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| ## Comptroller of the Currency                                        |
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| > Administrator of National Banks                                     |
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Washington, DC 20219

November 16, 2004 **Conditional Approval #664**

#### December 2004

Cary Davis

Executive Vice President

FSGBank, N.A.

P.O. Box 1885

Athens, TN 37371-1885

Re: Application of FSGBank N.A. to establish two branches;

Control Numbers 2004-SO-05-0284 & 2004-SO-05-0285

Dear Mr. Davis:

This is to inform you that on November 16, 2004 the Office of the
Comptroller of the Currency (OCC) conditionally approved the proposal of
FSGBank, N.A., Chattanooga, Tennessee (Bank), to establish and operate
two branch offices under the name of Primer Banco Seguro, una division
de FSGBank, N.A. ("PBS branches"). [^1] The branches will be located in
Dalton, Georgia at 1249 Murray Avenue and 430 Fields Avenue.

The PBS branches will primarily market services to individuals who do
not have a relationship with a bank and who would benefit from access to
a Spanish speaking staff. PBS branches will offer services that include
check cashing, electronic demand deposit accounts, limited checking and
savings accounts, money orders, bill payment, wire transfers, notary,
Individual Tax Identification Number issuance, financial education, and
access to the Internet at in-branch computers. PBS branches will also
act as finder for providing phone cards, accidental death and
dismemberment insurance products, and tax anticipation loans. Credit
products at PBS branches will initially be limited to 7/1 Adjustable
Rate Mortgages and automobile loans.

This conditional approval is granted based on a thorough review of all
information available, including commitments and representations made in
the application and by the Bank's representatives. The representations
made by FSGBank, NA, include but are not limited to the following:

-   All Spanish language advertising undertaken by PBS branches will
    conform to the Unfair and Deceptive Practices Act by not misleading
    customers into believing that the services offered at PBS branches
    are as affordable as the services provided at other branches of
    FSGBank;

-   PBS branches will not offer or make any products with fees and rate
    levels that would reach HOEPA triggers or any offering of consumer
    loans that would be considered "predatory;"

-   PBS branches will conduct finder activities in a manner consistent
    with the provisions of 12 C.F.R. §7.1002; and

-   PBS branches will make bank-owned computers with Internet access
    available to its customers at PBS branches without charge. Thus, the
    Bank will not sell Internet access services. The proposed free
    service is permissible as a promotional activity. The OCC notes that
    offering Internet services on shared computers that are available to
    the public creates special risks. Accordingly, the OCC expects the
    Bank to put in place controls to prevent inappropriate access to
    information, including confidential information of the computer user
    and bank customers.[^2] The OCC also expects the Bank to effectively
    isolate these public-access computers from internal bank systems,
    and to detect and prevent inappropriate communications to and from
    these computers.

The approval is subject to the following condition: Prior to offering
credit products at the PBS branches, FSGBank must request and receive no
objection from the OCC's Nashville Assistant Deputy Comptroller. This
condition does not apply to the 7/1 adjustable rate mortgage or auto
installment loans as presented in the Bank's application for the PBS
branches.

Please be advised that the condition of this approval is deemed to be a
condition "imposed in writing by the agency in connection with the
granting of any application or other request" within the meaning of 12
U.S.C. §1818, and, as such, may be enforced in proceedings under 12
U.S.C. §1818.

If the branches are not opened within 18 months from this date, the
conditional approval automatically terminates unless the OCC grants an
extension.

Within 10 days after opening, the Bank must advise this office of each
branch\'s opening date, so the OCC may complete its records. Reference
the CAIS control number in your letter.

If a branch is closed, a 90-day advance notice of proposed branch
closing must be submitted to the OCC pursuant to 12 U.S.C. §1831r-1.
Following the closing of the branch office, a final closing notice
should be submitted to this office.

This conditional approval decision, and the activities and
communications by OCC employees in connection with the filing, do not
constitute a contract, express or implied, or any other obligation
binding upon the OCC, the U.S., any agency or entity of the U.S., or any
officer or employee of the U.S., and do not affect the ability of the
OCC to exercise its supervisory, regulatory and examination authorities
under applicable law and regulations. The foregoing may not be waived or
modified by any employee or agent of the OCC or the U.S.

If you have any questions with regard to this letter, please contact
Licensing Manager Karen Bryant at 214-720-7052 or me at 202-874-5060.

Sincerely,

/s/ J. Greg Parvin

J. Greg Parvin

National Bank Examiner/Sr. Licensing Analyst

cc: Official File

[^1]: The activities of the PBS branches will be nearly identical to
    those operated by National Bank of Commerce upon its acquisition of
    two El Banco Branches from Flag Bank. See OCC's Conditional Approval
    #612, December 2003, *Interpretations and Actions*.

[^2]: For example, one retail firm that offered a similar service
    discovered that fraudsters had loaded "sniffer" or keystroke logging
    programs on the shared public computers that enabled the fraudsters
    to intercept user passwords and user login IDs that they could then
    use to engage in unauthorized transactions. The bank should take
    reasonable steps to prevent this and also ensure that these
    public-access computers do not store confidential customer
    information in, for example, uncleared cache files.