirenotice to the FDIC under this subpart:

(1) The acquisition of additionalvoting shares of an insured statenonmember bank by a person who:

(i) Held the power to vote 25 percentor more of any class of voting shares ofthat institution continuously sinceMarch 9, 1979, or since that institutioncommenced business, whichever islater; or

(ii) Is presumed, under § 303.82(b)(2)of this subpart, to have controlled theinstitution continuously since March 9,1979, if the aggregate amount of votingshares held does not exceed 25 percentor more of any class of voting shares ofthe institution or, in other cases, wherethe FDIC determines that the person hascontrolled the bank continuously sinceMarch 9, 1979;

(2) The acquisition of additionalshares of a class of voting shares of aninsured state nonmember bank by anyperson (or persons acting in concert)who has lawfully acquired andmaintained control of the institution (forpurposes of § 303.82 of this subpart)after complying with the procedures ofthe Change in Bank Control Act toacquire voting shares of the institutionunder this subpart;

(3) Acquisitions of voting sharessubject to approval under section 3 ofthe Bank Holding Company Act (12U.S.C. 1842(a)), section 18(c) of the FDIAct (12 U.S.C. 1828(c)), or section 10 ofthe Home Owners’ Loan Act (12 U.S.C.1467a);

(4) Transactions exempt under theBank Holding Company Act:foreclosures by institutional lenders,fiduciary acquisitions by banks, andincreases of majority holdings by bankholding companies described insections 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 proxysolicitation;

(6) The receipt of voting shares of aninsured state nonmember bank througha pro rata stock dividend; and

(7) The acquisition of voting shares ina foreign bank, which has an insuredbranch or branches in the United States.(This exemption does not extend to thereports and information required underparagraphs 9, 10, and 12 of the Changein Bank Control Act of 1978 (12 U.S.C.1817(j) (9), (10), and (12)).)

(b) Prior notice exemption. (1) Thefollowing acquisitions of voting sharesof an insured state nonmember bank,which otherwise would require priornotice under this subpart, are notsubject to the prior notice requirementsif the acquiring person notifies theappropriate regional director (DOS)within 90 calendar days after theacquisition and provides any relevantinformation requested by the regionaldirector (DOS):

(i) The acquisition of voting sharesthrough inheritance;

(ii) The acquisition of voting shares asa bona fide gift; or

(iii) The acquisition of voting sharesin satisfaction of a debt previouslycontracted in good faith, except that theacquiror of a defaulted loan secured bya controlling amount of a statenonmember bank’s voting securitiesshall file a notice before the loan isacquired.

(2) The following acquisitions ofvoting shares of an insured statenonmember bank, which otherwisewould require prior notice under thissubpart, are not subject to the priornotice requirements if the acquiringperson notifies the appropriate regionaldirector (DOS) within 90 calendar daysafter receiving notice of the acquisitionand provides any relevant informationrequested by the regional director(DOS):

(i) A percentage increase inownership of voting shares resultingfrom a redemption of voting shares bythe issuing bank; or

(ii) The sale of shares by anyshareholder that is not within thecontrol of a person resulting in thatperson becoming the largestshareholder.

(3) Nothing in paragraph (b)(1) of thissection limits the authority of the FDICto disapprove a notice pursuant to§ 303.85(c) of this subpart.

§ 303.84 Filing procedures.(a) Filing notice. (1) A notice required

under this subpart shall be filed withthe appropriate regional director (DOS)


and shall contain all the informationrequired by paragraph 6 of the Changein Bank Control Act, section 7(j) of theFDI Act (12 U.S.C. 1817(j)(6)), orprescribed in the designated interagencyform which may be obtained from anyFDIC regional office.

(2) The FDIC may waive any of theinformational requirements of the noticeif the FDIC determines that it is in thepublic interest.

(3) A notificant shall notify theappropriate regional director (DOS)immediately of any material changes ina notice submitted to the regionaldirector (DOS), including changes infinancial or other conditions.

(4) When the acquiring person is anindividual, or group of individualsacting in concert, the requirement toprovide personal financial data may besatisfied by a current statement of assetsand liabilities and an income summary,as required in the designatedinteragency form, together with astatement of any material changes sincethe date of the statement or summary.The regional director (DOS),nevertheless, may request additionalinformation if appropriate.

(b) Other laws. Nothing in thisregulation shall affect any obligationwhich the acquiring person(s) may haveto comply with the federal securitieslaws or other laws.

§ 303.85 Processing.

(a) Acceptance of notice. The 60-daynotice period specified in § 303.82 ofthis subpart shall commence on the dateof receipt of a substantially completenotice. The regional director (DOS) shallnotify the person or persons submittinga notice under this subpart in writing ofthe date the notice is accepted forprocessing. The FDIC may requestadditional relevant information at anytime.

(b) Time period for FDIC action.—(1)Consummation of acquisition. (i) Thenotificant(s) may consummate theproposed acquisition 60 days aftersubmission to the regional director(DOS) of a substantially complete noticeunder paragraph (a) of this section,unless within that period the FDICdisapproves the proposed acquisition orextends the 60-day period.

(ii) The notificant(s) may consummatethe proposed transaction before theexpiration of the 60-day period if theFDIC notifies the notificant(s) in writingof its intention not to disapprove theacquisition.

(c) Disapproval of acquisition ofcontrol. Subpart D of 12 CFR part 308sets forth the rules of practice andprocedure for a notice of disapproval.

§ 303.86 Public notice requirements.(a) Publication.—(1) Newspaper

announcement. Any person(s) filing anotice under this subpart shall publishan announcement soliciting publiccomment on the proposed acquisition.The announcement shall be publishedin a newspaper of general circulation inthe community in which the homeoffice of the state nonmember bank to beacquired is located. The announcementshall be published as close as ispracticable to the date the notice is filedwith the appropriate regional director(DOS), but in no event more than 10calendar days before or after the filingdate.

(2) Contents of newspaperannouncement. The newspaperannouncement shall conform to thepublic notice requirements set forth in§ 303.7 of this part.

(3) Delay of publication. The FDICmay permit delay in the publicationrequired by this section if the FDICdetermines, for good cause shown, thatit is in the public interest to grant sucha delay. Requests for delay ofpublication may be submitted to theappropriate regional director (DOS).

(4) Shortening or waiving notice. TheFDIC may shorten the public commentperiod to a period of not less than 10days, or waive the public comment ornewspaper publication requirements ofthis paragraph, or act on a notice beforethe expiration of a public commentperiod, if it determines in writing eitherthat an emergency exists or thatdisclosure of the notice, solicitation ofpublic comment, or delay untilexpiration of the public comment periodwould seriously threaten the safety orsoundness of the bank to be acquired.

(5) Consideration of public comments.In acting upon a notice filed under thissubpart, the FDIC shall consider allpublic comments received in writingwithin 20 days following the requirednewspaper publication or, if the FDIChas shortened the public commentperiod pursuant to paragraph (a)(4) ofthis section, within such shorter period.

(6) Publication if filing is subsequentto acquisition of control. (i) Whenever anotice of a proposed acquisition ofcontrol is not filed in accordance withthe Change in Bank Control Act andthese regulations, the acquiringperson(s) shall, within 10 days of beingso directed by the FDIC, publish anannouncement of the acquisition ofcontrol in a newspaper of generalcirculation in the community in whichthe home office of the state nonmemberbank to be acquired is located.

(ii) The newspaper announcementshall contain the name(s) of theacquiror(s), the name of the depository

institution involved, and the date of theacquisition of the stock. Theannouncement shall also contain astatement indicating that the FDIC iscurrently reviewing the acquisition ofcontrol. The announcement also shallstate that any person wishing tocomment on the change in control maydo so by submitting written commentsto the appropriate regional director(DOS) of the FDIC (give address ofregional office) within 20 days followingthe required newspaper publication.

§ 303.87 Delegation of authority.

(a) Authority is delegated to theDirector and the Deputy Director (DOS)and, where confirmed in writing by theDirector, to an associate director and theappropriate regional director anddeputy regional director, to issue awritten notice of the FDIC’s intent notto disapprove an acquisition of controlof an insured state nonmember bank.

(b) The authority delegated byparagraph (a) of this section shallinclude the power to:

(1) Act in situations whereinformation is submitted on acquisitionsarising out of events beyond theperson’s control, as set forth in§ 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 (12U.S.C. 1817(j)) by a person acquiringless than 25 percent of any class ofvoting shares of an insured statenonmember bank; and

(4) Delay or waive publication, waiveor shorten the public comment period,or act on a proposed acquisition ofcontrol prior to the expiration of thepublic comment period, as provided in§§ 303.86(a) (3) and (4) of this subpart.

(c) Authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director, todisapprove an acquisition of control ofan insured state nonmember bank.

Subpart F—Change of Director orSenior Executive Officer

§ 303.100 Scope.

This subpart sets forth thecircumstances under which an insuredstate nonmember bank must notify theFDIC of a change in any member of itsboard of directors or any seniorexecutive officer and the procedures forfiling such notice, as well as applicabledelegations of authority. This regulationimplements section 32 of the FDI Act(12 U.S.C. 1831i).

§ 303.101 Definitions.

For purposes of this subpart:


(a) Director means a person whoserves on the board of directors or boardof trustees of an insured statenonmember bank, except that this termdoes not include an advisory directorwho:

(1) Is not elected by the shareholders;(2) Is not authorized to vote on any

matters before the board of directors orboard of trustees or any committeethereof;

(3) Solely provides general policyadvice to the board of directors or boardof trustees and any committee thereof;and

(4) Has not been identified by theFDIC as a person who performs thefunctions of a director for purposes ofthis subpart.

(b) Senior executive officer means aperson who holds the title of president,chief executive officer, chief operatingofficer, chief managing official (in aninsured state branch of a foreign bank),chief financial officer, chief lendingofficer, or chief investment officer, or,without regard to title, salary, orcompensation, performs the function ofone or more of these positions. Seniorexecutive officer also includes any otherperson identified by the FDIC, whetheror not hired as an employee, withsignificant influence over, or whoparticipates in, major policymakingdecisions of the insured statenonmember bank.

(c) Troubled condition means anyinsured state nonmember bank that:

(1) Has a composite rating, asdetermined in its most recent report ofexamination of 4 or 5 under the UniformFinancial Institutions Rating System(UFIRS), or in the case of an insuredstate branch of a foreign bank, anequivalent rating;

(2) Is subject to a proceeding initiatedby the FDIC for termination orsuspension of deposit insurance;

(3) Is subject to a cease-and-desistorder or written agreement issued byeither the FDIC or the appropriate statebanking authority that requires action toimprove the financial condition of thebank or is subject to a proceedinginitiated by the FDIC or state authoritywhich contemplates the issuance of anorder that requires action to improve thefinancial condition of the bank, unlessotherwise informed in writing by theFDIC; or

(4) Is informed in writing by the FDICthat it is in troubled condition forpurposes of the requirements of thissubpart on the basis of the bank’s mostrecent report of condition or report ofexamination, or other informationavailable to the FDIC.

§ 303.102 Filing procedures.(a) Insured state nonmember banks.

An insured state nonmember bank shallgive the FDIC written notice, asspecified in paragraph (c)(1) of thissection, at least 30 days prior to addingor replacing any member of its board ofdirectors, employing any person as asenior executive officer of the bank, orchanging the responsibilities of anysenior executive officer so that theperson would assume a different seniorexecutive officer position, if:

(1) The bank is not in compliancewith all minimum capital requirementsapplicable to the bank as determined onthe basis of the bank’s most recentreport of condition or report ofexamination;

(2) The bank is in troubled condition;or

(3) The FDIC determines, inconnection with its review of a capitalrestoration plan required under section38(e)(2) of the FDI Act (12 U.S.C.1831o(e)(2)) or otherwise, that suchnotice is appropriate.

(b) Insured branches of foreign banks.In the case of the addition of a memberof the board of directors or a change insenior executive officer in a foreignbank having an insured state branch, thenotice requirement shall not apply tosuch additions and changes in theforeign bank parent, but only to changesin senior executive officers in the statebranch.

(c)(1) Content of filing. The noticerequired by paragraph (a) of this sectionshall be filed with the appropriateregional director (DOS) and shallcontain information pertaining to thecompetence, experience, character, orintegrity of the individual with respectto whom the notice is submitted, asprescribed in the designated interagencyform which is available from any FDICregional office. The regional director orhis or her designee may requireadditional information.

(2) Modification. The FDIC maymodify or accept other information inplace of the requirements of paragraph(c)(1) of this section for a notice filedunder this subpart.

§ 303.103 Processing and waiver of priornotice.

(a) Processing. The 30-day noticeperiod specified in § 303.102(a) shallbegin on the date substantially allinformation required to be submitted bythe notificant pursuant to§ 303.102(c)(1) is received by theappropriate regional director (DOS). Theregional director shall notify the banksubmitting the notice of the date onwhich the notice is accepted forprocessing and of the date on which the

30-day notice period will expire. Ifprocessing cannot be completed within30 days, the notificant will be advisedin writing, prior to expiration of the 30-day period, of the reason for the delayin processing and of the additional timeperiod, not to exceed 60 days, in whichprocessing will be completed.

(b) Commencement of service.—(1) Atexpiration of period. A proposeddirector or senior executive officer maybegin service after the end of the 30-dayperiod or any other additional period asprovided under paragraph (a) of thissection, unless the FDIC disapproves thenotice before the end of the period.

(2) Prior to expiration of period. Aproposed director or senior executiveofficer may begin service before the endof the 30-day period or any additionaltime period as provided underparagraph (a) of this section, if the FDICnotifies the bank and the individual inwriting of the FDIC’s intention not todisapprove the notice.

(c) Waiver of prior notice. (1) Waiverrequests. The FDIC may permit anindividual, upon petition by the bank tothe appropriate regional director (DOS),to serve as a senior executive officer ordirector before filing the notice requiredunder this subpart if the FDIC finds that:

(i) Delay would threaten the safety orsoundness of the bank;

(ii) Delay would not be in the publicinterest; or

(iii) Other extraordinarycircumstances exist that justify waiverof prior notice.

(2) Automatic waiver. In the case ofthe election of a new director notproposed by management at a meetingof the shareholders of an insured statenonmember bank, the prior 30-daynotice is automatically waived and theindividual immediately may beginserving, provided that a complete noticeis filed with the appropriate regionaldirector (DOS) within two business daysafter the individual’s election.

(3) Effect on disapproval authority. Awaiver shall not affect the authority ofthe FDIC to disapprove a notice within30 days after a waiver is granted underparagraph (c)(1) of this section or theelection of an individual who has fileda notice and is serving pursuant to anautomatic waiver under paragraph (c)(2)of this section.

(d) Notice of disapproval. The FDICmay disapprove a notice filed under§ 303.102 if the FDIC finds that thecompetence, experience, character, orintegrity of the individual with respectto whom the notice is submittedindicates that it would not be in the bestinterests of the depositors of the bank orin the best interests of the public topermit the individual to be employed


by, or associated with, the bank. SubpartL of 12 CFR part 308 sets forth the rulesof practice and procedure for a notice ofdisapproval.

§ 303.104 Delegation of authority.The following authority is delegated

to the Director and Deputy Director(DOS) and, where confirmed in writingby the Director, to an associate directorand the appropriate regional director ordeputy regional director to:

(a) Designate an insured statenonmember bank as being in troubledcondition;

(b) Grant waivers of the prior noticerequirement;

(c) Extend the 30-day processingperiod for an additional period of up to60 days in the event of extenuatingcircumstances; and

(d) Issue notices of disapproval ornotices of intent not to disapproveunder this subpart.

Subpart G—Activities and Investmentsof Insured State Banks [Reserved]

Subpart H—Filings by SavingsAssociations [Reserved]

Subpart I—Mutual-to-StockConversions

§ 303.160 Scope.This subpart sets forth the notice

requirements which must be met bymutually owned state-chartered savingsbanks that propose to convert to stockform, and the related delegations ofauthority. The substantive requirementsgoverning such conversions arecontained in § 333.4 of this chapter.

§ 303.161 Filing procedures.A notice shall be filed in letter form

with the appropriate regional director(DOS) at the same time as theconversion application materials arefiled with the institution’s primary stateregulator.

§ 303.162 Content of notice.The notice shall provide a description

of the proposed conversion and includeall materials that have been filed withany state or federal banking regulatorand any state or federal securitiesregulator. Copies of all agreementsentered into as part of the mutual-to-stock conversion between the institutionand its officers, directors or trustees,and any agreements entered into withany other institution and/or itssuccessors must be provided. Aninsured mutual savings bank charteredby a state that does not require the filingof an application to convert from mutualto stock form that proposes to convert tostock form shall notify the FDIC of the

proposed conversion and provide anymaterials requested by the FDIC.

§ 303.163 Processing.(a) The FDIC shall review the

materials submitted by the institutionseeking to convert from mutual to stockform. The FDIC, in its discretion, mayrequest any additional information itdeems necessary to evaluate theproposed conversion and the institutionpromptly shall provide suchinformation to the FDIC. Among thefactors to be reviewed by the FDIC are:

(1) The use of the proceeds from thesale of stock, as set forth in the businessplan;

(2) The adequacy of the disclosurematerials;

(3) The participation of depositors inapproving the transaction;

(4) The form of the proxy statementrequired for the vote of the depositors/members on the conversion;

(5) Any increased compensation andother remuneration (including stockgrants, stock option rights and othersimilar benefits) to be granted to officersand directors/trustees of the bank inconnection with the conversion;

(6) The adequacy and independenceof the appraisal of the value of themutual savings bank for purposes ofdetermining the price of the shares ofstock to be sold;

(7) The process by which the bank’strustees approved the appraisal, thepricing of the stock and thecompensation arrangements for insiders;

(8) The nature and apportionment ofstock subscription rights; and

(9) The bank’s plans to fulfill itscommitment to serving the convenienceand needs of its community.

(b) Additional considerations. Inreviewing the materials required to besubmitted under this section, the FDICwill take into account the extent towhich the proposed conversionconforms with the various provisions ofthe mutual-to-stock conversionregulations of the Office of ThriftSupervision (OTS) (12 CFR part 563b),as currently in effect at the time theFDIC reviews the required materialsrelated to the proposed conversion. Anynon-conformity with those provisionswill be closely reviewed. Conformitywith the OTS requirements will not besufficient for FDIC regulatory purposesif the FDIC determines that theproposed conversion would pose a riskto the institution’s safety or soundness,violate any law or regulation or presenta breach of fiduciary duty.

(c) Notification of completed filing ofmaterials. The FDIC shall notify theinstitution when all the requiredmaterials related to the proposed

conversion have been filed with theFDIC and the notice is thereby completefor purposes of computing the timeperiods designated in paragraphs (d)and (f) of this section.

(d) Notice of intent not to object. If theFDIC determines, in its discretion, thatthe proposed conversion would notpose a risk to the institution’s safety orsoundness, violate any law or regulationor present a breach of fiduciary duty,then the FDIC shall issue to the bankseeking to convert, within 60 days ofreceipt of a substantially completenotice of proposed conversion or within20 days after the last applicable state orother federal regulator has approved theproposed conversion, whichever is later,a notice of intent not to object to theproposed conversion. The FDIC may, inits discretion, extend by written noticeto the institution the initial 60-dayperiod by an additional 60 days.

(e) Letter of objection. If the FDICdetermines, in its discretion, that theproposed conversion poses a risk to theinstitution’s safety or soundness,violates any law or regulation orpresents a breach of fiduciary duty, thenthe FDIC shall issue a letter to theinstitution stating its objection(s) to theproposed conversion and advising theinstitution that the conversion shall notbe consummated until such letter isrescinded. A copy of the letter ofobjection shall be furnished to theinstitution’s primary state regulator andany other state or federal bankingregulator and state or federal securitiesregulator involved in the conversion.The letter of objection shall advise theinstitution of its right to petition theFDIC for reconsideration under§ 303.11(f) of this part. Such action shallnot, in any way, prohibit the FDIC fromtaking any other action(s) that it maydeem necessary.

(f) Consummation of the conversion.An institution may consummate theproposed conversion upon either:

(1) The receipt of a notice of intentnot to object; or

(2) The expiration of the 60-dayperiod following receipt of asubstantially complete notice by theFDIC or the 20-day period after the lastapplicable state or other federalregulator has approved the proposedconversion, whichever is later, unlessthe FDIC issues a notice of objectionbefore the end of that period. If a noticeof objection is issued, the conversionshall not be consummated until suchletter is rescinded. The FDIC may, in itsdiscretion, extend by written notice tothe institution the initial 60-day periodby an additional 60 days.


§ 303.164 Delegation of authority.(a) Authority is delegated to the

Director and Deputy Director (DOS) toissue a notice of intent not to object toa proposed conversion transaction thatis determined not to pose a risk to theinstitution’s safety or soundness, violateany law or regulation, present a breachof fiduciary duty, and not to raise anyunique legal or policy issues. Suchauthority will be exercised inaccordance with the time periodscontained in § 303.163(d) of thissubpart, unless the bank seeking toconvert agrees to a longer time period.

(b) Authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director and theappropriate regional director anddeputy regional director to acceptnotices of intent to convert to stock formand to extend the initial 60-day periodwithin which FDIC may object by anadditional 60 days.

Subpart J—Foreign Bank Activities

§ 303.180 Scope.This subpart sets forth procedures for

complying with applicationrequirements relating to the foreignactivities of insured state nonmemberbanks and the U.S. activities of insuredbranches of foreign banks anddelegations of authority.

§ 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 FederalReserve System.

(b) Comptroller means the Office ofthe Comptroller of the Currency.

(c) Eligible insured branch. Aninsured branch will be treated as aneligible depository institution withinthe meaning of § 303.2(r) of this part ifthe insured branch:

(1) Received an FDIC-assignedcomposite ROCA rating of 1 or 2 as aresult of its most recent federal or stateexamination, and the FDIC,Comptroller, or Board of Governors havenot expressed concern about thecondition or operations of the foreignbanking organization or the support itoffers the branch;

(2) Received a satisfactory or betterCommunity Reinvestment Act (CRA)rating from its primary federal regulatorat its most recent examination;

(3) Received a compliance rating of 1or 2 from its primary federal regulatorat its most recent examination;

(4) Is well capitalized as defined insubpart B of part 325 of this chapter;and

(5) Is not subject to a cease and desistorder, consent order, prompt correctiveaction directive, written agreement,memorandum of understanding, orother administrative agreement with anyU.S. bank regulatory authority.

(d) Federal branch means a federalbranch of a foreign bank as defined by§ 346.1 of this chapter.

(e) Foreign bank means a foreign bankas defined by § 346.1 of this chapter.

(f) Foreign branch means a foreignbranch of an insured state nonmemberbank as defined by § 347.2 of thischapter.

(g) Insured branch means an insuredbranch of a foreign bank as defined by§ 346.1 of this chapter.

(h) State branch means a state branchof a foreign bank as defined by § 346.1of this chapter.

§ 303.182 Establishing, moving or closinga foreign branch of a state nonmemberbank.

(a) General consent to expand withina country. (1) General consent of theFDIC is granted under § 347.3 of thischapter for an eligible depositoryinstitution to establish additionalforeign branches conducting activitiesauthorized by § 347.3 in any foreigncountry in which the bank alreadyoperates one or more foreign branches,or to move an existing foreign branchwithin a foreign country.

(2) Notice procedures for generalconsent. The eligible depositoryinstitution must provide the appropriateregional director (DOS) written noticewithin 30 days of taking such action,and include the location of the foreignbranch, including a street address, anda statement that the foreign branch hasnot been located on a site on the WorldHeritage List or on the foreign country’sequivalent of the National Register ofHistoric Places (National Register), inaccordance with section 402 of theNational Historic Preservation ActAmendments of 1980 (NHPAAmendments Act) (16 U.S.C. 470a–2).The appropriate regional director willprovide written acknowledgment ofreceipt of the notice.

(b) Filing procedures for other branchestablishments. (1) Where to file. Aninsured state nonmember bank seekingto establish a foreign branch other thanunder paragraph (a) of this section mustsubmit an application to the appropriateregional director (DOS).

(2) Content of filing. A complete letterfiling must contain the followinginformation:

(i) The exact location of the foreignbranch, including a street address, anda statement whether the foreign branchwill be located on a site on the World

Heritage List or on the foreign country’sequivalent of the National Register, inaccordance with section 402 of theNHPA Amendments Act;

(ii) Details concerning anyinvolvement in the proposal by aninsider of the applicant, including anyfinancial arrangements relating to fees,the acquisition of property, leasing ofproperty, and construction contracts;

(iii) A brief description of theapplicant’s business plan with respectto the foreign branch; and

(iv) A brief description of theactivities of the branch, and to theextent any activities are not authorizedby § 347.3 of this chapter, theapplicant’s reasons why they should beapproved.

(3) Additional information. Theappropriate regional director (DOS) mayrequest additional information tocomplete processing.

(c) Processing.—(1) Expeditedprocessing for eligible depositoryinstitutions. An application filed by aneligible depository institution as definedin § 303.2(r) of this part that operatesforeign branches in two or moreterritories or foreign countries toestablish a foreign branch that conductsactivities authorized by § 347.3 of thischapter in an additional foreign countrywill be acknowledged in writing by theFDIC and will receive expeditedprocessing, unless the applicant isnotified in writing to the contrary andprovided with the basis for thatdecision. The FDIC may remove anapplication from expedited processingfor any of the reasons set forth in§ 303.11(c)(2) of this part. Absent suchremoval, an application processedunder expedited processing is deemedapproved 45 days after the FDIC’sreceipt of a substantially completeapplication.

(2) Standard processing. For thoseapplications which are not processedpursuant to the expedited procedures,the FDIC will provide the applicantwith written notification of the finalaction taken as soon as the decision isrendered.

(d) Exceptions to general consent andexpedited processing. (1) Upon notice toan insured state nonmember bank, theFDIC may modify or suspend theavailability of its general consent orexpedited processing under this section.

(2) General consent or expeditedprocessing under this section does notapply in any case in which:

(i) The foreign branch would belocated on a site on the World HeritageList or on the foreign country’sequivalent of the National Register inaccordance with section 402 of theNHPA Amendments Act; or


(ii) Any applicable law or practice inthe relevant foreign country would limitthe FDIC’s access to information forsupervisory purposes.

(e) Closing. Within 30 days after itcloses a foreign branch, an insured statenonmember bank must advise theappropriate regional director (DOS) byletter of the name, location, and date ofclosing of the closed branch.

(f) Delegation of authority. Authorityis delegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector and the appropriate regionaldirector and deputy regional director toapprove an application under paragraph(c) of this section if the followingcriteria are satisfied:

(1) The requirements of section 402the NHPA Amendments Act have beenfavorably resolved; and

(2) The applicant will only conductactivities authorized by § 347.3 of thischapter.

§ 303.183 Acquisition of stock of foreignbanks or other financial entities by aninsured state nonmember bank.

(a) Definition. For purposes of thissection only, a foreign bank or otherfinancial entity means a foreign bank orother financial entity as defined by§ 347.2 of this chapter.

(b) Filing procedures.—(1) Where tofile. An application by an insured statenonmember bank to acquire or hold anownership interest in a foreign bank orother financial entity, as required by§ 347.4 of this chapter, must be filed inwriting with the appropriate regionaldirector (DOS).

(2) Content of filing. A complete letterfiling must contain full informationconcerning the foreign bank or otherfinancial entity, including the followinginformation:

(i) The cost, number, class of sharesto be acquired, and the proposedcarrying value of such shares on thebooks of the insured state nonmemberbank;

(ii) A recent balance sheet and incomestatement of the foreign bank or otherfinancial entity;

(iii) A brief description of the foreignbank’s or other financial entity’sbusiness (including full informationconcerning any direct or indirectbusiness transacted in the UnitedStates);

(iv) Lists of directors and principalofficers (with address and principalbusiness affiliation of each) and of allshareholders known to hold 10 percentor more of any class of the foreignbank’s or other financial entity’s stockor other evidence of ownership, and theamount held by each; and

(v) Information concerning the rightsand privileges of the various classes ofshares outstanding.


(c) Processing. The FDIC will providethe applicant with written notificationof the final action taken.

(d) Delegations of authority. Authorityis delegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector, to approve or denyapplications submitted under thissection for the acquisition and holdingof stock or other evidences of ownershipof a foreign bank or other financialentity that result in the statenonmember bank having a less than 25percent ownership interest in such bankor other financial entity.

§ 303.184 Moving an insured branch of aforeign bank.

(a) Filing procedures.—(1) Where andwhen to file. An application by aninsured branch of a foreign bank seekingthe FDIC’s consent to move from onelocation to another, as required bysection 18(d)(1) of the FDI Act (12U.S.C. 1828(d)(1)), must be submitted inwriting to the appropriate regionaldirector (DOS) on the date the noticerequired by paragraph (c) of this sectionis published, or within 5 days after thedate of the last required publication.

(2) Content of filing. A complete letterfiling must include the followinginformation:

(i) The exact location of the proposedsite, including the street address;

(ii) Details concerning anyinvolvement in the proposal by aninsider of the insured branch, includingany financial arrangements relating tofees, the acquisition of property, leasingof property, and construction contracts;

(iii) A statement of the impact of theproposal on the human environment,including information on compliancewith local zoning laws and regulationsand the effect on traffic patterns, forpurposes of complying with theapplicable provisions of the NEPA;

(iv) A statement as to whether the siteis included in or is eligible for inclusionin the National Register of HistoricPlaces, including a statement thatclearance has been or will be obtainedfrom the State Historic PreservationOfficer, for purposes of complying withthe applicable provisions of the NHPA;

(v) Comments on any changes inservices to be offered, the community tobe served, or any other effect theproposal may have on the applicant’scompliance with the CRA; and

(vi) A copy of the newspaperpublication required by paragraph (c) ofthis section, as well as the name andaddress of the newspaper and the dateof the publication.

(3) Comptroller’s application. If theapplicant is filing an application withthe Comptroller which contains theinformation required by paragraph (a)(2)of this section, the applicant maysubmit a copy to the FDIC in lieu of aseparate application.


(b) Processing.—(1) Expeditedprocessing for eligible insured branches.An application filed by an eligibleinsured branch as defined in§ 303.181(c) of this part will beacknowledged in writing by the FDICand will receive expedited processing,unless the applicant is notified to thecontrary and provided with the basis forthat decision. The FDIC may remove anapplication from expedited processingfor any of the reasons set forth in§ 303.11(c)(2) of this part. Absent suchremoval, an application processedunder expedited processing will bedeemed approved on the latest of thefollowing:

(i) The 21st day after the FDIC’sreceipt of a substantially completeapplication; or

(ii) The 5th day after expiration of thecomment period described in paragraph(c) of this section.

(2) Standard processing. For thoseapplications that are not processedpursuant to the expedited procedures,the FDIC will provide the applicantwith written notification of the finalaction as soon as the decision isrendered.

(c) Publication requirement andcomment period.—(1) Newspaperpublications. The applicant mustpublish a notice of its proposal to movefrom one location to another, asdescribed in § 303.7(b), in a newspaperof general circulation in the communityin which the insured branch is locatedprior to its being moved and in thecommunity to which it is to be moved.The notice must include the insuredbranch’s current and proposedaddresses.

(2) Public comments. All publiccomments must be received by theappropriate regional director (DOS)within 15 days after the date of the lastnewspaper publication required byparagraph (c)(1) of this section, unlessthe comment period has been extendedor reopened in accordance with§ 303.9(b)(2).


(3) Lobby notices. If the insuredbranch has a public lobby, a copy of thenewspaper publication must be postedin the public lobby for at least 15 daysbeginning on the date of the publicationrequired by paragraph (c)(1) of thissection.

(d) Delegation of authority. (1)Authority is delegated to the Directorand Deputy Director (DOS) and, whereconfirmed in writing by the Director, toan associate director and theappropriate regional director anddeputy regional director to approve anapplication under this section. For theDirector, Deputy Director or associatedirector (DOS) to exercise this authority,paragraphs (d)(1)(i) through (d)(1)(iv)and (d)(1)(vi) of this section must besatisfied. For the regional director ordeputy regional director (DOS) toexercise this authority, paragraphs(d)(1)(i) through (d)(1)(vi) of this sectionmust be satisfied.

(i) The factors set forth in section 6 ofthe FDI Act (12 U.S.C. 1816) have beenconsidered and favorably resolved;

(ii) The applicant is at leastadequately capitalized as defined insubpart B of part 325 of this chapter;

(iii) Any financial arrangementswhich have been made in connectionwith the proposed relocation and whichinvolve the applicant’s directors,officers, major shareholders, or theirinterests are fair and reasonable incomparison to similar arrangements thatcould have been made withindependent third parties;

(iv) Compliance with the CRA, theNEPA, the NHPA and any applicablerelated regulations, including 12 CFRpart 345, has been considered andfavorably resolved;

(v) No CRA protest as defined in§ 303.2(l) of this part has been filedwhich remains unresolved or, wheresuch a protest has been filed andremains unresolved, the Director (DCA),Deputy Director (DCA), an associatedirector (DCA) or the appropriateregional director or deputy regionaldirector (DCA) concurs that approval isconsistent with the purposes of the CRAand the applicant agrees in writing toany conditions imposed regarding theCRA; and

(vi) The applicant agrees in writing tocomply with any conditions imposed bythe delegate, other than the standardconditions defined in § 303.2(ff) of thispart which may be imposed without theapplicant’s written consent.

(2) Authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director, toapprove applications under this sectionwhich meet all criteria in paragraph

(d)(1) of this section except that theapplicant does not agree in writing tocomply with any condition imposed bythe delegate, other than the standardconditions defined in § 303.2(ff) whichmay be imposed without the applicant’swritten consent; or

(3) Authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director, todeny applications under this section.

§ 303.185 Mergers involving an insuredbranch of a foreign bank.

(a) Applicability of subpart D. Mergersrequiring the FDIC’s prior approval asset forth in § 303.62 of this part includeany merger in which the resultinginstitution is an insured branch of aforeign bank which is not a federalbranch, or any merger which involvesany insured branch and any uninsuredinstitution. In such cases:

(1) References to an eligibledepository institution in subpart D ofthis part include an eligible insuredbranch as defined in § 303.181 of thissubpart;

(2) The definition of a corporatereorganization in § 303.61(b) of this partincludes a merger between an insuredbranch and other branches, agencies, orsubsidiaries in the United States of thesame foreign bank; and

(3) For the purposes of § 303.62(b)(1)of this part on interstate mergers, amerger transaction involving an insuredbranch is one involving the acquisitionof a branch of an insured bank withoutthe acquisition of the bank for purposesof section 44 of the FDI Act (12 U.S.C.1831u) only when the mergertransaction involves fewer than all theinsured branches of the same foreignbank in the same state.

§ 303.186 Exemptions from insurancerequirement for a state branch of a foreignbank.

(a) Filing procedures.—(1) Where tofile. An application by a state branch forconsent to operate as a noninsured statebranch, as required by § 346.6(b) of thischapter, must be submitted in writing tothe appropriate regional director (DOS).


(i) The kinds of deposit activities inwhich the state branch proposes toengage;

(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 allsectors of the United States economy,including the international trade financesector;

(v) That the activity will not give theforeign bank an unfair competitiveadvantage over United States bankingorganizations; and

(vi) A resolution by the applicant’sboard of directors, or evidence ofapproval by senior management if aresolution is not required pursuant tothe applicant’s organizationaldocuments, authorizing the filing of theapplication.


(b) Processing. The FDIC will providethe applicant with written notificationof the final action taken.

§ 303.187 Approval for an insured statebranch of a foreign bank to conductactivities not permissible for federalbranches.

(a) Filing procedures.—(1) Where tofile. An application by an insured statebranch seeking approval to conductactivities not permissible for a federalbranch, as required by § 346.101(a) ofthis chapter, must be submitted inwriting to the appropriate regionaldirector (DOS).


(i) A brief description of the activity,including the manner in which it willbe conducted and an estimate of theexpected dollar volume associated withthe activity;

(ii) An analysis of the impact of theproposed activity on the condition ofthe United States operations of theforeign bank in general and of thebranch in particular, including a copy ofthe feasibility study, management plan,financial projections, business plan, orsimilar document concerning theconduct of the activity;

(iii) A resolution by the applicant’sboard of directors, or evidence ofapproval by senior management if aresolution is not required pursuant tothe applicant’s organizationaldocuments, authorizing the filing of theapplication;

(iv) A statement by the applicant ofwhether it is in compliance with§§ 346.19 and 346.20 of this chapter,Pledge of assets and Asset maintenance,respectively;

(v) A statement by the applicant thatit has complied with all requirements ofthe Board of Governors concerningapplications to conduct the activity inquestion and the status of each suchapplication, including a copy of theBoard of Governors’ disposition of suchapplication, if applicable; and


(vi) A statement of why the activitywill pose no significant risk to the BankInsurance Fund.

(3) Board of Governors application. Ifthe application to the Board ofGovernors contains the informationrequired by paragraph (a) of this section,the applicant may submit a copy to theFDIC in lieu of a separate letterapplication.


(b) Divestiture or cessation.—(1)Where to file. Divestiture plansnecessitated by a change in law or otherauthority, as required by § 346.101(f) ofthis chapter, must be submitted inwriting to the appropriate regionaldirector (DOS).


(i) A detailed description of themanner in which the applicant proposesto divest itself of or cease the activity inquestion; and

(ii) A projected timetable describinghow long the divestiture or cessation isexpected to take.


(c) Delegation of authority. Authorityis delegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector and the appropriate regionaldirector and deputy regional director, toapprove plans of divestiture andcessation submitted pursuant toparagraph (b) of this section.

Subpart K—Prompt Corrective Action

§ 303.200 Scope.(a) General. (1) This subpart covers

applications filed pursuant to section 38of the FDI Act (12 U.S.C. 1831o), whichrequires insured depository institutionsthat are not adequately capitalized toreceive approval prior to engaging incertain activities. Section 38 restricts orprohibits certain activities and requiresan insured depository institution tosubmit a capital restoration plan whenit becomes undercapitalized. Therestrictions and prohibitions becomemore severe as an institution’s capitallevel declines.

(2) Definitions for the capitalcategories referenced in this PromptCorrective Action subpart may be foundin subpart B of part 325 of this chapter,§ 325.103(b) for banks and § 325.103(c)for insured branches of foreign banks.

(b) Institutions covered. Restrictionsand prohibitions contained in subpart B

of part 325 of this chapter applyprimarily to insured state nonmemberbanks and insured branches of foreignbanks, as well as to directors and seniorexecutive officers of those institutions.Portions of subpart B of part 325 of thischapter also apply to all insureddepository institutions that are deemedto be critically undercapitalized.

§ 303.201 Filing procedures.

Applications shall be filed with theappropriate regional director (DOS). Theapplication shall contain theinformation specified in each respectivesection of this subpart, and shall be inletter form as prescribed in § 303.3 ofthis part. Additional information may berequested by the FDIC. Such letter shallbe signed by the president, senior officeror a duly authorized agent of theinsured depository institution and beaccompanied by a certified copy of aresolution adopted by the institution’sboard of directors or trusteesauthorizing the application.

§ 303.202 Processing.

The FDIC will provide the applicantwith a subsequent written notificationof the final action taken as soon as thedecision is rendered.

§ 303.203 Applications for capitaldistribution.

(a) Scope. An insured statenonmember bank and any insuredbranch of a foreign bank shall submit anapplication for capital distribution if,after having made a capital distribution,the institution would beundercapitalized, significantlyundercapitalized, or criticallyundercapitalized.

(b) Content of filing. An application torepurchase, redeem, retire or otherwiseacquire shares or ownership interests ofthe insured depository institution shalldescribe the proposal, the shares orobligations which are the subjectthereof, and the additional shares orobligations of the institution which willbe issued in at least an amountequivalent to the distribution. Theapplication also shall explain how theproposal will reduce the institution’sfinancial obligations or otherwiseimprove its financial condition. If theproposed action also requires anapplication under section 18(i) of theFDI Act (12 U.S.C. 1828(i)) asimplemented by § 303.241 of this partregarding prior consent to retire capital,such application should be filedconcurrently with, or made a part of, theapplication filed pursuant to section 38of the FDI Act (12 U.S.C. 1831o).

§ 303.204 Applications for acquisitions,branching, and new lines of business

(a) Scope. (1) Any insured statenonmember bank and any insuredbranch of a foreign bank which isundercapitalized or significantlyundercapitalized, and any insureddepository institution which is criticallyundercapitalized, shall submit anapplication to engage in acquisitions,branching or new lines of business.

(2) A new line of business willinclude any new activity exercisedwhich, although it may be permissible,has not been exercised by theinstitution.

(b) Content of filing. Applicationsshall describe the proposal, state thedate the institution’s capital restorationplan was accepted by its primary federalregulator, describe the institution’sstatus toward implementing the plan,and explain how the proposed action isconsistent with and will further theachievement of the plan or otherwisefurther the purposes of section 38 of theFDI Act. If the FDIC is not theapplicant’s primary federal regulator,the application also should statewhether approval has been requestedfrom the applicant’s primary federalregulator, the date of such request andthe disposition of the request, if any. Ifthe proposed action also requiresapplications pursuant to section 18 (c)or (d) of the FDI Act (mergers andbranches) (12 U.S.C. 1828 (c) or (d)),such applications should be filedconcurrently with, or made a part of, theapplication filed pursuant to section 38of the FDI Act (12 U.S.C. 1831o).

§ 303.205 Applications for bonuses andincreased compensation for seniorexecutive officers.

(a) Scope. Any insured statenonmember bank or insured branch ofa foreign bank that is significantly orcritically undercapitalized, or anyinsured state nonmember bank or anyinsured branch of a foreign bank that isundercapitalized and which has failedto submit or implement in any materialrespect an acceptable capital restorationplan, shall submit an application to paya bonus or increase compensation forany senior executive officer.

(b) Content of filing. Applicationsshall list each proposed bonus orincrease in compensation, and for thelatter shall identify compensation foreach of the twelve calendar monthspreceding the calendar month in whichthe institution became undercapitalized.Applications also shall state the date theinstitution’s capital restoration plan wasaccepted by the FDIC, and describe anyprogress made in implementing theplan.


§ 303.206 Application for payment ofprincipal or interest on subordinated debt.

(a) Scope. Any criticallyundercapitalized insured depositoryinstitution shall submit an applicationto pay principal or interest onsubordinated debt.

(b) Content of filing. Applicationsshall describe the proposed paymentand provide an explanation of actiontaken under section 38(h)(3)(A)(ii) of theFDI Act (action instead of receivershipor conservatorship). The applicationalso shall explain how such paymentswould further the purposes of section 38of the FDI Act (12 U.S.C. 1831o).Existing approvals pursuant to requestsfiled under section 18(i)(1) of the FDIAct (12 U.S.C. 1828(i)(1)) (capital stockreductions or retirements) shall not bedeemed to be the permission neededpursuant to section 38.

§ 303.207 Restricted activities for criticallyundercapitalized institutions.

(a) Scope. Any criticallyundercapitalized insured depositoryinstitution shall submit an applicationto engage in certain restricted activities.

(b) Content of filing. Applications toengage in any of the following activities,as set forth in sections 38(i)(2)(A)through (G) of the FDI Act, shalldescribe the proposed activity andexplain how the activity would furtherthe purposes of section 38 of the FDIAct (12 U.S.C. 1831o):

(1) Enter into any material transactionother than in the usual course ofbusiness including any action withrespect to which the institution isrequired to provide notice to theappropriate federal banking agency.Materiality will be determined on acase-by-case basis;

(2) Extend credit for any highlyleveraged transaction (as defined in part325 of this chapter);

(3) Amend the institution’s charter orbylaws, except to the extent necessary tocarry out any other requirement of anylaw, regulation, or order;

(4) Make any material change inaccounting methods;

(5) Engage in any covered transaction(as defined in section 23A(b) of theFederal Reserve Act (12 U.S.C. 371c(b));

(6) Pay excessive compensation orbonuses. Part 359 of this chapterprovides guidance for determiningexcessive compensation. The FDIC willconsider the existing compensationlevels of an institution’s executiveofficers directors and principalshareholders (as defined in RegulationO, 12 CFR part 215) on a case-by-casebasis, and will require prior writtenapproval for any change in theircompensation levels; or

(7) Pay interest on new or renewedliabilities at a rate that would increasethe institution’s weighted average costof funds to a level significantlyexceeding the prevailing rates of intereston insured deposits in the institution’snormal market area. Section 337.6 ofthis chapter (Brokered deposits)provides guidance for defining therelevant terms of this provision;however this provision does notsupersede the general prohibitionscontained in § 337.6.

§ 303.208 Delegation of authority.Authority is delegated to the Director

and Deputy Director (DOS) and, whereconfirmed in writing by the Director, toan associate director and theappropriate regional director anddeputy regional director, to approve ordeny the following applications,requests or petitions submitted pursuantto this subpart:

(a) Applications filed pursuant tosection 38 of the FDI Act (12 U.S.C.1831o) (prompt corrective action),including applications to make a capitaldistribution;

(b) Applications for acquisitions,branching, and new lines of business(except that the delegation is limited tothe authority as delegated to approve ordeny any concurrent application filedpursuant to section 18(c) or (d) of theFDI Act (12 U.S.C. 1828(c) or (d));

(c) Applications to pay a bonus orincrease compensation;

(d) Applications for an exception topay principal or interest onsubordinated debt; and

(e) Applications by criticallyundercapitalized insured depositoryinstitutions to engage in any restrictedactivity listed in this subpart.

Subpart L—Section 19 of the FDI Act(Consent to Service of PersonsConvicted of Certain CriminalOffenses)

§ 303.220 Scope.This subpart covers applications

under section 19 of the FDI Act (12U.S.C. 1829).

Pursuant to section 19, any personwho has been convicted of any criminaloffense involving dishonesty, breach oftrust, or money laundering, or hasagreed to enter into a pretrial diversionor similar program in connection with aprosecution for such offense, may notbecome, or continue as, an institution-affiliated party of an insured depositoryinstitution; own or control, directly orindirectly, any insured depositoryinstitution; or otherwise participate,directly or indirectly, in the conduct ofthe affairs of any insured depository

institution without the prior writtenconsent of the FDIC.

§ 303.221 Filing procedures.(a) Regional office. An application

under section 19 shall be filed with theappropriate FDIC regional director(DOS).

(b) Contents of filing. Applicationforms may be obtained from any FDICregional office. The FDIC may requireadditional information beyond thatsought in the form or questionnaire, aswarranted, in individual cases.

§ 303.222 Service at another insureddepository institution.

In the case of a person who hasalready been approved by the FDICunder this subpart or section 19 of theAct in connection with a particularinsured depository institution, suchperson may not become an institutionaffiliated party, or own or controldirectly or indirectly another insureddepository institution, or participate inthe conduct of the affairs of anotherinsured depository institution, withoutthe prior written consent of the FDIC.

§ 303.223 Applicant’s right to hearingfollowing denial.

An applicant may request a hearingfollowing a denial of an application inaccordance with the provisions of part308 of this chapter.

§ 303.224 Delegation of authority.(a) Approvals. Authority is delegated

to the Director and Deputy Director(DOS) or, where confirmed in writing bythe Director, to an associate director orto the appropriate regional director ordeputy regional director, to approveapplications made by insureddepository institutions pursuant tosection 19 of the FDI Act, afterconsultation with the Legal Division;provided however, that authority maynot be delegated to the regional directoror deputy regional director where theapplicant’s primary supervisoryauthority interposes any objection tosuch application.

(b) Denials. Authority is delegated tothe Director and Deputy Director (DOS)or, where confirmed in writing by theDirector, to an associate director, todeny applications made by insureddepository institutions pursuant tosection 19 of the Act.

(c) Concurrent legal certification. Theauthority to deny applications delegatedunder this section shall be exercisedonly upon the concurrent certificationby the General Counsel or, whereconfirmed in writing by the GeneralCounsel, his or her designee, that theaction taken is not inconsistent withsection 19 of the FDI Act.


(d) Conditions on applicationapprovals. Regional directors anddeputy regional directors acting underdelegated authority under this subpartmay impose any of the followingconditions on the approval ofapplications, as appropriate inindividual cases:

(1) A participant or institution-affiliated party of an institution shall bebonded to the same extent as others insimilar positions; and/or

(2) When deemed necessary, the priorconsent of the appropriate regionaldirector (DOS) shall be required for anyproposed significant changes in dutiesand/or responsibilities of the personwho is the subject of the application.

(e) Authority not delegated by FDICBoard of Directors. The FDIC Board ofDirectors has not delegated its authorityto consider and act upon an applicationunder section 19 of the FDI Act after ahearing held in accordance with theprovisions of part 308 of this chapter.

Subpart M—Other Filings

§ 303.240 General.

This subpart sets forth the filingprocedures to be followed when seekingthe FDIC’s consent to engage in certainactivities or accomplish other matters asspecified in the individual sectionscontained herein. For those matterscovered by this subpart that also havesubstantive FDIC regulations or relatedstatements of policy, references to therelevant regulations or statements ofpolicy are contained in the specificsections.

§ 303.241 Reduce or retire capital stock orcapital debt instruments.

(a) Scope. This section contains theprocedures to be followed by an insuredstate nonmember bank to seek the priorapproval of the FDIC to reduce theamount or retire any part of its commonor preferred stock, or to retire any partof its capital notes or debenturespursuant to section 18(i)(1) of the Act(12 U.S.C. 1828(i)(1)).

(b) Filing procedures. Applicants shallsubmit a letter application to theappropriate regional director (DOS).

(c) Content of filing. The applicationshall contain the following:

(1) The type and amount of theproposed change to the capital structureand the reason for the change;

(2) A schedule detailing the presentand proposed capital structure;

(3) The time period that the proposalwill encompass;

(4) If the proposal involves a series oftransactions affecting Tier 1 capitalcomponents which will beconsummated over a period of time

which shall not exceed 12 months, theapplication shall certify that the insureddepository institution will maintainitself as a well capitalized institution asdefined in part 325 of this chapter, bothbefore and after each of the proposedtransactions;

(5) If the proposal involves therepurchase of capital instruments, theamount of the repurchase price and thebasis for establishing the fair marketvalue of the repurchase price;

(6) A statement that the proposal willbe available to all holders of a particularclass of outstanding capital instrumentson an equal basis, and if not, the detailsof any restrictions; and

(7) The date that the applicant’s boardof directors approved the proposal.

(d) Additional information. The FDICmay request additional information atany time during processing of theapplication.

(e) Undercapitalized institutions.Procedures regarding applications by anundercapitalized insured depositoryinstitution to retire capital stock orcapital debt instruments pursuant tosection 38 of the FDI Act (12 U.S.C.1831o) are set forth in subpart K(Prompt Corrective Action), § 303.203 ofthis part. Applications pursuant tosection 38 and 18(i) may be filedconcurrently, or as a single application.

(f) Expedited processing for eligibledepository institutions. An applicationfiled under this section by an eligibledepository institution as defined in§ 303.2(r) of this part will beacknowledged in writing by the FDICand will receive expedited processing,unless the applicant is notified inwriting to the contrary and providedwith the basis for that decision. TheFDIC may remove an application fromexpedited processing for any of thereasons set forth in § 303.11(c)(2) of thispart. Absent such removal, anapplication processed under expeditedprocessing will be deemed approved 20days after the FDIC’s receipt of asubstantially complete application.

(g) Standard processing. For thoseapplications that are not processedpursuant to expedited procedures, theFDIC will provide the applicant withwritten notification of the final action assoon as the decision is rendered.

(h) Delegation of authority. Authorityis delegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector and the appropriate regionaldirector and deputy regional director, toapprove or deny an applicationpursuant to section 18(i)(1) of the FDIAct (12 U.S.C. 1828(i)) to reduce theamount or retire any part of common or

preferred capital stock, or to retire anypart of capital notes or debentures.

§ 303.242 Exercise of trust powers.(a) Scope. This section contains the

procedures to be followed by a statenonmember bank to seek the FDIC’sprior consent to exercise trust powers.The FDIC’s prior consent to exercisetrust powers is not required in thefollowing circumstances:

(1) Where a state nonmember bankreceived authority to exercise trustpowers from its chartering authorityprior to December 1, 1950; or

(2) Where an insured depositoryinstitution continues to conduct trustactivities pursuant to authority grantedby its chartering authority subsequent toa charter conversion or withdrawal frommembership in the Federal ReserveSystem.

(b) Filing procedures. Applicantsshould submit to the appropriateregional director (DOS) a completedform, ‘‘Application for Consent ToExercise Trust Powers.’’ This form maybe obtained from any FDIC regionaloffice.

(c) Content of filing. The filing shouldconsist of the completed trustapplication form.

(d) Additional information. The FDICmay request additional information atany time during processing of the filing.

(e) Expedited processing for eligibledepository institutions. An applicationfiled under this section by an eligibledepository institution as defined in§ 303.2(r) of this part will beacknowledged in writing by the FDICand will receive expedited processing,unless the applicant is notified inwriting to the contrary and providedwith the basis for that decision. TheFDIC may remove an application fromexpedited processing for any of thereasons set forth in § 303.11(c)(2) of thispart. Absent such removal, anapplication processed under expeditedprocedures will be deemed approved 30days after the FDIC’s receipt of asubstantially complete application.

(f) Standard processing. For thoseapplications that are not processedpursuant to the expedited procedures,the FDIC will provide the applicantwith written notification of the finalaction as soon as the decision isrendered.

(g) Delegation of authority. (1) Wherethe criteria listed in paragraph (g)(2) ofthis section are satisfied and theapplicant agrees in writing to complywith any conditions imposed by theapproving FDIC official, other than thestandard conditions defined in§ 303.2(ff) of this part, which may beimposed without the applicant’s written


consent, authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director and theappropriate regional director anddeputy regional director, to approveapplications for the FDIC’s consent toexercise trust powers.

(2) The following criteria must besatisfied before the authority delegatedin paragraph (g)(1) of this section maybe exercised:

(i) The factors set forth in section 6 ofthe FDI Act (12 U.S.C. 1816) have beenconsidered and favorably resolved;

(ii) The proposed management of thetrust business is determined to becapable of satisfactorily handling theanticipated business; and

(iii) The applicant’s board of directorsformally has adopted the FDICStatement of Principles of TrustDepartment Management available fromany FDIC regional office.

(h) Denials and certain conditionalapprovals. Authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director to:

(1) Deny applications for trust powers;and

(2) Approve applications for trustpowers where the criteria listed inparagraph (g)(2) of this section aresatisfied but the applicant does notagree in writing to comply with anycondition imposed by the delegate,other than the standard conditionsdefined in § 303.2(ff) of this part whichmay be imposed without the applicant’swritten consent.

§ 303.243 Brokered deposit waivers.(a) Scope. Pursuant to section 29 of

the FDI Act (12 U.S.C. 1831f) and§ 337.6 of this chapter, an adequatelycapitalized insured depositoryinstitution may not accept, renew or rollover any brokered deposits unless it hasobtained a waiver from the FDIC. A wellcapitalized insured depositoryinstitution may accept brokereddeposits without a waiver, and anundercapitalized insured depositoryinstitution may not accept, renew or rollover any brokered deposits under anycircumstances. This section contains theprocedures to be followed to file withthe FDIC for a brokered deposit waiver.The FDIC will provide notice to thedepository institution’s appropriatefederal banking agency and any stateregulatory agency, as appropriate, that arequest for a waiver has been filed andwill consult with such agency oragencies, prior to taking action on theinstitution’s request for a waiver. Priornotice and/or consultation shall not berequired in any particular case if the

FDIC determines that the circumstancesrequire it to take action without givingsuch notice and opportunity forconsultation.

(b) Filing procedures. Applicantsshould submit a letter application to theappropriate regional director (DOS).

(c) Content of filing. The applicationshould contain the following:

(1) The time period for which thewaiver is requested;

(2) A statement of the policygoverning the use of brokered depositsin the institution’s overall funding andliquidity management program;

(3) The volume, rates and maturitiesof the brokered deposits held currentlyand anticipated during the waiverperiod sought, including any internallimits placed on the terms, solicitationand use of brokered deposits;

(4) How brokered deposits are costedand compared to other fundingalternatives and how they are used inthe institution’s lending and investmentactivities, including a detaileddiscussion of asset growth plans;

(5) Procedures and practices used tosolicit brokered deposits, including anidentification of the principal sources ofsuch deposits;

(6) Management systems overseeingthe solicitation, acceptance and use ofbrokered deposits;

(7) A recent consolidated financialstatement with balance sheet andincome statements; and

(8) The reasons the institutionbelieves its acceptance, renewal orrollover of brokered deposits wouldpose no undue risk.

(d) Additional information. The FDICmay request additional information atany time during processing of theapplication.

(e) Expedited processing for eligibledepository institutions. An applicationfiled under this section by an eligibledepository institution as defined in this§ 303.243(e) will be acknowledged inwriting by the FDIC and will receiveexpedited processing, unless theapplicant is notified in writing to thecontrary and provided with the basis forthat decision. For the purpose of thissection, an applicant will be deemed aneligible depository institution if itsatisfies all of the criteria contained in§ 303.2(r) except that the applicant maybe adequately capitalized rather thanwell capitalized. The FDIC may removean application from expeditedprocessing for any of the reasons setforth in § 303.11(c)(2) of this part.Absent such removal, an applicationprocessed under expedited procedureswill be deemed approved 21 days afterthe FDIC’s receipt of a substantiallycomplete application.

(f) Standard processing. For thosefilings which are not processedpursuant to the expedited procedures,the FDIC will provide the applicantwith written notification of the finalaction as soon as the decision isrendered.

(g) Conditions for approval. A waiverissued pursuant to this section shall:

(1) Be for a fixed period, generally nolonger than two years, but may beextended upon refiling; and

(2) May be revoked by the FDIC at anytime by written notice to the institution.

(h) Delegation of authority. Authorityis delegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector and the appropriate regionaldirector and deputy regional director, toapprove or deny brokered depositwaiver applications. Based upon apreliminary review, any delegate maygrant a temporary waiver for a shortperiod in order to facilitate the orderlyprocessing of a filing for a waiver.

§ 303.244 Golden parachute andseverance plan payments.

(a) Scope. Pursuant to section 18(k) ofthe FDI Act (12 U.S.C. 1828(k)) and part359 of this chapter (12 CFR part 359),an insured depository institution ordepository institution holding companymay not make golden parachutepayments or excess nondiscriminatoryseverance plan payments unless thedepository institution or holdingcompany obtains permission to makesuch payments in accordance with therules contained in part 359 of thischapter. This section contains theprocedures to file for the FDIC’s consentwhen such consent is necessary underpart 359 of this chapter, as describedbelow:

(1) Golden parachute payments. Agolden parachute payment is defined in§ 359.1(f)(1) of this chapter as a paymentby a troubled insured depositoryinstitution or troubled depositoryinstitution holding company. A troubledinsured depository institution or atroubled depository institution holdingcompany is prohibited from makinggolden parachute payments unless itobtains the consent of the appropriatefederal banking agency and the writtenconcurrence of the FDIC. Therefore, inthe case of golden parachute payments,the procedures in this section apply toall troubled insured depositoryinstitutions and troubled depositoryinstitution holding companies.

(2) Excess nondiscriminatoryseverance plan payments. In the case ofexcess nondiscriminatory severanceplan payments as provided by§ 359.1(f)(2)(v) of this chapter, the


FDIC’s consent is necessary for statenonmember banks that meet the criteriaset forth in § 359.1(f)(1)(ii) of thischapter. In addition, the FDIC’s consentis required for all insured depositoryinstitutions or depository institutionholding companies that meet the samecriteria and seek to make payments inexcess of the 12-month amountspecified in § 359.1(f)(2)(v).

(b) Filing procedures. Applicantsshould submit a letter application to theappropriate FDIC regional director(DOS).

(c) Content of filing. The applicationshould contain the following:

(1) The reasons why the applicantseeks to make the payment;

(2) An identification of theinstitution-affiliated party who willreceive the payment;

(3) A copy of any contract oragreement regarding the subject matterof the filing;

(4) The cost of the proposed paymentand its impact on the institution’scapital and earnings; and

(5) The reasons why consent to thepayment should be granted.


(e) Processing. The FDIC will providethe applicant with a subsequent writtennotification of the final action taken assoon as the decision is rendered.

(f) Delegation of authority. Authorityis delegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector and the appropriate regionaldirector and deputy regional director, toapprove or to deny filings to make:

(1) Excess nondiscriminatoryseverance plan payments as provided by12 CFR 359.1(f)(2)(v); and

(2) Golden parachute paymentspermitted by 12 CFR 359.4.

§ 303.245 Waiver of liability for commonlycontrolled depository institutions.

(a) Scope. Section 5(e) of the FDI Act(12 U.S.C. 1815(e)) creates liability forcommonly controlled insureddepository institutions for lossesincurred or anticipated to be incurredby the FDIC in connection with thedefault of a commonly controlledinsured depository institution or anyassistance provided by the FDIC to anycommonly controlled insureddepository institution in danger ofdefault. In addition to certain statutoryexceptions and exclusions contained insections 5(e)(6), (7) and (8), the FDI Actalso permits the FDIC, in its discretion,to exempt any insured depositoryinstitution from this liability if itdetermines that such exemption is in

the best interests of the Bank InsuranceFund (BIF) or the Savings AssociationInsurance Fund (SAIF). This sectiondescribes procedures to request aconditional waiver of liability pursuantto 12 U.S.C. 1815(e)(5)(A).

(b) Definition. Conditional waiver ofliability means an exemption fromliability pursuant to section 5(e) of theFDI Act (12 U.S.C. 1815(e)) subject toterms and conditions.

(c) Filing procedures. Applicantsshould submit a letter application to theappropriate regional director (DOS).

(d) Content of filing. The applicationshould contain the followinginformation:

(1) The basis for requesting a waiver;(2) The existence of any significant

events (e.g., change of control, capitalinjection, etc.) that may have an impactupon the applicant and/or anypotentially liable institution;

(3) Current, and if applicable, proforma financial information regardingthe applicant and potentially liableinstitution(s); and

(4) The benefits to the appropriateFDIC insurance fund resulting from thewaiver and any related events.

(e) Additional information. The FDICmay request additional information atany time during the processing of thefiling.

(f) Processing. The FDIC will providethe applicant with written notificationof the final action as soon as thedecision is rendered.

(g) Failure to comply with terms ofconditional waiver. In the event aconditional waiver of liability is issued,failure to comply with the termsspecified therein may result in thetermination of the conditional waiver ofliability. The FDIC reserves the right torevoke the conditional waiver ofliability after giving the applicantwritten notice of such revocation and areasonable opportunity to be heard onthe matter.

(h) Authority retained by FDIC Boardof Directors. The FDIC Board ofDirectors retains the authority to act onany application for waiver of liability ofcommonly controlled depositoryinstitutions.

§ 303.246 Insurance fund conversions.(a) Scope. This section contains the

procedures to be followed by an insureddepository institution to seek the FDIC’sprior approval to engage in an insurancefund conversion that involves thetransfer of deposits between the SAIFand the BIF. Optional conversiontransactions, commonly referred to asOakar transactions, pursuant to section5(d)(3) of the FDI Act (12 U.S.C.1815(d)(3)) which do not involve the

transfer of deposits between the SAIFand the BIF are governed by theprocedures set forth in subpart D(Merger Transactions) of this part.

(b) Filing procedures. Applicantsshould submit a letter application to theappropriate FDIC regional director(DOS). The filing should be signed byrepresentatives of each institutionparticipating in the transaction.Insurance fund conversions which areproposed in conjunction with a mergerapplication filed pursuant to section18(c) of the FDI Act (12 U.S.C. 1828(c))should be included with that filing.

(c) Content of filing. The applicationshould include the followinginformation:

(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 institutionupon consummation of the transaction;and

(4) Certification by each party to thetransaction that applicable entrance andexit fees will be paid pursuant to part312 of this chapter.


(e) Processing. The FDIC will providethe applicant with written notificationof the final action as soon as thedecision is rendered.

(f) Delegation of authority. Authorityis delegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector and the appropriate regionaldirector and deputy regional director, toapprove or deny filings for insurancefund conversions involving the transfersof deposits between the SavingsAssociation Insurance Fund and theBank Insurance Fund.

§ 303.247 Conversion with diminution ofcapital.

(a) Scope. This section contains theprocedures to be followed by an insuredfederal depository institution seekingthe prior written consent of the FDICpursuant to section 18(i)(2) of the FDIAct (12 U.S.C. 1828(i)(2)) to convertfrom an insured federal depositoryinstitution to an insured statenonmember bank (except a Districtbank) where the capital stock or surplusof the resulting bank will be less thanthe capital stock or surplus,respectively, of the convertinginstitution at the time of theshareholders’ meeting approving suchconversion.



(c) Content of filing. The applicationshould contain the followinginformation:

(1) A description of the proposedtransaction;

(2) A schedule detailing the presentand proposed capital structure; and

(3) A copy of any documentssubmitted to the state charteringauthority with respect to the charterconversion.

(d) Additional information. The FDICmay request additional information atany time during the processing.


(f) Delegation of authority—(1)Approvals. Authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director and theappropriate regional director anddeputy regional director, to approveapplications to convert with diminutionof capital.

(2) Denials. Authority is delegated tothe Director and Deputy Director (DOS)and, where confirmed in writing by theDirector, to an associate director to denyapplications to convert with diminutionof capital.

§ 303.248 Continue or resume status as aninsured institution following terminationunder section 8 of the FDI Act.

(a) Scope. This section relates toapplications by depository institutionswhose insured status has beenterminated under section 8 of the FDIAct (12 U.S.C. 1818) for permission tocontinue or resume its status as aninsured depository institution. Thissection covers institutions whosedeposit insurance continues in effect forany purpose or for any length of timeunder the terms of an FDIC orderterminating deposit insurance, but doesnot cover operating non-insureddepository institutions which werepreviously insured by the FDIC, or anynon-insured, non-operating depositoryinstitution whose charter has not beensurrendered or revoked.


(c) Content of filing. The filing shouldcontain the following information:

(1) A complete statement of the actionrequested, all relevant facts, and thereason for such requested action; and

(2) A certified copy of the resolutionof the depository institution’s board ofdirectors authorizing submission of thefiling.



(f) Authority retained by FDIC Boardof Directors. The FDIC Board ofDirectors retains the authority to act onany application to continue or resumestatus as an insured institutionfollowing termination under section 8 ofthe FDI Act.

§ 303.249 Truth in Lending Act—Relieffrom reimbursement.

(a) Scope. This process applies torequests for relief from reimbursementpursuant to the Truth in Lending Act(15 U.S.C. 1601 et seq.) and RegulationZ (12 CFR part 226).

(b) Procedures to be followed in filinginitial requests for relief. Requests forrelief from reimbursement should befiled with the appropriate regionaldirector (DCA) within 60 days afterreceipt of the compliance report ofexamination containing the request toconduct a file search and makerestitution to affected customers. Thefiling should contain a complete andconcise statement of the actionrequested, all relevant facts, the reasonsand analysis relied upon as the basis forsuch requested action, and allsupporting documentation.

(c) Additional information. The FDICmay request additional information atany time during processing of any suchrequests.

(d) Processing. The FDIC willacknowledge receipt of the request andprovide the applicant with a subsequentwritten notification of its determinationas soon as the decision is rendered.

(e) Delegation of authority—(1) Denialof initial requests for relief. Authority isdelegated to the Director and DeputyDirector (DCA), and where confirmed inwriting by the Director, to an associatedirector, or to the appropriate regionaldirector or deputy regional director, todeny requests for relief from therequirements for reimbursement undersection 608(a)(2) of the Truth in LendingSimplification and Reform Act (15U.S.C. 1607(e)(2)); provided however,that a regional director or deputyregional director is not authorized todeny any request where the estimatedamount of reimbursement is greater than$25,000.

(2) Approval of initial requests forrelief. Authority is delegated to theDirector and Deputy Director (DCA),and where confirmed in writing by thedirector, to a deputy director or anassociate director to approve requestsfor relief from the requirements forreimbursement under section 608(a)(2)

of the Truth in Lending Simplificationand Reform Act (15 U.S.C. 1607(a)(2)).

(f) Legal concurrence. The authoritydelegated under this section shall beexercised only upon concurrentcertification by the General Counsel or,where confirmed in writing by theGeneral Counsel, by his or her designee,or, in cases where a regional director ordeputy regional director denies requestsfor relief, by the appropriate regionalcounsel, that the action taken is notinconsistent with the Truth in LendingSimplification and Reform Act.

(g) Procedures to be followed in filingrequests for reconsideration. Within 15days of receipt of written notice that itsrequest for relief has been denied, therequestor may petition the appropriateregional director (DCA) forreconsideration of such request inaccordance with the procedures setforth in § 303.11(f) of this part.

§ 303.250 Modification of conditions.(a) Scope. This section contains the

procedures to be followed by an insureddepository institution to seek the priorconsent of the FDIC to modify therequirements of a prior approval of afiling issued by the FDIC.

(b) Filing procedures. Applicantsshould submit a letter application to theappropriate FDIC regional director(DOS).


(1) A description of the originalapproval;

(2) A description of the modificationrequested; and

(3) The reason for the request.(d) Additional information. The FDIC

may request additional information atany time during processing of the filing.

(e) Processing. The FDIC will providethe applicant with a subsequent writtennotification of the final action as soonas the decision is rendered.

(f) Delegation of authority. Authorityis delegated to the Director and DeputyDirector (DOS) and, where confirmed inwriting by the Director, to an associatedirector and the appropriate regionaldirector and deputy regional director, toapprove or deny requests to modify therequirements of a prior approval of afiling issued by the FDIC subject to thefollowing criteria:

(1) The Legal Division is consulted tothe same extent as was required forapproval of the original filing; and

(2) The approving delegate had theauthority to approve the original filing.

§ 303.251 Extension of time.(a) Scope. This section contains the

procedures to be followed by an insured


depository institution to seek the priorconsent of the FDIC for additional timeto fulfill a condition required in anapproval of a filing issued by the FDICor to consummate a transaction whichwas the subject of an approval by theFDIC.



(1) A description of the originalapproval;

(2) Identification of the original timelimitation;

(3) The additional time periodrequested; and

(4) The reason for the request.(d) Additional information. The FDIC

may request additional information atany time during processing of the filing.


(f) Delegation of authority. (1) Exceptas provided in paragraph (f)(2) of thissection, authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director and theappropriate regional director anddeputy regional director, to approve ordeny requests for extensions of timewithin which to perform acts or fulfillconditions required by a prior FDICaction on a filing of the insureddepository institution.

(2) Limits on exercise of delegatedauthority. (i) Extensions of timeapproved may not exceed one year.

(ii) Notwithstanding the delegationsin paragraph (f)(1) of this section, nodelegate shall have the authority to denyan extension of time request unless thatdelegate has the authority under thispart to deny the original filing uponwhich the extension of time ispredicated.

Subpart N—Enforcement Delegations

§ 303.260 Scope.

This subpart contains delegations ofauthority relating to the initiation,prosecution, and settlement ofadministrative enforcement actionsunder the FDI Act and other laws andregulations enforced by the FDIC,including investigations and subpoenas.

§ 303.261 Issuance of notification toprimary regulator under section 8(a) of theFDI Act (12 U.S.C. 1818(a)).

(a) Book capital less than 2 percent.Authority is delegated to the Directorand Deputy Director (DOS), and where

confirmed in writing by the Director, toan associate director or to theappropriate regional director or deputyregional director, to issue notificationsto primary regulator when therespondent depository institution’s bookcapital is less than 2 percent of totalassets; provided that authority may notbe delegated to the regional director ordeputy regional director whenever therespondent depository institution hasissued any mandatory convertible debtor any form of Tier 2 capital (such aslimited life preferred stock,subordinated notes and debentures).

(b) Tier 1 capital less than 2 percent.Authority is delegated to the Directorand Deputy Director (DOS) and, whereconfirmed in writing by the Director, toan associate director, to issuenotifications to primary regulator whenthe respondent depository institution’sadjusted Tier 1 capital is less than 2percent of adjusted part 325 total assetsas defined in § 303.2(b) of this part.

(c) Legal concurrence. The authoritydelegated under this section shall beexercised only upon concurrentcertification by the General Counsel or,where confirmed in writing by theGeneral Counsel, by his or her designee,or, in cases where a regional director ordeputy regional director issuesnotifications to primary regulator, by theappropriate regional counsel, that theallegations contained in the findings ofviolations of law or regulation and/orunsafe or unsound practices and/orunsafe or unsound condition, if proven,constitute a basis for the issuance of anotification to primary regulatorpursuant to section 8(a) of the FDI Act(12 U.S.C. 1818(a)).

§ 303.262 Issuance of notice of intention toterminate insured status under section 8(a)of the FDI Act (12 U.S.C. 1818(a)).

(a) General. Authority is delegated tothe Director and Deputy Director (DOS),and where confirmed in writing by theDirector, to an associate director, toissue notices of intent to terminateinsured status when the respondentdepository institution has failed tocorrect any violations of law orregulation and/or unsafe or unsoundpractices and/or unsafe or unsoundcondition as specified in the relevantnotification to primary regulator.

(b) Legal concurrence. The authoritydelegated under this section shall beexercised only upon concurrentcertification by the General Counsel or,where confirmed in writing by theGeneral Counsel, by his or her designee,that the allegations contained in thefindings in the notice of intention toterminate insured status of violations oflaw or regulation and/or unsafe or

unsound practices and/or unsafe orunsound condition, if proven, constitutea basis for termination of the insuredstatus of the respondent depositoryinstitution pursuant to section 8(a) ofthe FDI Act (12 U.S.C. 1818(a)).

§ 303.263 Cease-and-desist actions undersection 8(b) of the FDI Act (12 U.S.C.1818(b)).

(a) General. Authority is delegated tothe Director and Deputy Director (DOS),to the Director and Deputy Director(DCA), and where confirmed in writingby the appropriate Director, to anassociate director or to the appropriateregional director or deputy regionaldirector to issue:

(1) Notices of charges; and(2) Cease-and-desist orders (with or

without a prior notice of charges) wherethe respondent depository institution orindividual respondent consents to theissuance of the cease-and-desist orderprior to the filing by an administrativelaw judge of proposed findings of fact,conclusions of law and recommendeddecision with the Executive Secretary ofthe FDIC.

(b) Joint DOS–DCA action. TheDirector (DOS) and the Director (DCA)may issue a joint notice of charges orcease-and-desist order under thissection, where such notice or orderaddresses both safety and soundnessand consumer compliance matters. Ajoint notice or order will require thesignatures of both Directors or theirDeputy Directors or associate directors,regional directors or deputy regionaldirectors.

(c) Legal concurrence. The authoritydelegated under this section shall beexercised only upon concurrentcertification by the General Counsel or,where confirmed in writing by theGeneral Counsel, by his or her designee,or, in cases where a regional director ordeputy regional director issues thenotice of charges or the stipulated cease-and-desist order, by the appropriateregional counsel, that the allegationscontained in the notice of charges, ifproven, constitute a basis for theissuance of a section 8(b) order, or thatthe stipulated cease-and-desist order isauthorized under section 8(b) of the FDIAct, and, upon its effective date, shallbe a cease-and-desist order which hasbecome final for purposes ofenforcement pursuant to the FDI Act.

§ 303.264 Temporary cease-and-desistorders under section 8(c) of the FDI Act (12U.S.C. 1818(c)).

(a) General. Authority is delegated tothe Director and Deputy Director (DOS)and to the Director and Deputy Director(DCA), and where confirmed in writing


by the appropriate Director, to anassociate director, to issue temporarycease-and-desist orders.

(b) Joint DOS-DCA action. TheDirector (DOS) and the Director (DCA)may issue a joint temporary cease-and-desist order where such order addressesboth safety and soundness andconsumer compliance matters. A jointnotice or order will require thesignatures of both Directors or theirDeputy Directors or associate directors.

(c) Legal concurrence. The authoritydelegated under this section shall beexercised only upon concurrentcertification by the General Counsel or,where confirmed in writing by theGeneral Counsel, by his or her designee,that the action is not inconsistent withsection 8(c) of the FDI Act (12 U.S.C.1818(c)) and the temporary cease-and-desist order is enforceable in a UnitedStates District Court.

§ 303.265 Removal and prohibition actionsunder section 8(e) of the FDI Act (12 U.S.C.1818(e)).

(a) General. Authority is delegated tothe Director and Deputy Director (DOS)or the Director and Deputy Director(DCA) and, where confirmed in writingby the appropriate Director, to anassociate director, to issue:

(1) Notices of intention to remove aninstitution-affiliated party from office orto prohibit an institution-affiliated partyfrom further participation in theconduct of the affairs of an insureddepository institution pursuant tosections 8(e)(1) and (2) of the FDI Act(12 U.S.C. 1818(e)(1) and (2)), andtemporary orders of suspensionpursuant to section 8(e)(3) of the FDIAct (12 U.S.C. 1818(e)(3)); and

(2) Orders of removal, suspension orprohibition from participation in theconduct of the affairs of an insureddepository institution where theinstitution-affiliated party consents tothe issuance of such orders prior to thefiling by an administrative law judge ofproposed findings of fact, conclusions oflaw and a recommended decision withthe Executive Secretary of the FDIC.

(b) Joint DOS-DCA action. TheDirector (DOS) and the Director (DCA)may issue joint notices and orderspursuant to this section where suchnotice or order addresses both safetyand soundness and consumercompliance matters. A joint notice ororder will require the signatures of bothdirectors or their deputy directors orassociate directors.

(c) Legal concurrence. The authoritydelegated under this section shall beexercised only upon concurrentcertification by the General Counsel or,where confirmed in writing by the

General Counsel, by his or her designee,that the allegations contained in thenotice of intent, if proven, constitute abasis for the issuance of a notice ofintent pursuant to section 8(e) of the FDIAct, or that the stipulated section 8(e)order is not inconsistent with section8(e) of the FDI Act, and, upon issuance,shall be an order which has becomefinal for purposes of enforcementpursuant to the FDI Act.

§ 303.266 Suspension and removal actionunder section 8(g) of the FDI Act (12 U.S.C.1818(g)).

(a) General. Authority is delegated tothe Director and Deputy Director (DOS),to the Director and Deputy Director(DCA), and where confirmed in writingby the appropriate Director, to anassociate director, to issue orders ofsuspension or prohibition to aninstitution-affiliated party who ischarged in any information, indictment,or complaint, or who is convicted of orenters a pretrial diversion or similarprogram, as to any criminal offensecited in or covered by section 8(g) of theFDI Act, when such institution-affiliatedparty consents to the suspension orprohibition.

(b) Delegation of authority wheresuspension or prohibition mandated.Authority is delegated to the Directorand Deputy Director (DOS), to theDirector and Deputy Director (DCA),and where confirmed in writing by theappropriate Director, to an associatedirector, to issue orders of suspensionand prohibition to any institution-affiliated party who is charged in anyinformation, indictment, or complaint,or who is convicted or enters a pretrialdiversion or similar program, as to anycriminal offense involving mandatorysuspension or prohibition undersections 8(g)(1)(A)(ii) and (C)(ii) of theFDI Act (12 U.S.C. 1818(g)(1)(A)(ii) and(C)(ii)), whether or not such institution-affiliated party consents to thesuspension or prohibition.

(c) Joint DOS-DCA action. TheDirector (DOS) and the Director (DCA)may issue joint orders pursuant to thissection where such order addresses bothsafety and soundness and consumercompliance matters. A joint order willrequire the signatures of both Directorsor their Deputy Directors or associatedirectors.

(d) Legal concurrence. The authoritydelegated under this section shall beexercised only upon concurrentcertification by the General Counsel or,where confirmed in writing by theGeneral Counsel, by his or her designee,that the action taken is not inconsistentwith section 8(g) of the FDI Act (12U.S.C. 1818(g)) and the order is

enforceable in a United States DistrictCourt pursuant to sections 8(i) and 8(j)of the FDI Act (12 U.S.C. 1818(i) and (j)).

§ 303.267 Termination of insured statusunder section 8(p) of the FDI Act (12 U.S.C.1818(p)).

(a) General. Authority is delegated tothe Executive Secretary to issue consentorders terminating the insured status ofinsured depository institutions thathave ceased to engage in the business ofreceiving deposits other than trust fundspursuant to section 8(p) of the FDI Act(12 U.S.C. 1818(p)).

(b) DOS and legal concurrence. Theauthority delegated under this sectionshall be exercised only upon therecommendation and concurrence of theDirector or Deputy Director (DOS) or,when confirmed in writing by theDirector, an associate director, and uponthe certification of the General Counselor, where confirmed in writing by theGeneral Counsel, by his or her designee,that the action taken is not inconsistentwith section 8(p) of the FDI Act (12U.S.C. 1818(p)).

§ 303.268 Termination of insured statusunder section 8(q) of the FDI Act (12 U.S.C.1818(q)).

(a) General. Authority is delegated tothe Executive Secretary to issue consentorders terminating the insured status ofan insured depository institution wherethe liabilities of the insured institutionfor deposits shall have been assumed byanother insured depository institutionor depository institutions, whether byway of merger, consolidation, or otherstatutory assumption, or pursuant tocontract, pursuant to section 8(q) of theFDI Act (12 U.S.C. 1818(q)).

(b) DOS and legal concurrence. Theauthority delegated under this sectionshall be exercised only upon therecommendation and concurrence of theDirector or Deputy Director (DOS) or,when confirmed in writing by theDirector, an associate director, and uponthe certification of the General Counselor, where confirmed in writing by theGeneral Counsel, by his or her designee,that the action taken is not inconsistentwith section 8(q) of the FDI Act (12U.S.C. 1818(q)).

§ 303.269 Civil money penalties.

(a) General. Except as providedotherwise in this section, authority isdelegated to the Director and DeputyDirector (DOS), to the Director andDeputy Director (DCA), and whereconfirmed in writing by the appropriateDirector, to an associate director, toissue:

(1) Notice of assessment of civilmoney penalties; and


(2) Final orders to pay (with orwithout a prior notice of assessment ofcivil money penalty) where the insureddepository institution or institution-affiliated party consents to the issuanceof the order to pay and waives, asapplicable, receipt of a notice ofassessment of civil money penalty andthe right to an administrative hearing.

(b) Legal concurrence. The authoritydelegated under paragraph (a) of thissection shall be exercised only uponconcurrent certification by the GeneralCounsel or, where confirmed in writingby the General Counsel, by his or herdesignee, that the allegations containedin the notice of assessment, if proven,constitute a basis for assessment of civilmoney penalties, or that the stipulatedfinal order to pay is authorized underthe FDI Act, and upon its effective date,shall be an order to pay which hasbecome final for purposes ofenforcement pursuant to the FDI Act.

(c) Joint DOS–DCA action. TheDirector (DOS) and the Director (DCA)may issue joint notices pursuant toparagraph (a) of this section where suchnotice addresses both safety andsoundness and consumer compliancematters. A joint notice will require thesignatures of both Directors or theirDeputy Directors or associate directors.

(d) Required reports. (1) Authority isdelegated to the General Counsel or hisor her designee for the levying andenforcement of civil money penaltiesunder:

(i) Section 7(a)(1) of the FDI Act (12U.S.C. 1817(a)(1)) for the late,inaccurate, false or misleading filing ofReports of Condition and Reports ofIncome;

(ii) Section 8(i) of the FDI Act (12U.S.C. 1818(i)) for the late, inaccurate,false or misleading filing of HomeMortgage Disclosure Act (HMDA)reports;

(iii) Section 8(i) of the FDI Act (12U.S.C. 1818(i)) for the late, inaccurate,false or misleading filing of CommunityReinvestment Act (CRA) loan datareports; and

(iv) Such other reports as the Board ofDirectors may require.

(2) In the exercise of this delegatedauthority, the General Counsel or his orher designee shall consult with theappropriate Director, Deputy Director,or associate director before imposingany penalty.

§ 303.270 Notices of assessment undersection 5(e) of the FDI Act (12 U.S.C.1815(e)).

(a) General. Authority is delegated tothe Director and Deputy Director (DOS),and where confirmed in writing by theDirector, to an associate director, to

issue notices of assessment of liability tocommonly controlled insureddepository institutions for the estimatedamount of loss to the deposit insurancefunds.

(b) Legal concurrence. The authoritydelegated under this section shall beexercised only upon concurrentcertification by the General Counsel or,where confirmed in writing by theGeneral Counsel, by his or her designee,that the action taken is not inconsistentwith section 5(e) of the FDI Act (12U.S.C. 1815(e)).

§ 303.271 Prompt corrective actiondirectives and capital plans under section38 of the FDI Act (12 U.S.C. 1831o) and part325 of this chapter.

(a) General—Notices, directives andorders. Authority is delegated to theDirector and Deputy Director (DOS), andwhere confirmed in writing by theDirector, to an associate director, or tothe appropriate regional director ordeputy regional director, to accept,reject, require new or revised capitalrestoration plans, or make any otherdeterminations with respect to theimplementation of capital restorationplans and, in accordance with subpart Qof part 308 of this chapter, to issue:

(1) Notices of intent to issue capitaldirectives;

(2) Directives to insured statenonmember banks that fail to maintaincapital in accordance with therequirements contained in part 325 ofthis chapter;

(3) Notices of intent to issue promptcorrective action directives, exceptdirectives issued pursuant to section38(f)(2)(F)(ii) of the FDI Act (12 U.S.C.1831(f)(2)(F)(ii));

(4) Directives to insured depositoryinstitutions pursuant to section 38 of theFDI Act (12 U.S.C. 1831o), with orwithout the consent of the respondentbank to the issuance of the directive,except directives issued pursuant tosection 38(f)(2)(F)(ii) of the FDI Act (12U.S.C. 1831o(f)(2)(F)(ii));

(5) Directives to insured depositoryinstitutions requiring immediate actionor imposing proscriptions pursuant tosection 38 of the FDI Act (12 U.S.C.1831o) and part 325 of this chapter, andin accordance with the requirementscontained in § 308.201(a)(2) of thischapter;

(6) Notices of intent to reclassifyinsured banks pursuant to §§ 325.103(d)and 308.202 of this chapter;

(7) Directives to reclassify insuredbanks pursuant to §§ 325.103(d) and308.202 of this chapter with the consentof the respondent bank to the issuanceof the directive; and

(8) Orders on request for informalhearings to reconsider reclassifications

and designate the presiding officer atthe hearing pursuant to § 308.202 of thischapter.

(b) Notices—Dismissal of director andofficer. Authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director, to:

(1) Issue notices of intent to issue aprompt corrective action directiveordering the dismissal from office of adirector or senior executive officerpursuant to section 38(f)(2)(F)(ii) of theFDI Act (12 U.S.C. 1831o(f)(2)(F)(ii)) andin accordance with the requirementscontained in § 308.203 of this chapter;

(2) Issue directives ordering thedismissal from office of a director orsenior executive officer pursuant tosection 38(f)(2)(F)(ii) of the FDI Act (12U.S.C. 1831o(f)(2)(F)(ii)); and

(3) Issue orders of dismissal fromoffice of a director or senior executiveofficer pursuant to section 38(f)(2)(F)(ii)of the FDI Act (12 U.S.C.1831o(f)(2)(F)(ii)) where the individualconsents to the issuance of such orderprior to the filing of a recommendationby the presiding officer with the FDIC.

(c) Reclassification of institution otherthan on basis of capital. Authority isdelegated to the Director and DeputyDirector (DOS), and where confirmed inwriting by the Director, to an associatedirector, to:

(1) Act on recommended decisions ofpresiding officers pursuant to a requestfor reconsideration of a reclassificationin accordance with the requirementscontained in § 308.202 of this chapter;and

(2) Act on requests for rescission of areclassification.

(d) Appeals of immediately effectivePCA directives. Authority is delegated tothe Director and Deputy Director (DOS),and where confirmed in writing by theDirector, to an associate director, to acton appeals from immediately effectivedirectives issued pursuant to section 38of the FDI Act (12 U.S.C. 1831o) and§ 308.201 of this chapter.

(e) Informal hearings. Authority isdelegated to the Executive Secretary ofthe FDIC to issue orders for informalhearings and designate presidingofficers on directives issued pursuant tosection 38(f)(2)(F)(ii) of the FDI Act (12U.S.C. 1831o(f)(2)(F)(ii)).

(f) Legal concurrence. The authoritydelegated under this section shall beexercised only upon the concurrentcertification by the General Counsel or,where confirmed in writing by theGeneral Counsel, by his or her designee,or, in cases where a regional director ordeputy regional director issues a notice,directive, or order, by the appropriateregional counsel, that the action taken is


not inconsistent with section 38 of theFDI Act (12 U.S.C. 1831o) and part 325of this chapter.

§ 303.272 Investigations under section10(c) of the FDI Act (12 U.S.C. 1820(c)).

(a) Authority of division directors.Authority is delegated to the Directorand Deputy Director (DOS), to theDirector and Deputy Director (DCA), tothe Director and Deputy Director of theDivision of Resolutions andReceiverships, and where confirmed inwriting by the appropriate Director, toan associate director, or to theappropriate regional director anddeputy regional director, to issue anorder of investigation pursuant tosection 10(c) of the FDI Act (12 U.S.C.1820(c)) and subpart K of part 308 ofthis chapter (12 CFR 308.144 through308.150).

(b) Authority of General Counsel.Authority is delegated to the GeneralCounsel, and where confirmed inwriting by the General Counsel, to hisor her designee, to issue an order ofinvestigation pursuant to sections 8through 13 of the FDI Act (12 U.S.C.1818–1823), as appropriate, and subpartK of part 308 of this chapter (12 CFR308.144 through 308.150).

(c) Concurrence in certain situations.In issuing an order of investigation thatpertains to an open insured depositoryinstitution or an institution makingapplication to become an insureddepository institution, or a post-conservatorship or post-receivershiporder of investigation, the authoritydelegated under this section shall beexercised only upon the concurrentexecution of the order of investigationby the Director or Deputy Director(DOS), or the Director or DeputyDirector (DCA), or the Director orDeputy Director of the Division ofResolutions and Receiverships, theirrespective associate directors, and theGeneral Counsel or his or her designee.In the case of a joint order ofinvestigation, such authority shall beexercised only upon the concurrentexecution of the order of investigationby both Directors or Deputy Directors, ortheir associate directors, and upon thecertification and execution of the orderby the General Counsel or his or herdesignee.

§ 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 writingby the appropriate Director, to anassociate director, to accept, deny orenter into negotiations for or regardingsettlement and settlement offers with

insured depository institutions, or withan institution-affiliated party, pertainingto or arising in connection with aproceeding under part 308 of thischapter. In cases where a proceedingunder part 308 of this chapter wasissued jointly by DOS and DCA, bothDirectors or Deputy Directors, or theirassociate directors, must agree to accept,deny or enter into negotiationsregarding settlement and settlementoffers with insured depositoryinstitutions or with an institution-affiliated party.

(b) Legal concurrence. The authoritydelegated under this section shall beexercised only upon concurrentcertification by the General Counsel or,where confirmed in writing by theGeneral Counsel, by his or her designee,that the action taken is not inconsistentwith the FDI Act.

§ 303.274 Acceptance of writtenagreements.

(a) Written agreements under section8(a) of the FDI Act. Authority isdelegated to the Director and DeputyDirector (DOS), and where confirmed inwriting by the Director, to an associatedirector, to accept or enter into anywritten agreements with insureddepository institutions, or anyinstitution-affiliated party pertaining toany matter which may be addressed bythe FDIC pursuant to section 8(a) of theFDI Act (12 U.S.C. 1818(a)).

(b) Written agreements in lieu ofcease-and-desist orders. Authority isdelegated to the Director and DeputyDirector (DOS) and to the Director andDeputy Director (DCA), and whereconfirmed in writing by the appropriateDirector, to an associate director, toaccept or enter into any writtenagreements with insured depositoryinstitutions, or any institution-affiliatedparty pertaining to any safety andsoundness or consumer compliancematter which may be addressed by theFDIC pursuant to section 8(b) of the FDIAct (12 U.S.C. 1818(b)) or any otherprovision of the FDI Act whichaddresses safety and soundness orconsumer compliance matters. In caseswhich would address both safety andsoundness and consumer compliancematters, the Directors, or theirdesignees, may accept or enter into jointwritten agreements with insureddepository institutions or anyinstitution-affiliated party.

(c) Written agreements as conditionsattendant to FDIC filings contained inthis part. Authority is delegated to theDirector and Deputy Director (DOS), andto the Director and Deputy Director(DCA) and, where confirmed in writingby the appropriate Director, to an

associate director, or to the appropriateregional director or deputy regionaldirector, to accept or enter into anywritten agreements with insureddepository institutions, any institution-affiliated party or any other petitionerwhich contains conditions precedent tothe FDIC’s non-objection to a filingpursuant to this part.

(d) Legal concurrence. The authoritydelegated under this section shall beexercised only upon concurrentcertification by the General Counsel or,where confirmed in writing by theGeneral Counsel, by his or her designee,that the action taken is not inconsistentwith the FDI Act.

§ 303.275 Modifications and terminationsof enforcement actions and orders.

(a) Termination of section 8(a) (12U.S.C. 1818(a)) orders and agreements.Authority is delegated to the Directorand Deputy Director (DOS) and, whereconfirmed in writing by the Director, toan associate director, or to theappropriate regional director or deputyregional director, to terminateoutstanding section 8(a) orders andagreements and to terminate actions andagreements which are pending pursuantto section 8(a) of the FDI Act when thedepository institution is closed by afederal or state authority or merges intoanother institution.

(b) Termination of section 8(a) (12U.S.C. 1818(a)) notification to primaryregulator issued by Board of Directors.Authority is delegated to the Directorand Deputy Director (DOS), and whereconfirmed in writing by the Director, toan associate director, or to theappropriate regional director or deputyregional director, to terminatenotifications to primary regulator issuedby the Board of Directors pursuant tosection 8(a) of the FDI Act where therespondent depository institution is inmaterial compliance with suchnotification or for good cause shown.

(c) Termination of section 8(a) (12U.S.C. 1818(a)) notice of intent toterminate insured status. In cases wherethe Board of Directors has issued anotice of intent to terminate insuredstatus pursuant to section 8(a) of the FDIAct, authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director, or tothe appropriate regional director ordeputy regional director, to terminatethe actions pending pursuant to suchnotice of intent to terminate insuredstatus where the respondent depositoryinstitution is in material compliancewith the applicable notification toprimary regulator or for good causeshown.


(d) Sections 8(b) and 8(c)(12 U.S.C.1818(b) and (c)) actions and orders. (1)Authority is delegated to the Directorand Deputy Director (DOS) and to theDirector and Deputy Director (DCA), asappropriate and, where confirmed inwriting by the appropriate Director, toan associate director, or to theappropriate regional director or deputyregional director, to terminateoutstanding section 8(b) and section 8(c)orders and agreements and to terminateactions and agreements which arepending pursuant to sections 8(b) and8(c) of the FDI Act when the depositoryinstitution is closed by a federal or stateauthority or merges into anotherinstitution. In cases where a joint orderwas issued by DOS and DCA, bothDirectors, or their Deputy Directors orassociate directors, or the appropriateregional directors or deputy regionaldirectors, must execute the order oftermination.

(2) Authority is delegated to theDirector and Deputy Director (DOS) andto the Director and Deputy Director(DCA), as appropriate, and whereconfirmed in writing by the appropriateDirector, to an associate director, or tothe appropriate regional director ordeputy regional director, to terminateoutstanding section 8(b) orders issuedby the Board of Directors either wherematerial compliance with the section8(b) order has been achieved by therespondent depository institution orindividual respondent or for good causeshown. In cases where an order issuedby the Board of Directors addresses bothsafety and soundness and consumercompliance matters, both Directors orDeputy Director, or the designees of theDirectors, must execute the order oftermination.

(e) Modification and termination ofsection 8(e) (12 U.S.C. 1818(e)) ordersand actions. Authority is delegated tothe Director and Deputy Director (DOS)and the Director and Deputy Director(DCA), as appropriate, and whereconfirmed in writing by the appropriateDirector, to an associate director, tomodify or terminate outstanding section8(e) orders and pending actions and togrant consent under section 8(e)(7)(B) ofthe Act (12 U.S.C. 1818(e)(7)(B)) for themodification or termination of anoutstanding section 8(e) order issued byanother Federal financial institutionregulatory agency where:

(1) The respondent has demonstratedhis or her fitness to participate in anymanner in the conduct of the affairs ofan insured depository institution;

(2) The respondent has shown that hisor her participation would not pose arisk to the institution’s safety andsoundness; or

(3) The respondent has proven thathis or her participation would not erodepublic confidence in the institution.

(f) Modification and termination ofsection 8(g) (12 U.S.C. 1818(g)) ordersand actions. Pursuant to section 8(j) ofthe FDI Act (12 U.S.C. 1818(j)),authority is delegated to the Directorand Deputy Director (DOS) and theDirector and Deputy Director (DCA), asappropriate, and where confirmed inwriting by the appropriate Director, toan associate director, to approverequests for modifications orterminations of section 8(g) ordersissued by either the Board of Directorsor under delegated authority.

(g) Other matters not specificallyaddressed. For all outstanding orpending notices, actions, orders,directives and agreements notspecifically addressed in this subpart,the delegations of authority contained inthis subpart shall include the authorityto modify or terminate any outstandingor pending notice, order, directive oragreement issued pursuant to delegatedauthority, as may be appropriate.

(h) Termination of pending actions—general. Any pending enforcementaction may be dismissed or terminatedby the Director or Deputy Director ofDOS or DCA, as appropriate, at any timeprior to the commencement of a hearingon the merits by an administrative lawjudge. Once a hearing on the merits hasbeen convened by an administrative lawjudge, a pending enforcement actionmay be dismissed or terminated bystipulation or consent of the affectedparties no later than 14 days after theadministrative law judge has closed therecord of the hearing. Only the FDICBoard of Directors may terminate ordismiss an enforcement action morethan 14 days after the record has beenclosed by an administrative law judge.

(i) Legal concurrence. Any dismissals,modifications or terminations pursuantto this section shall be exercised onlyupon concurrent certification by theGeneral Counsel or, where confirmed inwriting by the General Counsel, by hisor her designee, or, in cases where aregional director or deputy regionaldirector acts under delegated authority,by the appropriate regional counsel, thatthe action taken is not inconsistent withthe FDI Act.

§ 303.276 Enforcement of outstandingenforcement orders.

After consultation with the Director(DOS) or the Director (DCA), or aDeputy Director or an associate director,or the appropriate regional director ordeputy regional director, as may beappropriate, the General Counsel ordesignee is authorized to initiate and

prosecute any action to enforce anyeffective and outstanding order ortemporary order issued under 12 U.S.C.1817, 1818, 1820, 1828, 1829, 1831l,1831o, 1972, or 3909, or any provisionthereof, in the appropriate United StatesDistrict Court.

§ 303.277 Compliance plans under section39 of the FDI Act (12 U.S.C. 1831p–1)(standards for safety and soundness) andpart 308 of this chapter.

(a) Compliance plans. Authority isdelegated to the Director and DeputyDirector (DOS), and where confirmed inwriting by the Director, to an associatedirector, or to the appropriate regionaldirector or deputy regional director, toaccept, to reject, to require new orrevised compliance plans, or to makeany other determinations with respect tothe implementation of compliance planspursuant to subpart R of part 308 of thischapter.

(b) Notices, orders, and other action.Authority is delegated to the Directorand Deputy Director (DOS) and, whereconfirmed in writing by the Director, toan associate director, to:

(1) Issue notices of intent to issue anorder requiring the bank to correct asafety and soundness deficiency or totake or refrain from taking other actionspursuant to section 39 of the FDI Act (12U.S.C. 1831p-1) and in accordance withthe requirements contained in§ 308.304(a)(1) of this chapter;

(2) Issue an order requiring the bankimmediately to correct a safety andsoundness deficiency or to take orrefrain from taking other actionspursuant to section 39 of the FDI Act (12U.S.C. 1831p–1) and in accordance withthe requirements contained in§ 308.304(a)(2) of this chapter; and

(3) Act on requests for modification orrescission of an order.

(c) Legal concurrence—complianceplans. The authority delegated underthis section as to compliance plans shallbe exercised only upon the concurrentcertification by the General Counsel or,where confirmed in writing by theGeneral Counsel, by his or her designee,or, in cases where a regional director ordeputy regional director accepts, rejectsor requires new or revised complianceplans or makes any otherdeterminations with respect tocompliance plans, by the appropriateregional counsel, that the action taken isnot inconsistent with the FDI Act.

(d) Legal concurrence—notices andorders. The authority delegated underthis section as to notices and ordersshall be exercised only upon theconcurrent certification by the GeneralCounsel or, where confirmed in writingby the General Counsel, by his or her


designee that the allegations containedin the notice of intent, if proven,constitute a basis for the issuance of afinal order pursuant to section 39 of theFDI Act or that the issuance of a finalorder is not inconsistent with section 39of the FDI Act or that the stipulatedsection 39 order is not inconsistent withsection 39 of the FDI Act and is an orderwhich has become final for purposes ofenforcement pursuant to the FDI Act.

§ 303.278 Enforcement matters whereauthority is not delegated.

Without limiting the Board ofDirectors’ authority, the Board ofDirectors has retained the authority toact upon the following enforcementmatters:

(a) Notifications to primary regulatorunder section 8(a) of the FDI Act (12U.S.C. 1818(a)) when the respondentbank’s book capital is at or above 2percent of total assets and adjusted Tier1 capital is at or above 2 percent ofadjusted part 325 total assets as definedin § 303.2(b) of this part;

(b) Orders terminating insured statusunder section 8(a) of the FDI Act (12U.S.C. 1818(a));

(c) Cease-and-desist orders undersection 8(b) of the FDI Act (12 U.S.C.1818(b)) when the respondentdepository institution or individualdoes not consent to the issuance of suchorders;

(d) Temporary orders of suspensionand prohibition under section 8(e) of theFDI Act (12 U.S.C. 1818(e));

(e) Orders of removal, suspension orprohibition from participation in theconduct of the affairs of an insureddepository institution under section 8(e)of the FDI Act (12 U.S.C. 1818(e)) whenthe individual does not consent to theissuance of such orders;

(f) Orders of suspension orprohibition to an indicted director,officer or person participating in theconduct of the affairs of an insureddepository institution and orders ofremoval or prohibition to a convicteddirector, officer or person participatingin the conduct of the affairs of aninsured depository institution undersection 8(g) of the FDI Act (12 U.S.C.1818(g)) when such director, officer orperson does not consent to thesuspension or removal;

(g) Final orders to pay civil moneypenalties where respondents do notconsent to the assessment of civilmoney penalties and hearings have beenheld;

(h) Denials of requests formodifications or terminations of ordersissued pursuant to section 8(g) of theFDI Act;

(i) Grants or denials of requests forreinstatement to office, whether or notan informal hearing has been requested,pursuant to § 308.203 of this chapter;and

(j) Grants or denials of requests forwaivers of liability of commonlycontrolled insured depositoryinstitutions as to assessments undersection 5(e) of the FDI Act (12 U.S.C.1815(e)).

PART 337—UNSAFE AND UNSOUNDBANKING PRACTICES

2. The authority citation for part 337is 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 byrevising paragraph (a)(5)(iii), adding asentence at the end of paragraph (c),removing paragraphs (d) and (e), andredesignating paragraphs (g) and (h) as(d) and (e), respectively, to read asfollows:

§ 337.6 Brokered deposits.(a) * * *(5) * * *(iii) Notwithstanding paragraph

(a)(5)(ii) of this section, the term depositbroker includes any insured depositoryinstitution that is not well capitalized,and any employee of any such insureddepository institution, which engages,directly or indirectly, in the solicitationof deposits by offering rates of interest(with respect to such deposits) whichare significantly higher than theprevailing rates of interest on depositsoffered by other insured depositoryinstitutions in such depositoryinstitution’s normal market area.* * * * *

(c) * * * For filing requirements,consult 12 CFR 303.243.* * * * *

PART 341—REGISTRATION OFTRANSFER AGENTS

4. The authority citation for part 341continues 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 asfollows:

§ 341.7 Delegation of authority.(a) Except as provided in paragraph

(b) of this section, authority is delegatedto the Director and Deputy Director(DOS) and, where confirmed in writingby the Director, to an associate directorand appropriate regional director anddeputy regional director, to act on

disclosure matters under and pursuantto sections 17 and 17A of the SecuritiesExchange Act of 1934 (15 U.S.C. 78).

(b) Authority to act on disclosurematters is retained by the Board ofDirectors when such matters involveexemption from registrationrequirements pursuant to section17A(c)(1) of the Securities Exchange Actof 1934 (15 U.S.C. 78q–1(c)(1)).

PART 346—FOREIGN BANKS


Authority: 12 U.S.C. 1813, 1815, 1817,1819, 1820, 3103, 3104, 3105, 3108.

7. Section 346.19 of subpart C isamended by adding a new paragraph(e)(14) to read as follows:

§ 346.19 Pledge of assets.

* * * * *(e) * * *(14) Delegation of authority. (i)

Authority is delegated to the Directorand Deputy Director of the Division ofSupervision and, where confirmed inwriting by the Director, to an associatedirector and the appropriate regionaldirector and deputy regional director ofthe region in which the insured branchis located, to enter into pledgeagreements with foreign banks anddepositories under this section. Thisauthority also shall extend to the powerto revoke such approval and require thedismissal of the depository.

(ii) Authority is delegated to theGeneral Counsel or designee to modifythe terms of the model depositagreement used under this section.* * * * *

PART 348—MANAGEMENT OFFICIALINTERLOCKS


Authority: 12 U.S.C. 3207, 12 U.S.C.1823(k).

9. Section 348.9 is added to read asfollows:

§ 348.9 Delegation of authority.(a) Authority is delegated to the

Director and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director andappropriate regional director anddeputy regional director, to approve ordeny requests to establish managementofficial interlocks pursuant to § 348.6 orsection 205(8) of the DepositoryInstitutions Management Interlocks Act(except that a regional director ordeputy regional director may deny sucha request only if the request was madepursuant to 348.6(b)(4)); and


(b) Authority is delegated to theDirector and Deputy Director (DOS) and,where confirmed in writing by theDirector, to an associate director to denya request to establish a managementofficial interlock pursuant to anyprovision of either § 348.6 or section205(8) of the Depository InstitutionsManagement Interlocks Act.

PART 359—GOLDEN PARACHUTEAND INDEMNIFICATION PAYMENTS


Authority: 12 U.S.C. 1828(k).

11. Section 359.6 is revised to read asfollows:

§ 359.6 Filing instructions.Requests to make excess

nondiscriminatory severance plan

payments pursuant to § 359.1(f)(2)(v)and golden parachute paymentspermitted by § 359.4 shall be submittedin writing to the appropriate regionaldirector (DOS). For filing requirements,consult 12 CFR 303.244. In the eventthat the consent of the institution’sprimary federal regulator is required inaddition to that of the FDIC, therequesting party shall submit a copy ofits letter to the FDIC to the institution’sprimary federal regulator. In the case ofnational banks, such written requestsshall be submitted to the OCC. In thecase of state member banks and bankholding companies, such writtenrequests shall be submitted to theFederal Reserve district bank where theinstitution or holding company,respectively, is located. In the case ofsavings associations and savings

association holding companies, suchwritten requests shall be submitted tothe OTS regional office where theinstitution or holding company,respectively, is located. In cases whereonly the prior consent of theinstitution’s primary federal regulator isrequired and that agency is not theFDIC, a written request satisfying therequirements of this section shall besubmitted to the primary federalregulator as described in this section.

By order of the Board of Directors.

Dated at Washington, DC., this 23rd day ofSeptember, 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

Federal Deposit Insurance Corporation

Documents