[Federal Register Volume 62, Number 196 (Thursday, October 9, 1997)]
[Proposed Rules]
[Pages 52810-52868]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26235]



[[Page 52809]]

_______________________________________________________________________

Part II





Federal Deposit Insurance Corporation





_______________________________________________________________________



12 CFR Parts 303, 337, et al.



Practice and Procedure: Golden Parachute and Indemnification Payments; 
Proposed Rule



Deposit Insurance Applications; Notice



Bank Merger Transactions; Notice



Domestic Branch Establishment Applications; Notice



Main Office or Branch Relocation Applications; Notice



Liability of Commonly Controlled Depository Institutions; Notice

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

[[Page 52810]]



FEDERAL DEPOSIT INSURANCE CORPORATION

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

RIN 3064-AC02


Applications, Requests, Submittals, Delegations of Authority, and 
Notices Required To Be Filed by Statute or Regulation; Unsafe and 
Unsound Banking Practices; Registration of Transfer Agents; Foreign 
Banks; Management Official Interlocks; Golden Parachute and 
Indemnification Payments

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Proposed rule.

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SUMMARY: The FDIC is proposing to amend its regulations governing 
application, notice and request procedures and delegations of authority 
by streamlining, modernizing and clarifying current policies and 
practices. Specifically, the FDIC proposes to offer qualifying well-
capitalized and well-managed insured depository institutions and their 
holding companies expedited review procedures for several major types 
of filings, including deposit insurance, merger and branch 
applications. The agency also proposes to centralize substantially all 
filing procedures found throughout its rules within the regulation for 
ease of reference. Furthermore, the FDIC proposes to reorganize the 
requirements for each major application or notice type into a separate 
regulatory subpart that will contain all information necessary to 
submit a filing to the agency, as well as any relevant internal agency 
delegations of authority to approve or deny submissions. In addition, 
the agency is incorporating statutory changes to its application 
procedures made by the Economic Growth and Regulatory Paperwork 
Reduction Act of 1996. Finally, the FDIC is proposing technical 
amendments to related regulations to conform these changes.
    This action is being taken in accordance with section 303(a) of the 
Riegle Community Development and Regulatory Improvement Act of 1994 
which requires the federal banking agencies to review and streamline 
their regulations and policies in order to improve efficiency, reduce 
unnecessary costs, eliminate unwarranted constraints on credit 
availability, and remove inconsistencies and outmoded and duplicative 
requirements.
    The proposal seeks to reduce burden on insured depository 
institutions by imposing regulatory requirements only where needed to 
address safety and soundness concerns or accomplish other statutory 
responsibilities of the FDIC. The proposed rule also strives to more 
closely align the FDIC's application processing regulations with those 
of the other federal banking agencies.

DATES: Comments must be received by January 7, 1998.

ADDRESSES: Send written comments to Robert E. Feldman, Executive 
Secretary, Attention: Comments/OES, Federal Deposit Insurance 
Corporation, 550 17th Street, NW., Washington, DC 20429. Comments may 
be hand-delivered to the guard station at the rear of the 17th Street 
building (located on F Street), on business days between 7 a.m. and 5 
p.m. (Fax number (202) 898-3838; Internet address: <a href="/cdn-cgi/l/email-protection#c6a5a9ababa3a8b2b586a0a2afa5e8a1a9b0"><span class="__cf_email__" data-cfemail="94f7fbf9f9f1fae0e7d4f2f0fdf7baf3fbe2">[email protected]</span></a>). 
Comments may be inspected and photocopied in the FDIC Public 
Information Center, Room 100, 801 17th Street, NW., Washington, DC 
20429, between 9 a.m. and 4:30 p.m. on business 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 Consumer Affairs: Steven D. 
Fritts, Associate Director, (202) 942-3454, and Louise N. Kotoshirodo, 
Review Examiner, (202) 942-3599. Legal Division: Susan van den Toorn, 
Counsel, Regulation and Legislation Section, (202) 898-8707, and Nancy 
Schucker Recchia, Counsel, Regulation and Legislation Section, (202) 
898-8885. For administrative enforcement issues: Grovetta N. Gardineer, 
Counsel, Compliance and Enforcement Section, (202) 736-0665, and Philip 
P. Houle, Counsel, Compliance and Enforcement Section, (202) 736-0758. 
For foreign bank activities (Subpart J): Jamey G. Basham, Counsel, 
Regulation and Legislation Section, Legal Division (202) 898-7265, and 
Christie A. Sciacca, Assistant Director, Division of Supervision (202) 
898-3671, Federal Deposit Insurance Corporation, 550 17th Street, NW., 
Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

    Part 303 of the FDIC's regulations (12 CFR part 303) generally 
describes the procedures to be followed by both the FDIC and applicants 
with respect to applications, notices, or requests required to be filed 
by statute or regulation. Additional information concerning processing 
is contained in related FDIC statements of policy. Part 303 also sets 
forth delegations of authority from the FDIC's Board of Directors to 
the Directors of the Division of Supervision (DOS), the Division of 
Compliance and Consumer Affairs (DCA), the General Counsel of the Legal 
Division, the Executive Secretary, and, in some cases, their designees 
to act on certain applications, notices, requests, and enforcement 
matters.
    The FDIC is proposing comprehensive revisions to part 303 as part 
of a systematic review of its regulations and policy statements 
undertaken in accordance with section 303(a) of the Riegle Community 
Development and Regulatory Improvement Act of 1994 (CDRIA) (12 U.S.C. 
4803(a)). Section 303(a) of CDRIA requires the FDIC, the Office of the 
Comptroller of the Currency, the Board of Governors of the Federal 
Reserve System, and the Office of Thrift Supervision (federal banking 
agencies) to streamline and modify their regulations and written 
policies in order to improve efficiency, reduce unnecessary costs, and 
eliminate unwarranted constraints on credit availability. The statute 
also requires each of the federal banking agencies to remove 
inconsistencies and outmoded and duplicative requirements from their 
regulations and written policies.
    To initiate its CDRIA review, the FDIC published in the Federal 
Register a notice soliciting comment on its regulations and written 
policies. 60 FR 62345, December 6, 1995. In response to that request, 
the FDIC received four comments regarding part 303 and one comment 
concerning a related policy statement.
    One commenter wrote that electronic filing of various reports and 
documents has the potential to reduce burden arising from compliance 
with filing requirements. In particular, the commenter noted that other 
governmental agencies already have recognized the benefits of 
electronic filing and that certain application procedures, such as 
applications to establish or relocate an office and applications 
relating to mergers are well-suited for electronic filing. The FDIC is 
working the other federal banking agencies in an attempt to adopt 
uniform filing forms for common applications and to have such forms 
filed electronically where possible.
    Another commenter suggested that with regard to applications by 
insured state nonmember banks to establish a branch, move its main 
office, or relocate a branch pursuant to Sec. 303.2(c), the regulations 
should reduce the regulatory burden of setting up shared automated 
teller machines (ATMs). Applications are no longer required for ATMs 
and

[[Page 52811]]

remote service units (RSUs) as a result of section 2205 of the Economic 
Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA) (Pub. L. 
104-208, 110 Stat. 3009), which excluded ATMs and RSUs from the 
definition of a ``domestic branch'' under section 3(o) of the FDI Act 
(12 U.S.C. 1831(o)). Therefore, the definition of ``branch'' in 
proposed Sec. 303.41 excludes ATMs and RSUs.
    With regard to section 32 notices (change in director or senior 
executive officer), a commenter suggested that exceptions be carved out 
for two of the three statutory triggering events. Section 32 of the 
Federal Deposit Insurance Act (FDI Act) required prior notice from a 
depository institution or holding company that (1) was chartered less 
than two years; (2) had undergone a change in control within the 
preceding two years; or (3) was not in compliance with minimum capital 
requirements or was otherwise in ``troubled condition.'' Section 2209 
of EGRPRA subsequently amended section 32 by eliminating the prior 
notice requirement for institutions and holding companies that are 
chartered for less than two years or that have undergone a change in 
control within the preceding two years. However, institutions and 
holding companies that are not in compliance with minimum capital 
requirements or are otherwise in ``troubled condition'' remain subject 
to the prior notice requirement. As a result, this comment has been 
rendered moot.
    One commenter questioned why current Sec. 303.2(a)(4) includes a 
requirement that an application by an insured state nonmember bank to 
establish a branch, move its main office or relocate a branch contain a 
statement as to whether or not the site is included in or is eligible 
for inclusion in the National Register of Historic Places, including 
evidence that clearance has been obtained from the State Historic 
Preservation Officer (SHPO). As a federal agency, the FDIC is subject 
to the National Historic Preservation Act (NHPA) (16 U.S.C. 470 et 
seq.) which creates a mandatory review and consultation process for 
Federal undertakings that may affect properties included in or eligible 
for inclusion in the National Register of Historic Places maintained by 
the Secretary of the Interior. In order to comply with NHPA, the FDIC 
currently requests applicants to state whether the site is included in, 
or eligible for inclusion in the National Register and to provide 
evidence that clearance has been obtained from the SHPO. See 12 CFR 
Sec. 303.2(a)(4). However, the proposed filing procedures at 
Sec. 303.42(b)(5) modify the current requirements to provide that 
applicants submit a statement that clearance has been or will be 
obtained from the SHPO. In addition, the FDIC is undertaking a review 
of its statement of policy on the National Historic Preservation Act of 
1966 as part of the CDRIA review process and is exploring the 
possibility of entering into a programmatic agreement with the Advisory 
Council on Historic Preservation which would greatly streamline the 
historic preservation review process, especially for those applications 
which do not involve a historic site. The FDIC expects to issue a 
revised statement of policy on NHPA in 1998.
    Finally, the comment received on the FDIC's written policies 
concerned the statement of policy on Applications for Deposit 
Insurance. Discussion of the comment is contained in the revised 
statement of policy on Applications for Deposit Insurance published 
elsewhere in today's Federal Register.
    The proposed revisions to part 303 seek to reduce regulatory burden 
on insured depository institutions, particularly upon state nonmember 
banks supervised by the FDIC. The proposed rule also strives to more 
closely align the FDIC's application processing regulations with those 
of the other federal banking agencies. Furthermore, the proposal 
reflects changes to the FDIC's application procedures made by EGRPRA.

II. Discussion

    The proposed regulation meets the goals of section 303(a) of CDRIA 
in several important ways.
    <bullet> New expedited processing procedures have been introduced 
for six application types which represent the majority of all filings 
(applications for deposit insurance, mergers, branches, consent to 
exercise trust powers, retirement of capital, and certain foreign 
banking activities).
    During the first six months of 1997, the FDIC acted on 1615 
applications, notices and requests. Approximately 1500 or 93 percent of 
these filings were of the type for which expedited processing or notice 
procedures would be available under this proposal. Under present 
regulations, only 130 of the filings acted upon during the first six 
months of 1997 actually took the form of notices with clear time frames 
for regulatory action. In addition to reducing processing time for 
filings submitted by well managed and well capitalized banks, the 
proposed expedited procedures will add more certainty to the timing of 
regulatory decision. This new approach will allow the FDIC to focus its 
resources on applications that do not fall within the new expedited 
review procedure and are therefore more likely to present safety and 
soundness risks or raise CRA or compliance concerns.
    <bullet> The processing of some applications has been structured to 
act like notices. For example, applications to establish a branch or to 
relocate a main office or branch processed under expedited procedures 
will generally be deemed approved 21 days after receipt of a 
substantially complete application. Branch related applications 
represented more than 50 percent of all applications acted upon by the 
FDIC in the first six months of 1997.
    <bullet> Regulations and guidelines issued by the federal banking 
agencies implementing common statutes have been made more uniform. This 
is particularly true for filings regarding mergers, changes in bank 
control, and changes in director or senior executive officer.
    <bullet> Filing contents have been clarified and streamlined 
wherever practical. Examples include applications for a merger which 
qualifies as a corporate reorganization, a temporary office in an 
emergency or disaster situation, applications for deposit insurance for 
an interim institution in connection with a related merger transaction, 
and applications for continuation for deposit insurance by a state bank 
withdrawing from the Federal Reserve System.
    <bullet> The procedural requirements for virtually all applications 
and notices have been centralized in part 303. Subpart A of the 
proposed regulation contains the general rules applicable to all 
filings. Each subpart that follows contains all of the procedural 
requirements for a particular application type. For example, subpart C 
on branching contains definitions applicable to that subpart, filing 
procedures, processing procedures, public notice provisions and 
delegations of authority. Subpart M contains miscellaneous filings that 
do not merit separate subparts. Subpart N contains all administrative 
enforcement action delegations.
    <bullet> Delegations of authority from the FDIC's Board of 
Directors to the Directors of DOS, DCA, the General Counsel of the 
Legal Division, and the Executive Secretary to act on certain 
applications, notices, requests, and enforcement matters have been 
reviewed and updated.
    <bullet> Duplicative and outdated material has been deleted from 
existing part 303. An example is eliminating application procedures for 
the establishment or relocation of a remote service facility,

[[Page 52812]]

which is no longer required pursuant to section 2205 of EGRPRA.
    Concurrently with this proposal to amend part 303, the FDIC is 
publishing elsewhere in today's Federal Register two revised statements 
of policy on Applications for Deposit Insurance and Bank Merger 
Transactions for comment. The FDIC is also proposing elsewhere in 
today's Federal Register to rescind its statements of policy on 
Applications to Establish a Domestic Branch and Applications to 
Relocate Main Office or Branch, and to amend its statement of policy on 
Liability of Commonly Controlled Depository Institutions. The latter 
policy statement is being amended to move the application procedures to 
request a waiver of cross-guaranty liability from the policy statement 
to proposed part 303. It is recommended that interested parties read 
those policy statements in conjunction with the proposed regulatory 
text of part 303 and submit combined comments to the agency, if 
practicable.
    In addition, the FDIC has already rescinded the following policy 
statements related to part 303 as unnecessary or duplicative:
    <bullet> Changes in Control in Insured State Nonmember Banks (62 FR 
24927, May 7, 1997)
    <bullet> Applications, Legal Fees, and Other Expenses (62 FR 15479, 
April 1, 1997)
    <bullet> Eligibility to Make Application to Become an Insured Bank 
Under Section 5 of the Federal Deposit Insurance Act (62 FR 15706, 
April 2, 1997)
    The FDIC rescinded the first two statements of policy because any 
necessary substantive information contained in them has been moved to 
the proposed regulation or other policy statements. The third statement 
of policy was rescinded because the analysis was based on a provision 
of the FDI Act that was repealed by the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (Pub. L. 102-242, 105 Stat. 2236).

III. Proposed Rule

    The discussion below identifies and explains significant proposed 
changes to part 303. The FDIC requests general comments on all aspects 
of the proposed regulation as well as specific comments on certain 
issues as noted throughout the preamble. To aid the reader, a 
derivation table follows the preamble which relates the sections of 
proposed part 303 to current part 303, as well as other sections of the 
FDIC regulations which are being relocated to part 303.

A. Subpart A--Rules of General Applicability

    Subpart A of part 303 clarifies and simplifies the rules generally 
applicable to processing of applications, notices and requests 
(filings) required by regulation or statute by reorganizing the 
definitions and general rules of procedure currently found in 
Sec. 303.0 and Sec. 303.6, respectively, into one subpart. Subpart A 
also explains the availability of expedited processing for an 
``eligible depository institution'' (defined in proposed Sec. 303.2(r)) 
and the criteria under which the FDIC may remove a filing from 
expedited processing. Further, subpart A contains general principles 
governing delegations of authority from the Board of Directors to 
certain FDIC officials, most of which are currently contained in 
Sec. 303.10(a) and Sec. 303.11 (a) and (b).
    The availability of expedited procedures for several major types of 
filings (deposit insurance, branches, and mergers) as well as some 
other filings (for example, consent to exercise trust powers and 
reduce/retire capital stock or capital debt instruments) will reduce 
burden upon the banking industry by enabling banks and thrifts to 
undertake corporate activities more quickly. Expedited processing will 
also introduce more certainty into the application process for both 
applicants and interested parties by establishing fixed timeframes for 
decision and receipt of comment letters. Furthermore, centralizing in 
one subpart general information that was previously scattered 
throughout part 303 will make part 303 much easier to use for the 
public, bankers, attorneys and regulators.
    In addition to reorganizing existing regulatory text into one 
subpart, subpart A also updates terminology, streamlines procedures, 
and reflects current FDIC policies and practices.
    Definitions. Subpart A alphabetizes the definitions currently set 
forth in Sec. 303.0 and adds several new definitions.
    New definitions of ``applicant'' and ``filing'' were added for ease 
of drafting regulatory text and to add clarity and consistency. 
``Applicant'' is intended to replace the terms ``insured depository 
institution,'' ``state nonmember bank'' or ``individual'' where they 
appear throughout part 303. The scope section of each subpart will 
explain whether particular filing procedures are applicable to all 
insured depository institutions or only to state nonmember banks. The 
term ``filing'' is intended to provide a convenient way to collectively 
refer to applications, notices, or requests, where appropriate 
throughout part 303. New definitions were also added for 
``application'' and ``notice'' to clarify the distinctions between 
those types of filings.
    A definition of ``insider'' was added to avoid duplication in 
several subparts. The current definition of ``protest'' found in 
Sec. 303.0(b)(30) has been replaced with three terms (``comment,'' 
``adverse comment,'' and ``CRA protest'') to distinguish among the 
types of comments that DOS and DCA may receive in connection with a 
pending filing. The term ``deputy director'' has been defined to 
include deputy directors of both DOS and DCA to reflect those 
positions. Also, a definition has been added for ``General Counsel'' of 
the FDIC. Further, the various types of Section 8 enforcement orders 
have been grouped under one category ``Section 8 orders''.
    A new definition of ``eligible depository institution'' has been 
added to establish criteria that institutions must meet to qualify for 
expedited processing, as discussed below.
    Definitions of ``Associate General Counsel for Compliance and 
Enforcement,'' ``regional manager,'' and ``remote service facility'' 
are being removed as obsolete or no longer necessary.
    Expedited processing. Subpart A sets forth the general procedures 
for expedited processing, for which only an eligible depository 
institution qualifies. Proposed Sec. 303.2(r) of subpart A defines the 
term ``eligible depository institution'' as a depository institution 
that meets the following five criteria: (1) Received an FDIC-assigned 
composite Uniform Financial Institutions Rating System (UFIRS) rating 
of 1 or 2 as a result of its most recent federal or state examination; 
\1\ (2) received at least a satisfactory CRA rating from its primary 
federal regulator at its last examination; (3) received a compliance 
rating of 1 or 2 from its primary federal regulator at its last 
examination; (4) is well-capitalized; and (5) is not subject to any 
corrective or supervisory order or agreement. Although an institution 
must have a satisfactory or better CRA rating in order to qualify for 
expedited processing for any filing, the CRA performance of an 
institution will serve as a basis for decision only in connection with 
``applications for a deposit facility'' as required by section 2903(2) 
of the Community Reinvestment Act (12 U.S.C. 2903(2)). Proposed 
Sec. 303.5 sets

[[Page 52813]]

forth those relevant filings for which an institution's CRA record will 
be taken into account (deposit insurance, mergers, and establishment or 
relocation of a branch or main office, including the relocation of an 
insured branch of a foreign bank). The FDIC believes that these five 
criteria for eligibility are appropriate to ensure that only well-
capitalized, well-managed institutions that do not present any 
supervisory, compliance or CRA concerns receive expedited processing. 
The FDIC specifically requests comment on whether these standards for 
eligibility are appropriate.
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    \1\ An FDIC-assigned composite UFIRS rating may be based on the 
FDIC's own examination, or based on the review of examination 
reports prepared by state banking authorities or the other federal 
banking agencies.
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    It should be noted that the FDIC recently issued two proposed rules 
for comment which would revise and consolidate its international 
banking regulations (12 CFR part 347) and regulations governing the 
activities and investments of insured state banks and savings 
associations (12 CFR part 362). 62 FR 37748, July 16, 1997; 62 FR 
47969, Sept. 12, 1997. These proposals also contain expedited 
procedures and definitions of an ``eligible'' type of institution which 
generally parallel proposed Sec. 303.2(r) of subpart A, but add two 
additional criteria: (1) That the institution has been chartered and 
operating for at least three years; and (2) that the institution 
received a rating of 1 or 2 under the ``management'' component rating 
of the UFIRS at its most recent examination. The additional criteria 
may be appropriate in connection with the part 347 and 362 proposals to 
the extent that the eligibility criteria govern substantive issues 
beyond the question of whether an application should receive expedited 
processing. The FDIC will evaluate the necessity of the additional 
criteria in the context of parts 347 and 362 as it goes forward with 
those rulemakings.
    Under Sec. 303.11(c) of the proposed rule, expedited processing 
will be automatically given to institutions meeting the definition of 
an ``eligible depository institution'' (with a few exceptions where 
other conditions apply) upon determination by the appropriate regional 
director (DOS). Therefore, an applicant need not request expedited 
processing or even identify itself as an eligible institution. A filing 
may be removed from expedited processing pursuant to proposed 
Sec. 303.11(c)(2) if: (1) For filings subject to public notice, an 
adverse comment is received that warrants additional investigation or 
review; (2) for filings subject to evaluation of CRA performance, a CRA 
protest is received that warrants additional investigation or review, 
or the appropriate regional director (DCA) determines that the filing 
presents a significant CRA or compliance concern; (3) for any filing, 
the appropriate regional director (DOS) determines that the filing 
presents a significant supervisory concern, or raises a significant 
legal or policy issue; or (4) for any filing, the appropriate regional 
director (DOS) determines that other good cause exists for removal. If 
a filing is removed from expedited processing, the applicant will be 
promptly informed in writing of the reason. For filings which the 
appropriate regional director has not been delegated authority to 
approve, the filing will generally be removed from expedited 
processing.
    Computation of time. Previously, part 303 simply contained a cross-
reference to Sec. 308.12, which governs computation of time for 
purposes of the FDIC's rules of administrative procedure. The proposed 
rule clarifies that the FDIC uses a calendar day rule and begins 
computing the relevant period on the day after an event occurs (for 
example, the day after receipt of a filing or newspaper publication).
    Effect of CRA performance on filings. This new section clearly 
states that CRA performance will be considered in connection with 
applications to establish a domestic branch or relocate a domestic 
branch or main office, merger applications, and deposit insurance 
applications, and clarifies that CRA applies to applications to 
relocate an insured branch of a foreign bank. Although this information 
is currently contained in part 345 (Community Reinvestment Act), the 
FDIC believes that an explicit statement concerning the filings covered 
by CRA better serves the public and the banking industry than providing 
a cross-reference.
    Public notice. Current Sec. 303.6(f)(4) reproduces a notice that 
institutions are required to use when publishing notice of a filing in 
a local newspaper. Under Sec. 303.7(c) of the proposed rule, applicants 
are offered the choice of a sample notice or a list of contents which 
may be used to draft a notice tailored to the needs of the institution. 
This choice is designed to reduce burden on the banking industry by 
providing more flexibility.
    Proposed Sec. 303.7(b) adds a new provision requiring confirmation 
of publication. Promptly after publication, the applicant must mail or 
otherwise deliver a copy of the newspaper notice to the appropriate 
regional director (DOS). This is designed to avoid possible delays in 
processing if a defective notice is discovered.
    Proposed Sec. 303.7(d) reduces burden by providing that an 
applicant may publish a single public notice for multiple transactions 
provided that the notice includes an explanation of how the 
transactions are related and states the closing date of the longest 
public comment period that will apply. Further, Sec. 303.7(e) of the 
proposed rule states that the FDIC may accept the publication of a 
single joint notice containing information required by both the FDIC 
and another federal banking agency or state banking authority provided 
that the notice states that comments must be submitted to both 
agencies.
    Public comments. Current Sec. 303.6(f)(3) permits interested 
parties to comment upon a pending filing until the date of final 
disposition. Proposed Sec. 303.9(a) provides that comments would be 
accepted only during a defined comment period in order to add certainty 
to the filing process for both the public and the applicant. Closing 
the comment period on a date certain eliminates the risk of final 
action being delayed due to a late comment or of final action being 
taken while a comment is in the process of being transmitted to the 
FDIC.
    In order to provide the public with adequate time to submit 
meaningful comments, proposed Sec. 303.9(b)(2) grants the appropriate 
regional director (DOS) three bases upon which to extend or reopen the 
public comment period: (1) If the applicant fails to file all required 
information on a timely basis to permit review by the public or makes a 
request for confidential treatment not granted by the FDIC that delays 
the public availability of that information; (2) if any person 
requesting an extension of time satisfactorily demonstrates to the FDIC 
that additional time is necessary to develop factual information that 
may materially affect the application; or (3) for good cause. Good 
cause is currently the only basis for extension of the comment period 
under Sec. 303.6(f)(3).
    Further, proposed Sec. 303.9(b)(4) clarifies that the FDIC will 
provide copies of all comments to the applicant and that the applicant 
will be given an opportunity to respond.
    Hearings and other meetings. Proposed Sec. 303.10 simplifies the 
current rules concerning hearing procedures contained in Sec. 303.6 
(h), (i), and (j) and updates those provisions to reflect current FDIC 
practices.
    Decisions on filings. Proposed Sec. 303.11 sets forth new 
provisions concerning multiple transactions, abandonment of filings, 
and nullification of decisions. With regard to multiple transactions, 
if all related transactions have been granted expedited processing, 
then the longest

[[Page 52814]]

expedited processing time will govern for all transactions. The 
proposed rule also codifies current FDIC practice concerning 
abandonment of filings. If an applicant does not provide additional 
information requested by the FDIC within the time period specified, the 
FDIC may notify the applicant that the filing has been deemed abandoned 
and processing has been discontinued. The proposal also contains three 
nullification provisions. The FDIC may nullify a decision on a filing 
if: (1) The agency becomes aware of any material misrepresentation or 
omission after rendering a decision; (2) the agency is not informed by 
the applicant of a subsequent material change in circumstances prior to 
rendering a decision; or (3) the decision is contrary to law, 
regulation, or FDIC policy, or granted due to clerical or 
administrative error, or a material mistake of law or fact. The FDIC 
believes these provisions are useful additions to part 303.
    Appeals and petitions for reconsideration. Current Sec. 303.6(e) 
contains the FDIC's procedures governing petitions for reconsideration 
of a denied filing. Proposed Sec. 303.11(f) would clarify that these 
procedures cover only requests for reconsideration of filings that do 
not otherwise have appeal procedures provided by other regulation or 
written guidance, and that decisions to deny a hearing request are 
nonappealable.
    As proposed, Sec. 303.11(f)(2) provides that within 15 days of 
receipt of notice from the FDIC that its filing has been denied, an 
applicant may file a petition with the appropriate regional director 
containing either a resolution of the board of directors of the 
applicant authorizing filing, if the applicant is a corporation or 
other entity, or a letter signed by the individual(s) filing the 
petition, if the applicant is not a corporation or other entity. As 
under the existing rule, the filing must contain substantive 
information that for good cause was not previously set forth in the 
filing and specific reasons why the FDIC should reconsider its prior 
decision.
    A regional director or deputy regional director (DOS or DCA) may 
approve, but not deny, a petition for reconsideration. However, the 
Director or Deputy Director (DOS or DCA) may approve or deny a 
petition. If the petition is granted, the filing will be reconsidered 
by the Board of Directors if the filing was originally denied by the 
Board of Directors or denied by the Director, Deputy Director, or an 
associate director (DOS or DCA). The Director or Deputy Director (DOS 
or DCA) will reconsider the filing if the filing was originally denied 
by a regional director or deputy regional director. Proposed 
Sec. 303.11(f) also clarifies that a decision on a petition for 
reconsideration by the Director or Deputy Director (DOS or DCA) is a 
final agency decision and is not appealable to the Board of Directors.
    The FDIC specifically seeks comment on its new petition for 
reconsideration procedures, which are designed to provide a more 
objective review. It should be noted that the FDIC has separate appeal 
procedures regarding material supervisory determinations such as 
examination ratings, material disputed asset classifications, 
determinations regarding violations of laws and regulations, etc. which 
were published in the Federal Register on March 25, 1995. 60 FR 15923. 
In addition, procedures for requesting a review of assessment risk 
classification and for revision of computation of quarterly assessment 
payments are contained in part 327. Therefore, proposed Sec. 303.11(f) 
applies only to filings as that term is defined in part 303.
    General delegations of authority. Proposed Sec. 303.12 contains the 
general principles governing delegations of authority from the Board of 
Directors to FDIC officials. Some, but not all, of these principles are 
currently contained in Secs. 303.10(a) and 303.11 (a) and (b). This 
proposed section states that the Board does not delegate its authority 
regarding matters covered in the FDIC's regulations unless such a 
delegation is specifically made. However, in matters where the Board 
has neither specifically delegated nor retained authority, FDIC 
officials may take action with respect to matters which generally 
involve conditions or circumstances requiring prompt action to protect 
the interests of the FDIC and to achieve flexibility and expedition in 
the exercise of FDIC functions under part 303. Delegations are to be 
broadly construed in favor of the existence of authority in FDIC 
officials who act under delegated authority, and any exercise of 
delegated authority by an official is conclusive evidence of that 
official's authority. The purpose of this broad construction is to 
promote the efficient operation of the FDIC, to allow the public to 
rely on actions of FDIC officials, and to discourage frivolous 
challenges to the exercise of delegated authority.
    Delegations of authority to DOS and DCA officials. Proposed 
Sec. 303.13 contains delegations of authority to DOS and DCA officials 
to enable them to carry out the FDIC's applications function.
    Where a CRA protest is filed and remains unresolved, proposed 
Sec. 303.13(a) delegates authority to the regional director or deputy 
regional director (DCA) to concur that approval of any filing subject 
to CRA is consistent with the purposes of CRA. Previously, receipt of a 
CRA protest caused a filing to be forwarded to Washington for review. 
This change in policy is expected to improve and expedite decision 
making by placing it closer to the source.
    For purposes of determining when to commence processing of a 
filing, proposed Sec. 303.13(b) delegates authority to DOS officials to 
determine whether a filing is substantially complete. This provision 
also is intended to clarify that the standard to initiate the 
processing period is the receipt of a substantially complete filing.
    Proposed Sec. 303.13(c) contains a delegation of authority 
permitting DOS officials to enter into memoranda of agreement pursuant 
to regulations of the Advisory Council on Historic Preservation which 
implement the National Historic Preservation Act (NHPA). This provision 
is currently found in Sec. 303.8(g) of the FDIC's regulations and 
facilitates the agency's ability to comply with NHPA.

B. Subpart B--Deposit Insurance

    Since passage of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (Pub. L. 102-242, 105 Stat. 2236), all proposed 
depository institutions or existing noninsured depository institutions 
that desire federal deposit insurance have been required to apply to 
the FDIC. This includes all nationally chartered banks, state or 
federally chartered savings associations, and state chartered banks, 
including state member banks.
    Subpart B reorganizes and clarifies the filing and processing 
procedures for an applicant to follow in applying for deposit insurance 
for a proposed or existing noninsured depository institution, for an 
interim depository institution (when required), and for continuation of 
deposit insurance for a state bank upon withdrawing from membership in 
the Federal Reserve System. The proposal updates the regulation to 
reflect current statutory requirements and current FDIC policy for 
processing such applications. Subpart B also sets forth the delegations 
of authority and criteria under which DOS may approve such 
applications. The proposed rule should be read in conjunction with the 
FDIC's revised policy statement on Applications for Deposit Insurance 
found elsewhere in today's Federal Register. Substantive changes to the 
regulatory text are discussed below.

[[Page 52815]]

    Expedited processing. Under expedited processing, an application 
for deposit insurance for a proposed depository institution which will 
be a subsidiary of an ``eligible depository institution'' or an 
``eligible holding company'' will be processed within 60 days of 
receipt of a substantially complete application or 20 days after 
publication, whichever is later. Currently, deposit insurance 
applications are processed within 120 days. See FDIC Financial 
Institutions Letter 26-96 dated May 6, 1996. An eligible depository 
institution is defined in proposed Sec. 303.2(r). An eligible holding 
company is defined in proposed Sec. 303.22(a) as a bank or thrift 
holding company which has consolidated assets of $150 million or more; 
has an assigned composite rating of 2 or better; and has at least 75 
percent of its consolidated depository institution assets in eligible 
depository institutions. If the FDIC does not act within the expedited 
processing period, it does not constitute an automatic or default 
approval. Public comment is invited on the definition of eligible 
holding company and the time frame for processing applications for 
deposit insurance under expedited review.
    Public notice and comment period. Current regulations state that 
notice shall be published on the date the application is mailed or 
delivered to the regional director or not more than 30 days prior to 
that date. Under proposed Sec. 303.23(a), notice would be published as 
close as practicable to the filing date but not more than five days 
before the filing date. This provides assurance that the public portion 
of the application file will be available for inspection during the 
comment period.
    Currently, the notice informs the public that comments may be filed 
with the regional director at any time before processing of the 
application has been completed and that processing will not be 
completed earlier than the 15th day following either the date of 
publication or date of receipt of the application, whichever is later. 
Proposed Sec. 303.23(a) would require that interested parties file 
comments with the regional director on or before the 15th day following 
the date of publication. Closing the comment period eliminates the risk 
of final action being delayed due to a late comment or of final action 
being taken while a comment is in the mail to the FDIC. The proposed 
15-day comment period is considered adequate time for an interested 
party to provide comments. Also, the regional director may extend or 
reopen the comment period for good cause, such as when an interested 
party cannot provide comments within the 15 days for reasons beyond the 
party's control. Comment is invited on the adequacy of the 15 day 
comment period, especially in light of the ability of regional 
directors to extend or reopen the comment period under 
Sec. 303.9(b)(2).
    Application for deposit insurance for an interim depository 
institution. An interim depository institution is defined in proposed 
Sec. 303.24(a) as an institution formed or organized solely to 
facilitate a merger transaction which will be reviewed by one of the 
four federal banking agencies and that the institution will not open 
for business. The filing will consist of a brief letter application and 
a copy of the related merger transaction. Also, newspaper publication 
requirements concerning the application for deposit insurance for an 
interim is being eliminated as unnecessary since public notice would be 
required for the merger transaction, which is considered to be the 
primary transaction. It is anticipated that the FDIC will consult with 
the federal banking agency reviewing the merger application and that 
final action on the deposit insurance application will be taken within 
21 days after receipt of a substantially complete application. If 
additional review by the FDIC is warranted, the applicant will be so 
advised in writing.
    Continuation of deposit insurance upon withdrawing from membership 
in the Federal Reserve System. Procedures are being simplified. Under 
Sec. 303.25 of the proposal, the applicant would file a letter 
application containing the information specified in the regulation, 
including a new requirement that the application must contain a 
statement by the bank's management that there are no current 
outstanding or proposed corrective programs or supervisory agreements 
with the Federal Reserve System. If such programs or agreements exist, 
the application must contain a statement that the bank's board of 
directors is willing to enter into a similar agreement with the FDIC 
which would become effective upon the date of withdrawal from the 
Federal Reserve System. The regional director would notify the 
applicant in writing within 15 days of the date a substantially 
complete application is received that deposit insurance will continue 
upon termination of membership in the Federal Reserve System or that 
additional review will be necessary. If additional review is warranted, 
the regional director would inform the applicant in writing of the 
reasons and inform the applicant that it will be notified in writing of 
the FDIC's final decision regarding continuation of deposit insurance. 
Upon further review, the regional director may approve the continuation 
of deposit insurance or, if denial is deemed warranted, forward a 
recommendation for action by the FDIC Board of Directors.
    Other changes. Current Sec. 303.7(d)(1)(ii) lists a number of 
specific criteria that must be met before delegated authority can be 
exercised. The criteria relate to initial capitalization, legal fees 
and other expenses, projected profitability, investment in fixed assets 
and financial arrangements involving insiders, including stock 
financing arrangements. These criteria, which have been updated to 
reflect current policy, are discussed in the revised policy statement 
on Applications for Deposit Insurance which is simply cross-referenced 
in the proposed rule to avoid duplication.
    Current Sec. 303.7(d)(1)(iii)(A) states that authority to approve 
an application for deposit insurance may not be delegated to the 
regional director or deputy regional director where a protest under the 
Community Reinvestment Act (CRA) is filed. This provision is being 
revised to permit approval of a CRA-protested application by the 
regional director (DOS) or deputy regional director (DOS) where the 
protest has been reviewed by DCA, the regional director (DCA) or deputy 
regional director (DCA) concurs that approval is consistent with the 
purposes of the CRA, and the applicant agrees in writing to any 
conditions imposed regarding the CRA.
    Section 303.7(d)(1)(iii)(B) of the current regulation states that 
the authority to approve an application may not be delegated to a 
regional director or deputy regional director where: (1) There is 
direct or indirect financing by proposed directors, officers or 5 
percent or more shareholders of more than 75 percent of the purchase 
price of the stock subscribed by any one shareholder; (2) there is 
aggregate financing of stock subscriptions in excess of 50 percent of 
the total capital offered; or (3) warehoused or trusteed stock exceeds 
10 percent of initial capital funds. This provision is being eliminated 
because the revised policy statement contains a comprehensive 
discussion of financing that the FDIC believes provides adequate 
guidance. If proposed financing is not within the established 
guidelines, the regional director will forward a recommendation to the 
Director (DOS).
    A new provision found at Sec. 303.26(d)(2) would permit DOS to 
impose a condition which requires the maintenance of a leverage capital 
ratio of at least 8 percent throughout the first three years of 
operation of a depository institution while also providing an

[[Page 52816]]

adequate allowance for loan and lease losses. This clarifies the FDIC's 
long-standing position that the minimum ratio of 8 percent is to be 
maintained throughout the first three years of operation rather than 
only requiring that the ratio be at least 8 percent at the end of the 
third year of operation.
    Under current Sec. 303.7(d)(2)(i), authority to approve 
applications for deposit insurance by operating noninsured institutions 
is delegated to the regional director (DOS) or deputy regional director 
(DOS) only for those applicant institutions with total assets of less 
than $250 million. There is no such restriction on the authority of the 
Director or Deputy Director (DOS). Accordingly, this size limitation is 
being eliminated from the proposed regulation.
    Other minor changes are made within the subpart to facilitate 
reorganization and clarification to produce a more concise and user-
friendly regulation.

C. Subpart C--Establishment and Relocation of Domestic Branches and 
Offices

    Subpart C reorganizes and clarifies the portion of part 303 that 
implements section 18(d) of the FDI Act which requires insured state 
nonmember banks to obtain the prior written consent of the FDIC in 
order to establish a domestic branch, relocate the main office, or 
relocate a branch. The most significant changes from the current 
regulation are provisions implementing expedited processing for 
eligible depository institutions, the addition of several new 
definitions, and the exclusion of remote service units, including 
automated teller machines and automated loan machines, from the 
definition of a branch. As proposed, applications filed by eligible 
depository institutions will be deemed approved 21 days after receipt 
of a substantially complete application, or 5 days after the expiration 
of the comment period, whichever is later. Additional technical 
requirements regarding the expedited procedure apply to interstate 
branch applications. The average processing time for branch 
applications during the first six months of 1997 was 30 days. In 
addition to expedited processing, the proposed subpart contains two 
special provisions which provide further regulatory relief. One of 
these provisions gives advance consent for the relocation of a branch 
or main office in the event of a disaster or emergency and the other 
provision allows the regional director to waive publication required in 
the case of a redesignation of a main office and existing branch.
    A section has also been added to allow the regional director (DOS) 
to approve an application under this subpart that is the subject of an 
unresolved CRA protest, provided the regional director (DCA) finds that 
approval of the application would be consistent with the purposes of 
CRA and the applicant agrees in writing to any nonstandard conditions 
imposed regarding CRA. This provision is expected improve decision 
making by placing it closer to the actual decision maker and avoiding 
unnecessary delays. In addition, the subpart adds provisions which 
implement relevant portions of the FDI Act regarding the establishment 
of interstate branches and implements changes contained in section 2205 
of EGRPRA.
    Finally, as part of the systematic review of its written policies 
pursuant to CDRIA, the FDIC is proposing elsewhere in today's Federal 
Register to rescind its Statement of Policy of Applications to Relocate 
a Main Office or Branch and Statement of Policy on Applications to 
Establish a Domestic Branch. Both statements are considered obsolete 
and unnecessary in view of the comprehensive approach taken in subpart 
C.
    Scope. Proposed Sec. 303.40 limits the scope of this subpart to 
applications regarding the establishment of domestic branches, and the 
relocation of a main office or domestic branch, including provisions 
regarding interstate branching. Excluded from the scope of the subpart 
are filings for the approval of the acquisition and establishment of 
branches in connection with a bank merger transaction. Proposed 
regulations for such filings are found in subpart D. The scope of the 
subpart also does not include filings by insured branches of foreign 
banks to relocate a branch or filings by state nonmember banks to 
establish a foreign branch. Proposed regulations regarding foreign 
banks and branches are contained in subpart J.
    Interstate branching. The Riegle-Neal Interstate Banking and 
Branching Efficiency Act of 1994 (Interstate Act) (Pub. L. 103-328, 108 
Stat. 2338) became effective on September 29, 1994, and, among other 
things, amended the FDI Act to establish a federal framework for 
interstate branching effective June 1, 1997. Among the new interstate 
branching authorities added by the Interstate Act are a provision 
regarding the retention of branches after an interstate relocation of a 
main office and a provision regarding interstate branching through de 
novo branches.
    Section 102(b)(3) of the Interstate Act adds a new paragraph (3) to 
section 18(d) of the FDI Act that permits a state nonmember bank, after 
the relocation of its main office to another state, to retain branches 
in its former home state. Home state means the state by which a state 
bank is chartered. This authority is, however, subject to certain 
limitations. A bank relocating its main office from one state to 
another may retain its branches in the original state only to the 
extent that the bank would be authorized, as a bank chartered in the 
new state, to establish or acquire those branches. As of June 1, 1997, 
an out-of-state bank may establish branches in another state only if it 
is authorized to establish such branches (i) as de novo branches under 
section 18(d)(4)(A) of the FDI Act, (ii) as a result of an interstate 
merger transaction under section 44 of the FDI Act, or (iii) as a 
result of an emergency assisted transaction under section 13(f) or 
13(k) of the FDI Act. In effect, this provision means that a state 
nonmember bank can relocate its main office to another state and retain 
its existing branches in the original state if it could, as a bank 
chartered in the new state, establish those branches in the original 
state. Therefore, if the bank were considered to be chartered in such 
new state and could, with such other-state charter, establish those 
branches in the original state by means of an interstate de novo branch 
transaction, an interstate merger, or an emergency assisted 
transaction, then it can retain those branches. Accordingly, the 
proposed rule includes a requirement that an applicant seeking to 
relocate its main office interstate indicate whether the applicant 
intends to retain its existing home state branches.
    Section 103(b) of the Interstate Act adds a new paragraph (4) to 
section 18(d) of the FDI Act that permits, subject to certain 
requirements and conditions, interstate branching through de novo 
branches. Under this authority the FDIC may approve an application by a 
state nonmember bank to establish and operate a de novo branch in a 
state that is not the bank's home state and in which the bank does not 
currently maintain a branch. In order to grant such approval, the FDIC 
must: (i) Determine that the host state (the state in which the bank 
seeks to establish a branch) has in effect a law that applies equally 
to all banks and expressly permits all out-of-state banks to establish 
de novo branches in such state, (ii) determine that the applicant has 
complied with the host state's filing requirements and has submitted to 
the host state a copy of the application it filed with the FDIC, (iii) 
determine that

[[Page 52817]]

the applicant is adequately capitalized and will continue to be 
adequately capitalized and adequately managed upon consummation of the 
transaction, and (iv) take the applicant's CRA record into 
consideration. Except for item (ii) in the foregoing listing, the FDIC 
generally has the resources needed to make the determinations required. 
Accordingly, among the application procedures included in this proposed 
rule is the requirement that the applicant request that the host state 
confirm in writing to the FDIC that the applicant has complied with the 
host state's filing requirements and has submitted a copy of its 
application with the FDIC to the host state supervisor.
    Definitions. In Sec. 303.41 of the proposal, the FDIC has added 
definitions for ``messenger service,'' ``mobile,'' ``temporary,'' and 
``seasonal branches'' and, as noted above, ``de novo'' branches as well 
as definitions of ``home state'' and ``host state'' . In an effort to 
promote uniformity and increase the use of common terms, the 
definitions used in this subpart are similar to those used by other 
federal banking agencies.
    With regard to the definition of ``branches,'' the proposed 
regulation at Sec. 303.41(a) clarifies that remote service units, 
including automated loan machines, are not branches. The exclusion of 
automated teller machines and remote service units is a result of 
statutory changes contained in section 2205 of EGRPRA.
    The definition of ``messenger services'' in Sec. 303.41(a)(1) 
provides that branch applications will be required only for those 
messenger services operated by a bank or an affiliate that picks up and 
delivers items relating to transactions between the bank and its 
customer in which deposits are received, checks paid or money lent. A 
messenger service established and operated by a non-affiliated third 
party generally does not constitute a branch for purposes of this 
subpart. Banks contracting with third parties for such services should 
consult with the appropriate regional director (DOS) to determine if 
the messenger service constitutes a branch.
    Section 303.41(a)(2) defines ``mobile branch'' as a branch service 
that does not have a permanent site and includes a vehicle that travels 
to various public locations and enables the applicant bank to conduct 
banking business with its customers. Because of the mobility inherent 
in such branches, they may serve regularly scheduled locations or may 
be open at irregular times and locations.
    The definition of ``temporary branch'' contained in 
Sec. 303.41(a)(3) clarifies that a bank may operate such a branch as a 
public service such as during an emergency or disaster to provide 
necessary banking services. A temporary branch can be approved for a 
period not to exceed one year. Such a time period should provide 
sufficient time for the applicant to restore appropriate services to 
the community.
    The definition of ``seasonal branch'' in Sec. 303.41(a)(4) provides 
that such a branch operate at periodically recurring intervals, such as 
during state fairs. This definition differs from the temporary branch 
in that once an application is approved for a seasonal branch, the 
applicant bank may return to that site on a recurring basis without the 
need to reapply.
    ``Branch relocation'' is defined in Sec. 303.41(b) as a move within 
the same immediate neighborhood of the existing branch that does not 
substantially affect the nature of the business of the branch or the 
customers of the branch. Moving a branch to another location outside 
its immediate neighborhood is considered the establishment of a new 
branch and the closing of an existing branch.
    The proposed regulation at Sec. 303.41(c) defines a ``de novo 
branch'' to mean a branch of a bank which is originally established by 
the bank and which does not become a branch of such bank as a result of 
the acquisition, conversion, merger, or consolidation of an insured 
depository institution or a branch of an insured depository 
institution.
    Definitions are also proposed for ``home state'' and ``host state'' 
at Sec. 303.41 (d) and (e). A home state means the state by which the 
bank is chartered and host state means a state, other than the home 
state of the bank, in which the bank maintains, or seeks to establish 
and maintain, a branch.
    Filing procedures. The proposed regulation also changes various 
application requirements. Changes address the timing of filing, the 
submission of copies of the publication, the inclusion of the 
geographic area in which a messenger service will operate, the 
inclusion of the community or communities in which a mobile branch will 
operate, and whether the mobile branch will serve various regularly 
scheduled locations or be open at irregular times and locations.
    As proposed in Sec. 303.42, an applicant must submit a letter 
application on the date the notice required by proposed Sec. 303.44 is 
published or within 5 days after the date of the last required 
publication. Previously, applicants could file up to 30 days subsequent 
to the first publication date. By filing applications 5 days after the 
date of the last newspaper publication, banks are able to submit all 
copies of the newspaper publications required by the proposed 
regulation and the public will have the assurance that the application 
will be on file during the comment period.
    Proposed Sec. 303.42(b)(7) has been added to require applicants to 
submit a copy of each newspaper publication in addition to providing 
the date of publication and the name and address of the newspaper. In 
the past, applicants have been required to immediately notify the FDIC 
after the publication. Submitting a copy of the newspaper notice allows 
FDIC to verify publication and the contents of the notice.
    The proposed regulation at Sec. 303.42(b)(2) clarifies the filing 
procedures for messenger services and mobile branches. Since messenger 
services by their very nature are not serving a fixed location, the 
designation of a specific site for operation is not practical. Rather 
these types of branches will operate in defined geographic areas, such 
as a neighborhood, city or county. By approving such applications on a 
geographic area, banks will be able to operate freely without 
reapplying for changes to schedules. Filings relative to mobile 
branches however must disclose the community or communities to be 
served and the intention to serve defined locations on a regular 
schedule or to be open at varing times and locations. Knowledge of the 
community or communities to be served assists the FDIC in determining 
compliance with the applicable statutory and regulatory provisions 
relating to branch filings. Applicants must, however, reapply when the 
geographic area to be served changes.
    Processing. Pursuant to proposed Sec. 303.43(a), the FDIC proposes 
to expedite processing for eligible depository institutions. It is the 
FDIC's intent to reduce regulatory burden for well-run, well-managed 
institutions by providing expeditious approvals of routine applications 
to establish a branch or to relocate the main office or branch.
    Pursuant to expedited processing procedures contained in proposed 
Sec. 303.11(c), an application submitted by an eligible depository 
institution as defined in proposed Sec. 303.2(r) will be acknowledged 
in writing by the FDIC and will receive expedited processing unless the 
FDIC removes the application from expedited processing for any of the 
reasons set forth in Sec. 303.11(c)(2). Section 303.43(a) provides that 
the FDIC may remove an application from expedited processing at any 
time before

[[Page 52818]]

the approval date and will promptly notify the applicant in writing of 
the reason for such action. Absent such removal, an application 
processed under expedited processing will be deemed approved on the 
latest of the following: (1) The 21st day after receipt of a 
substantially complete application by the FDIC, (2) the 5th day after 
expiration of the comment period described in Sec. 303.44 of this 
proposal, or (3) in the case of an application to establish and operate 
a de novo branch in a state that is not the applicant's home state and 
in which the applicant does not maintain a branch, the 5th day after 
the FDIC receives from the host state confirmation that the applicant 
has both complied with the filing requirements of the host state and 
submitted a copy of the application with the FDIC to the host state 
bank supervisor.
    The automatic approval date for an application under expedited 
procedures provides an applicant with a firm date by which its 
application will be approved. Under the existing regulation, the FDIC 
can approve applications immediately after expiration of the comment 
period, but applications can also be approved much later.
    For applicants not eligible for expedited processing, the FDIC will 
provide the applicant with written notification of the final action 
taken with regard to the particular application as soon as a decision 
is rendered.
    Public notice requirements. The proposed regulation at Sec. 303.44 
generally would amend and clarify the publication requirements relating 
to relocating a main office and establishing or relocating branch 
offices. It also provides for a specific time frame in which comments 
must be received.
    The proposed section retains current newspaper publication 
requirements contained in Sec. 303.6(f)(1)(ii) of the existing 
regulation, except for relocation of branches which will now require 
publication only in the community which the branch serves. A branch 
relocation can only occur in the same immediate neighborhood; hence, 
publication is needed in only one newspaper since it is likely that the 
one newspaper will cover all of the affected community. In such cases, 
the FDIC has deemed publication in the community in which the home 
office is located unnecessary. Furthermore, a single publication is 
consistent with the requirements of the other federal banking agencies. 
Section 303.44(a) continues the existing requirement that for 
applications to relocate a main office, publication must be made at 
least once each week on the same day for two consecutive weeks.
    Currently in Sec. 303.6, individuals may comment until processing 
of the application is completed. In order to eliminate the uncertainty 
regarding the close of the comment period, it is proposed that the 
comment period be limited as specified in Sec. 303.44. Proposed 
Sec. 303.44 provides that comments must be received by the appropriate 
regional director (DOS) within 15 days of the date of the last 
newspaper publication. Proposed Sec. 303.9 provides for extension or 
reopening of the comment period in certain situations.
    Special provisions. Section 303.45 of the proposed regulation adds 
several new provisions regarding procedures for opening temporary 
branches in emergency or disaster situations, re-designating a main 
office, and providing for the expiration of approved applications.
    The proposed regulation at Sec. 303.45(a) clarifies procedures 
relating to establishing temporary branches in emergency or disaster 
situations. The current regulation on branching contains no specific 
guidance on this issue. The FDIC recognizes the need in limited 
circumstances, such as emergency or disaster situations, where there 
exists a clear public need to continue banking services, that 
applicants may not be in a position to follow the normal application 
procedures for relocation of a main office or branch. As a result, the 
proposed regulation provides that in the case of an emergency or 
disaster at a main office or branch which requires that an office be 
immediately relocated to a temporary location, the applicant notify the 
appropriate regional director (DOS) within 3 days of such temporary 
location. In such limited cases, the FDIC will accept initial 
notification by whatever means appropriate. The FDIC is making this 
limited exception to allow for the public's need to have uninterrupted 
access to banking services. Such prior consent to relocate the office 
is appropriate because it may not always be possible for a bank to 
comply with the normal application procedures for relocating a main 
office or branch in such circumstances.
    The proposal further provides that within 10 days of the temporary 
relocation resulting from the emergency or disaster, the bank shall 
submit a written filing to the appropriate regional director (DOS) that 
identifies the nature of the emergency or disaster, specifies the 
location of the temporary branch, and provides an estimate of the 
duration the bank plans to operate the temporary branch. Finally, 
depending on the particular circumstances, as part of the review 
process, the appropriate regional director (DOS) may waive public 
notice requirements.
    Section 303.45(b) of the proposed regulation provides that in cases 
where an applicant desires to designate an existing branch as its main 
office and redesignate its main office as a branch, an application must 
be submitted to relocate the main office and to establish or relocate a 
branch, as appropriate. The appropriate regional director (DOS) may 
waive the public notice requirements in instances where an application 
presents no significant or novel policy, supervisory, CRA, compliance, 
or legal concern. Such waiver will be granted only within the 
applicant's home state.
    With regard to the expiration of approvals, applications which have 
been approved by the FDIC to establish branches and to relocate main 
offices and branches currently have no expiration date. The FDIC 
believes that approvals should not remain in effect indefinitely 
because circumstances surrounding an application may change over time. 
Therefore, proposed Sec. 303.45(c) provides that approval of an 
application expires if a branch has not commenced business or if a 
relocation has not been completed within 18 months of approval.
    Delegation of authority. Section 303.46 of the proposed regulations 
adds a delegation for the appropriate regional director to approve 
interstate branches. Additionally, the proposed regulation provides for 
a delegation to permit approval of a CRA-protested application by the 
regional director (DOS) or deputy regional director (DOS) where the 
protest has been reviewed by DCA, and the regional director (DCA) or 
deputy regional director (DCA) concurs that approval is consistent with 
the purposes of the CRA, and the applicant agrees in writing to any 
conditions imposed regarding CRA.
    New Sec. 303.46(c)(8) makes clear that the Board of Directors has 
not delegated authority to approve a branch application by a bank which 
the FDIC has determined is not reasonably helping to meet the credit 
needs of the community served by the bank in a host state pursuant to 
section 109 of the Riegle-Neal Interstate Banking and Branching 
Efficiency Act of 1994 (12 U.S.C. 1835a).
    The proposed regulation provides that appropriate regional 
directors may exercise delegated authority to act on applications for 
establishment of temporary branches or messenger services without a 
favorable resolution of the statutory factors in section 6 of

[[Page 52819]]

the FDI Act. This delegation recognizes the limited nature of these 
types of branches.
    The proposed regulation eliminates an obsolete delegation of 
authority relating to applications to establish and operate new 
teller's windows, drive-in facilities, or any like office, as an 
adjunct to the main office or branch (including offices not considered 
branches under state law). Applications to establish a new teller's 
window, drive-in facility, or any like offices are required when such a 
facility is a branch office. If such facilities are extensions of 
already approved main office and branches, no application to establish 
the facility is necessary.
    Other changes. Several other changes are proposed that affect the 
new subpart C. These modifications involve changing the term ``move a 
main office'' to ``relocate the main office,'' changing the term 
``courier service'' to ``messenger service,'' and deleting provisions 
relating to remote service facilities.
    Public comment. In addition to seeking public comments on the above 
revisions to subpart C associated with the establishment of branches 
and relocation of branches and the main office, the FDIC also seeks 
specific public comments on the following issues.
    Comment period: Since the FDIC is proposing in Sec. 303.44(b) to 
change from a comment period that was essentially open-ended in current 
Sec. 303.6 to a specific time frame (i.e., 15 days), the FDIC seeks 
comment on whether a 30-day comment period is more appropriate than the 
proposed 15 days and if so, the reasons why 15 days would not be a 
feasible period of time within which to submit comments.
    Mobile branch applications: The FDIC is proposing that the 
geographic location for a mobile branch be designated as to which 
community or communities are to be served. The FDIC seeks comment on 
whether such a designation is appropriate. The FDIC also seeks comment 
on whether a new application should be required if a change is made in 
the community or communities to be served.

D. Subpart D--Mergers

    Subpart D covers transactions subject to FDIC approval under the 
Bank Merger Act (12 U.S.C. 1828(c)). This includes mergers, 
consolidations, and similar transactions involving insured depository 
institutions (collectively, ``mergers''). This subpart gathers together 
from various sections of part 303 the existing provisions governing 
merger applications and reorganizes them to make the regulatory 
requirements easier to understand. Substantive changes have been made 
in processing procedures to reduce regulatory burden.
    The principal changes proposed in subpart D include the addition of 
an expedited processing procedure (proposed Sec. 303.64(a)); the 
modification and centralization of various definitions applicable to 
merger transactions, such as replacement of the term ``phantom merger'' 
used only by the FDIC with the more commonly-used ``interim merger'' 
(proposed Sec. 303.61(c)); and the addition of references to other 
statutory or regulatory provisions often applicable to merger 
transactions. These references, included at Sec. 303.62(b), are to the 
interstate merger provisions of section 44 of the FDI Act (12 U.S.C. 
1831u), applications for deposit insurance, insurance fund conversion 
transactions, branch closings, prompt corrective action considerations, 
and certification of assumption of deposit liabilities.
    The most significant change from the existing merger approval 
regulations is the proposed expedited processing procedure. This 
procedure would be available for transactions to which all parties are 
eligible depository institutions (as defined in proposed 
Sec. 303.2(r)), and immediately following which the resulting 
institution would be well-capitalized. Under expedited processing, 
which is generally applicable only to merger applications that can be 
approved under delegated authority, the application would be acted upon 
by the latest of 45 days after the FDIC receives a substantially 
complete application; 10 days after the last newspaper publication of 
the notice of the proposed merger; 5 days after the FDIC receives the 
Attorney General's comments on the competitive impact of the merger; 
or, for an interstate merger, 5 days after the FDIC confirms that the 
applicant has satisfactorily complied with the filing requirements of 
the resulting institution's host state. An application that otherwise 
qualifies for expedited processing may be removed from such treatment 
for the reasons stated in subpart A, at proposed Sec. 303.11(c)(2).
    Among the new references mentioned above, the reference to deposit 
insurance applications at proposed Sec. 303.62(b)(2) clarifies that the 
FDIC will not require a deposit insurance application to secure 
insurance coverage for an institution resulting from a statutory merger 
between a federally-chartered interim institution and an FDIC-insured 
institution, even if the resulting institution will operate under the 
interim federal charter. However, the FDIC will continue to require an 
application for deposit insurance if the entity merging with the 
interim federal institution is not insured and the parties wish the 
resulting institution to be insured.<SUP>2</SUP>
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    \2\ The Board does not believe that it is consistent with the 
language or intent of the FDI Act to insure without FDIC approval an 
institution resulting from a combination of institutions that 
themselves have never been granted deposit insurance by the FDIC.
---------------------------------------------------------------------------

    In addition to reorganizing and enhancing the merger application 
provisions to make them easier to use, the proposal reduces the 
procedural burden on applicants. For example, in addition to 
establishing an expedited processing procedure, the proposal would no 
longer call for copies of the charter or articles of incorporation of 
the resulting institution to be routinely submitted with a merger 
application. The proposal also simplifies the application requirements 
for mergers between institutions that are commonly-owned outside of a 
bank holding company structure by treating such transactions as 
``corporate reorganizations'' (proposed Sec. 303.61(b)).
    Further, in order to add predictability to the procedure for 
receiving and reviewing public comment on proposed mergers, the 
proposal provides that the comment period for non-emergency 
transactions will end on the 35th day after the applicant's first 
newspaper publication of notice of the merger (proposed 
Sec. 303.65(d)). This period provides additional time for interested 
parties to respond to the final publication which occurs approximately 
on the 30th day. No change is being made to the public notice 
requirements for transactions determined to be an emergency requiring 
expeditious action.
    The proposal also relaxes the FDIC's current practice of requiring 
that the first newspaper notice of the merger not be published until 
after the merger application is filed with the FDIC. Under the 
proposal, the applicant may publish its first notice up to 5 days 
before filing with the FDIC (proposed Sec. 303.65(a)(1)).
    With regard to CRA considerations, the proposal would expand the 
existing delegation to permit approval of a CRA-protested application 
by the regional director (DOS) or deputy regional director (DOS) where 
the protest has been reviewed by DCA, the regional director (DCA) or 
deputy regional director (DCA) concurs that approval is consistent with 
the purposes of the CRA, and the applicant agrees in writing to any 
conditions imposed regarding the CRA (proposed Sec. 303.66(b)(5)). This 
would modify the existing merger regulations, which provide that 
mergers

[[Page 52820]]

that are the subject of an unresolved CRA protest may be approved under 
delegated authority by senior supervisory officials in Washington, but 
may not be acted upon at the regional level.
    The proposed rule eliminates consideration and favorable resolution 
of compliance with the National Environmental Policy Act (NEPA) (42 
U.S.C. 4321 et seq.) as a criteria for DOS officials to exercise 
delegated authority to approve a merger transaction. This provision is 
currently found in Sec. 303.7(b)(7)(ii). The FDIC has found that the 
physical environment is unlikely to be affected by the FDIC's 
consideration of bank merger transactions and that, typically, the 
provisions of the NEPA would not be implicated. Since the FDIC is in 
the process of reviewing its policy statement on NEPA, the agency 
believes it is not advisable to include a reference to NEPA in the 
proposed regulatory text.
    The FDIC invites comment on all aspects of the proposed revisions 
to the merger provisions of part 303. Comments are more specifically 
invited regarding the expansion of the term ``corporate 
reorganization,'' elements of the expedited processing procedures as 
proposed for merger applications, and the inclusion of cross-references 
to related provisions. In addition, comment is sought on the proposal 
to require that comments regarding a particular merger application be 
filed with the FDIC no later than the 35th day after the first 
publication of notice of the merger.

E. Subpart E--Change in Bank Control

    The FDIC proposes to reorganize, clarify, and simplify its 
regulation implementing the Change in Bank Control Act of 1978. The 
proposed changes, developed in consultation with the other federal 
banking agencies, attempt to harmonize the scope and procedural 
requirements of the FDIC's regulation with those of the other federal 
banking agencies and to reduce unnecessary burden.
    The proposal defines the previously undefined term ``acting in 
concert'' to clarify the scope of the regulation. It also incorporates 
the current FDIC position that the acquisition of a loan in default 
that is secured by voting shares of an insured state nonmember bank is 
presumed to be an acquisition of the underlying shares. Further, the 
proposal lengthens the period of time for notifying the FDIC from 30 to 
90 days for shares acquired in satisfaction of a debt previously 
contracted in good faith or through testate or intestate succession or 
a bona fide gift. In the case of shares acquired in satisfaction of a 
debt previously contracted, the proposal adds language that reflects 
FDIC practice of requiring the acquiror of a defaulted loan secured by 
a controlling amount of a state nonmember bank's voting securities to 
file a notice before the loan is acquired.
    The proposal also would reduce regulatory burden on persons whose 
ownership percentage increases as the result of a redemption of voting 
shares by the issuing bank or the action of a third party not within 
the acquiring person's control. In these situations, the proposal would 
permit the person affected by the bank or third party action to file a 
notice within 90 calendar days after receiving notice of the 
transaction. Currently, these persons must file notice under the Change 
in Bank Control Act prior to the action that increases the person's 
percentage ownership, and, because these persons cannot control the 
third party action that causes the increased percentage ownership, they 
are often put in violation of the Change in Bank Control Act and the 
FDIC's Rules and Regulations.
    The FDIC also proposes to provide more flexible timing for 
newspaper announcements of filings under the Change in Bank Control Act 
by permitting notificants to publish the announcement as close as 
practicable to filing the notice of change in control. The proposed 
rule removes the requirement that the notificant have confirmation that 
the FDIC has accepted the notice before publishing the announcement.
    The FDIC also proposes to delete the provision governing notices 
filed in contemplation of a public tender offer which permits an 
acquiror to delay publication of the newspaper announcement. None of 
the other federal banking agencies has such a provision.
    The FDIC invites comment on all of its proposed revisions to the 
regulation implementing the Change in Bank Control Act. In particular, 
the FDIC requests comment on whether the definition of ``acting in 
concert'' is appropriate, and whether there is reason to retain the 
public tender offer provision.

F. Subpart F--Change of Director or Senior Executive Officer

    Section 32 of the FDI Act (12 U.S.C. 1831i) requires certain 
insured depository institutions and their depository institution 
holding companies to provide at least 30 days' prior notice to the 
appropriate federal banking agency before adding any individual to the 
board of directors or employing any individual as a senior executive 
officer. The agency may issue a notice of disapproval prior to 
expiration of the 30-day period if it determines, based upon the 
proposed individual's competence, experience, character or integrity, 
that it would not be in the best interests of the depositors or the 
public to permit the individual to be employed by, or associated with, 
the institution. Section 32 permits the agency to waive the prior 
notice requirement, but the agency may still disapprove an individual's 
association with the institution within 30 days after granting such a 
waiver.
    Until recently, section 32 required prior notice from a depository 
institution or holding company that was chartered less than two years; 
had undergone a change in control within the preceding two years; or 
was not in compliance with minimum capital requirements or was 
otherwise in ``troubled condition.'' Section 2209 of EGRPRA amended 
section 32 by eliminating the prior notice requirement for institutions 
and holding companies that are chartered for less than two years or 
that have undergone a change in control within the preceding two years. 
However, institutions and holding companies that are not in compliance 
with minimum capital requirements or are otherwise in ``troubled 
condition'' remain subject to the prior notice requirement. In 
addition, EGRPRA provides that prior notice will be required if the 
agency determines, in connection with its review of a capital 
restoration plan required under section 38 of the FDI Act (governing 
prompt corrective action) or otherwise, that such prior notice is 
appropriate. Also, the EGRPRA amendments provide the agencies with more 
latitude to determine the prior notice period and allow the agencies up 
to 90 days to issue a notice of disapproval.
    The FDIC published an interim rule implementing section 32 as 
applied to insured state nonmember banks on December 27, 1989 (54 FR 
53040) and requested comments. The interim rule, which added a new 
Sec. 303.14 to part 303 of the FDIC's regulations, remains in effect. 
Only seven commenters responded, and the principal issues raised 
concerned the definitions of ``change in control'' and ``troubled 
condition.'' Objections to the definition of change in control have 
been rendered moot by the EGRPRA amendments since a change of control 
within the preceding two years is no longer a triggering event for a 
section 32 notice. Two commenters objected to the definition of 
``troubled condition.'' One objected to an insured

[[Page 52821]]

state nonmember bank being considered in troubled condition if it is 
subject to a cease-and-desist order on the grounds that not all such 
orders result from safety and soundness concerns and/or financial 
difficulties. The other commenter objected to the fact that an insured 
state nonmember bank can be designated in troubled condition based upon 
a visitation, examination, or report of condition. The proposed rule 
clearly indicates that only a cease and desist order or written 
agreement that requires action to improve financial condition of the 
bank triggers the designation of troubled condition. However, such 
designation may also be made based upon an examination or report of 
condition. The FDIC believes that it is appropriate to use all 
information it deems reliable in making such a designation.
    The proposed regulation reflects the EGRPRA amendments to section 
32 and reorganizes, clarifies, and simplifies notice procedures. The 
proposal also strives to harmonize the procedural requirements of the 
FDIC's regulation with those of the other federal banking agencies and 
to reduce any unnecessary regulatory burden.
    Although the EGRPRA amendments appear to provide the agencies with 
authority to increase the prior notice period to 90 days, the FDIC 
proposes to retain the 30-day prior notice currently required by 
Sec. 303.14. This established 30-day regulatory period has proven 
sufficient to process the majority of filings, and reflects the FDIC's 
time line for processing section 32 notices adopted in FDIC Financial 
Institutions Letter 26-96 dated May 6, 1996. However, the agency 
proposes to amend the regulation to allow the agency to take an 
additional period of up to 60 days, if necessary, to issue a notice of 
disapproval. It is anticipated that this additional 60-day period would 
be used infrequently. In all such cases, the notificant will be advised 
in writing prior to expiration of the 30-day prior notice period of the 
reason the FDIC could not take action and of the projected additional 
time needed.
    Other than the revisions prompted by the EGRPRA amendments, there 
is little substantive change to the FDIC's regulation. Current 
Sec. 303.14(c)(2)(ii) provides that if a new member of a bank's board 
of directors is elected at a shareholder's meeting, prior notice is 
automatically waived. However, notice must be filed with the 
appropriate regional director (DOS) within 48 hours after the election. 
Proposed Sec. 303.103(c)(2) modifies this provision slightly to clarify 
that the automatic waiver applies to new board members not proposed by 
management and to state that the notice must be submitted within two 
business days, rather than 48 hours. Section 308.12 of the FDIC's 
regulations, which governs computation of processing time for purposes 
of part 303, refers to time in increments of days and not hours. This 
modification results in a more liberal computation of processing time 
in that intervening Saturdays, Sundays and federal holidays are not 
counted.
    The FDIC invites public comment on retention of the 30-day 
processing timeframe (subject to a possible 60-day extension) and the 
change in the automatic waiver filing period. The agency also welcomes 
suggestions for further reducing unnecessary burden on insured state 
nonmember banks when reviewing changes in officers and directors, 
consistent with the requirements of section 32.

G. Activities and Investments of Insured State Banks

    Subpart G is reserved for filing procedures related to activities 
and equity investments of insured state banks which are currently 
contained in part 362 (12 CFR part 362). Part 362 implements section 24 
of the FDI Act (12 U.S.C. 1831a), which was created by the Federal 
Deposit Insurance Corporation Improvement Act of 1991 (Pub. L. 102-242, 
105 Stat. 2236), and governs the circumstances in which insured state 
banks may engage in activities which are not permissible for national 
banks.
    The FDIC recently issued a notice of proposed rulemaking to make 
comprehensive revisions to part 362. 62 FR 47969, Sept. 12, 1997. In 
connection with these revisions, the FDIC proposes to eliminate certain 
application procedures which are outdated, and also to authorize 
certain activities to be approved by the FDIC on an expedited basis. 
The FDIC cannot determine at this time whether its 362 proposal or this 
notice of proposed rulemaking to revise part 303 will be finalized 
first, but it is the FDIC's intent to place the part 362 application 
procedures relating to state bank activities in subpart G of part 303 
at such time as both rules are final. In order to deal with this 
problem, the application procedures which implement the proposed 
revisions to part 362 concerning state bank activities are contained in 
subpart E of the 362 proposal. If the 362 proposal is finalized before 
this 303 proposal, insured state banks operating under the revised part 
362 will look to subpart E of part 362 for application procedures until 
such time as part 303 is finalized, at which point the FDIC will 
transfer the application procedures from subpart E of part 362 to 
subpart G of part 303. If the 303 proposal is finalized first, insured 
state banks operating under the current version of part 362 will 
continue to look to the current version of part 362 itself for 
application procedures until the revisions to part 362 are finalized, 
and the application procedures which are proposed as subpart E of part 
362 will be finalized as subpart G of part 303. Members of the public 
taking an interest in the FDIC's application procedures for the 
activities of insured state banks under part 362 should review the part 
362 proposal for the specifics of such application procedures.

H. Subpart H--Filings by Savings Associations

    The FDIC is also reserving subpart H for filing procedures related 
to activities of insured state savings associations and subsidiaries of 
insured savings associations, which are currently contained in 
Sec. 303.13 of part 303 (12 CFR 303.13). Section 303.13 implements 
sections 28 and 18(m) of the FDI Act (12 U.S.C. 1831(e) and 12 U.S.C. 
1828(m)), which were both created by the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (Pub. L. 101-73, 103 Stat. 484). 
Section 303.13 governs the circumstances in which a state savings 
association may engage in activities which are not permissible for a 
federal savings association, and also requires all insured savings 
associations to notify the FDIC prior to establishing a subsidiary or 
engaging in new activities through a subsidiary.
    As part of the FDIC's recently-issued notice of proposed rulemaking 
to revise part 362, discussed above, the FDIC has proposed to address 
the substantive issues covered by Sec. 303.13 as subparts C and D of a 
revised part 362. The proposal harmonizes, to the extent possible given 
the underlying statutes, the treatment of activities of insured state 
banks and the activities of insured state savings associations. In 
connection with these revisions, the FDIC proposes to eliminate certain 
application procedures which are outdated, and also to authorize 
certain activities to be approved by the FDIC on an expedited basis. 
The FDIC cannot determine at this time whether its 362 proposal or this 
notice of proposed rulemaking to revise part 303 will be finalized 
first, but it is the FDIC's intent to place the part 362 application 
procedures relating to savings associations in subpart H of part 303 at 
such time as both rules are final. In order to deal with this problem, 
the application procedures which implement the proposed revisions to

[[Page 52822]]

part 362 concerning savings associations are contained in subpart F of 
the 362 proposal. If the 362 proposal is finalized before this 303 
proposal, existing Sec. 303.13 will be rescinded in connection with 
finalizing part 362. Savings associations operating under the revised 
part 362 will look to subpart F of part 362 for application procedures 
until such time as part 303 is finalized, at which point the FDIC will 
transfer the application procedures from subpart F of part 362 to 
subpart H of part 303. If the 303 proposal is finalized first, existing 
Sec. 303.13 will be preserved without substantive change on an interim 
basis in connection with finalizing part 303. Savings associations 
operating under Sec. 303.13 will continue to look to Sec. 303.13 for 
application procedures until the revisions to part 362 are finalized. 
In connection with finalizing part 362, Sec. 303.13 will be rescinded, 
and the application procedures which are proposed as subpart F of part 
362 will be finalized as subpart H of part 303. Members of the public 
taking an interest in the FDIC's application procedures for the 
activities of insured savings associations and their subsidiaries 
should review the part 362 proposal for the specifics of such 
application procedures.

I. Subpart I--Mutual-to-Stock Conversions

    The FDIC is proposing to move the notice requirements for mutually 
owned state-chartered savings banks that propose to convert to stock 
form from Sec. 303.15 to a separate subpart I. These notice 
requirements were adopted in final form on January 1, 1995. The 
intended effect of the rules is to ensure that mutual-to-stock 
conversions of FDIC regulated institutions do not raise safety and 
soundness concerns, breaches of fiduciary duty, or other violations of 
law. The substantive regulation regarding mutual-to-stock conversions 
would remain in Sec. 333.4 of this chapter.
    The FDIC also is proposing to provide for delegated authority in 
its mutual-to-stock conversion regulations. Some members of the 
industry have commented that the FDIC takes longer than necessary to 
act on conversion transactions. At the present time, all conversion 
notices are reviewed by the FDIC Board of Directors. The FDIC has 
gained considerable experience in reviewing notices to convert and the 
Board believes it is now appropriate to delegate authority to the 
Director and the Deputy Director (DOS) to issue notices of intent not 
to object. Such a delegation would apply only when the proposed 
conversion is determined not to pose a risk to the converting 
institution's safety and soundness, violate any law or regulation, 
present a breach of fiduciary duty, or raise any unique legal or policy 
issues. The Board believes that this delegation will allow the FDIC to 
act more promptly on routine notices and ease regulatory burden.
    No other changes in procedures are being proposed. The public is 
invited to comment on any changes the FDIC could make to ease 
regulatory burden while ensuring that conversions do not raise 
supervisory concerns.

J. Subpart J--Foreign Bank Activities

    Proposed subpart J addresses application requirements relating to 
the foreign activities of insured state nonmember banks and the U.S. 
activities of insured branches of foreign banks. The FDIC is proposing 
to make these application requirements easier to use and more 
streamlined by centralizing them in subpart J. Under the FDIC's current 
rules, these application requirements are located in various 
subsections of three different regulations: 12 CFR part 303, 12 CFR 
part 346, and 12 CFR part 347. The FDIC also is proposing to further 
streamline processing for several of these application requirements.
    On July 15, 1997, the FDIC published a Notice of Proposed 
Rulemaking (part 347 NPR) which requests public comment on an FDIC 
proposal to revise the FDIC's rules on the foreign activities of 
insured state nonmember banks and the U.S. activities of insured 
branches of foreign banks. 62 FR 37748. Subpart D of the part 347 NPR 
includes four proposed application procedures designed to work with the 
substantive revisions made to the FDIC's international banking 
regulations under the part 347 NPR.<SUP>3</SUP> The FDIC cannot 
determine at this time whether the part 347 NPR or this notice of 
proposed rulemaking to revise part 303 (part 303 NPR) will be finalized 
first. To deal with the possibility that the part 303 NPR may be 
finalized before the part 347 NPR is finalized, this part 303 NPR 
contains interim versions of the same application procedures contained 
in subpart D of the part 347 NPR. The interim versions proposed here 
are designed to work with the existing versions of the FDIC's 
international banking regulations, and are different in several 
respects from the application procedures contained in subpart D of the 
part 347 NPR. Therefore, members of the public taking an interest in 
the FDIC's application procedures for international banking issues 
should review the part 347 NPR as well as this part 303 NPR.
---------------------------------------------------------------------------

    \3\ These are the procedures for: (1) Establishing, moving, or 
closing a foreign branch of a state nonmember bank; (2) investment 
by state nonmember banks in foreign organizations; (3) exemptions 
from the insurance requirement for a state branch of a foreign bank; 
and (4) approval for an insured state branch of a foreign bank to 
conduct activities not permissible for federal branches.
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    If this part 303 NPR is finalized first, the four interim 
application procedures will remain in effect only until the part 347 
NPR is finalized. In connection with finalizing the part 347 NPR, the 
FDIC will transfer the application procedures in subpart D of the part 
347 NPR to subpart J of part 303 and rescind the interim procedures. If 
the part 347 NPR is finalized first, the interim procedures in this 
part 303 NPR will never be finalized, and the FDIC will make necessary 
technical amendments to transfer the application procedures in subpart 
D of the part 347 NPR to subpart J of part 303.
    This part 303 NPR also contains two application procedures which 
are not of an interim nature: the procedure for moving an insured 
branch of a foreign bank, and the procedure for mergers involving an 
insured branch of a foreign bank. These two procedures are not impacted 
by the part 347 NPR.
Interim Application Procedures
    Establishing, moving, or closing a foreign branch of a state 
nonmember bank. Section 18(d)(2) of the FDI Act (12 U.S.C. 1828(d)(2)) 
and Sec. 347.3 require an insured state nonmember bank to obtain the 
FDIC's prior written consent before establishing a branch located 
outside the United States, its territories, Puerto Rico, Guam, American 
Samoa, the Trust Territory of the Pacific Islands, or the Virgin 
Islands. Applications for these foreign branches are currently treated 
under the same process applicable for domestic branches under 
Sec. 303.2. The FDIC proposes to treat foreign branches separately, 
since foreign branch applications are not legally required to be 
subjected to analysis under the CRA or factors under section 6 of the 
FDI Act, as is the case for domestic branches.
    Under Sec. 303.182 as proposed, the FDIC would give its general 
consent for an eligible depository institution (as defined by 
Sec. 303.2(r)) to establish additional foreign branches in any 
jurisdiction in which the bank already operates a branch, or to move a 
branch within the jurisdiction.<SUP>4</SUP> Also, an

[[Page 52823]]

eligible depository institution that operates branches in two or more 
foreign jurisdictions may establish additional branches conducting 
approved activities in additional foreign jurisdictions under expedited 
processing procedures permitting the eligible depository institution to 
establish the branch 45 days after submitting its application to the 
FDIC.
---------------------------------------------------------------------------

    \4\ An application to establish a foreign branch is not an 
``application for a deposit facility'' covered by the CRA, and the 
FDIC will therefore only take the insured state nonmember bank's CRA 
rating into account for purposes of determining whether the 
application receives expedited processing under the general consent 
and expedited processing procedures.
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    The FDIC is proposing these general consent and expedited 
processing procedures because an insured state nonmember bank meeting 
the requirements of the provisions ordinarily should have sufficient 
familiarity with the implications of foreign branching, and be of 
sufficiently sound overall condition, that extensive FDIC review is not 
required. The FDIC retains the option to suspend these procedures as to 
any institutions for which this is not the case. For applicants seeking 
to establish a branch in an additional jurisdiction, the FDIC may also 
remove an applicant from expedited processing for any of the grounds 
specified in Sec. 303.11(c) follows: (1) If the FDIC determines the 
filing presents a significant supervisory concern; (2) raises a 
significant legal or policy issue; or (3) if the FDIC determines other 
good cause exists for removal. The FDIC will promptly provide the 
applicant with a written explanation if the FDIC decides to remove a 
filing from expedited processing.
    General consent and expedited processing are also inapplicable in 
any case presenting either of two special circumstances. Since the FDIC 
must have access to information about a foreign branch's activities in 
order to effectively supervise the institution, general consent or 
expedited processing do not apply if the law or practice of the foreign 
jurisdiction would limit the FDIC's access to information for 
supervisory purposes. In such cases, the FDIC must have an opportunity 
to fully analyze the extent of the confidentiality conferred under 
foreign law and whether it would, in light of all the circumstances, 
impair the FDIC's ability to carry out its responsibilities as a bank 
supervisor. In addition, if the proposed foreign branch has a direct 
adverse impact on a site which is on the World Heritage List 
<SUP>5</SUP> or the foreign jurisdiction's equivalent of the National 
Register of Historic Places (National Register), the FDIC may need an 
opportunity to evaluate the proposal in light of section 402 of the 
National Historic Preservation Act Amendments of 1989 (NHPA Amendments 
Act) (16 U.S.C. 470a-2).
---------------------------------------------------------------------------

    \5\ The World Heritage List was established under the terms of 
The Convention Concerning the Protection of World Culture and 
Natural Heritage adopted in November, 1972 at a General Conference 
of the United Nations Education, Scientific and Cultural 
Organization. Current versions of the list are on the Internet at 
http://www.unesco.org/whc/heritage.htm, or may be obtained from the 
FDIC Public Information Center, Room 100, 801 17th Street, NW, 
Washington, DC 20429.
---------------------------------------------------------------------------

    Proposed Sec. 303.182 also requires an insured state nonmember bank 
which closes a foreign branch to notify the appropriate regional 
director (DOS) that it has done so. This notice stems from the current 
requirement for such notice under Sec. 347.3. The FDIC has previously 
determined that Congress did not intend section 42 of the FDI Act on 
branch closings to apply to foreign branches. Finally, proposed 
Sec. 303.182 sets out the procedures for applications which are not 
eligible for the general consent or expedited processing procedures.
    Acquisition of stock of foreign banks or other financial entities 
by an insured state nonmember bank. Section 18(l) of the FDI Act (12 
U.S.C. 1828(l)) and Sec. 347.4 require an insured state nonmember bank 
to obtain the FDIC's prior written consent before acquiring an 
ownership interest in a foreign bank or other financial entity. The 
current application procedures are set out in Sec. 303.5(d). Since the 
current substantive provisions governing foreign investment at 
Sec. 347.4 provide only relatively general guidance about the conduct 
of such activities, it is not possible for the FDIC to implement 
general consent and expedited processing procedures on an interim 
basis, and proposed Sec. 303.183 contains no substantive changes from 
the current procedures. However, in connection with the FDIC's 
revisions of the foreign investment rules in the part 347 NPR, the FDIC 
has proposed general consent and expedited processing procedures.
    Exemptions from the insurance requirement for a state branch of a 
foreign bank. Section 346.6 requires an uninsured state branch of a 
foreign bank to obtain the FDIC's consent if the branch proposes to 
accept initial deposits of less than $100,000 and such deposits are not 
otherwise exempted from the definition of retail deposit taking 
activity under Sec. 346.6(a). The current application procedures are 
set out in Sec. 346.6(b). These procedures need no substantive revision 
at this time, because the procedures were recently reviewed and amended 
by the FDIC as a result of amendments to the International Banking Act 
of 1978, Pub. L. 95-369, 92 Stat. 607 (12 U.S.C. 310l et seq.) made by 
the Riegle-Neal Interstate Banking and Branching Efficiency Act of 
1994, Pub. L. 103-328, 108 Stat. 2338 (Interstate Act). 61 FR 5671 
(Feb. 14, 1996).
    Approval for an insured state branch of a foreign bank to conduct 
activities not permissible for a federal branch. Section 346.101 
requires an insured state branch of a foreign bank to obtain the FDIC's 
permission to conduct any type of activity which is not permissible for 
a federal branch of a foreign bank. The current application procedures 
are set out in Sec. 346.101 itself, which was recently adopted. 59 FR 
60703 (Nov. 28, 1994). Thus, proposed Sec. 303.187 does not make any 
substantive changes from the current procedures on an interim basis.
Noninterim Application Procedures
    Moving an insured branch of a foreign bank. Section 18(d)(1) of the 
FDI Act requires any insured branch of a foreign bank which wishes to 
move from one location to another to obtain the FDIC's prior written 
consent. Applications for these insured branches currently are treated 
under the same process applicable to domestic branches of insured state 
nonmember banks under Sec. 303.2. Since the FDIC's consent to these 
applications is legally subject to the same statutory considerations as 
applications to establish or relocate a domestic branch or to relocate 
the main office of an insured state nonmember bank, the FDIC is 
proposing an application process in Sec. 303.184 which parallels 
proposed subpart C. This includes expedited processing for an eligible 
insured branch. Subpart J contains a proposed definition of ``eligible 
insured branch'' which parallels the general Sec. 303.2(r) definition 
of ``eligible depository institution,'' with appropriate changes to 
take into account the different supervisory rating system and capital 
requirements applicable to insured branches.
    Mergers involving an insured branch of a foreign bank. An insured 
branch of a foreign bank meets the definition of an insured depository 
institution under section 3 of the FDI Act (12 U.S.C. 1813) and is 
therefore subject to the Bank Merger Act. The FDIC's current rules and 
regulations do not include a specific application process for approvals 
of merger transactions involving an insured branch. In order to give 
insured branches conducting merger transactions which are subject to 
FDIC approval the benefit of the same streamlined application 
processing proposed for domestic institutions in subpart D, proposed 
Sec. 303.185 contains appropriate cross-references to subpart

[[Page 52824]]

D. Section 303.185 clarifies that an eligible insured branch as defined 
in subpart J generally is eligible for the expedited processing 
available to an eligible depository institution in subpart D. 
Similarly, Sec. 303.185 clarifies that a transaction in which an 
insured branch is merged with other branches, agencies, or subsidiaries 
in the United States of the same foreign bank parent is eligible for 
disposition under the enhanced delegations applicable to corporate 
reorganizations.<SUP>6</SUP>
---------------------------------------------------------------------------

    \6\ If the foreign bank parent itself is not primarily engaged 
in business in the United States, and is involved in some merger or 
other combination outside the United States which does not result in 
a corresponding merger transaction in the United States with respect 
to an insured branch, section 18(c)(11) provides that no approval is 
required, since no party to the transaction is primarily engaged in 
business in the United States.
---------------------------------------------------------------------------

    Section 303.185 also incorporates a point explained in Advisory 
Opinion FDIC-96-12 (May 13, 1996) concerning the treatment of an 
insured branch under section 44 of the FDI Act (12 U.S.C. 1831u) as 
added by section 102 of the Interstate Act. Section 44 permits the 
responsible federal regulator to approve an interstate merger 
transaction involving the acquisition of a branch of an insured bank 
without the acquisition of the entire bank, but approval is possible 
only if the state in which the branch is located expressly permits out-
of-state banks to acquire a branch of the bank without acquiring an 
entire bank. In contrast, section 44 permits the responsible federal 
regulator to approve an interstate merger transaction involving the 
acquisition of an entire bank if the state in which the bank is located 
has not adopted legislation to opt out of interstate mergers. Section 
303.185 treats interstate mergers involving an insured branch under the 
latter approach. Express state authority permitting out-of-state banks 
to acquire a branch of the bank without acquiring the entire bank is 
required only if a foreign bank has more than one insured branch in the 
affected state and proposes to sell fewer than all of them to the same 
acquiror. If such state authority does not exist, the FDIC requires the 
foreign bank to sell all of its insured branches in that state to the 
same affiliated or unaffiliated acquiror. As is explained in Advisory 
Opinion FDIC-96-12, the statute and definitions used in section 44 do 
not provide a conclusive answer to this issue, but the FDIC's approach 
gives effect to all of the language and purposes of the Interstate Act.

K. Subpart K--Prompt Corrective Action

    Section 38 of the FDI Act, which governs prompt corrective action, 
restricts or prohibits certain activities based on an institution's 
capital category, and requires an insured institution to submit a 
capital restoration plan when it becomes undercapitalized. On September 
15, 1992, the FDIC approved a final interagency rule implementing the 
requirements of prompt corrective action. The final rule, which became 
effective December 19, 1992, amended part 325 of the agency's 
regulations by defining five capital categories for purposes of 
implementing the prompt corrective action requirements. 57 FR 44900 
(Sept. 29, 1992).
    In conjunction with interagency action, the FDIC on January 26, 
1993, approved amendments to part 303 to implement certain application 
procedures relating to prompt corrective action. The application 
procedures outlined in Sec. 303.5(e) relate solely to activities that 
are prohibited unless prior written consent is granted by the 
appropriate agency. In addition, a new Sec. 303.7(f)(1)(ix) was added 
to part 303 which provides delegation of authority to act on 
applications seeking prior consent to engage in certain restricted 
activities which are filed pursuant to the prompt corrective action 
regulations. These revisions to part 303 became effective on February 
12, 1993. 58 FR 8219 (Feb. 12, 1993).
    Subpart K does not substantially amend current procedures. The only 
substantive change is that a new paragraph has been added as 
Sec. 303.207. This new section is derived from section 38(i)(2)(G) of 
the FDI Act, and relates to paying interest on new or renewed 
liabilities at a rate that would increase the institution's weighted 
average cost of funds to a level significantly exceeding the prevailing 
rates of interest on insured deposits in the institution's normal 
market area. Current Sec. 303.5(e) contains a reference to activities 
listed in sections 38(i)(2) (A) through (F) of section 38, and the 
addition of item G completes the list of the seven activities which are 
prohibited for critically undercapitalized institutions unless prior 
FDIC approval has been granted.
    As part of the reorganization of part 303, delegations previously 
contained in Sec. 303.7(f)(ix) have been consolidated into subpart K 
and delegations previously contained in Sec. 303.9(h), regarding 
directives and capital plans pursuant to section 38 of the FDI Act, 
have been consolidated with enforcement related delegations in subpart 
N. As subpart K applies only to the application process, it does not 
affect the general prompt corrective action regulations adopted as a 
part of the interagency rulemaking process.

L. Subpart L--Section 19 of the FDI Act (Consent to Service of Persons 
Convicted of Certain Criminal Offenses)

    Section 19 of the FDI Act prohibits any person convicted of any 
crime involving dishonesty, breach of trust, or money laundering, or 
who has agreed to enter into a pretrial diversion or similar program in 
connection with a prosecution for any such offense, from (i) continuing 
as or becoming an institution-affiliated party, (ii) owning or 
controlling directly or indirectly an insured depository institution, 
or (iii) otherwise participating in the conduct of the affairs of FDIC-
insured depository institutions, without the FDIC's prior written 
consent.
    Proposed subpart L does not substantially amend current section 19 
application procedures, but rather brings together in one place 
information on section 19 which was previously contained in various 
sections of part 303. However, proposed Sec. 303.222 has been added to 
clarify the FDIC's position that the prior consent of the FDIC is 
required before a person approved under section 19 to participate in 
the affairs of a particular institution may participate in the affairs 
of another insured institution. Delegations of authority to act upon 
applications filed pursuant to section 19 remains unchanged.
    On July 24, 1997, the FDIC Board of Directors published for comment 
a proposed Statement of Policy on Section 19 which contains 
interpretations of the statutory language (62 FR 39840). Issues 
addressed in the statement of policy include what constitutes 
participation, who is a ``person'' under the statute, the meaning of 
``own'' or ``control,'' procedures for filing a section 19 application, 
and the standards for granting consent to a section 19 application. The 
proposed rule should be read in conjunction with the proposed policy 
statement for a fuller understanding of the FDIC's position on section 
19.

M. Subpart M--Other Filings

    This subpart contains the procedural requirements and delegations 
of authority for miscellaneous filings which do not warrant treatment 
as separate subparts. In many instances, there were no regulations or 
guidelines established regarding procedures or content for submitting a 
filing to the FDIC. In addition, it was often unclear when the filing 
requirements were

[[Page 52825]]

applicable. Under proposed subpart M, all information relating to a 
particular filing has been brought together in a self-contained section 
under a standardized format. The FDIC believes that this will simplify 
the filing process for prospective applicants by setting forth this 
information in a single location.
    Under the proposal, new expedited review procedures will be offered 
for applications to reduce or retire capital stock or capital debt 
instruments and applications to exercise trust powers. Expedited 
processing for brokered deposit waivers has been retained yet modified 
to parallel the requirements for an ``eligible depository institution'' 
in proposed Sec. 303.2(r), with the exception of the well-capitalized 
criteria.
    Application procedures currently found in part 359 (golden 
parachutes and indemnification payments) are being moved to subpart M. 
In addition, procedures for requesting a conditional waiver of cross-
guaranty liability are being moved from the FDIC's Statement of Policy 
Regarding Liability of Commonly Controlled Depository Institutions to 
proposed subpart M. Finally, specific procedures are being added to 
address requests for relief from reimbursement under the Truth in 
Lending Act and Regulation Z.
    Reduce or retire capital stock or capital debt instruments. Section 
303.241 reorganizes, clarifies and simplifies procedures for 
applications to reduce or retire capital stock, notes or debentures 
pursuant to section 18(i)(1) of the FDI Act (12 U.S.C. 1828(i)(1)). 
Filing instructions are currently contained in the standard 
instructions for all applications for which no form of application has 
been prescribed (12 CFR 303.5(b)). Authority to approve or deny such 
applications is currently delegated at Sec. 303.7(f)(1)(iii).
    Under expedited processing, an application by an eligible 
depository institution (as defined in proposed Sec. 303.2(r)) will be 
deemed approved 20 days after receipt by the appropriate FDIC regional 
director (DOS), unless the applicant is notified that the FDIC has 
removed the application from expedited processing. A recent increase in 
the number of applications to reduce or retire capital stock, notes or 
debt indicates to the FDIC that expedited processing will simplify and 
streamline the process for and be of benefit to state nonmember banks. 
The 20-day automatic approval period is based upon the processing time 
established in the FDIC's Application Processing Time Lines (FIL-26-96, 
May 6, 1996) and is supported by the average processing time for 
approval of these types of requests during 1996.
    The information requested under the proposal is the basic 
information that is necessary to process a request pursuant to section 
18(i)(1) of the FDI Act and is included to provide guidance to 
prospective applicants. The filing procedures and information requested 
do not impose additional requirements upon applicants but simply 
clarify existing practice.
    Exercise of trust powers. Currently, Secs. 303.5(b) and 303.7(a)(2) 
contain the general application procedures for the FDIC's prior 
approval to exercise trust powers. Sections 333.1, 333.2 and 333.101 
provide the substantive basis for requesting such applications.
    The FDIC proposes to amend part 303 to create a new section 
relating to trust applications that would bring together all the trust 
application procedures as well as the related delegations of authority 
into one centralized location. The proposal contains two exceptions to 
the application requirements. The first exception allows a state 
nonmember bank that received authority to exercise trust powers from 
its chartering authorities prior to December 1, 1950 to exercise trust 
powers without the FDIC's consent. The second exception permits an 
insured depository institution to continue to conduct trust activities 
pursuant to authority granted by its chartering authority following a 
charter conversion or withdrawal from membership in the Federal Reserve 
System.
    The proposed procedures would require applicants to complete a 
trust application form obtained from any FDIC regional office and 
provides expedited processing for eligible depository institutions as 
defined in proposed Sec. 303.2(r). Under expedited processing, an 
eligible institution's trust application will be deemed approved 30 
days after receipt by the appropriate FDIC regional director, unless 
the applicant is advised in writing that its filing has been removed 
from expedited processing. For applications not processed pursuant to 
the expedited processing procedures, the FDIC will provide written 
notification of the final action taken with regard to the filing.
    Brokered deposit waivers. The FDIC is proposing to reorganize its 
regulations regarding applications to accept brokered deposits by 
adequately capitalized insured depository institutions. The application 
procedures would be placed in this subpart M and the substantive rules 
regarding the acceptance of brokered deposits would remain in 
Sec. 337.6. Procedures would not be substantially altered.
    Applicants for a brokered deposit waiver cannot meet the strict 
definition of an ``eligible depository institution'' set forth in 
proposed Sec. 303.2(r), regarding institutions eligible for expedited 
processing. The definition in Sec. 303.2(r) requires eligible 
depository institutions to be ``well capitalized.'' Well capitalized 
institutions are not required to apply for a waiver prior to accepting 
brokered deposits. Therefore, for the purpose of determining 
eligibility for expedited processing for this subsection only, an 
adequately capitalized institution which otherwise meets the standards 
of Sec. 303.2(r) will be deemed to be an eligible depository 
institution. Under the current regulation, any institution with a 
composite rating of 1 or 2 is eligible for expedited processing. The 
definition contained in Sec. 303.2(r) contains additional 
qualifications for eligibility. The FDIC does not believe that there is 
a compelling reason to use a substantially different definition of 
eligibility for this subsection than that used for all other types of 
applications for which expedited procedures are available.
    In moving the application procedures to part 303, the proposal 
would amend paragraph (c) of Sec. 337.6 by referring the applicant to 
Sec. 303.243 for filing instructions. Paragraphs (d) and (e) of 
Sec. 337.6 would be deleted because the information in those paragraphs 
(involving filing procedures, delegations of authority, and expedited 
processing procedures) would appear in Sec. 303.243.
    Golden parachutes and severance plan payments. The FDIC is 
proposing to revise its regulations regarding applications to make 
excess nondiscriminatory severance plan payments and golden parachute 
payments by insured depository institutions or depository institution 
holding companies. The FDIC's regulations with respect to such payments 
are codified at part 359. Generally, troubled depository institutions 
as defined in the regulations are prohibited under part 359 from making 
severance plan payments and golden parachute payments, unless the 
institution obtains the consent of its primary federal regulator and, 
in certain circumstances, the FDIC.
    Under the proposal, the substantive rules with respect to making 
such payments would remain unchanged in part 359 of the FDIC's 
regulations. The only changes to part 359 would appear in Sec. 359.6, 
which involves ``Filing instructions.'' First, a reference to new 
Sec. 303.244 of the FDIC's regulations would be added. Second, a 
sentence specifying the necessary elements of an

[[Page 52826]]

application would be deleted from Sec. 359.6. These elements and the 
procedures for obtaining the consent of the FDIC would be set forth in 
the new Sec. 303.244. The necessary elements would be expanded from two 
items to five items in Sec. 303.244 in order to assist an applicant in 
preparing a complete filing. The filing procedures and information 
requested do not impose additional requirements upon applicants, but 
simply clarify existing requirements.
    Waiver of liability for commonly controlled depository 
institutions. The application procedures for an insured depository 
institution to request a waiver of liability pursuant to section 5(e) 
of the FDI Act are new (12 U.S.C. 1815(e)). The FDIC Board of Directors 
recently approved revisions to the Statement of Policy Regarding 
Liability of Commonly Controlled Depository Institutions (62 FR 15480, 
April 1, 1997), which provides guidance to the industry as to the 
manner in which the FDIC will administer the provisions of section 5(e) 
of the FDI Act. The statement of policy is being further revised 
elsewhere in today's Federal Register to move the procedures for 
requesting a conditional waiver of the cross-guaranty liability to 
proposed Sec. 303.245 and to include a cross-reference to Sec. 303.245.
    Insurance fund conversions. The FDIC is proposing to revise its 
regulations regarding filings for insurance fund conversions at 
Sec. 303.246. The proposed revisions would reformat the filing 
requirements and delete references to and procedures regarding 
insurance fund conversions qualifying as exceptions to the insurance 
fund conversion moratorium imposed in section 5(d) of the FDI Act (12 
U.S.C. 1815(d)(2)(A)(ii)). Such references and procedures are no longer 
necessary because the insurance fund conversion moratorium expired in 
the last quarter of l996 when the Savings Association Insurance Fund 
reached its designated reserve ratio.
    Conversion with diminution of capital. Section 303.247 reorganizes 
and clarifies filing procedures pursuant to section 18(i)(2) of the FDI 
Act (12 U.S.C. 1828(i)(2)) to convert from an insured federal 
depository institution to a state nonmember bank where the capital 
stock or surplus of the resulting bank will be less than the capital 
stock or surplus, respectively, of the converting institution at the 
time of the shareholder's meeting approving such conversion. Filing 
instructions are currently contained in Sec. 303.3(c) and 
Sec. 303.5(b).
    The information requested of the applicant under the proposal is 
the basic information that is necessary to process a request pursuant 
to section 18(i)(2) of the FDI Act. The filing procedures and 
information requested do not impose additional requirements upon 
applicants but simply clarify existing requirements.
    A delegation of authority has been added to Sec. 303.247 to allow 
the Director, Deputy Director, or where confirmed in writing, an 
associate director, regional director or deputy regional director (DOS) 
to approve conversions with diminution of capital. Authority to deny is 
delegated only to the Director and Deputy Director (DOS). At present, 
there is no delegated authority.
    Continue or resume status as an insured institution following 
termination under section 8 of the FDI Act. Proposed Sec. 303.248 
covers applications by depository institutions for permission to 
continue or resume their insured status after termination of insurance 
under section 8 of the FDI Act (12 U.S.C. 1818). This section covers 
institutions whose deposit insurance continues in effect for any 
purpose or for any length of time under the terms of an FDIC order 
terminating deposit insurance. However, it does not cover any operating 
non-insured depository institution which was previously insured by the 
FDIC or any non-insured, non-operating depository institution whose 
charter has not been surrendered or revoked. Institutions not covered 
by this section would be required to file a de novo application for 
FDIC insurance. The contents of the filing under this section have been 
streamlined to require all relevant facts and reasons for the request 
and a certified copy of the resolution authorizing the request by the 
institution's board of directors.
    Truth in Lending Act--Requests for relief from reimbursement and 
reconsiderations of denials. Proposed Sec. 303.249 is intended to apply 
to requests for relief from reimbursement involving the Truth in 
Lending Act (15 U.S.C. 1601 et seq.) and Regulation Z (12 CFR 226) 
(Truth in Lending cases). Currently, no specific procedures or 
timeframes are provided for Truth in Lending cases in part 303. 
Requests for relief from reimbursement are addressed pursuant to the 
procedures in Sec. 303.6 which apply generally to applications, and 
requests for reconsideration of a request for relief following denial 
must be filed within 15 days under Sec. 303.6(e), which governs 
petitions for reconsideration. Proposed Sec. 303.249 sets forth new 
procedures specifically for Truth in Lending cases and provides that 
applicants may file initial requests for relief within 60 days after 
receipt of the compliance report of examination containing the request 
to conduct a file search and make restitution to affected customers. 
Requests for reconsideration following denial will continue to be 
handled under the FDIC's general petition for reconsideration 
provision, located at proposed Sec. 303.11(f), which requires filing 
within 15 days of receipt of denial.
    Modifications of conditions. Section 303.250 reorganizes and 
clarifies the procedures for requests to modify a previously issued 
FDIC approval of a filing. The instructions for these requests are 
currently contained in Sec. 303.5(b). The relevant delegation of 
authority to approve or to deny such filings is contained in existing 
Sec. 303.7(f)(l)(iv).
    The information requested of the applicant under the proposal is 
the basic information that is necessary to process a request of this 
nature. The filing procedures and information requested do not impose 
additional requirements upon applicants, but simply clarify existing 
requirements. However, a new criteria for exercise of delegated 
authority by DOS officials is being added requiring Legal Division 
consultation to modify conditions if Legal Division consultation was 
required in connection with the original filing.
    During 1995, the FDIC approved 15 requests to modify a prior 
approval, with an average processing time of 11 days. During 1996, the 
FDIC approved 14 such requests, with an average processing time of 15 
days. Given the low volume of activity and the prompt processing of 
those requests, the FDIC believes that the creation of special 
expedited procedures is not warranted.
    Extensions of time. Section 303.251 reorganizes and clarifies the 
procedures for requests seeking an extension of time to fulfill a 
condition required in an approval issued by the FDIC, or to consummate 
a transaction which was the subject of an approval by the FDIC. The 
instructions for these requests are currently contained in 
Sec. 303.5(b). The relevant delegation of authority to approve or to 
deny such filings is contained in existing Sec. 303.8(a).
    The information requested of the applicant under the proposal is 
the basic information that is necessary to process a request of this 
nature. The filing procedures and information requested do not impose 
additional requirements upon applicants, but simply clarify existing 
requirements.
    During 1995, the FDIC approved 31 requests for an extension of 
time, with an average processing time of 10 days.

[[Page 52827]]

During 1996, the FDIC approved 31 such requests, with an average 
processing time of 13 days. Given the low volume of activity and the 
prompt processing of those requests, the FDIC believes that the 
creation of special expedited procedures is not warranted.

N. Subpart N--Enforcement Delegations

    Subpart N makes several significant changes to the FDIC's 
enforcement delegations of authority, as described below.
    Section 8(a) notices of intention to terminate insured status. 
Under current Sec. 303.9(a), authority has been delegated to the 
Director of DOS to issue notifications to primary regulator (NPRs) 
under section 8(a) of the FDI Act (12 U.S.C. 1818(a)), with Legal 
Division concurrence. If unsafe or unsound conditions or practices and 
violations of law cited in an NPR are not corrected, a notice of 
intention to terminate insured status (NIT) may be issued.
    The Director of DOS, pursuant to an agreement with the Board of 
Directors, has not exercised delegated authority to issue NPRs, and has 
brought all such cases to the Board of Directors. Currently, when the 
Board issues an NPR, it also authorizes the Executive Secretary, with 
Legal Division concurrence, to issue an NIT, after being informed by 
DOS that an institution has not corrected the conditions, practices 
and/or violations of law cited in the NPR. Proposed Sec. 303.262 would 
largely codify existing FDIC practice by delegating authority to issue 
NITs, but would modify existing FDIC practice by allowing the Director 
of DOS to issue NITs with Legal Division concurrence. This would speed 
matters since the Executive Secretary now relies on information 
received from DOS prior to issuing NITs.
    Section 8(g) suspension and removal actions. Currently, authority 
is delegated to the Director and Deputy Director (DOS and DCA) and, 
when confirmed in writing by the Director, to an associate director, to 
issue orders of suspension or prohibition to any institution-affiliated 
party who is charged in any information, indictment or complaint, or 
who is convicted of or enters into a pretrial diversion or similar 
program, regarding any criminal offense cited in or covered by section 
8(g) of the FDI Act, when such institution-affiliated party consents to 
the suspension or prohibition. Proposed Sec. 303.266(b) contains a new 
delegation to issue orders of prohibition or suspension under section 
8(g), regardless of whether or not the institution-affiliated party 
consents to the order, if the criminal offense is one for which section 
8(g) mandates suspension or prohibition. The FDIC believes that such a 
delegation is appropriate since no discretion to issue this type of 
order is provided in the statute.
    Consent section 8(q) orders terminating insured status. Section 
8(q) of the FDI Act, 12 U.S.C. 1818(q), authorizes the issuance of 
consent orders terminating deposit insurance of an institution whose 
deposits have been assumed by another institution, whether by way of 
merger, consolidation, statutory assumption, or contract. Proposed 
Sec. 303.268 codifies the current delegation of authority to the 
Executive Secretary of the FDIC to issue consent orders pursuant to 
section 8(q) of the Act. This authority was contained in a June 13, 
1989 resolution of the Board of Directors and was not previously 
codified in part 303.
    Civil money penalties. Proposed Sec. 303.269 clarifies the FDIC's 
delegations of authority relating to the issuance of final orders to 
pay civil money penalties, whether or not a notice of charges has been 
issued in a case. Proposed Sec. 303.269 also authorizes the Director 
(DOS) and Director (DCA) to take joint action where violations for 
which civil money penalties are authorized involved both safety and 
soundness and consumer compliance matters. The proposal further 
delegates the authority to levy and enforce civil money penalties for 
the late, inaccurate, false or misleading filing of Reports of 
Condition and Income, Home Mortgage Disclosure Act Reports, CRA loan 
data reports (see 12 CFR 345.42), and all other required reports.
    Section 5(e) assessments of commonly-controlled institutions. 
Section 5(e) of the FDI Act, 12 U.S.C. 1815(e), permits the FDIC to 
recoup the amount of loss to the deposit insurance funds resulting from 
the failure of affiliated institutions or assistance provided to 
affiliated institutions. Proposed Sec. 303.270 sets forth the authority 
to issue notices of assessment under section 5(e) of the Act, also 
known as cross-guaranty assessments.. This authority was not previously 
codified in 12 CFR part 303. The addition of this provision and the 
delegations of authority to the Director, Deputy Director and, where 
confirmed in writing, to an associate director of DOS to issue notices 
of assessment of liability, reflect the actual practice of the Board of 
Directors. Additionally, proposed Sec. 303.278(j) provides that the 
Board expressly retains authority on whether or not to waive cross-
guaranty assessments. This provision is new and was not previously 
codified in part 303.
    Section 10(c) investigations. The legal authority of the General 
Counsel to issue orders of investigation pursuant to section 10(c) of 
the FDI Act contained in proposed Sec. 303.272(b) is being expanded to 
include sections 8 through 13 of the FDI Act (12 U.S.C. 1818-1823) in 
order to cover post-conservatorship or post-receivership investigations 
conducted by the FDIC in connection with the possible liability of 
directors, officers, and other institution-affiliated parties. The 
requirement of the concurrent certification of the General Counsel for 
certain orders of investigation issued by the Director and Deputy 
Director of the Division of Resolutions and Receiverships is being 
added to be consistent with the current requirement for orders issued 
in certain specified situations by the Directors and Deputy Directors 
of DOS and DCA.
    Acceptance of written agreements. Proposed Sec. 303.274 continues 
in effect FDIC delegations of authority on acceptance of written 
agreements in lieu of orders to terminate deposit insurance and to 
issue cease-and-desist orders under sections 8 (a) and (b) of the Act 
(12 U.S.C. 1818 (a) and (b)). The Director (DOS) has delegated 
authority to enter into written agreements relating to section 8(a) of 
the Act and relating to safety and soundness matters under section 8(b) 
of the Act, while the Director (DCA) has authority to enter into 
written agreements under section 8(b) of the Act relating to consumer 
compliance matters. Proposed Sec. 303.274(c) adds a new provision not 
previously codified in part 303, giving authority to the Director and 
Deputy Director (DOS) and (DCA) and, where confirmed in writing by the 
appropriate Director, to an associate director, or to the appropriate 
regional director or deputy regional director to enter into written 
agreements with insured institutions and institution-affiliated parties 
that contain conditions that must exist before the FDIC may issue a 
statement of non-objection to a filing under part 303.
    Termination of pending actions--general. Proposed Sec. 303.275 adds 
a new paragraph (h) which clarifies the time frames in which pending 
enforcement actions may be terminated or dismissed pursuant to 
delegated authority. The section provides that any pending enforcement 
action may be terminated or dismissed by the Director or Deputy 
Director of DOS or DCA, as appropriate, before the commencement of a 
hearing on the merits by an administrative law judge. Once a hearing on 
the merits has begun, the pending action may be dismissed or terminated 
by stipulation or consent of the affected parties no

[[Page 52828]]

later than 14 days after the administrative law judge has closed the 
record of the hearing. After this time, only the FDIC Board of 
Directors may terminate or dismiss an enforcement action. This 
provision was not previously codified in part 303.
    Standards governing modification and termination of section 8(e) 
prohibition orders. The delegation of authority to the Director and 
Deputy Director (DOS) and (DCA), as appropriate and if confirmed in 
writing, to the associate director to modify and terminate orders of 
removal or prohibition under section 8(e) of the FDI Act (12 U.S.C. 
1818(e)) may be found in proposed Sec. 303.276(e). Proposed 
Sec. 303.276(e) adds the standards articulated by the Board in FDIC 
enforcement decisions under which a removal or prohibition order may be 
modified or terminated. Those standards are as follows: (1) The 
respondent has demonstrated his/her fitness to participate in any 
manner in the conduct of the affairs of an insured depository 
institution, (2) the respondent has shown that his/her participation 
would not pose a risk to the institution's safety and soundness, and 
(3) the respondent has proven that his/her participation would not 
erode public confidence in the institution. Proposed Sec. 303.276(e) 
also delegates authority to grant consent pursuant to section 
8(e)(7)(B) of the Act for the modification of termination of 
outstanding section 8(e) orders issued by another federal financial 
regulator. These provisions are new and were not previously codified in 
part 303.
    Enforcement authority vested in General Counsel. Proposed subpart N 
would vest authority in the General Counsel or, where confirmed in 
writing by the General Counsel, his or her designee, to provide Legal 
Division concurrence regarding all enforcement actions. This change 
reflects the General Counsel's position as the head of the Legal 
Division with ultimate prosecutorial authority over all enforcement 
actions.

IV. Other Regulatory Changes

A. Part 337 (Unsafe and Unsound Banking Practices)

    The FDIC is proposing to amend Sec. 337.6, which governs the 
acceptance of brokered deposits by insured depository institutions. A 
well capitalized insured depository institution may accept brokered 
deposits without restriction by Sec. 337.6 while an undercapitalized 
institution may not accept brokered deposits under any circumstances. 
In the case of an adequately capitalized insured depository 
institution, a brokered deposit can be accepted but only if the 
institution has obtained a waiver from the FDIC. Under the proposal, 
the procedures for obtaining a waiver would be moved from Sec. 337.6 to 
12 CFR part 303. An institution seeking a waiver would be referred by 
Sec. 337.6(c) to Sec. 303.243. Paragraphs (d) and (e) of Sec. 337.6 
would be deleted because the information in those paragraphs (involving 
filing procedures, delegations of authority and expedited processing 
procedures) would appear in Sec. 303.243. Paragraph (f) would be 
deleted because the 60-day transition rule prescribed by that paragraph 
(for the period beginning on June 16, 1992) is obsolete.
    Additionally, Sec. 337.6 would be amended to reflect certain 
changes in the statutory definition of ``deposit broker.'' Prior to 
these changes, the term ``deposit broker'' included ``any insured 
depository institution'' that solicits deposits by offering interest 
rates that significantly exceed the prevailing rates offered by other 
insured depository institutions in the same market area ``having the 
same type of charter.'' Through the Riegle Community Development and 
Regulatory Improvement Act of 1994 (see Pub. L. 103-325, 108 Stat. 
2160, Sec. 337), Congress made two changes to this statutory 
definition. First, Congress changed ``any insured depository 
institution'' to ``any insured depository institution that is not well 
capitalized.'' The effect of this change was to relieve well 
capitalized institutions of the burden of reporting deposits with high 
interest rates as brokered deposits. Second, Congress removed the 
phrase, ``having the same type of charter.'' The effect of this change 
was to require a comparison between the interest rates of all insured 
depository institutions within a market area (as opposed to insured 
depository institutions with a particular type of charter). See 12 
U.S.C. 1831f(g)(3). Under the proposal, the amended statutory language 
would be incorporated in the FDIC's regulatory definition of ``deposit 
broker'' at Sec. 337.6(a)(5)(iii).

B. Part 346 (Foreign Banks)

    The FDIC is proposing to move current Sec. 303.8(f) from part 303 
to part 346, without substantive change. Section 303.8(f) contains 
delegations for the Division of Supervision to accept the pledge 
agreements by which insured branches of foreign banks pledge assets for 
the benefit of the FDIC, to be used in the event the FDIC becomes 
obligated to pay the insured deposits of the insured branch. Section 
303.8(f) also authorizes the General Counsel or designee to alter the 
model deposit agreement used. The FDIC is proposing to move the 
delegation to part 346 for ease of reference, in order to locate the 
delegation with the substantive pledge requirements to which the 
delegation applies. The delegation would be added as a new paragraph at 
the end of Sec. 346.19 on pledge of assets.

C. Part 359 (Golden Parachute and Indemnification Payments)

    The FDIC is proposing to amend 12 CFR part 359 by moving certain 
information from Sec. 359.6 (``Filing instructions'') to 12 CFR part 
303. The substantive rules in part 359 would remain unchanged. These 
rules govern the making of excess nondiscriminatory severance plan 
payments and golden parachute payments by insured depository 
institutions or depository institution holding companies. Generally, 
troubled depository institutions are prohibited under part 359 from 
making such payments unless the institution obtains the consent of the 
FDIC and/or the institution's primary federal regulator. Under the 
proposal, an institution seeking the consent of the FDIC would be 
referred by Sec. 359.6 to Sec. 303.244. Also, a listing of the 
necessary elements of an application would be moved from Sec. 359.6 to 
Sec. 303.244. These elements would be expanded in order to assist an 
applicant in preparing a complete filing.

V. Regulatory Text Deleted From Proposed Part 303

    Some matters currently addressed in part 303 are not being included 
in the proposed revisions to part 303 because these matters will be 
covered elsewhere or are no longer needed. Those items are summarized 
below:
    Section 303.2(c)--Special procedures for remote service facilities. 
Notice procedures for remote service facilities, along with related 
delegations of authority and the definition of ``remote service 
facility'' have been deleted because EGRPRA excludes such facilities 
from the definition of a branch.
    Section 303.11(c)--Request for review. This section merely states 
that an aggrieved party may request the Board of Directors to review 
any action taken under authority delegated under Secs. 303.7, 303.8, 
and 303.9. Numerous avenues already exist for appeal, such as those 
found under proposed Sec. 303.11(f) (Appeals and petitions for 
reconsideration) and part 308 (Uniform Rules of Practice and 
Procedure). Broad authority to challenge delegations of authority seems 
unnecessary and is not in keeping with the Board's recent

[[Page 52829]]

resolution on delegations of authority which has been codified in part 
in proposed Sec. 303.12 (General rules governing delegations of 
authority).
    Section 303.12--OMB control number assigned pursuant to the 
Paperwork Reduction Act. This section is being deleted in its entirety 
because this same material also appears in Sec. 304.7, Display of 
control numbers, of this chapter.
    Several delegations of authority are also being eliminated:
    Sections 303.7(f)(1)(vii) and 303.7(f)(2)(i)--Delegations regarding 
the Depository Institutions Management Interlocks Act. These 
delegations are being moved to part 348 (Management Official 
Interlocks) of this chapter.
    Section 303.8(b)--Disclosure laws and regulations. The delegations 
related to part 335 (Securities of nonmember insured banks) are now 
contained in part 335 of this chapter. The delegations to administer 
part 341 (Registration of Securities Transfer Agents) are being moved 
to part 341 of this chapter.
    Section 303.8(c)--Security devices and procedures and bank service 
arrangements. This is a delegation to administer the provisions of part 
326 (Minimum Security Devices and Procedures). There are no longer any 
application procedures related to part 326, so therefore no delegations 
of authority are required.
    Section 303.8(d)--In emergencies. This is a delegation to staff to 
manage the FDIC's affairs in the event an enemy attack renders the 
Board of Directors unable to perform its normal management functions. 
This delegation is being transferred to an internal Board resolution.
    Section 303.8(h)--Application or notices for membership or 
resumption of business. This delegation permits DOS officials to 
provide comments to other federal regulators on applications or notices 
for membership in the Federal Reserve System, or for conversion of a 
state bank to a national bank. This delegation is being deleted as 
unnecessary since it is done as a matter of practice.
    Section 303.8(i)--Depository Institutions Disaster Relief Act of 
1992 (DIDRA). The provisions of DIDRA that were the subject of these 
delegations have expired.

VI. Initial Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA) requires an 
agency to publish an initial regulatory flexibility analysis, except to 
the extent provided in 5 U.S.C. 605(b), whenever the agency is required 
to publish a general notice of proposed rulemaking for a proposed rule. 
Pursuant to subsections 603 (b) and (c) of the RFA, the FDIC provides 
the following initial regulatory flexibility analysis:
    Reasons why agency action is being considered. The ``Supplementary 
Information'' section above contains this information.
    Statement of objectives of and legal basis for proposed rule. The 
``Supplementary Information'' section above contains this information.
    Description and estimate of the number of small entities to which 
the proposed rule applies. The proposed rule applies generally to the 
approximately 6,300 state nonmember banks for which the FDIC is the 
primary federal regulator, regardless of size. As of June 26, 1997, 
there were 6,265 such institutions, 4,316 of which were small entities 
as defined by the RFA.<SUP>7</SUP> In addition, as indicated in the 
Scope paragraphs of the pertinent subparts, certain of the subparts 
apply to all depository institutions insured by the FDIC, regardless of 
size. As of June 26, 1997, there were 11,220 such institutions, 6,926 
of which were small entities as defined by the RFA. Subpart B (Deposit 
Insurance) also applies to proposed depository institutions and 
operating noninsured institutions that seek to apply for FDIC deposit 
insurance, regardless of size. Based upon recent experience, the FDIC 
estimates that the proposed rule will affect a total of approximately 
200 such entities per year, nearly all of which the FDIC would expect 
to be small entities as defined by the RFA. In limited circumstances, 
certain subparts apply more generally to other entities or persons, as 
defined by the respective subparts, making applications to the FDIC, 
regardless of size. Quantification of the number of such persons or 
small entities who will be affected by the proposed rule is not 
practicable. The FDIC believes that any economic impact on such small 
entities will be beneficial because the proposed rule serves to reduce 
regulatory burden. The FDIC invites the public to comment on this 
conclusion and will carefully review all comments received prior to 
issuing the final regulation.
---------------------------------------------------------------------------

    \7\ The RFA defines the term ``small entity'' in 5 U.S.C. 601 by 
reference to definitions published by the Small Business 
Administration. The Small Business Administration has defined a 
``small entity'' for banking purposes as a national or commercial 
bank, savings institution or credit union with less than $100 
million in assets. See 13 CFR 121.201.
---------------------------------------------------------------------------

    Projected reporting, recordkeeping and other compliance 
requirements of the proposed rule. The proposed rule reorganizes, 
clarifies and simplifies the rules applicable to the processing of 
applications, notices and requests, and updates the regulation to 
reflect recent statutory changes. The FDIC expects that these proposed 
changes will reduce industry costs associated with regulatory filings 
and will decrease processing time associated with such filings. For 
example, branch applications for eligible institutions generally will 
be deemed approved 21 days after filing and expedited procedures have 
been introduced for certain merger and deposit insurance applications. 
Consistent with statutory amendments, the proposed rule eliminates the 
need for banks that have undergone a recent change in control or have 
been operating less than two years to file notices to add a director or 
senior executive officer, thus substantially reducing the number of 
required filings. Reorganization of part 303 so that all information 
relevant to the filing and processing of each particular application 
type in one concise subpart also serves to lessen burden. The proposed 
rule also more closely aligns the procedural requirements of the FDIC's 
regulations with those of the other federal banking agencies, thus 
reducing the burden which may be associated with interpreting the rules 
of more than one federal banking agency.
    Identification of federal rules which may duplicate, overlap or 
conflict with the proposed rule. The ``Supplementary Information'' 
above contains this information.
    Discussion of significant alternatives to proposed rule. The FDIC 
believes that the proposed rule is an alternative to the existing part 
303 and provides economic benefits to small entities. The proposed rule 
reorganizes and consolidates the existing rule to make it easier for 
affected small entities to use. The reporting requirements have been 
clarified and simplified as a result of the FDIC's experience in 
administering the existing part 303. By streamlining application 
procedures and granting eligible depository institutions expedited 
processing of certain filings, the proposed rule enables small entities 
that qualify as eligible depository institutions to operate more 
efficiently. By reducing the regulatory burden associated with 
application procedures, the proposed rule reduces the resources small 
entities will have to devote to regulatory compliance. Because the 
majority of the filings required by the proposed rule are required by 
statute, elimination of the rule is not a viable alternative. The FDIC 
has carefully reviewed each of the existing filing and processing 
procedures and, where the applicable statutes provide some

[[Page 52830]]

flexibility, the FDIC proposes to revise existing part 303 in a way it 
believes best serves to reduce regulatory burden and streamline 
processing without compromising the safety and soundness of the banking 
industry.
    The FDIC invites the public to comment on whether the proposed rule 
reduces regulatory burden and to provide the FDIC with suggested 
alternatives to those set forth in the proposed rule. The FDIC will 
carefully review all comments received prior to issuing the final 
regulation.

VII. Paperwork Reduction Act

    The collections of information contained in this proposed rule and 
identified below have been submitted to the Office of Management and 
Budget (OMB) for review and approval in accordance with the 
requirements of the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 
3501 et seq.). Comments are invited on: (a) Whether the collection of 
information is necessary for the proper performance of the FDIC's 
functions, including whether the information has practical utility; (b) 
the accuracy of the estimates of the burden of the information 
collection; (c) ways to enhance the quality, utility, and clarity of 
the information to be collected; and (d) ways to minimize the burden of 
the information collection on respondents, including through the use of 
automated collection techniques or other forms of information 
technology.
    Comments should be addressed to the Office of Information and 
Regulatory Affairs, Office of Management and Budget, Attention: Desk 
Officer Alexander Hunt, New Executive Office Building, Room 3208, 
Washington, DC 20503, with copies of such comments to Steven F. Hanft, 
Assistant Executive Secretary (Regulatory Analysis), Federal Deposit 
Insurance Corporation, Room F-4080, 550 17th Street NW, Washington, DC 
20429. All comments should refer to ``Part 303.'' OMB is required to 
make a decision concerning the collections of information contained in 
the proposed regulations between 30 and 60 days after the publication 
of this document in the Federal Register. Therefore, a comment to OMB 
is best assured of having its full effect if OMB receives it within 30 
days of this publication. This does not affect the deadline for the 
public to comment to the FDIC on the proposed regulation.

Subpart C (Establishment and Relocation of Domestic Branches and 
Offices)

    Section 18(d)(1) of the FDI Act (12 U.S.C. 1828(d)(1)) provides 
that no state nonmember insured bank shall establish and operate any 
new domestic branch or move its main office or any such branch from one 
location to another without the prior written consent of the FDIC after 
considering the factors enumerated in section 6 of the FDI Act (12 
U.S.C. 1816). Subpart C of the proposed regulation sets forth the 
application requirements and procedures for insured state nonmember 
banks to establish a branch, relocate a main office, and relocate a 
branch subject to the approval by the FDIC. The information collected 
is used by the FDIC to evaluate the statutory factors and determine 
whether to grant consent. This collection of information has been 
approved by OMB under clearance number 3064-0070 through May 31, 1998. 
Public comment regarding this collection is being solicited because the 
proposed regulation would modify the OMB-approved collection by 
addressing the establishment and relocation of interstate branches and 
deleting remote service facilities from the section 18(d) application 
requirements.
Estimate of Annual Burden
    Number of applications: 1,750.
    Number of hours to prepare an application: 5.
    Total annual burden hours: 8,750.

Subpart M (Other Filings); Section 303.242 (Exercise Trust Powers)

    Section 333.2 of the FDIC's regulations (12 CFR 333.2) prohibits 
any insured state nonmember bank from changing the general character of 
its business without the prior written consent of the FDIC. The 
exercise of trust powers by a bank is usually considered to be a change 
in the general character of a bank's business if the bank did not 
exercise those powers previously because trust powers create a new 
fiduciary relationship. Therefore, unless a bank is currently 
exercising trust powers, it must file a formal application to obtain 
the FDIC's written consent to exercise trust powers. Section 303.242 of 
the proposed regulation sets forth the application procedures relating 
to the FDIC's prior approval to exercise trust powers. Each application 
submitted by a bank is evaluated by the FDIC to verify the 
qualifications of bank management to administer a trust department to 
ensure that the bank's financial condition will not be jeopardized as a 
result of trust operations. This collection of information has been 
approved by OMB under clearance number 3064-0025 through December 31, 
1997. Public comment is being solicited because the collection is being 
modified to simplify and clarify the ``Application for Consent to 
Exercise Trust Powers'' form, and to eliminate a number of items of 
information required under the current form. In addition, the 
collection is being modified so that an ``eligible depository 
institution'' as defined in Sec. 303.2(r) of the proposal will file an 
abbreviated application and will receive expedited processing by the 
FDIC.
Estimate of Annual Burden
    Number of applications from ``eligible depository institutions'': 
31.
    Average number of hours to prepare an 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 prepare an application: 24.
    Annual burden hours: 120.
    Total number of applications: 36.
    Total annual burden hours: 368.
Other Collections of Information
    Proposed part 303 addresses collections of information in addition 
to subpart C and subpart M collections discussed above. Subpart B 
(Deposit Insurance) addresses a collection approved by OMB under 
clearance number 3064-0001 which expires on July 31, 2000. Subpart D 
(Mergers) addresses a collection approved by OMB under clearance number 
3064-0015 which expires on September 30, 1998. The merger application 
collection will be the subject of an interagency solicitation of public 
comment concerning the PRA aspects of a single, interagency form for 
affiliated and nonaffiliated mergers. Subpart E (Change in Bank 
Control) addresses a collection approved by OMB under clearance number 
3064-0019 which expires on January 31, 2000. Subpart F (Change of 
Director or Senior Executive Officer) addresses a collection approved 
by OMB under clearance number 3064-0097 which expires on January 31, 
2000. Subpart G (Activities and Investments of Insured State Banks), 
addresses a collection approved by OMB under clearance number 3064-
0111, and Subpart H (Filings by Savings Associations), addresses a 
collection approved under clearance number 3064-0104. Public comment 
about these two collections was sought in a notice of proposed 
rulemaking regarding 12 CFR part 362, ``Activities of Insured State 
Banks and Insured Savings Associations.'' 62 FR 47969, Sept. 12, 1997.
    Subpart I (Mutual-to-Stock Conversions) addresses a collection 
approved by OMB under clearance number 3064-0117 which expires on

[[Page 52831]]

July 31, 2000. Subpart J (Foreign Bank Activities) addresses two 
collections approved by OMB under clearance numbers 3064-0114 and 3064-
0125, both of which expire on July 31, 2000. Subpart K (Prompt 
Corrective Action) addresses a collection approved by OMB under 
clearance number 3064-0115 which expires on July 31, 1999. Subpart L 
(Section 19) addresses a collection approved by OMB under clearance 
number 3064-0018 which expires on July 31, 2000. Subpart M (Other 
Filings) Sec. 303.241 (Reduce or retire capital stock or capital debt 
instruments) addresses a collection approved by OMB under clearance 
number 3064-0079 which expires on October 31, 1997. Public comment was 
sought about this collection on July 29, 1997 (62 FR 40525). A 
submission to renew 3064-0079 without change will be made to OMB in 
early October, 1997 at which time further comment will be solicited. 
Subpart M (Other Filings) Sec. 303.243 (Brokered deposits) addresses a 
collection approved by OMB under clearance number 3064-0099 which 
expires on August 31, 1998.
    The FDIC has reviewed these other collections of information and 
has concluded that either the proposed part 303 does not change the 
collection of information as approved by OMB in a way that requires 
that public comment be solicited or that the proposed changes have 
already been incorporated into recent OMB PRA submissions. Public 
comment and OMB review of these collections will occur as part of the 
regular cycle of review under the PRA. Nonetheless, the FDIC welcomes 
comment about the PRA aspects of this proposed regulation or any 
subpart of it. Comment specifically about PRA related issues should 
identify the Paperwork Reduction Act and any particular subpart and/or 
collection for which consideration is desired.

VIII. Derivation Table

    This table directs readers to the provision(s) of the former 
regulation, if any, upon which the provision in the proposed 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.         

[[Page 52832]]

                                                                        
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),   Revised.         
                                 (iv).                                  

[[Page 52833]]

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

[[Page 52834]]

                                                                        
(d),(e),(f)...................  .....................  Added.           
(g)...........................  337.6 (c),(e)........  No change.       
(h)...........................  337.6 (e),             Revised.         
                                 303.7(f)(1)(viii).                     
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 and procedure, Authority delegations 
(Government agencies), Bank deposit insurance, Banks, banking, Bank 
merger, Branching, Foreign branches, Foreign investments, Golden 
parachute payments, Insured branches, Interstate branching, Reporting 
and recordkeeping requirements.

12 CFR Part 337

    Banks, banking, Reporting and recordkeeping requirements, Savings 
associations, Securities.

12 CFR Part 341

    Banks, banking, Reporting and recordkeeping requirements, 
Securities.

12 CFR Part 346

    Bank deposit insurance, Foreign banking, Reporting and 
recordkeeping requirements.

12 CFR Part 348

    Antitrust, Banks, banking, Holding companies.

12 CFR Part 359

    Banks, banking, Golden parachute payments, Indemnity payments.
    For the reasons set forth in the preamble and under the authority 
of 12 U.S.C. 1819(a)(Tenth), the FDIC Board of Directors hereby 
proposes to amend 12 CFR chapter III as follows:
    1. Part 303 is revised to read as follows:

PART 303--FILING PROCEDURES AND 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 officials in the Division of 
Supervision and the Division of Compliance and Consumer Affairs.

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 in the Federal Reserve System.
303.26  Delegation of authority.
303.27  Authority retained by the FDIC Board of Directors.

Subpart C--Establishment and Relocation of 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.

[[Page 52835]]

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 Senior Executive 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 of Insured State Banks [Reserved]

Subpart H--Filings by Savings Associations [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 
nonmember bank.
303.183  Acquisition of stock of foreign banks or other financial 
entities by an insured state nonmember bank.
303.184  Moving an insured branch of a foreign bank.
303.185  Mergers involving an insured branch of a foreign bank.
303.186  Exemptions from insurance requirement for a state branch of 
a foreign bank.
303.187  Approval of an insured state branch of a foreign bank to 
conduct activities not permissible for federal branches.

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 
senior executive officers.
303.206  Application for payment of principal or interest on 
subordinated debt.
303.207  Restricted activities for critically undercapitalized 
institutions.
303.208  Delegation of authority.

Subpart L--Section 19 of the FDI Act (Consent to Service of Persons 
Convicted of 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 termination under section 8 of the FDI Act.
303.249  Truth in Lending Act--Relief from reimbursement.
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 FDI Act (12 U.S.C. 1818(a)).
303.262  Issuance of notice of intention to terminate insured status 
under section 8(a) of the FDI Act (12 U.S.C. 1818(a)).
303.263  Cease-and-desist actions under section 8(b) of the FDI Act 
(12 U.S.C. 1818(b)).
303.264  Temporary cease-and-desist orders under section 8(c) of the 
FDI Act (12 U.S.C. 1818(c)).
303.265  Removal and prohibition actions under section 8(e) of the 
FDI Act (12 U.S.C. 1818(e)).
303.266  Suspension and removal action under section 8(g) of the FDI 
Act (12 U.S.C. 1818(g)).
303.267  Termination of insured status under section 8(p) of the FDI 
Act (12 U.S.C. 1818(p)).
303.268  Termination of insured status under section 8(q) of the FDI 
Act (12 U.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 directives and capital plans under 
section 38 of the FDI Act (12 U.S.C. 1831o) and part 325 of 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 39 of the FDI Act (12 U.S.C. 
1831p-1) (standards for safety and soundness) and part 308 of this 
chapter.
303.278  Enforcement matters where authority 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.


Sec. 303.0   Scope.

    (a) This part generally describes the procedures to be followed by 
both the FDIC and applicants with respect to applications, requests, or 
notices required to be filed by statute or regulation. Additional 
details concerning processing are explained in related FDIC statements 
of policy. This part also sets forth delegations of authority from the 
FDIC's Board of Directors to the Directors of the Division of 
Supervision (DOS), the Division of Compliance and Consumer Affairs 
(DCA), the General Counsel of the Legal Division, the Executive 
Secretary, and, in some cases, their designees to act on certain 
applications, notices, requests, and enforcement matters.
    (b) Additional application procedures may be found in the following 
FDIC regulations:
    (1) 12 CFR part 327--Assessments (Request for review of assessment 
risk classification);
    (2) 12 CFR part 328--Advertisement of Membership (Application for 
temporary waiver of advertising requirements);
    (3) 12 CFR part 345--Community Reinvestment (CRA strategic plans 
and requests for designation as a wholesale or limited purpose 
institution);
    (4) 12 CFR part 348--Management Official Interlocks (Exemption 
request).

Subpart A--Rules of General Applicability


Sec. 303.1  Scope.

    Subpart A prescribes the general procedures for submitting 
applications, notices, and requests (collectively, ``filings'') to the 
FDIC which are required by statute or regulation. This subpart also 
prescribes the procedures to be followed by the FDIC, applicants and 
interested parties during the process of considering a filing, 
including public notice and comment. This subpart further explains the 
availability of expedited processing for eligible depository 
institutions (defined in Sec. 303.2(r)). Finally, this subpart sets 
forth general principles governing delegations of authority by the 
FDIC's Board of Directors.


Sec. 303.2  Definitions.

    For purposes of this part:

[[Page 52836]]

    (a) Act or FDI Act means the Federal Deposit Insurance Act (12 
U.S.C. 1811 et seq.).
    (b) Adjusted part 325 total assets means adjusted 12 CFR part 325 
total assets as calculated and reflected in the FDIC's Reports of 
Examination.
    (c) Adverse comment means any objection, protest, or other adverse 
written statement submitted by an interested party relative to a 
filing. The term adverse comment shall not include any comment 
concerning the Community Reinvestment Act (CRA), fair lending, consumer 
protection, or civil rights that the appropriate regional director or 
deputy regional director (DCA) determines to be frivolous (for example, 
raising issues between the commenter and the applicant that have been 
resolved). The term adverse comment also shall not include any other 
comment that the appropriate regional director or deputy regional 
director (DOS) determines to be frivolous (for example, a non-
substantive comment submitted primarily as a means of delaying action 
on the filing).
    (d) Amended order to pay means an order to forfeit and pay civil 
money penalties, the amount of which has been changed from that 
assessed in the original notice of assessment of civil money penalties.
    (e) Applicant means a person or entity that submits a filing to the 
FDIC.
    (f) Application means a submission requesting FDIC approval to 
engage in various corporate activities and transactions.
    (g) Appropriate FDIC region, appropriate FDIC regional office, 
appropriate regional director, appropriate deputy regional director, 
appropriate regional counsel mean, respectively, the FDIC region, and 
the FDIC regional office, regional director, deputy regional director, 
and regional counsel, which the FDIC designates as follows:
    (1) When an institution or proposed institution that is the subject 
of a filing or administrative action is not and will not be part of a 
group of related institutions, the appropriate region for the 
institution and any individual associated with the institution is the 
FDIC region in which the institution or proposed institution is or will 
be located; or
    (2) When an institution or proposed institution that is the subject 
of a filing or administrative action is or will be part of a group of 
related institutions, the appropriate region for the institution and 
any individual associated with the institution is the FDIC region in 
which the group's major policy and decision makers are located, or any 
other region the FDIC designates on a case-by-case basis.
    (h) Associate director means any associate director of the Division 
of Supervision (DOS) or the Division of Compliance and Consumer Affairs 
(DCA) or, in the event such titles become obsolete, any official of 
equivalent authority within the respective divisions.
    (i) Book capital means total equity capital which is comprised of 
perpetual preferred stock, common stock, surplus, undivided profits and 
capital reserves, as those items are defined in the instructions of the 
Federal Financial Institutions Examination Council (FFIEC) for the 
preparation of Consolidated Reports of Condition and Income for insured 
banks.
    (j) Comment means any written statement of fact or opinion 
submitted by an interested party relative to a filing.
    (k) Corporation, FDIC means the Federal Deposit Insurance 
Corporation.
    (l) CRA protest means any adverse comment from the public related 
to a pending filing which raises a negative issue relative to the 
Community Reinvestment Act (CRA) (12 U.S.C. 2901 et seq.), whether or 
not it is labeled a protest and whether or not a hearing is requested.
    (m) Deputy Director means the Deputy Director of the Division of 
Supervision (DOS) or the Deputy Director of the Division of Compliance 
and Consumer Affairs (DCA) or, in the event such titles become 
obsolete, any official of equivalent or higher authority within the 
respective divisions.
    (n) Deputy regional director means any deputy regional director of 
the Division of Supervision (DOS) or the Division of Compliance and 
Consumer Affairs (DCA) or, in the event such titles become obsolete, 
any official of equivalent authority within the same FDIC region of DOS 
or DCA.
    (o) DCA means the Division of Compliance and Consumer Affairs or, 
in the event the Division of Compliance and Consumer Affairs is 
reorganized, such successor division.
    (p) DOS means the Division of Supervision or, in the event the 
Division of Supervision is reorganized, such successor division.
    (q) Director means the Director of the Division of Supervision 
(DOS) or the Director of the Division of Compliance and Consumer 
Affairs (DCA) or, in the event such titles become obsolete, any 
official of equivalent or higher authority within the respective 
divisions.
    (r) Eligible depository institution means a depository institution 
that meets the following criteria:
    (1) Received an FDIC-assigned composite rating of 1 or 2 under the 
Uniform Financial Institutions Rating System (UFIRS) as a result of its 
most recent federal or state examination;
    (2) Received a satisfactory or better Community Reinvestment Act 
(CRA) rating from its primary federal regulator at its most recent 
examination;
    (3) Received a compliance rating of 1 or 2 from its primary federal 
regulator at its most recent examination;
    (4) Is well capitalized as defined in the appropriate capital 
regulation and guidance of the institution's primary federal regulator; 
and
    (5) Is not subject to a cease and desist order, consent order, 
prompt corrective action directive, written agreement, memorandum of 
understanding, or other administrative agreement with its primary 
federal regulator or chartering authority.
    (s) Filing means an application, notice or request submitted to the 
FDIC under this part.
    (t) General Counsel means the head of the Legal Division of the 
FDIC or any official within the Legal Division exercising equivalent 
authority for purposes of this part.
    (u) Insider means a person who is or is proposed to be a director, 
officer, or incorporator of an applicant; a shareholder who directly or 
indirectly controls 10 percent or more of any class of the applicant's 
outstanding voting stock; or the associates or interests of any such 
person.
    (v) Institution-affiliated party shall have the same meaning as 
provided in section 3(u) of the Act (12 U.S.C. 1813(u)).
    (w) NEPA means the National Environmental Policy Act of 1969 (42 
U.S.C. 4321 et seq.)
    (x) NHPA means the National Historic Preservation Act of 1966 (16 
U.S.C. 470 et seq.)
    (y) Notice means a submission notifying the FDIC that a depository 
institution intends to engage in or has commenced certain corporate 
activities or transactions.
    (z) Notice of assessment of civil money penalties means a notice of 
assessment of civil money penalties, findings of fact and conclusions 
of law, and order to pay issued pursuant to sections 7(a)(1), 7(j)(15), 
8(i) or 18(h) of the Act (12 U.S.C. 1817(a)(1), 1817(j)(15), 1818(i), 
or 1828(h)), section 106(b) of the Bank Holding Company Act (12 U.S.C. 
1972), section 910(d) of the International Lending Supervision Act of 
1983 (12 U.S.C. 3909), or any other provision of law providing for the 
assessment of civil money penalties by the FDIC.

[[Page 52837]]

    (aa) Notice of charges means a notice of charges and of hearing 
setting forth the allegations of unsafe or unsound practices or 
violations and fixing the time and place of the hearing issued under 
section 8(b) of the Act (12 U.S.C. 1818(b)).
    (bb) Notice to primary regulator means the notice described in 
section 8(a)(2)(A) of the Act concerning termination of deposit 
insurance (12 U.S.C. 1818(a)(2)(A)).
    (cc) Regional counsel means a regional counsel of the Legal 
Division or, in the event the title becomes obsolete, any official of 
equivalent authority within the Legal Division. The authority delegated 
to a regional counsel may be exercised, when confirmed in writing by 
the regional counsel, by a deputy regional counsel, or any official of 
equivalent or higher authority in the Supervision and Legislation 
Branch of the Legal Division.
    (dd) Regional director means any regional director in the Division 
of Supervision (DOS) or the Division of Compliance and Consumer Affairs 
(DCA), or in the event such titles become obsolete, any official of 
equivalent authority within the respective divisions.
    (ee) Section 8 orders:
    (1) Section 8(a) order means an order terminating the insured 
status of a depository 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 cease and desist issued under section 8(b) of the Act (12 U.S.C. 
1818(b)).
    (3) Section 8(c) order, temporary cease-and-desist order means a 
temporary order to cease and desist issued under section 8(c) of the 
Act (12 U.S.C. 1818(c)).
    (4) Section 8(e) order means a final order of removal or 
prohibition issued under section 8(e) of the Act (12 U.S.C. 1818(e)).
    (5) Section 8(e)(3) order, temporary order of suspension means a 
temporary order of suspension or prohibition issued under section 
8(e)(3) of the Act (12 U.S.C. 1818(e)(3)).
    (6) Section 8(g) order means an order of suspension or order of 
prohibition issued under section 8(g) of the Act (12 U.S.C. 1818(g)).
    (ff) Standard conditions means the conditions that any FDIC 
official acting under delegated authority may impose as a matter of 
routine when approving a filing, whether or not the applicant has 
agreed to their inclusion. The following conditions, or variations 
thereof, are standard conditions:
    (1) That the applicant has obtained all necessary and final 
approvals from the appropriate federal or state authority or other 
applicable authority;
    (2) That if the transaction does not take effect within a specified 
time period, or unless, in the meantime, a request for an extension of 
time has been approved, the consent granted shall expire at the end of 
the said time period;
    (3) That until the conditional commitment of the FDIC becomes 
effective, the FDIC retains the right to alter, suspend or withdraw its 
commitment should any interim development be deemed to warrant such 
action; and
    (4) In the case of a merger transaction (as defined in 
Sec. 303.61(a) of this part), including a corporate reorganization, 
that the proposed transaction not be consummated before the 30th 
calendar day (or shorter time period as may be prescribed by the FDIC 
with the concurrence of the Attorney General) after the date of the 
order approving the merger.
    (gg) Tier 1 capital shall have the same meaning as provided in 
Sec. 325.2(t) of this chapter (12 CFR 325.2(t)).
    (hh) Total assets shall have the same meaning as provided in 
Sec. 325.2(v) of this chapter (12 CFR 325.2(v)).


Sec. 303.3  General filing procedures.

    Unless stated otherwise, filings should be submitted to the 
appropriate regional director (DOS). Forms and instructions for 
submitting filings may be obtained from any FDIC regional office (DOS). 
If no form is prescribed, the filing should be in writing; be signed by 
the applicant or a duly authorized agent; and contain a concise 
statement of the action requested. For specific filing and content 
requirements, consult the specific subparts of this part. The FDIC may 
require the applicant to submit additional information.


Sec. 303.4  Computation of time.

    For purposes of this part, the FDIC begins computing the relevant 
period on the day after an event occurs (e.g., the day after a 
substantially complete filing is received by the FDIC or the day after 
publication begins) through the last day of the relevant period. When 
the last day is a Saturday, Sunday or federal holiday, the period runs 
until the end of the next business day.


Sec. 303.5  Effect of Community Reinvestment Act performance on 
filings.

    Among other factors, the FDIC takes into account the record of 
performance under the Community Reinvestment Act (CRA) of each 
applicant in considering a filing for approval of:
    (a) The establishment of a domestic branch;
    (b) The relocation of the bank's main office or a domestic branch;
    (c) The relocation of an insured branch of a foreign bank;
    (d) A transaction subject to the Bank Merger Act; and
    (e) Deposit insurance.


Sec. 303.6  Investigations and examinations.

    The Board of Directors, Directors of (DOS) or (DCA), their 
associate directors, or the appropriate regional director or 
appropriate deputy regional director (DOS) or (DCA) acting under 
delegated authority may examine or investigate and evaluate facts 
related to any filing under this chapter to the extent necessary to 
reach an informed decision and take any action necessary or appropriate 
under the circumstances.


Sec. 303.7  Public notice requirements.

    (a) General. The public must be provided with prior notice of a 
filing to establish a domestic branch, relocate a domestic branch or 
the main office, relocate an insured branch of a foreign bank, engage 
in a merger or other business combination, initiate a change of control 
transaction, or request deposit insurance. The public has the right to 
comment on, or to protest, these types of proposed transactions during 
the relevant comment period. In order to fully apprise the public of 
this right, an applicant shall publish a public notice of its filing in 
a newspaper of general circulation. For specific publication 
requirements, consult subparts B (deposit insurance), C (branches and 
relocations), D (mergers), E (change in bank control), and J (foreign 
bank activities).
    (b) Confirmation of publication. The applicant shall mail or 
otherwise deliver a copy of the newspaper notice to the appropriate 
regional director (DOS) promptly after publication.
    (c) Content of notice. (1) The public notice referred to in 
paragraph (a) of this section shall consist of the following:
    (i) Name and address of the applicant(s). In the case of an 
application for deposit insurance for a de novo bank, the names of all 
organizers or incorporators. In the case of an application to establish 
a branch, include the location of the proposed branch or, in the case 
of an application to relocate a branch, include the current and 
proposed address of the branch. In the case of a merger application, 
include the names of all parties to the transaction. In the case of a 
notice of acquisition of control, the name(s) of the acquiring parties. 
In the case of an application to relocate an insured branch of a 
foreign bank, include the

[[Page 52838]]

current and proposed address of the branch.
    (ii) Type of filing being made;
    (iii) Name of the depository institution(s) that is the subject 
matter of the filing;
    (iv) That the public may submit comments to the appropriate FDIC 
regional director (DOS);
    (v) The address of the appropriate FDIC regional office (DOS) where 
comments may be sent (the same location as that where the filing will 
be made);
    (vi) The closing date of the public comment period as specified in 
the appropriate subpart; and
    (vii) That the nonconfidential portions of the application are on 
file in the regional office and are available for public inspection 
during regular business hours.
    (2) Alternatively, paragraphs (b)(1) (iv) through (vii) of this 
section may be satisfied through use of the following notice:

    Any person wishing to comment on this application may file his 
or her comments in writing with the regional director (DOS) of the 
Federal Deposit Insurance Corporation at its regional office [insert 
address of regional office]. If any person desires to protest the 
granting of this application, he or she has a right to do so if he 
or she files a written comment with the regional director by the 
[insert closing date of the public comment period specified in the 
appropriate subpart of part 303]. The non-confidential portions of 
the application are on file in the regional office and are available 
for public inspection during regular business hours.

    (d) Multiple transactions. The FDIC may consider more than one 
transaction, or a series of transactions, to be a single filing for 
purposes of the publication requirements of this section. When 
publishing a single public notice for multiple transactions, the 
applicant shall explain in the public notice how the transactions are 
related and state the closing date of the longest public comment period 
that shall apply to all of the related transactions.
    (e) Joint public notices. For a transaction subject to public 
notice requirements by the FDIC and another federal or state banking 
authority, the FDIC will accept publication of a single joint notice 
containing all the information required by both the FDIC and the other 
federal agency or state banking authority, provided that the notice 
states that comments must be submitted to both the FDIC and, if 
applicable, the other federal or state banking authority.


Sec. 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 the non-confidential 
portions of a filing (the public file) until 180 days following final 
disposition of a filing. The public file generally consists of portions 
of the filing, supporting data, supplementary information, and comments 
submitted by interested persons (if any) to the extent that the 
documents have not been afforded confidential treatment. To view or 
request photocopies of the public file, an oral or written request 
should be submitted to the appropriate regional director. The public 
file will be produced for review not more than one business day after 
receipt by the regional office. The FDIC may impose a fee for 
photocopying in accordance with Sec. 309.5(c) of this chapter and with 
the rates the FDIC publishes annually in the Federal Register.
    (b) Confidential treatment. (1) The applicant may request that 
specific information be treated as confidential. The following 
information generally is considered confidential:
    (i) Personal information, the release of which would constitute a 
clearly unwarranted invasion of privacy;
    (ii) Commercial or financial information, the disclosure of which 
would result in substantial competitive harm to the submitter; and
    (iii) Information the disclosure of which could seriously affect 
the financial condition of any depository institution.
    (2) If an applicant requests confidential treatment for information 
that the FDIC does not consider to be confidential, the FDIC may 
include that information in the public file after notifying the 
applicant. On its own initiative, the FDIC may determine that certain 
information should be treated as confidential and withhold that 
information from the public file. A written request for information 
withheld from the public file, or copies of the public file following 
closure of the file 180 days after final disposition, should be 
submitted pursuant to the Freedom of Information Act (5 U.S.C. 552) to 
the FDIC, Office of the Executive Secretary, 550 17th Street, NW., 
Washington, DC 20429.


Sec. 303.9  Comments.

    (a) Submission of comments. For filings subject to a public notice 
requirement, any person may submit comments to the appropriate FDIC 
regional director (DOS) during the comment period.
    (b) Comment period. (1) General. Consult specific subparts of this 
part for the comment period applicable to a particular filing.
    (2) Extension. The appropriate regional director or deputy regional 
director (DOS) may extend or reopen the comment period if:
    (i) The applicant fails to file all required information on a 
timely basis to permit review by the public or makes a request for 
confidential treatment not granted by the FDIC that delays the public 
availability of that information;
    (ii) Any person requesting an extension of time satisfactorily 
demonstrates to the FDIC that additional time is necessary to develop 
factual information that the FDIC determines may materially affect the 
application; or
    (iii) The appropriate regional director or deputy regional director 
(DOS) determines that other good cause exists.
    (3) Solicitation of comments. Whenever appropriate, the regional 
director (DOS) may solicit comments from any person or institution 
which might have an interest in or be affected by the pending filing.
    (4) Applicant response. The FDIC will provide copies of all 
comments received to the applicant and may give the applicant an 
opportunity to respond.


Sec. 303.10  Hearings and other meetings.

    (a) Matters covered. This section covers hearings and other 
proceedings in connection with filings for or by:
    (1) Deposit insurance by a proposed new depository institution or 
operating non-insured institution;
    (2) An insured state nonmember bank to establish a domestic branch 
or to relocate a main office or domestic branch;
    (3) Relocation of an insured branch of a foreign bank;
    (4) (i) Merger or consolidation which requires the FDIC's prior 
approval under the Bank Merger Act (12 U.S.C. 1828(c));
    (ii) Except as otherwise expressly provided, the provisions of this 
Sec. 303.10 shall not be applicable to any proposed merger transaction 
which the FDIC Board of Directors determines must be acted upon 
immediately to prevent the probable default of one of the institutions 
involved or must be handled with expeditious action due to an existing 
emergency condition, as permitted by the Bank Merger Act (12 U.S.C. 
1828(c)(6)); and
    (5) Any other purpose or matter which the FDIC Board of Directors 
in its sole discretion deems appropriate.
    (b) Hearing requests. Before the end of the comment period, any 
person may submit to the appropriate regional director (DOS) a written 
request for a hearing on a filing. The request must describe the nature 
of the issues or facts to be presented and the reasons why written 
submissions would be

[[Page 52839]]

insufficient to make an adequate presentation of those issues or facts 
to the FDIC. A person requesting a hearing shall simultaneously submit 
a copy of the request to the applicant.
    (c) Action on a hearing request. The regional director (DOS) may 
grant or deny a request for a hearing and may limit the issues that he 
or she deems relevant or material. The FDIC generally grants a hearing 
request only if it determines that written submissions would be 
insufficient or that a hearing otherwise would be in the public 
interest.
    (d) Denial of a hearing request. If the regional director (DOS) 
denies a hearing request, he or she shall notify the person requesting 
the hearing of the reason for the denial. A decision to deny a hearing 
request shall be a final agency determination that is not appealable to 
the Board of Directors.
    (e) FDIC procedures prior to the hearing. (1) Notice of hearing. 
The FDIC shall issue a notice of hearing if it grants a request for a 
hearing or orders a hearing because it is in the public interest. The 
notice of hearing shall state the subject and date of the filing, the 
time and place of the hearing, and the issues to be addressed. The FDIC 
shall send a copy of the notice of hearing to the applicant, to the 
person requesting the hearing, and to anyone else requesting a copy.
    (2) Presiding officer. The FDIC shall appoint a presiding officer 
to conduct the hearing, who will usually be the appropriate regional 
director (DOS). The presiding officer is responsible for all procedural 
questions not governed by this Sec. 303.10.
    (f) Participation in the hearing. Any person who wishes to appear 
(participant) shall notify the appropriate regional director (DOS) of 
his or her intent to participate in the hearing no later than 10 days 
from the date that the FDIC issues the Notice of Hearing. At least 5 
days before the hearing, each participant shall submit to the 
appropriate regional director (DOS), as well as to the applicant and 
any other person as required by the FDIC, the names of witnesses, a 
statement describing the proposed testimony of each witness, and one 
copy of each exhibit the participant intends to present.
    (g) Transcripts. The FDIC shall arrange for a hearing transcript. 
The person requesting the hearing and the applicant each shall bear the 
cost of one copy of the transcript for his or her use unless such cost 
is waived by the presiding officer and incurred by the FDIC.
    (h) Conduct of the hearing. (1) Presentations. Subject to the 
rulings of the presiding officer, the applicant and participants may 
make opening and closing statements and present witnesses, material, 
and data.
    (2) Information submitted. Any person presenting material shall 
furnish one copy to the FDIC, one copy to the applicant, and one copy 
to each participant.
    (3) Laws not applicable to hearings. The Administrative Procedure 
Act (5 U.S.C. 551 et seq.), the Federal Rules of Evidence (28 U.S.C. 
Appendix), the Federal Rules of Civil Procedure (28 U.S.C. Rule 1 et 
seq.), and the FDIC's Rules of Practice and Procedure (12 CFR part 308) 
do not govern hearings under this Sec. 303.10.
    (i) Closing the hearing record. At the applicant's or any 
participant's request, or at the FDIC's discretion, the FDIC may keep 
the hearing record open for up to 10 days following the FDIC's receipt 
of the transcript. The FDIC shall resume processing the filing after 
the record closes.
    (j) Informal proceedings. The FDIC may arrange for an informal 
proceeding with an applicant and other interested parties in connection 
with a filing, either upon receipt of a written request for such a 
meeting made during the comment period, or upon the FDIC's own 
initiative. No later than 10 days prior to an informal proceeding, the 
appropriate regional director (DOS) shall notify the applicant and each 
person who requested a hearing or oral presentation of the date, time, 
and place of the proceeding. The proceeding may assume any form, 
including a meeting with FDIC representatives at which participants 
will be asked to present their views orally. The appropriate regional 
director (DOS) or (DCA) may hold separate meetings with each of the 
participants.
    (k) Disposition and notice thereof. The FDIC shall notify the 
applicant and all participants of the final disposition of a filing and 
shall provide a statement of the reasons for the final disposition.
    (l) Computation of time. In computing periods of time under this 
section, the provisions of Sec. 308.12 of the FDIC's Rules of Practice 
and Procedure (12 CFR 308.12) shall apply.
    (m) Authority retained by FDIC Board of Directors to modify 
procedures. The FDIC Board of Directors may delegate authority by 
resolution on a case-by-case basis to the presiding officer to adopt 
different procedures in individual matters and on such terms and 
conditions as the Board of Directors determines in its discretion. Such 
resolution shall be made available for public inspection and copying in 
the Office of the Executive Secretary under the Freedom of Information 
Act (5 U.S.C. 552(a)(2)).


Sec. 303.11  Decisions.

    (a) General procedures. The FDIC may approve, conditionally 
approve, deny, or not object to a filing after appropriate review and 
consideration of the record. The FDIC will promptly notify the 
applicant and any person who makes a written request of the final 
disposition of a filing. If the FDIC denies a filing, the FDIC will 
immediately notify the applicant in writing of the reasons for the 
denial.
    (b) Authority retained by FDIC Board of Directors to modify 
procedures. In acting on any filing under this part, the FDIC Board of 
Directors may by resolution adopt procedures which differ from those 
contained in this part when it deems it necessary or in the public 
interest to do so. Such resolution shall be made available for public 
inspection and copying in the Office of the Executive Secretary under 
the Freedom of Information Act (5 U.S.C. 552(a)(2)).
    (c) Expedited processing. (1) A filing submitted by an eligible 
depository institution as defined in Sec. 303.2(r) of this part will 
receive expedited processing as specified in the appropriate subparts 
of this part unless the appropriate regional director or deputy 
regional director (DOS) chooses to remove the filing from expedited 
processing for the reasons set forth in paragraph (c)(2) of this 
section. Except for filings made pursuant to subpart J (foreign bank 
activities), expedited processing will not be available for any filing 
that the appropriate regional director (DOS) does not have delegated 
authority to approve.
    (2) Removal of filing from expedited processing. The appropriate 
regional director or deputy regional director (DOS) may remove a filing 
from expedited procedures at any time prior to final disposition if:
    (i) For filings subject to public notice under Sec. 303.7, an 
adverse comment is received that warrants additional investigation or 
review;
    (ii) For filings subject to evaluation of CRA performance under 
Sec. 303.5, a CRA protest is received that warrants additional 
investigation or review, or the appropriate regional director (DCA) 
determines that the filing presents a significant CRA or compliance 
concern;
    (iii) For any filing, the appropriate regional director (DOS) 
determines that the filing presents a significant supervisory concern, 
or raises a significant legal or policy issue; or

[[Page 52840]]

    (iv) For any filing, the appropriate regional director (DOS) 
determines that other good cause exists for removal.
    (3) For purposes of this section, a significant CRA concern 
includes but is not limited to a determination by the appropriate 
regional director (DCA) that, although a depository institution may 
have an institution-wide rating of satisfactory, a depository 
institution's CRA rating is less than satisfactory in a state or multi-
state metropolitan statistical area (MSA), or a depository 
institution's CRA performance is less than satisfactory in an MSA or in 
the non-MSA portion of a state in which it seeks to expand through 
approval of an application for a deposit facility as defined in 12 
U.S.C. 2902(3).
    (4) If the FDIC determines that it is necessary to remove a filing 
from expedited review procedures pursuant to paragraph (c)(2) of this 
section, the FDIC promptly will provide the applicant with a written 
explanation.
    (d) Multiple transactions. If the FDIC is considering related 
transactions, some or all of which have been granted expedited 
processing, then the longest processing time for any of the related 
transactions shall govern for purposes of approval.
    (e) Abandonment of filing. A filing must contain all information 
set forth in the applicable subpart of this part. To the extent 
necessary to evaluate a filing, the FDIC may require an applicant to 
provide additional information. If information requested by the FDIC is 
not provided within the time period specified by the agency, the FDIC 
may deem the filing abandoned and shall provide written notification to 
the applicant and any interested parties that submitted comments to the 
FDIC that the file has been closed.
    (f) Appeals and petitions for reconsideration--(1) General. Appeal 
procedures for a denial of a change in bank control (subpart E), change 
in senior executive officer or board of directors (subpart F) or denial 
of an application pursuant to section 19 of the FDI Act (subpart L) are 
contained in 12 CFR part 308, subparts D, L, and M, respectively. For 
all other filings covered by this chapter for which appeal procedures 
are not provided by regulation or other written guidance, the 
procedures specified in paragraphs (f) (2) through (5) of this section 
shall apply. A decision to deny a request for a hearing is a final 
agency determination that is not appealable to the Board of Directors 
pursuant to Sec. 303.10(d) of this part.
    (2) Filing procedures. Within 15 days of receipt of notice from the 
FDIC that its filing has been denied, any applicant may file a petition 
for reconsideration with the appropriate regional director (DOS), if 
the filing initially was submitted to DOS, or the appropriate regional 
director (DCA), if the filing initially was submitted to DCA.
    (3) Content of filing. A petition for reconsideration must contain 
the following information:
    (i) A resolution of the board of directors of the applicant 
authorizing filing of the petition, if the applicant is a corporation 
or other entity, or a letter signed by the individual(s) filing the 
petition, if the applicant is not a corporation or other entity;
    (ii) Relevant, substantive information that for good cause was not 
previously set forth in the filing; and
    (iii) Specific reasons why the FDIC should reconsider its prior 
decision.
    (4) Delegation of authority. (i) Authority is delegated to the 
Director and Deputy Director (DOS) and (DCA), as appropriate and, where 
confirmed in writing by the appropriate Director, to an associate 
director and the appropriate regional director and deputy regional 
director, to grant a petition for reconsideration, after consultation 
with the Legal Division.
    (ii) Authority is delegated to the Director and Deputy Director 
(DOS) and (DCA), as appropriate, to deny a petition for 
reconsideration, after consultation with the Legal Division.
    (iii) Notwithstanding paragraphs (F)(4) (i) and (ii) of 
Sec. 303.11, no reconsideration of a filing that originally required 
Legal Division concurrence may be acted upon without Legal Division 
concurrence.
    (5) Procedures for reconsideration of filings. If a petition for 
reconsideration is granted, the filing will be reconsidered by:
    (i) The Board of Directors, if the filing was originally denied by 
the Board of Directors or denied by the Director or Deputy Director or 
an associate director (DOS) or (DCA); or
    (ii) The Director or Deputy Director (DOS) or (DCA), if the filing 
was originally denied by a regional director or deputy regional 
director.
    (6) Final decision. Decisions made on a petition for 
reconsideration by the Director or Deputy Director (DOS) or (DCA) are 
final agency decisions and are not appealable to the Board of 
Directors.
    (g) Nullification of decision--(1) Material misrepresentation or 
omission. If the FDIC subsequently becomes aware of any material 
misrepresentation or omission after the agency has rendered a decision 
on a filing, the FDIC may nullify its decision by providing written 
notification to the applicant of the determination and the reason 
therefor. Any person responsible for any material misrepresentation or 
omission in a filing or supporting materials may be subject to an 
enforcement action and other penalties, including criminal penalties 
provided in Title 18 of the United States Code.
    (2) Material change in circumstances. If the FDIC is not informed 
by the applicant of a subsequent material change in circumstances prior 
to rendering a decision on a filing (for example, a material change in 
a business plan, or the financial condition of the depository 
institution), the FDIC may nullify its decision in the manner described 
in paragraph (g)(1) of this section.
    (3) Other nullifications. The FDIC may nullify any decision on a 
filing that is contrary to law, regulation or FDIC policy, or granted 
due to clerical or administrative error, or a material mistake of law 
or fact.


Sec. 303.12  General rules governing delegations of authority.

    (a) Scope. This section contains general rules governing the FDIC 
Board of Director's delegations of authority under this chapter. These 
principles are procedural in nature only and are not substantive 
standards. All delegations of authority, confirmations, limitations, 
revisions, and rescissions under this chapter must be in writing and 
maintained with the Office of the Executive Secretary.
    (b) Authority not delegated. Except as otherwise expressly 
provided, the FDIC Board of Directors does not delegate its authority.
    (1) The FDIC Board of Directors retains and does not delegate the 
authority to act on agreements with foreign regulatory or supervisory 
authorities, matters that would establish or change existing 
Corporation policy, matters that might attract unusual attention or 
publicity, or involve an issue of first impression notwithstanding any 
existing delegation of authority.
    (2) The FDIC Board of Directors retains the authority to act on any 
filing or enforcement matter upon which any member of the Board of 
Directors wishes to act, even if the authority to act on such filing or 
enforcement matter has been delegated.
    (c) Exercise of delegated authority not mandated. Any FDIC official 
with delegated authority under this chapter may elect not to exercise 
that authority.
    (d) Action by FDIC officials. In matters where the FDIC Board of 
Directors has neither specifically delegated nor retained authority, 
FDIC officials may take action with respect to matters

[[Page 52841]]

which generally involve conditions or circumstances requiring prompt 
action to protect the interests of the FDIC and to achieve flexibility 
and expedition in its operations and the exercise of FDIC functions 
under this part.
    (e) Construction. The delegations of authority contained in this 
chapter are to be broadly construed in favor of the existence of 
authority in FDIC officials who act under delegated authority. Any 
exercise of delegated authority by an FDIC official is conclusive 
evidence of that official's authority.
    (f) Written confirmations, limitations, revisions or rescissions. 
Where the FDIC Board of Directors has delegated authority to the 
Director (DOS), Director (DCA) or the General Counsel, or their 
respective designees, each shall have the right to confirm, limit, 
revise, or rescind any delegation of authority issued or approved by 
them, respectively, to any subordinate official(s).


Sec. 303.13  Delegations of authority to officials in the Division of 
Supervision and the Division of Compliance and Consumer Affairs.

    (a) CRA protests. Where a CRA protest is filed and remains 
unresolved, authority is delegated to the Director and Deputy Director 
(DCA) and, where confirmed in writing by the Director, to an associate 
director or the appropriate regional director or deputy regional 
director to concur that approval of any filing subject to CRA is 
consistent with the purposes of CRA.
    (b) Adequacy of filings. Authority is delegated to the Director and 
Deputy Director (DOS) and, where confirmed in writing by the Director, 
to an associate director and the appropriate regional director and 
deputy regional director, to determine whether a filing is 
substantially complete for purposes of commencing processing.
    (c) National Historic Preservation Act. Authority is delegated to 
the Director and Deputy Director (DOS) and, where confirmed in writing 
by the Director, to an associate director and the appropriate regional 
director and deputy regional director, to enter into memoranda of 
agreement pursuant to regulations of the Advisory Council on Historic 
Preservation which implement the National Historic Preservation Act of 
1966 (16 U.S.C. 470).

Subpart B--Deposit Insurance


Sec. 303.20  Scope.

    This subpart sets forth the procedures for applying for deposit 
insurance for a proposed depository institution or an operating 
noninsured depository institution under section 5 of the FDI Act (12 
U.S.C. 1815). It also sets forth the procedures for requesting 
continuation of deposit insurance for a state bank withdrawing from 
membership in the Federal Reserve System and for interim institutions 
chartered to facilitate a merger transaction. Related delegations of 
authority are also set forth.


Sec. 303.21  Filing procedures.

    (a) Applications for deposit insurance shall be filed with the 
appropriate regional director (DOS). The relevant application forms and 
instructions for applying for deposit insurance for an existing or 
proposed depository institution may be obtained from any FDIC regional 
office (DOS).
    (b) Application for deposit insurance for an interim depository 
institution shall be filed and processed in accordance with the 
procedures set forth in Sec. 303.24 of this subpart. An interim 
depository institution is defined as an institution formed or organized 
solely for the purpose of facilitating a merger transaction which will 
be reviewed by a responsible agency as defined in section 18(c)(2) of 
the FDI Act.
    (c) A request for continuation of deposit insurance upon 
withdrawing from membership in the Federal Reserve System shall be in 
letter form and shall provide the information prescribed in Sec. 303.25 
of this subpart.


Sec. 303.22  Processing.

    (a) Expedited processing for proposed institutions. (1) An 
application for deposit insurance for a proposed institution which will 
be a subsidiary of an eligible depository institution as defined in 
Sec. 303.2(r) of this part or an eligible holding company will be 
acknowledged in writing by the FDIC and will receive expedited 
processing, unless the applicant is notified in writing to the contrary 
and provided with the basis for that decision. An eligible holding 
company is defined as a bank or thrift holding company that has 
consolidated assets of $150 million or more, has an assigned composite 
rating of 2 or better, and has at least 75 percent of its consolidated 
depository institution assets comprised of eligible depository 
institutions. The FDIC may remove an application from expedited 
processing for any of the reasons set forth in Sec. 303.11(c)(2) of 
this part.
    (2) Under expedited processing, the FDIC will take action on an 
application within 60 days of receipt of a substantially complete 
application, or 20 days after publication, whichever is later. Final 
action may be withheld until the FDIC has assurance that permission to 
organize the proposed institution will be granted by the chartering 
authority. Notwithstanding paragraph (a)(1) of this section, if the 
FDIC does not act within the expedited processing period, it does not 
constitute an automatic or default approval.
    (b) Standard processing. For those applications that are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action as soon as 
the decision is rendered.


Sec. 303.23  Public notice requirements.

    (a) De novo institutions and operating noninsured institutions. The 
applicant shall publish a notice, as prescribed in Sec. 303.7 of this 
part, in a newspaper of general circulation in the community in which 
the main office of the depository institution is or will be located. 
Notice shall be published as close as practicable to, but no sooner 
than five days before, the date the application is mailed or delivered 
to the regional director (DOS). Comments by interested parties must be 
received by the appropriate regional director (DOS) within 15 days 
following the date of publication, unless the comment period has been 
extended or reopened in accordance with Sec. 303.9(b)(2) of this part.
    (b) Exceptions to public notice requirements. No publication shall 
be required in connection with the granting of insurance to a new 
depository institution established pursuant to the resolution of a 
failed depository institution, or to an interim depository institution 
formed or organized solely to facilitate a merger transaction, or for a 
request for continuation of federal deposit insurance by a state bank 
withdrawing from membership in the Federal Reserve System.


Sec. 303.24  Application for deposit insurance for an interim 
institution.

    (a) Content of application. A letter application for deposit 
insurance for an interim institution, accompanied by a copy of the 
related merger application, shall be filed with the appropriate 
regional director. The letter application should briefly describe the 
transaction and contain a statement that deposit insurance is being 
requested for an interim institution formed or organized solely for the 
purpose of facilitating a merger transaction which will be reviewed by 
a federal banking agency other than the FDIC and that the institution 
will not open for business.
    (b) Processing. An application for deposit insurance for an interim 
depository institution will be

[[Page 52842]]

acknowledged in writing by the FDIC. Final action will be taken within 
21 days after receipt of a substantially complete application, unless 
the applicant is notified in writing that additional review is 
warranted. If the FDIC does not act within the expedited processing 
period, it does not constitute an automatic or default approval.


Sec. 303.25  Continuation of deposit insurance upon withdrawing from 
membership in the Federal Reserve System.

    (a) Content of application. To continue its insured status upon 
withdrawal from membership in the Federal Reserve System, a state bank 
must submit a letter application to the appropriate regional director 
(DOS). A complete application shall consist of the following 
information:
    (1) A copy of the letter, and any attachments thereto, sent to the 
Federal Reserve setting forth the bank's intention to terminate its 
membership;
    (2) A copy of the letter from the Federal Reserve acknowledging the 
bank's notice to terminate membership;
    (3) A statement regarding any anticipated changes in the bank's 
general business plan during the next 12-month period; and
    (4)(i) A statement by the bank's management that there are no 
outstanding or proposed corrective programs or supervisory agreements 
with the Federal Reserve System.
    (ii) If such programs or agreements exist, a statement by applicant 
that its Board of Directors is willing to enter into a similar 
supervisory agreement with the FDIC which would become effective upon 
withdrawal from the Federal Reserve System.
    (b) Processing. An application for deposit insurance under this 
section will be acknowledged in writing by the FDIC. The appropriate 
regional director (DOS) shall notify the applicant, within 15 days of 
receipt of a substantially complete application, either that federal 
deposit insurance will continue upon termination of membership in the 
Federal Reserve System or that additional review is warranted and the 
applicant will be notified, in writing, of the FDIC's final decision 
regarding continuation of deposit insurance. If the FDIC does not act 
within the expedited processing period, it does not constitute an 
automatic or default approval.


Sec. 303.26  Delegation of authority.

    (a) Proposed depository institutions. (1) Authority is delegated to 
the Director and the Deputy Director (DOS) and, where confirmed in 
writing by the Director, to an associate director and the appropriate 
regional director and deputy regional director, to approve applications 
for deposit insurance for proposed depository institutions. For the 
Director, Deputy Director or associate director (DOS) to exercise this 
authority, paragraphs (a)(1)(i) through (a)(1)(iv) of this section must 
be satisfied and the applicant shall have agreed in writing to comply 
with any conditions imposed by the delegate, other than those listed in 
paragraph (d) of this section which may be imposed without the 
applicant's consent. For the regional director or deputy regional 
director (DOS) to exercise this authority, paragraphs (a)(1)(i) through 
(a)(1)(v) of this section must be satisfied and the applicant shall 
have agreed in writing to comply with any conditions imposed by the 
delegate, other than those listed in paragraph (d) of this section 
which may be imposed without the applicant's consent.
    (i) The factors set forth in section 6 of the Act (12 U.S.C. 1816) 
have been considered and favorably resolved;
    (ii) No unresolved management interlocks, as prohibited by the 
Depository Institution Management Interlocks Act (12 U.S.C. 3201 et 
seq.), part 348 of this chapter or any other applicable implementing 
regulation, exist;
    (iii) The application is in conformity with the standards and 
guidelines for the granting of deposit insurance established in the 
FDIC statement of policy ``Applications for Deposit Insurance'' (2 FDIC 
Law, Regulations and Related Acts (FDIC) 5349); and
    (iv) Compliance with the CRA, the NEPA, the NHPA and any applicable 
related regulations, including 12 CFR part 345, has been considered and 
favorably resolved; and
    (v) No CRA protest as defined in Sec. 303.2(l) of this part has 
been filed which remains unresolved or, where such a protest has been 
filed and remains unresolved, the Director (DCA), Deputy Director 
(DCA), an associate director (DCA) or the appropriate regional director 
(DCA) or deputy regional director (DCA) concurs that approval is 
consistent with the purposes of the CRA and the applicant agrees in 
writing to any conditions imposed regarding the CRA.
    (2) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director and the appropriate regional director and deputy regional 
director, to approve applications for deposit insurance filed by or on 
behalf of proposed interim depository institutions formed or organized 
solely for the purpose of facilitating a merger transaction which will 
be reviewed by a responsible agency as defined in section 18(c)(2) of 
the FDI Act.
    (b) Operating noninsured depository institutions. Authority is 
delegated to the Director and the Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director and the 
appropriate regional director and deputy regional director, to approve 
applications for deposit insurance by operating noninsured depository 
institutions. For the delegate to exercise this authority, the 
following criteria must be satisfied and the applicant shall have 
agreed in writing to comply with any condition imposed by the delegate, 
other than those listed in paragraph (d) of this section which may be 
imposed without the applicant's consent:
    (1) The applicant is determined to be eligible for federal deposit 
insurance for the class of institution to which the applicant belongs 
in the state (as defined in 12 U.S.C. 1813(a)) in which the applicant 
is located;
    (2) The factors set forth in section 6 of the Act (12 U.S.C. 1816) 
have been considered and favorably resolved;
    (3) No unresolved management interlocks, as prohibited by the 
Depository Institution Management Interlocks Act (12 U.S.C. 3201 et 
seq.), part 348 of this chapter or any other applicable implementing 
regulation, exist;
    (4) The application is in conformity with the standards and 
guidelines for the granting of deposit insurance to operating 
noninsured depository institutions established in the FDIC policy 
statement ``Applications for Deposit Insurance'' (2 FDIC Law, 
Regulations and Related Acts (FDIC) 5349);
    (5) Compliance with the CRA, the NEPA, the NHPA, and any applicable 
related regulations, including 12 CFR part 345, has been considered and 
favorably resolved; and
    (6) No CRA protest as defined in Sec. 303.2(l) of this part has 
been filed which remains unresolved or, where such a protest has been 
filed and remains unresolved, the Director (DCA), Deputy Director 
(DCA), an associate director (DCA) or the appropriate regional director 
(DCA) or deputy regional director (DCA) concurs that approval is 
consistent with the purposes of the CRA and the applicant agrees in 
writing to any conditions imposed regarding the CRA.
    (c) Continuation of deposit insurance upon withdrawing from 
membership in the Federal Reserve System. Authority is delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to an associate

[[Page 52843]]

director and the appropriate regional director and deputy regional 
director to approve continuation of federal deposit insurance where the 
applicant has agreed in writing to comply with any conditions imposed 
by the delegate, other than the standard conditions defined in 
Sec. 303.2(ff) of this part which may be imposed without the 
applicant's written consent.
    (d) Conditions that may be imposed under delegated authority. 
Following are conditions which may be imposed by a delegate in 
approving applications for deposit insurance without affecting the 
authority granted under paragraphs (a) and (b) of this section:
    (1) The applicant will provide a specific amount of initial paid-in 
capital;
    (2) With respect to a proposed depository institution that has 
applied for deposit insurance pursuant to this subpart, the Tier 1 
capital to assets leverage ratio (as defined in the appropriate capital 
regulation and guidance of the institution's primary federal regulator) 
will be maintained at not less than eight percent throughout the first 
three years of operation and that an adequate allowance for loan and 
lease losses will be provided;
    (3) Any changes in proposed management or proposed ownership to the 
extent of 10 or more percent of stock, including new acquisitions of or 
subscriptions to 10 or more percent of stock shall be approved by the 
FDIC prior to the opening of the depository institution;
    (4) The applicant will adopt an accrual accounting system for 
maintaining the books of the depository institution;
    (5) Where applicable, deposit insurance will not become effective 
until the applicant has been granted a charter as a depository 
institution, has authority to conduct a depository institution 
business, and its establishment and operation as a depository 
institution have been fully approved by the appropriate state and/or 
federal supervisory authority;
    (6) Where deposit insurance is granted to an interim institution 
formed or organized solely to facilitate a related transaction, deposit 
insurance will only become effective in conjunction with consummation 
of the related transaction;
    (7) Where applicable, a registered or proposed bank holding 
company, or a registered or proposed thrift holding company, has 
obtained approval of the Board of Governors of the Federal Reserve 
System or the Office of Thrift Supervision to acquire voting stock 
control of the proposed depository institution prior to its opening;
    (8) Where applicable, the applicant has submitted any proposed 
contracts, leases, or agreements relating to construction or rental of 
permanent quarters to the appropriate regional director for review and 
comment;
    (9) Where applicable, full disclosure has been made to all proposed 
directors and stockholders of the facts concerning the interest of any 
insider in any transactions being effected or then contemplated, 
including the identity of the parties to the transaction and the terms 
and costs involved. An insider is one who is or is proposed to be a 
director, officer, or incorporator of an applicant; a shareholder who 
directly or indirectly controls 10 or more percent of any class of the 
applicant's outstanding voting stock; or the associates or interests of 
any such person;
    (10) The person(s) selected to serve as the principal operating 
officer(s) shall be acceptable to the regional director;
    (11) The applicant will have adequate fidelity coverage;
    (12) The depository institution will obtain an audit of its 
financial statements by an independent public accountant annually for 
at least the first three years after deposit insurance is effective, 
furnish a copy of any reports by the independent auditor (including any 
management letters) to the appropriate FDIC regional office within 15 
days after their receipt by the depository institution and notify the 
appropriate FDIC regional office within 15 days when a change in its 
independent auditor occurs; and
    (13) Any standard condition defined in Sec. 303.2(ff) of this part.


Sec. 303.27  Authority retained by the FDIC Board of Directors.

    Without limiting the Board of Director's authority, the Board of 
Directors retains authority to deny applications for deposit insurance 
and approve applications for deposit insurance where the applicant does 
not agree in writing to comply with any condition imposed by the FDIC, 
other than the standard conditions listed in Secs. 303.2(ff) and 
303.26(d) of this part, which may be imposed without the applicant's 
written consent.

Subpart C--Establishment and Relocation of Domestic Branches and 
Offices


Sec. 303.40  Scope.

    (a) General. This subpart sets forth the application requirements 
and procedures and the delegation of authority for insured state 
nonmember banks to establish a branch, relocate a main office, and 
relocate a branch subject to the approval by the FDIC pursuant to 
sections 13(f), 13(k), 18(d) and 44 of the FDI Act.
    (b) Mergers. Applications for approval of the acquisition and 
establishment of branches in connection with a merger transaction under 
section 18(c) of the FDI Act (12 U.S.C. 1828(c)), are processed in 
accordance with subpart D (Mergers) of this part.
    (c) Insured branches of foreign banks and foreign branches of 
domestic banks. Applications regarding insured branches of foreign 
banks and foreign branches of domestic banks are processed in 
accordance with subpart J (Foreign Bank Activities) of this part.
    (d) Interstate acquisition of individual branch. Applications 
requesting approval of the interstate acquisition of an individual 
branch or branches located in a state other than the applicant's home 
state without the acquisition of the whole bank are treated as 
interstate bank merger transactions under section 44 of the FDI Act (12 
U.S.C. 1831a(u)), and are processed in accordance with subpart D 
(Mergers) of this part.


Sec. 303.41  Definitions.

    For purposes of this subpart:
    (a) Branch includes any branch bank, branch office, additional 
office, or any branch place of business located in any State of the 
United States or in any territory of the United States, Puerto Rico, 
Guam, American Samoa, the Trust Territory of the Pacific Islands, the 
Virgin Islands, and the Northern Mariana Islands at which deposits are 
received or checks paid or money lent. A branch does not include an 
automated teller machine, an automated loan machine, or a remote 
service unit. The term branch also includes the following:
    (1) A messenger service that is operated by a bank or its affiliate 
that picks up and delivers items relating to transactions in which 
deposits are received or checks paid or money lent. A messenger service 
established and operated by a non-affiliated third party generally does 
not constitute a branch for purposes of this subpart. Banks contracting 
with third parties to provide messenger services should consult with 
the appropriate regional director (DOS) to determine if the messenger 
service constitutes a branch.
    (2) A mobile branch, other than a messenger service, that does not 
have a single, permanent site and uses a vehicle that travels to 
various locations to enable the public to conduct banking business. A 
mobile branch may serve defined locations on a regular schedule

[[Page 52844]]

or may serve a defined area at varying times and locations.
    (3) A temporary branch that operates for a limited period of time 
not to exceed one year as a public service, such as during an emergency 
or disaster situation.
    (4) A seasonal branch that operates at various periodically 
recurring intervals, such as during state and local fairs, college 
registration periods, and other similar occasions.
    (b) Branch relocation means a move within the same immediate 
neighborhood of the existing branch that does not substantially affect 
the nature of the business of the branch or the customers of the 
branch. Moving a branch to a location outside its immediate 
neighborhood is considered the closing of an existing branch and the 
establishment of a new branch.
    (c) De novo branch means a branch of a bank which is established by 
the bank as a branch and does not become a branch of such bank as a 
result of:
    (1) The acquisition by the bank of an insured depository 
institution or a branch of an insured depository institution; or
    (2) The conversion, merger, or consolidation of any such 
institution or branch.
    (d) Home state means the state by which the bank is chartered.
    (e) Host state means a state, other than the home state of the 
bank, in which the bank maintains, or seeks to establish and maintain, 
a branch.


Sec. 303.42  Filing procedures.

    (a) General. An applicant shall submit an application to the 
appropriate regional director (DOS) on the date the notice required by 
Sec. 303.44 of this subpart is published, or within 5 days after the 
date of the last required publication.
    (b) Content of filing. A complete letter application shall include 
the following information:
    (1) A statement of intent to establish a branch, or to relocate the 
main office or a branch;
    (2) The exact location of the proposed site including the street 
address. With regard to messenger services, specify the geographic area 
in which the services will be available. With regard to a mobile 
branch, specify the community or communities in which the vehicle will 
operate and the intention to:
    (i) Serve defined locations on a regular schedule; or
    (ii) Be open at varying times and locations; or
    (iii) A combination of paragraphs (b)(2)(i) and (b)(2)(ii) of this 
section;
    (3) Details concerning any involvement in the proposal by an 
insider of the bank as defined in Sec. 303.2(u) of this part, including 
any financial arrangements relating to fees, the acquisition of 
property, leasing of property, and construction contracts;
    (4) A statement on the impact of the proposal on the human 
environment, including, information on compliance with local zoning 
laws and regulations and the effect on traffic patterns, for purposes 
of complying with the applicable provisions of the NEPA;
    (5) A statement as to whether or not the site is included in or is 
eligible for inclusion in the National Register of Historic Places, 
including a statement that clearance has been or will be obtained from 
the State Historic Preservation Officer for purposes of complying with 
applicable provisions of the NHPA;
    (6) Comments on any changes in services to be offered, the 
community to be served, or any other effect the proposal may have on 
the applicant's compliance with the CRA;
    (7) A copy of each newspaper publication required by Sec. 303.44 of 
this subpart, the name and address of the newspaper, and date of the 
publication;
    (8) When an application is submitted to establish and operate a de 
novo branch in a state that is not the applicant's home state and in 
which the applicant does not maintain a branch, a statement that the 
applicant has requested that the host state provide to the appropriate 
regional director (DOS) written confirmation:
    (i) That the applicant has complied with that state's filing 
requirements; and
    (ii) That the applicant has also submitted to the host state bank 
supervisor a copy of the filing with the FDIC to establish and operate 
a de novo branch.
    (9) When an application is submitted to relocate the main office of 
the applicant from one state to another, a statement of the applicant's 
intent regarding retention of branches in the state where the main 
office exists prior to relocation.
    (c) Undercapitalized institutions. Applications to establish a 
branch by applicants subject to section 38 of the FDI Act (12 U.S.C. 
1831o) also should provide the information required by Sec. 303.204 of 
this part. Applications pursuant to sections 38 and 18(d) of the FDI 
Act (12 U.S.C. 1831o and 1828(d)) may be filed concurrently or as a 
single application.
    (d) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.


Sec. 303.43  Processing.

    (a) Expedited processing for eligible depository institutions. An 
application filed under this subpart by an eligible depository 
institution as defined in Sec. 303.2(r) of this part will be 
acknowledged in writing by the FDIC and will receive expedited 
processing, unless the applicant is notified in writing to the contrary 
and provided with the basis for that decision. The FDIC may remove an 
application from expedited processing for any of the reasons set forth 
in Sec. 303.11(c)(2) of this part. Absent such removal, an application 
processed under expedited processing will be deemed approved on the 
latest of the following:
    (1) The 21st day after receipt by the FDIC of a substantially 
complete filing;
    (2) The 5th day after expiration of the comment period described in 
Sec. 303.44 of this part; or
    (3) In the case of an application to establish and operate a de 
novo branch in a state that is not the applicant's home state and in 
which the applicant does not maintain a branch, the 5th day after the 
FDIC receives confirmation from the host state that the applicant has 
both complied with the application requirements of the host state and 
submitted a copy of the application with the FDIC to the host state 
bank supervisor.
    (b) Standard processing. For those applications which are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action as soon as 
the decision is rendered.


Sec. 303.44  Public notice requirements.

    (a) Newspaper publications. For applications to establish or 
relocate a branch, a notice as described in Sec. 303.7(b) of this part 
shall be published once in a newspaper of general circulation. For 
applications to relocate a main office, notice shall be published at 
least once each week on the same day for two consecutive weeks. The 
required publication shall be made in the following communities:
    (1) To establish a branch. In the community in which the main 
office is located and in the communities to be served by the branch 
(including messenger services and mobile branches).
    (2) To relocate a main office. In the community in which the main 
office is currently located and in the community to which the main 
office proposes to relocate.
    (3) To relocate a branch. In the community in which the branch is 
located.

[[Page 52845]]

    (b) Public comments. Comments by interested parties must be 
received by the appropriate regional director (DOS) within 15 days 
after the date of the last newspaper publication required by paragraph 
(a) of this section, unless the comment period has been extended or 
reopened in accordance with Sec. 303.9(b)(2) of this part.
    (c) Lobby notices. In the case of applications to relocate a main 
office or a branch, a copy of the required newspaper publication shall 
be posted in the public lobby of the office to be relocated for at 
least 15 days beginning with the date of the last published notice 
required by paragraph (a) of this section.


Sec. 303.45  Special provisions.

    (a) Emergency or disaster events. (1) In the case of an emergency 
or disaster at a main office or a branch which requires that an office 
be immediately relocated to a temporary location, applicants shall 
notify the appropriate regional director (DOS) within 3 days of such 
temporary relocation.
    (2) Within 10 days of the temporary relocation resulting from an 
emergency or disaster, the bank shall submit a written application to 
the appropriate regional director (DOS), that identifies the nature of 
the emergency or disaster, specifies the location of the temporary 
branch, and provides an estimate of the duration the bank plans to 
operate the temporary branch.
    (3) As part of the review process, the appropriate regional 
director (DOS) will determine on a case by case basis whether 
additional information is necessary and may waive public notice 
requirements.
    (b) Redesignation of main office and existing branch. In cases 
where an applicant desires to redesignate its main office as a branch 
and redesignate an existing branch as the main office, an application 
shall be submitted to relocate the main office and to relocate or 
establish a branch as appropriate. The appropriate regional director 
(DOS) may waive the public notice requirements in instances where an 
application presents no significant or novel policy, supervisory, CRA, 
compliance or legal concerns. Such waiver will be granted only to a 
redesignation within the applicant's home state.
    (c) Expiration of approval. Approval of an application expires if a 
branch has not commenced business or if a relocation has not been 
completed within 18 months after date of approval.


Sec. 303.46  Delegation of authority.

    (a) Approval of applications. (1) Where the applicant agrees in 
writing to comply with any conditions imposed by the delegate, other 
than the standard conditions defined in Sec. 303.2(ff) of this part 
which may be imposed without the applicant's written consent, authority 
is delegated to the Director and Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director and the 
appropriate regional director and deputy regional director, to approve 
the applications listed in this paragraph (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 must be satisfied. For the regional director or deputy regional 
director (DOS) to exercise this authority, criteria in paragraphs (c) 
(1)-(7) of this section must be satisfied.
    (i) Establish a branch;
    (ii) Establish and operate a de novo branch in a state that is not 
the applicant's home state and in which the applicant 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 condition imposed by the delegate, authority is delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to an associate director to approve the applications 
listed in paragraph (a)(1) of this section.
    (b) Denial of applications. (1) Authority is delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to an associate director and the appropriate regional 
director and deputy regional director, to deny an application to 
establish a temporary branch.
    (2) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director to deny applications for consent to:
    (i) Establish a branch;
    (ii) Establish and operate a de novo branch in a state that is not 
the applicant's home state and in which the applicant 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 satisfied before the authority delegated in paragraph (a) of this 
section may be exercised:
    (1) The factors set forth in section 6 of the FDI Act (12 U.S.C. 
1816) have been considered and favorably resolved except that this 
criterion does not apply to applications to establish messenger 
services and temporary branches;
    (2) The applicant meets the capital requirements set forth in 12 
CFR part 325 and the FDIC's ``Statement of Policy on Capital Adequacy'' 
(12 CFR part 325, appendix B) or agrees in writing to increase capital 
so as to be in compliance with the requirements of 12 CFR part 325 
before or at the consummation of the transaction which is the subject 
of the filing, except that this criterion does not apply to 
applications to establish messenger services and temporary branches, or 
to relocate branches or main offices;
    (3) Any financial arrangements which have been made in connection 
with the proposed branch or relocation and which involve the 
applicant's insiders are fair and reasonable in comparison to similar 
arrangements that could have been made with independent third parties;
    (4) Compliance with the CRA, the NEPA, the NHPA, and any applicable 
related regulations, including 12 CFR part 345, has been considered and 
favorably resolved;
    (5) No CRA protest as defined in Sec. 303.2(l) of this part has 
been filed which remains unresolved or, where such a protest has been 
filed and remains unresolved, the Director (DCA), Deputy Director 
(DCA), an associate director (DCA) or the appropriate regional director 
(DCA) or deputy regional director (DCA) concurs that approval is 
consistent with the purposes of the CRA and the applicant agrees in 
writing to any conditions imposed regarding the CRA;
    (6) An applicant with one or more existing branches in a state 
other than the applicant's home state has not failed the credit needs 
test in a host state under section 109 of the Riegle-Neal Interstate 
Banking and Branching Efficiency Act of 1994 (12 U.S.C. 1835a).
    (7) Additionally, for applications submitted to establish and 
operate a de novo branch in a state that is not the applicant's home 
state and in which the applicant does not maintain a branch:
    (i) Receipt by the appropriate regional director (DOS) of the host 
state's written confirmation that the applicant has complied with that 
state's filing requirements and that the applicant also has submitted 
to the host state bank supervisor a copy of its FDIC filing to 
establish and operate a de novo branch;
    (ii) Determination by the FDIC that the applicant is adequately 
capitalized as of the date of the filing and will continue to be 
adequately capitalized and adequately managed upon consummation of the 
transaction;
    (iii) Confirmation that the host state has in effect a law that 
meets the requirements of section 18(d)(4)(A) of

[[Page 52846]]

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 applications submitted to relocate a main 
office from one state to another where the applicant seeks to retain 
branches in the state where the applicant's main office exists prior to 
an interstate relocation of the main office, confirmation that the 
filing meets the requirements of section 18(d)(3)(B) of the FDI Act (12 
U.S.C. 1828(d)(3)(B)).

Subpart D--Mergers


Sec. 303.60  Scope.

    This subpart sets forth the application requirements, procedures, 
and delegations of authority for transactions subject to FDIC approval 
under the Bank Merger Act, section 18(c) of the FDI Act (12 U.S.C. 
1828(c)).


Sec. 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 the assets of, 
or assumes liability to pay any deposits made in, any other insured 
depository institution; or
    (2) Merges or consolidates with any noninsured bank or institution 
or assumes liability to pay any deposits made in, or similar 
liabilities of, any noninsured bank or institution, or transfers assets 
to any noninsured bank or institution in consideration of the 
assumption of liability for any portion of the deposits made in such 
insured depository institution.
    (b) Corporate reorganization means a merger between commonly-owned 
institutions, between an insured depository institution and its 
subsidiary, or between an insured depository institution and its 
holding company, provided that the merger would have no effect on 
competition or otherwise have significance under the statutory 
standards set forth in section 18(c) of the FDI Act (12 U.S.C. 
1828(c)). For purposes of this paragraph, institutions are commonly-
owned if more than 50 percent of the voting stock of each of the 
institutions is owned by the same company, individual, or group of 
closely-related individuals acting in concert.
    (c) Interim merger means a merger (other than a purchase and 
assumption transaction) between an operating depository institution and 
a newly-formed depository institution or corporation that will not open 
for business and that exists solely for the purpose of facilitating a 
corporate reorganization.
    (d) Optional conversion (Oakar transaction) means a merger in which 
an insured depository institution assumes deposit liabilities insured 
by the deposit insurance fund (either the Bank Insurance Fund (BIF) or 
the Savings Association Insurance Fund (SAIF)) of which that assuming 
institution is not a member, and elects not to convert the insurance 
covering the assumed deposits. Such transactions are covered by section 
5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)).
    (e) Resulting institution refers to the surviving institution upon 
consummation of a merger.


Sec. 303.62  Transactions requiring prior approval.

    (a) Mergers. The following transactions require the prior written 
approval of the FDIC under this subpart:
    (1) Any merger, including any corporate reorganization, interim 
merger, or optional conversion, in which the resulting institution is 
to be an insured state nonmember bank; and
    (2) Any merger, including any corporate reorganization or interim 
merger, that involves an uninsured bank or institution.
    (b) Related provisions. Transactions covered by this subpart also 
may be subject to other provisions or application requirements, 
including the following:
    (1) Interstate mergers. Interstate mergers between insured banks 
are subject to the provisions of section 44 of the FDI Act (12 U.S.C. 
1831u). In the case of a merger that consists of the acquisition of a 
branch without acquisition of the bank, the branch is treated for 
section 44 purposes as a bank whose home state is the state in which 
the branch is located.
    (2) Deposit insurance. An application for deposit insurance will be 
required in connection with a merger between a state-chartered interim 
institution and an insured depository institution if the related merger 
application is being acted upon by a federal banking agency other than 
the FDIC. If the FDIC is the federal banking agency responsible for 
acting on the related merger application, a separate application for 
deposit insurance is not necessary. Procedures for applying for deposit 
insurance are set forth in subpart B of this part. An application for 
deposit insurance will not be required in connection with a merger of a 
federally-chartered interim institution and an insured institution, 
even if the resulting institution is to operate under the charter of 
the federal interim institution.
    (3) Deposit insurance fund conversions. Procedures for conversion 
transactions involving the transfer of deposits from BIF to SAIF or 
from SAIF to BIF are set forth in subpart M of this part at 
Sec. 303.246.
    (4) Branch closings. Branch closings in connection with a merger 
are subject to the notice requirements of section 42 of the FDI Act (12 
U.S.C. 1831r-1), including requirements for notice to customers. These 
requirements are addressed in the Interagency Policy Statement 
Concerning Branch Closings Notices and Policies (2 FDIC Law, 
Regulations and Related Acts (FDIC) 5391).
    (5) Undercapitalized institutions. Applications for a merger by 
applicants subject to section 38 of the FDI Act (12 U.S.C. 1831o) 
should also provide the information required by Sec. 303.204 of this 
part. Applications pursuant to sections 38 and 18(c) of the FDI Act (12 
U.S.C, 1831o and 1828(c)) may be filed concurrently or as a single 
application.
    (6) Certification of assumption of deposit liability. An insured 
depository institution assuming deposit liabilities of another insured 
institution must provide certification of assumption of deposit 
liability to the FDIC in accordance with 12 CFR part 307.


Sec. 303.63  Filing procedures.

    (a) General. Applications required under this subpart shall be 
filed with the appropriate regional director (DOS). The appropriate 
forms and instructions, including instructions concerning notice to 
depositors where applicable, may be obtained upon request from any DOS 
regional office.
    (b) Mergers. Applications for approval of mergers shall be 
accompanied by copies of all agreements or proposed agreements relating 
to the merger and any other information requested by the FDIC.
    (c) Interim mergers. Applications for approval of interim mergers 
and any related deposit insurance applications shall be made by filing 
the forms and other documents required by paragraphs (a) and (b) of 
this section and such other information as may be required by the FDIC 
for consideration of the request for deposit insurance.
    (d) Optional conversions. Applications for optional conversions 
shall include a statement that the proposed merger is a transaction 
covered by section 5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)).

[[Page 52847]]

Sec. 303.64  Processing.

    (a) Expedited processing for eligible depository institutions. (1) 
General. An application filed under this subpart by an eligible 
depository institution as defined in Sec. 303.2(r) of this part and 
which meets the additional criteria in paragraph (a)(4) of this section 
will be acknowledged by the FDIC in writing and will receive expedited 
processing, unless the applicant is notified in writing to the contrary 
and provided with the basis for that decision. The FDIC may remove an 
application from expedited processing for any of the reasons set forth 
in Sec. 303.11(c)(2) of this part.
    (2) Under expedited processing, the FDIC will take action on an 
application by the date that is the latest of:
    (i) 45 days after the date of the FDIC's receipt of a substantially 
complete merger application; or
    (ii) 10 days after the date of the last notice publication required 
under Sec. 303.65 of this subpart; or
    (iii) 5 days after receipt of the Attorney General's report on the 
competitive factors involved in the proposed transaction; or
    (iv) For an interstate merger subject to the provisions of section 
44 of the FDI Act (12 U.S.C. 1831u), 5 days after the FDIC confirms 
that the applicant has satisfactorily complied with the filing 
requirements of the resulting institution's host state.
    (3) Notwithstanding paragraph (a)(1) of this section, if the FDIC 
does not act within the expedited processing period, it does not 
constitute an automatic or default approval.
    (4) Qualifications.--(i) Criteria. The FDIC will process an 
application using expedited procedures if:
    (A) All parties to the merger are eligible depository institutions 
as defined in Sec. 303.2(r) of this part; and
    (B) Immediately following the merger, the resulting institution 
will be ``well capitalized'' pursuant to subpart B of part 325 of this 
chapter (12 CFR part 325).
    (b) Standard processing. For those applications not processed 
pursuant to the expedited procedures, the FDIC will provide the 
applicant with written notification of the final action taken by the 
FDIC on the application as soon as the decision is rendered.


Sec. 303.65  Public notice requirements.

    (a) General. Except as provided in paragraph (b) of this section, 
an applicant for approval of a merger must publish notice of the 
proposed transaction on at least three occasions at approximately two-
week intervals in a newspaper of general circulation in the community 
or communities where the main offices of the merging institutions are 
located or, if there is no such newspaper in the community, then in the 
newspaper of general circulation published nearest thereto.
    (1) First publication. The first publication of the notice should 
be as close as practicable to the date on which the application is 
filed with the FDIC, but no more than 5 days prior to the filing date.
    (2) Last publication. The last publication of the notice shall be 
on the 30th day after the first publication or, if the newspaper does 
not publish on the 30th day, on the newspaper's publication date that 
is closest to the 30th day.
    (b) Exceptions.--(1) Emergency requiring expeditious action. If the 
FDIC determines that an emergency exists requiring expeditious action, 
notice shall be published twice during a 10-day period. The first 
notice shall be published as soon as possible after the FDIC notifies 
the applicant of such determination. The second notice shall be 
published on the 10th day after the first publication or, if the 
newspaper does not publish on the 10th day, on the newspaper's 
publication date that is closest to the 10th day.
    (2) Probable failure. If the FDIC determines that it must act 
immediately to prevent the probable failure of one of the institutions 
involved in a proposed merger, publication is not required.
    (c) Content of notice.--(1) General. The notice shall conform to 
the public notice requirements set forth in Sec. 303.7 of this part.
    (2) Branches. If it is contemplated that the resulting institution 
will operate offices of the other institution(s) as branches, the 
following statement shall be included in the notice required in section 
Sec. 303.7(b):

    It is contemplated that all offices of the above-named 
institutions will continue to be operated (with the exception of 
[insert identity and location of each office that will not be 
operated]).

    (3) Emergency requiring expeditious action. If the FDIC determines 
that an emergency exists requiring expeditious action, the notice shall 
specify as the closing date of the public comment period the date that 
is the 10th day after the date of the first publication.
    (d) Public comments. Comments must be received by the regional 
director (DOS) within 35 days after the first publication of the 
notice, unless the comment period has been extended or reopened in 
accordance with Sec. 303.9(b)(2). If the FDIC has determined that an 
emergency exists requiring expeditious action, comments must be 
received by the regional director within 10 days after the first 
publication.


Sec. 303.66  Delegation of authority.

    (a) General.--(1) Bank Merger Act approval. Subject to paragraphs 
(a)(3) and (e) of this section, authority is delegated in paragraphs 
(b), (c), and (d) of this section to the designated FDIC officials to 
approve under the Bank Merger Act any application filed under this 
subpart for approval of a merger for which the specified criteria are 
satisfied.
    (2) Interstate merger approval. With respect to an interstate 
merger covered by section 44 of the FDI Act (12 U.S.C. 1831u), in 
addition to the authority delegated to any official in paragraph (b), 
(c), or (d) of this section to approve the merger under the Bank Merger 
Act, authority is also delegated to such official to approve the merger 
under section 44. This delegation is subject to paragraph (a)(3) of 
this section and to the condition that the merger is eligible for FDIC 
approval under section 44.
    (3) Combined approvals. The delegations in paragraphs (a)(2), (b), 
(c), and (d) of this section do not apply to an interstate bank merger 
covered both by section 44 and by the Bank Merger Act, unless the 
merger is being approved pursuant to delegated authority under both 
section 44 and the Bank Merger Act.
    (b) Basic delegation. Authority is delegated to the Director and 
Deputy Director (DOS) and, where confirmed in writing by the Director, 
to an associate director, and the appropriate regional director and 
deputy regional director to approve applications under the Bank Merger 
Act. For the Director, Deputy Director or associate director (DOS) to 
exercise this authority, paragraphs (b) (1) through (4) and (b)(6) of 
this section must be satisfied. For the regional director or deputy 
regional director (DOS) to exercise this authority, paragraphs (b)(1) 
through (b)(6) of this section must be satisfied.
    (1) The resulting institution would meet all applicable capital 
requirements upon consummation of the transaction (or, where the 
resulting entity is an insured branch of a foreign bank, would be in 
compliance with 12 CFR 346.20 upon consummation of the transaction); 
and
    (2) The factors set forth in section 18(c)(5) of the Act (12 U.S.C. 
1828(c)(5)) have been considered and favorably resolved; and
    (3)(i) The merging institutions do not operate in the same relevant 
geographic market(s); or
    (ii) In each relevant geographic market in which more than one of 
the merging

[[Page 52848]]

institutions operate, the resulting institution upon consummation of 
the merger would hold no more than 15 percent of the total deposits 
held by banks and/or other depository institutions (as appropriate) in 
the market; or
    (iii) In each relevant geographic market in which more than one of 
the merging institutions operate, the resulting institution upon 
consummation of the merger would hold no more than 25 percent of the 
total deposits held by banks and/or other depository institutions (as 
appropriate) in the market, and the Attorney General has notified the 
FDIC in writing that the proposed merger would not have a significantly 
adverse effect on competition; and
    (4) Compliance with the CRA and any applicable related regulations, 
including 12 CFR part 345, has been considered and favorably resolved; 
and
    (5) No CRA protest as defined in Sec. 303.2(l) of this part has 
been filed which remains unresolved or, where such a protest has been 
filed and remains unresolved, the Director (DCA), Deputy Director 
(DCA), associate director (DCA), the appropriate regional director 
(DCA), or deputy regional director (DCA) concurs that approval is 
consistent with the purposes of the CRA, and the applicant agrees in 
writing to any conditions imposed regarding the CRA; and
    (6) The applicant agrees in writing to comply with any conditions 
imposed by the delegate, other than the standard conditions defined in 
Sec. 303.2(ff) of this part, which may be imposed without the 
applicant's written consent.
    (c) Additional delegations. In addition to the delegations 
otherwise provided for in this section, and subject to the criteria set 
forth in paragraphs (b)(1), (2), (4) and (6) of this section, authority 
is delegated to the Director and to the Deputy Director (DOS) and, 
where confirmed in writing by the Director, to an associate director, 
to approve an application for a merger upon the consummation of which 
the resulting institution would hold not more than 35 percent of the 
total deposits held by banks and/or other depository institutions (as 
appropriate) in any relevant geographic market in which more than one 
of the merging institutions operate, and the Attorney General has 
notified the FDIC in writing that the merger would not have a 
significantly adverse effect on competition.
    (d) Corporate reorganizations; interim mergers.--(1) Basic 
delegation. In addition to the delegations otherwise provided for in 
this section, authority is delegated to the Director and to the Deputy 
Director (DOS) and, where confirmed in writing by the Director, to an 
associate director and the appropriate regional director and deputy 
regional director, to approve:
    (i) An application for a corporate reorganization that satisfies 
the criteria set forth in paragraphs (b) (5) and (6) of this section; 
and
    (ii) Any related application for deposit insurance.
    (2) Additional delegation. Authority is further delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to an associate director to approve:
    (i) An application for corporate reorganization that satisfies the 
criteria set forth in paragraphs (b)(6) of this section and as to which 
a CRA protest as defined in Sec. 303.2(l) of this part has been filed 
which remains unresolved; and
    (ii) Any related application for deposit insurance.
    (e) Limitations. The delegations in paragraphs (b) through (d) of 
this section do not apply if:
    (1) The Attorney General of the United States has determined that 
the merger would have a significantly adverse effect on competition; or
    (2) The FDIC has made a determination pursuant to section (c)(6) of 
the Bank Merger Act (12 U.S.C. 1828(c)(6)) that an emergency exists 
requiring expeditious action or that the transaction must be 
consummated immediately in order to avoid a probable failure.
    (f) Review of competitive factors reports. In deciding whether to 
approve a merger under the authority delegated by this section, the 
delegate shall review any reports provided by the Attorney General of 
the United States, the Comptroller of the Currency, the Board of 
Governors of the Federal Reserve System, or the Director of the Office 
of Thrift Supervision in response to a request by the FDIC for reports 
on the competitive factors involved in the proposed merger. If the 
Attorney General has not provided a competitive factors report and if 
the delegation criterion specified in either paragraph (b)(3) (i) or 
(ii) of this section is satisfied, the delegate may request from the 
FDIC's General Counsel or designee a written opinion as to whether the 
proposed merger may have a significantly adverse effect on competition.
    (g) Competitive factor reports provided by the FDIC. Authority is 
delegated to the Director and the Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director and the 
appropriate regional director and deputy regional director, to furnish 
requested reports to the Board of Governors of the Federal Reserve 
System, the Comptroller of the Currency, or the Director of the Office 
of Thrift Supervision on the competitive factors involved in any merger 
subject to approval by one of those agencies, if the delegate is of the 
view that the proposed merger would not have a substantially adverse 
effect on competition.


Sec. 303.67  Authority retained by the FDIC Board of Directors

    Without limiting the authority of the Board of Directors, the Board 
of Directors retains authority to act on applications covered by this 
subpart if the criteria or other conditions for delegation are not 
satisfied. This includes the retention of authority to deny 
applications for merger transactions. It further includes retention of 
authority to approve applications for merger transactions where:
    (a) The limitations specified in Sec. 303.66(e) preclude action 
under delegated authority;
    (b) The applicant does not agree in writing to comply with any 
conditions imposed by the delegate, other than the standard conditions 
defined in Sec. 303.2(ff) of this part, which may be imposed without 
the applicant's written consent; or
    (c) The resulting institution, upon consummation of a merger other 
than a corporate reorganization, would have more than 35 percent of the 
total deposits held by banks and/or other depository institutions (as 
appropriate) in any relevant geographic market in which more than one 
of the merging institutions operate.

Subpart E--Change in Bank Control


Sec. 303.80  Scope.

    This subpart sets forth the procedures for submitting a notice to 
acquire control of an insured state nonmember bank pursuant to the 
Change in Bank Control Act of 1978, section 7(j) of the FDI Act (12 
U.S.C. 1817(j)), and delegations of authority regarding such filings.


Sec. 303.81  Definitions.

    For purposes of this subpart:
    (a) Acquisition means a purchase, assignment, transfer, pledge or 
other disposition of voting shares, or an increase in percentage 
ownership of an insured state nonmember bank resulting from a 
redemption of voting shares.
    (b) Acting in concert means knowing participation in a joint 
activity or parallel action towards a common goal

[[Page 52849]]

of acquiring control of an insured state nonmember bank, whether or not 
pursuant to an express agreement.
    (c) Control means the power, directly or indirectly, to direct the 
management or policies of an insured bank or to vote 25 percent or more 
of any class of voting shares of an insured bank.
    (d) Person means an individual, corporation, partnership, trust, 
association, joint venture, pool, syndicate, sole proprietorship, 
unincorporated organization, and any other form of entity; and a voting 
trust, voting agreement, and any group of persons acting in concert.


Sec. 303.82  Transactions requiring prior notice.

    (a) Prior notice requirement. Any person acting directly or 
indirectly, or through or in concert with one or more persons, shall 
give the FDIC 60 days prior written notice, as specified in Sec. 303.84 
of this subpart, before acquiring control of an insured state nonmember 
bank, unless the acquisition is exempt under Sec. 303.83.
    (b) Acquisitions requiring prior notice.--(1) Acquisition of 
control. The acquisition of control, unless exempted, requires prior 
notice to the FDIC.
    (2) Rebuttable presumption of control. The FDIC presumes that an 
acquisition of voting shares of an insured state nonmember bank 
constitutes the acquisition of the power to direct the management or 
policies of an insured bank requiring prior notice to the FDIC, if, 
immediately after the transaction, the acquiring person (or persons 
acting in concert) will own, control, or hold with power to vote 10 
percent or more of any class of voting shares of the institution, and 
if:
    (i) The institution has registered shares under section 12 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78l); or
    (ii) No other person will own, control or hold the power to vote a 
greater percentage of that class of voting shares immediately after the 
transaction. If two or more persons, not acting in concert, each 
propose to acquire simultaneously equal percentages of 10 percent or 
more of a class of voting shares of an insured state nonmember bank, 
each such person shall file prior notice with the FDIC.
    (c) Acquisitions of loans in default. The FDIC presumes an 
acquisition of a loan in default that is secured by voting shares of an 
insured state nonmember bank to be an acquisition of the underlying 
shares for purposes of this section.
    (d) Other transactions. Transactions other than those set forth in 
paragraph (b)(2) of this section resulting in a person's control of 
less than 25 percent of a class of voting shares of an insured state 
nonmember bank are not deemed by the FDIC to constitute control for 
purposes of the Change in Bank Control Act.
    (e) Rebuttal of presumptions. Prior notice to the FDIC is not 
required for any acquisition of voting shares under the presumption of 
control set forth in this section, if the FDIC finds that the 
acquisition will not result in control. The FDIC will afford any person 
seeking to rebut a presumption in this section an opportunity to 
present views in writing or, if appropriate, orally before its 
designated representatives at an informal conference.


Sec. 303.83  Transactions not requiring prior notice.

    (a) Exempt transactions. The following transactions do not require 
notice to the FDIC under this subpart:
    (1) The acquisition of additional voting shares of an insured state 
nonmember bank by a person who:
    (i) Held the power to vote 25 percent or more of any class of 
voting shares of that institution continuously since March 9, 1979, or 
since that institution commenced business, whichever is later; or
    (ii) Is presumed, under Sec. 303.82(b)(2) of this subpart, to have 
controlled the institution continuously since March 9, 1979, if the 
aggregate amount of voting shares held does not exceed 25 percent or 
more of any class of voting shares of the institution or, in other 
cases, where the FDIC determines that the person has controlled the 
bank continuously since March 9, 1979;
    (2) The acquisition of additional shares of a class of voting 
shares of an insured state nonmember bank by any person (or persons 
acting in concert) who has lawfully acquired and maintained control of 
the institution (for purposes of Sec. 303.82 of this subpart) after 
complying with the procedures of the Change in Bank Control Act to 
acquire voting shares of the institution under this subpart;
    (3) Acquisitions of voting shares subject to approval under section 
3 of the Bank Holding Company Act (12 U.S.C. 1842(a)), section 18(c) of 
the FDI Act (12 U.S.C. 1828(c)), or section 10 of the Home Owners' Loan 
Act (12 U.S.C. 1467a);
    (4) Transactions exempt under the Bank Holding Company Act: 
foreclosures by institutional lenders, fiduciary acquisitions by banks, 
and increases of majority holdings by bank holding companies described 
in sections 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 proxy solicitation;
    (6) The receipt of voting shares of an insured state nonmember bank 
through a pro rata stock dividend; and
    (7) The acquisition of voting shares in a foreign bank, which has 
an insured branch or branches in the United States. (This exemption 
does not extend to the reports and information required under 
paragraphs 9, 10, and 12 of the Change in Bank Control Act of 1978 (12 
U.S.C. 1817(j) (9), (10), and (12)).)
    (b) Prior notice exemption. (1) The following acquisitions of 
voting shares of an insured state nonmember bank, which otherwise would 
require prior notice under this subpart, are not subject to the prior 
notice requirements if the acquiring person notifies the appropriate 
regional director (DOS) within 90 calendar days after the acquisition 
and provides any relevant information requested by the regional 
director (DOS):
    (i) The acquisition of voting shares through inheritance;
    (ii) The acquisition of voting shares as a bona fide gift; or
    (iii) The acquisition of voting shares in satisfaction of a debt 
previously contracted in good faith, except that the acquiror of a 
defaulted loan secured by a controlling amount of a state nonmember 
bank's voting securities shall file a notice before the loan is 
acquired.
    (2) The following acquisitions of voting shares of an insured state 
nonmember bank, which otherwise would require prior notice under this 
subpart, are not subject to the prior notice requirements if the 
acquiring person notifies the appropriate regional director (DOS) 
within 90 calendar days after receiving notice of the acquisition and 
provides any relevant information requested by the regional director 
(DOS):
    (i) A percentage increase in ownership of voting shares resulting 
from a redemption of voting shares by the issuing bank; or
    (ii) The sale of shares by any shareholder that is not within the 
control of a person resulting in that person becoming the largest 
shareholder.
    (3) Nothing in paragraph (b)(1) of this section limits the 
authority of the FDIC to disapprove a notice pursuant to Sec. 303.85(c) 
of this subpart.


Sec. 303.84  Filing procedures.

    (a) Filing notice. (1) A notice required under this subpart shall 
be filed with the appropriate regional director (DOS)

[[Page 52850]]

and shall contain all the information required by paragraph 6 of the 
Change in Bank Control Act, section 7(j) of the FDI Act (12 U.S.C. 
1817(j)(6)), or prescribed in the designated interagency form which may 
be obtained from any FDIC regional office.
    (2) The FDIC may waive any of the informational requirements of the 
notice if the FDIC determines that it is in the public interest.
    (3) A notificant shall notify the appropriate regional director 
(DOS) immediately of any material changes in a notice submitted to the 
regional director (DOS), including changes in financial or other 
conditions.
    (4) When the acquiring person is an individual, or group of 
individuals acting in concert, the requirement to provide personal 
financial data may be satisfied by a current statement of assets and 
liabilities and an income summary, as required in the designated 
interagency form, together with a statement of any material changes 
since the date of the statement or summary. The regional director 
(DOS), nevertheless, may request additional information if appropriate.
    (b) Other laws. Nothing in this regulation shall affect any 
obligation which the acquiring person(s) may have to comply with the 
federal securities laws or other laws.


Sec. 303.85  Processing.

    (a) Acceptance of notice. The 60-day notice period specified in 
Sec. 303.82 of this subpart shall commence on the date of receipt of a 
substantially complete notice. The regional director (DOS) shall notify 
the person or persons submitting a notice under this subpart in writing 
of the date the notice is accepted for processing. The FDIC may request 
additional relevant information at any time.
    (b) Time period for FDIC action.--(1) Consummation of acquisition. 
(i) The notificant(s) may consummate the proposed acquisition 60 days 
after submission to the regional director (DOS) of a substantially 
complete notice under paragraph (a) of this section, unless within that 
period the FDIC disapproves the proposed acquisition or extends the 60-
day period.
    (ii) The notificant(s) may consummate the proposed transaction 
before the expiration of the 60-day period if the FDIC notifies the 
notificant(s) in writing of its intention not to disapprove the 
acquisition.
    (c) Disapproval of acquisition of control. Subpart D of 12 CFR part 
308 sets forth the rules of practice and procedure for a notice of 
disapproval.


Sec. 303.86  Public notice requirements.

    (a) Publication.--(1) Newspaper announcement. Any person(s) filing 
a notice under this subpart shall publish an announcement soliciting 
public comment on the proposed acquisition. The announcement shall be 
published in a newspaper of general circulation in the community in 
which the home office of the state nonmember bank to be acquired is 
located. The announcement shall be published as close as is practicable 
to the date the notice is filed with the appropriate regional director 
(DOS), but in no event more than 10 calendar days before or after the 
filing date.
    (2) Contents of newspaper announcement. The newspaper announcement 
shall conform to the public notice requirements set forth in Sec. 303.7 
of this part.
    (3) Delay of publication. The FDIC may permit delay in the 
publication required by this section if the FDIC determines, for good 
cause shown, that it is in the public interest to grant such a delay. 
Requests for delay of publication may be submitted to the appropriate 
regional director (DOS).
    (4) Shortening or waiving notice. The FDIC may shorten the public 
comment period to a period of not less than 10 days, or waive the 
public comment or newspaper publication requirements of this paragraph, 
or act on a notice before the expiration of a public comment period, if 
it determines in writing either that an emergency exists or that 
disclosure of the notice, solicitation of public comment, or delay 
until expiration of the public comment period would seriously threaten 
the safety or soundness of the bank to be acquired.
    (5) Consideration of public comments. In acting upon a notice filed 
under this subpart, the FDIC shall consider all public comments 
received in writing within 20 days following the required newspaper 
publication or, if the FDIC has shortened the public comment period 
pursuant to paragraph (a)(4) of this section, within such shorter 
period.
    (6) Publication if filing is subsequent to acquisition of control. 
(i) Whenever a notice of a proposed acquisition of control is not filed 
in accordance with the Change in Bank Control Act and these 
regulations, the acquiring person(s) shall, within 10 days of being so 
directed by the FDIC, publish an announcement of the acquisition of 
control in a newspaper of general circulation in the community in which 
the home office of the state nonmember bank to be acquired is located.
    (ii) The newspaper announcement shall contain the name(s) of the 
acquiror(s), the name of the depository institution involved, and the 
date of the acquisition of the stock. The announcement shall also 
contain a statement indicating that the FDIC is currently reviewing the 
acquisition of control. The announcement also shall state that any 
person wishing to comment on the change in control may do so by 
submitting written comments to the appropriate regional director (DOS) 
of the FDIC (give address of regional office) within 20 days following 
the required newspaper publication.


Sec. 303.87  Delegation of authority.

    (a) Authority is delegated to the Director and the Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director and the appropriate regional director and deputy regional 
director, to issue a written notice of the FDIC's intent not to 
disapprove an acquisition of control of an insured state nonmember 
bank.
    (b) The authority delegated by paragraph (a) of this section shall 
include the power to:
    (1) Act in situations where information is submitted on 
acquisitions arising out of events beyond the person's control, as set 
forth in Sec. 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 (12 U.S.C. 1817(j)) by a person acquiring less than 25 
percent of any class of voting shares of an insured state nonmember 
bank; and
    (4) Delay or waive publication, waive or shorten the public comment 
period, or act on a proposed acquisition of control prior to the 
expiration of the public comment period, as provided in Secs. 303.86(a) 
(3) and (4) of this subpart.
    (c) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director, to disapprove an acquisition of control of an insured state 
nonmember bank.

Subpart F--Change of Director or Senior Executive Officer


Sec. 303.100  Scope.

    This subpart sets forth the circumstances under which an insured 
state nonmember bank must notify the FDIC of a change in any member of 
its board of directors or any senior executive officer and the 
procedures for filing such notice, as well as applicable delegations of 
authority. This regulation implements section 32 of the FDI Act (12 
U.S.C. 1831i).


Sec. 303.101  Definitions.

    For purposes of this subpart:

[[Page 52851]]

    (a) Director means a person who serves on the board of directors or 
board of trustees of an insured state nonmember bank, except that this 
term does not include an advisory director who:
    (1) Is not elected by the shareholders;
    (2) Is not authorized to vote on any matters before the board of 
directors or board of trustees or any committee thereof;
    (3) Solely provides general policy advice to the board of directors 
or board of trustees and any committee thereof; and
    (4) Has not been identified by the FDIC as a person who performs 
the functions of a director for purposes of this subpart.
    (b) Senior executive officer means a person who holds the title of 
president, chief executive officer, chief operating officer, chief 
managing official (in an insured state branch of a foreign bank), chief 
financial officer, chief lending officer, or chief investment officer, 
or, without regard to title, salary, or compensation, performs the 
function of one or more of these positions. Senior executive officer 
also includes any other person identified by the FDIC, whether or not 
hired as an employee, with significant influence over, or who 
participates in, major policymaking decisions of the insured state 
nonmember bank.
    (c) Troubled condition means any insured state nonmember bank that:
    (1) Has a composite rating, as determined in its most recent report 
of examination of 4 or 5 under the Uniform Financial Institutions 
Rating System (UFIRS), or in the case of an insured state branch of a 
foreign bank, an equivalent rating;
    (2) Is subject to a proceeding initiated by the FDIC for 
termination or suspension of deposit insurance;
    (3) Is subject to a cease-and-desist order or written agreement 
issued by either the FDIC or the appropriate state banking authority 
that requires action to improve the financial condition of the bank or 
is subject to a proceeding initiated by the FDIC or state authority 
which contemplates the issuance of an order that requires action to 
improve the financial condition of the bank, unless otherwise informed 
in writing by the FDIC; or
    (4) Is informed in writing by the FDIC that it is in troubled 
condition for purposes of the requirements of this subpart on the basis 
of the bank's most recent report of condition or report of examination, 
or other information available to the FDIC.


Sec. 303.102  Filing procedures.

    (a) Insured state nonmember banks. An insured state nonmember bank 
shall give the FDIC written notice, as specified in paragraph (c)(1) of 
this section, at least 30 days prior to adding or replacing any member 
of its board of directors, employing any person as a senior executive 
officer of the bank, or changing the responsibilities of any senior 
executive officer so that the person would assume a different senior 
executive officer position, if:
    (1) The bank is not in compliance with all minimum capital 
requirements applicable to the bank as determined on the basis of the 
bank's most recent report of condition or report of examination;
    (2) The bank is in troubled condition; or
    (3) The FDIC determines, in connection with its review of a capital 
restoration plan required under section 38(e)(2) of the FDI Act (12 
U.S.C. 1831o(e)(2)) or otherwise, that such notice is appropriate.
    (b) Insured branches of foreign banks. In the case of the addition 
of a member of the board of directors or a change in senior executive 
officer in a foreign bank having an insured state branch, the notice 
requirement shall not apply to such additions and changes in the 
foreign bank parent, but only to changes in senior executive officers 
in the state branch.
    (c)(1) Content of filing. The notice required by paragraph (a) of 
this section shall be filed with the appropriate regional director 
(DOS) and shall contain information pertaining to the competence, 
experience, character, or integrity of the individual with respect to 
whom the notice is submitted, as prescribed in the designated 
interagency form which is available from any FDIC regional office. The 
regional director or his or her designee may require additional 
information.
    (2) Modification. The FDIC may modify or accept other information 
in place of the requirements of paragraph (c)(1) of this section for a 
notice filed under this subpart.


Sec. 303.103  Processing and waiver of prior notice.

    (a) Processing. The 30-day notice period specified in 
Sec. 303.102(a) shall begin on the date substantially all information 
required to be submitted by the notificant pursuant to 
Sec. 303.102(c)(1) is received by the appropriate regional director 
(DOS). The regional director shall notify the bank submitting the 
notice of the date on which the notice is accepted for processing and 
of the date on which the 30-day notice period will expire. If 
processing cannot be completed within 30 days, the notificant will be 
advised in writing, prior to expiration of the 30-day period, of the 
reason for the delay in processing and of the additional time period, 
not to exceed 60 days, in which processing will be completed.
    (b) Commencement of service.--(1) At expiration of period. A 
proposed director or senior executive officer may begin service after 
the end of the 30-day period or any other additional period as provided 
under paragraph (a) of this section, unless the FDIC disapproves the 
notice before the end of the period.
    (2) Prior to expiration of period. A proposed director or senior 
executive officer may begin service before the end of the 30-day period 
or any additional time period as provided under paragraph (a) of this 
section, if the FDIC notifies the bank and the individual in writing of 
the FDIC's intention not to disapprove the notice.
    (c) Waiver of prior notice. (1) Waiver requests. The FDIC may 
permit an individual, upon petition by the bank to the appropriate 
regional director (DOS), to serve as a senior executive officer or 
director before filing the notice required under this subpart if the 
FDIC finds that:
    (i) Delay would threaten the safety or soundness of the bank;
    (ii) Delay would not be in the public interest; or
    (iii) Other extraordinary circumstances exist that justify waiver 
of prior notice.
    (2) Automatic waiver. In the case of the election of a new director 
not proposed by management at a meeting of the shareholders of an 
insured state nonmember bank, the prior 30-day notice is automatically 
waived and the individual immediately may begin serving, provided that 
a complete notice is filed with the appropriate regional director (DOS) 
within two business days after the individual's election.
    (3) Effect on disapproval authority. A waiver shall not affect the 
authority of the FDIC to disapprove a notice within 30 days after a 
waiver is granted under paragraph (c)(1) of this section or the 
election of an individual who has filed a notice and is serving 
pursuant to an automatic waiver under paragraph (c)(2) of this section.
    (d) Notice of disapproval. The FDIC may disapprove a notice filed 
under Sec. 303.102 if the FDIC finds that the competence, experience, 
character, or integrity of the individual with respect to whom the 
notice is submitted indicates that it would not be in the best 
interests of the depositors of the bank or in the best interests of the 
public to permit the individual to be employed

[[Page 52852]]

by, or associated with, the bank. Subpart L of 12 CFR part 308 sets 
forth the rules of practice and procedure for a notice of disapproval.


Sec. 303.104  Delegation of authority.

    The following authority is delegated to the Director and Deputy 
Director (DOS) and, where confirmed in writing by the Director, to an 
associate director and the appropriate regional director or deputy 
regional director to:
    (a) Designate an insured state nonmember bank as being in troubled 
condition;
    (b) Grant waivers of the prior notice requirement;
    (c) Extend the 30-day processing period for an additional period of 
up to 60 days in the event of extenuating circumstances; and
    (d) Issue notices of disapproval or notices of intent not to 
disapprove under this subpart.

Subpart G--Activities and Investments of Insured State Banks 
[Reserved]

Subpart H--Filings by Savings Associations [Reserved]

Subpart I--Mutual-to-Stock Conversions


Sec. 303.160  Scope.

    This subpart sets forth the notice requirements which must be met 
by mutually owned state-chartered savings banks that propose to convert 
to stock form, and the related delegations of authority. The 
substantive requirements governing such conversions are contained in 
Sec. 333.4 of this chapter.


Sec. 303.161  Filing procedures.

    A notice shall be filed in letter form with the appropriate 
regional director (DOS) at the same time as the conversion application 
materials are filed with the institution's primary state regulator.


Sec. 303.162  Content of notice.

    The notice shall provide a description of the proposed conversion 
and include all materials that have been filed with any state or 
federal banking regulator and any state or federal securities 
regulator. Copies of all agreements entered into as part of the mutual-
to-stock conversion between the institution and its officers, directors 
or trustees, and any agreements entered into with any other institution 
and/or its successors must be provided. An insured mutual savings bank 
chartered by a state that does not require the filing of an application 
to convert from mutual to stock form that proposes to convert to stock 
form shall notify the FDIC of the proposed conversion and provide any 
materials requested by the FDIC.


Sec. 303.163  Processing.

    (a) The FDIC shall review the materials submitted by the 
institution seeking to convert from mutual to stock form. The FDIC, in 
its discretion, may request any additional information it deems 
necessary to evaluate the proposed conversion and the institution 
promptly shall provide such information to the FDIC. Among the factors 
to be reviewed by the FDIC are:
    (1) The use of the proceeds from the sale of stock, as set forth in 
the business plan;
    (2) The adequacy of the disclosure materials;
    (3) The participation of depositors in approving the transaction;
    (4) The form of the proxy statement required for the vote of the 
depositors/members on the conversion;
    (5) Any increased compensation and other remuneration (including 
stock grants, stock option rights and other similar benefits) to be 
granted to officers and directors/trustees of the bank in connection 
with the conversion;
    (6) The adequacy and independence of the appraisal of the value of 
the mutual savings bank for purposes of determining the price of the 
shares of stock to be sold;
    (7) The process by which the bank's trustees approved the 
appraisal, the pricing of the stock and the compensation arrangements 
for insiders;
    (8) The nature and apportionment of stock subscription rights; and
    (9) The bank's plans to fulfill its commitment to serving the 
convenience and needs of its community.
    (b) Additional considerations. In reviewing the materials required 
to be submitted under this section, the FDIC will take into account the 
extent to which the proposed conversion conforms with the various 
provisions of the mutual-to-stock conversion regulations of the Office 
of Thrift Supervision (OTS) (12 CFR part 563b), as currently in effect 
at the time the FDIC reviews the required materials related to the 
proposed conversion. Any non-conformity with those provisions will be 
closely reviewed. Conformity with the OTS requirements will not be 
sufficient for FDIC regulatory purposes if the FDIC determines that the 
proposed conversion would pose a risk to the institution's safety or 
soundness, violate any law or regulation or present a breach of 
fiduciary duty.
    (c) Notification of completed filing of materials. The FDIC shall 
notify the institution when all the required materials related to the 
proposed conversion have been filed with the FDIC and the notice is 
thereby complete for purposes of computing the time periods designated 
in paragraphs (d) and (f) of this section.
    (d) Notice of intent not to object. If the FDIC determines, in its 
discretion, that the proposed conversion would not pose a risk to the 
institution's safety or soundness, violate any law or regulation or 
present a breach of fiduciary duty, then the FDIC shall issue to the 
bank seeking to convert, within 60 days of receipt of a substantially 
complete notice of proposed conversion or within 20 days after the last 
applicable state or other federal regulator has approved the proposed 
conversion, whichever is later, a notice of intent not to object to the 
proposed conversion. The FDIC may, in its discretion, extend by written 
notice to the institution the initial 60-day period by an additional 60 
days.
    (e) Letter of objection. If the FDIC determines, in its discretion, 
that the proposed conversion poses a risk to the institution's safety 
or soundness, violates any law or regulation or presents a breach of 
fiduciary duty, then the FDIC shall issue a letter to the institution 
stating its objection(s) to the proposed conversion and advising the 
institution that the conversion shall not be consummated until such 
letter is rescinded. A copy of the letter of objection shall be 
furnished to the institution's primary state regulator and any other 
state or federal banking regulator and state or federal securities 
regulator involved in the conversion. The letter of objection shall 
advise the institution of its right to petition the FDIC for 
reconsideration under Sec. 303.11(f) of this part. Such action shall 
not, in any way, prohibit the FDIC from taking any other action(s) that 
it may deem necessary.
    (f) Consummation of the conversion. An institution may consummate 
the proposed conversion upon either:
    (1) The receipt of a notice of intent not to object; or
    (2) The expiration of the 60-day period following receipt of a 
substantially complete notice by the FDIC or the 20-day period after 
the last applicable state or other federal regulator has approved the 
proposed conversion, whichever is later, unless the FDIC issues a 
notice of objection before the end of that period. If a notice of 
objection is issued, the conversion shall not be consummated until such 
letter is rescinded. The FDIC may, in its discretion, extend by written 
notice to the institution the initial 60-day period by an additional 60 
days.

[[Page 52853]]

Sec. 303.164  Delegation of authority.

    (a) Authority is delegated to the Director and Deputy Director 
(DOS) to issue a notice of intent not to object to a proposed 
conversion transaction that is determined not to pose a risk to the 
institution's safety or soundness, violate any law or regulation, 
present a breach of fiduciary duty, and not to raise any unique legal 
or policy issues. Such authority will be exercised in accordance with 
the time periods contained in Sec. 303.163(d) of this subpart, unless 
the bank seeking to convert agrees to a longer time period.
    (b) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director and the appropriate regional director and deputy regional 
director to accept notices of intent to convert to stock form and to 
extend the initial 60-day period within which FDIC may object by an 
additional 60 days.

Subpart J--Foreign Bank Activities


Sec. 303.180  Scope.

    This subpart sets forth procedures for complying with application 
requirements relating to the foreign activities of insured state 
nonmember banks and the U.S. activities of insured branches of foreign 
banks and delegations of authority.


Sec. 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 Federal 
Reserve System.
    (b) Comptroller means the Office of the Comptroller of the 
Currency.
    (c) Eligible insured branch. An insured branch will be treated as 
an eligible depository institution within the meaning of Sec. 303.2(r) 
of this part if the insured branch:
    (1) Received an FDIC-assigned composite ROCA rating of 1 or 2 as a 
result of its most recent federal or state examination, and the FDIC, 
Comptroller, or Board of Governors have not expressed concern about the 
condition or operations of the foreign banking organization or the 
support it offers the branch;
    (2) Received a satisfactory or better Community Reinvestment Act 
(CRA) rating from its primary federal regulator at its most recent 
examination;
    (3) Received a compliance rating of 1 or 2 from its primary federal 
regulator at its most recent examination;
    (4) Is well capitalized as defined in subpart B of part 325 of this 
chapter; and
    (5) Is not subject to a cease and desist order, consent order, 
prompt corrective action directive, written agreement, memorandum of 
understanding, or other administrative agreement with any U.S. bank 
regulatory authority.
    (d) Federal branch means a federal branch of a foreign bank as 
defined by Sec. 346.1 of this chapter.
    (e) Foreign bank means a foreign bank as defined by Sec. 346.1 of 
this chapter.
    (f) Foreign branch means a foreign branch of an insured state 
nonmember bank as defined by Sec. 347.2 of this chapter.
    (g) Insured branch means an insured branch of a foreign bank as 
defined by Sec. 346.1 of this chapter.
    (h) State branch means a state branch of a foreign bank as defined 
by Sec. 346.1 of this chapter.


Sec. 303.182  Establishing, moving or closing a foreign branch of a 
state nonmember bank.

    (a) General consent to expand within a country. (1) General consent 
of the FDIC is granted under Sec. 347.3 of this chapter for an eligible 
depository institution to establish additional foreign branches 
conducting activities authorized by Sec. 347.3 in any foreign country 
in which the bank already operates one or more foreign branches, or to 
move an existing foreign branch within a foreign country.
    (2) Notice procedures for general consent. The eligible depository 
institution must provide the appropriate regional director (DOS) 
written notice within 30 days of taking such action, and include the 
location of the foreign branch, including a street address, and a 
statement that the foreign branch has not been located on a site on the 
World Heritage List or on the foreign country's equivalent of the 
National Register of Historic Places (National Register), in accordance 
with section 402 of the National Historic Preservation Act Amendments 
of 1980 (NHPA Amendments Act) (16 U.S.C. 470a-2). The appropriate 
regional director will provide written acknowledgment of receipt of the 
notice.
    (b) Filing procedures for other branch establishments. (1) Where to 
file. An insured state nonmember bank seeking to establish a foreign 
branch other than under paragraph (a) of this section must submit an 
application to the appropriate regional director (DOS).
    (2) Content of filing. A complete letter filing must contain the 
following information:
    (i) The exact location of the foreign branch, including a street 
address, and a statement whether the foreign branch will be located on 
a site on the World Heritage List or on the foreign country's 
equivalent of the National Register, in accordance with section 402 of 
the NHPA Amendments Act;
    (ii) Details concerning any involvement in the proposal by an 
insider of the applicant, including any financial arrangements relating 
to fees, the acquisition of property, leasing of property, and 
construction contracts;
    (iii) A brief description of the applicant's business plan with 
respect to the foreign branch; and
    (iv) A brief description of the activities of the branch, and to 
the extent any activities are not authorized by Sec. 347.3 of this 
chapter, the applicant's reasons why they should be approved.
    (3) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (c) Processing.--(1) Expedited processing for eligible depository 
institutions. An application filed by an eligible depository 
institution as defined in Sec. 303.2(r) of this part that operates 
foreign branches in two or more territories or foreign countries to 
establish a foreign branch that conducts activities authorized by 
Sec. 347.3 of this chapter in an additional foreign country will be 
acknowledged in writing by the FDIC and will receive expedited 
processing, unless the applicant is notified in writing to the contrary 
and provided with the basis for that decision. The FDIC may remove an 
application from expedited processing for any of the reasons set forth 
in Sec. 303.11(c)(2) of this part. Absent such removal, an application 
processed under expedited processing is deemed approved 45 days after 
the FDIC's receipt of a substantially complete application.
    (2) Standard processing. For those applications which are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action taken as 
soon as the decision is rendered.
    (d) Exceptions to general consent and expedited processing. (1) 
Upon notice to an insured state nonmember bank, the FDIC may modify or 
suspend the availability of its general consent or expedited processing 
under this section.
    (2) General consent or expedited processing under this section does 
not apply in any case in which:
    (i) The foreign branch would be located on a site on the World 
Heritage List or on the foreign country's equivalent of the National 
Register in accordance with section 402 of the NHPA Amendments Act; or

[[Page 52854]]

    (ii) Any applicable law or practice in the relevant foreign country 
would limit the FDIC's access to information for supervisory purposes.
    (e) Closing. Within 30 days after it closes a foreign branch, an 
insured state nonmember bank must advise the appropriate regional 
director (DOS) by letter of the name, location, and date of closing of 
the closed branch.
    (f) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director to approve an application under 
paragraph (c) of this section if the following criteria are satisfied:
    (1) The requirements of section 402 the NHPA Amendments Act have 
been favorably resolved; and
    (2) The applicant will only conduct activities authorized by 
Sec. 347.3 of this chapter.


Sec. 303.183  Acquisition of stock of foreign banks or other financial 
entities by an insured state nonmember bank.

    (a) Definition. For purposes of this section only, a foreign bank 
or other financial entity means a foreign bank or other financial 
entity as defined by Sec. 347.2 of this chapter.
    (b) Filing procedures.--(1) Where to file. An application by an 
insured state nonmember bank to acquire or hold an ownership interest 
in a foreign bank or other financial entity, as required by Sec. 347.4 
of this chapter, must be filed in writing with the appropriate regional 
director (DOS).
    (2) Content of filing. A complete letter filing must contain full 
information concerning the foreign bank or other financial entity, 
including the following information:
    (i) The cost, number, class of shares to be acquired, and the 
proposed carrying value of such shares on the books of the insured 
state nonmember bank;
    (ii) A recent balance sheet and income statement of the foreign 
bank or other financial entity;
    (iii) A brief description of the foreign bank's or other financial 
entity's business (including full information concerning any direct or 
indirect business transacted in the United States);
    (iv) Lists of directors and principal officers (with address and 
principal business affiliation of each) and of all shareholders known 
to hold 10 percent or more of any class of the foreign bank's or other 
financial entity's stock or other evidence of ownership, and the amount 
held by each; and
    (v) Information concerning the rights and privileges of the various 
classes of shares outstanding.
    (3) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (c) Processing. The FDIC will provide the applicant with written 
notification of the final action taken.
    (d) Delegations of authority. Authority is delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to an associate director, to approve or deny applications 
submitted under this section for the acquisition and holding of stock 
or other evidences of ownership of a foreign bank or other financial 
entity that result in the state nonmember bank having a less than 25 
percent ownership interest in such bank or other financial entity.


Sec. 303.184  Moving an insured branch of a foreign bank.

    (a) Filing procedures.--(1) Where and when to file. An application 
by an insured branch of a foreign bank seeking the FDIC's consent to 
move from one location to another, as required by section 18(d)(1) of 
the FDI Act (12 U.S.C. 1828(d)(1)), must be submitted in writing to the 
appropriate regional director (DOS) on the date the notice required by 
paragraph (c) of this section is published, or within 5 days after the 
date of the last required publication.
    (2) Content of filing. A complete letter filing must include the 
following information:
    (i) The exact location of the proposed site, including the street 
address;
    (ii) Details concerning any involvement in the proposal by an 
insider of the insured branch, including any financial arrangements 
relating to fees, the acquisition of property, leasing of property, and 
construction contracts;
    (iii) A statement of the impact of the proposal on the human 
environment, including information on compliance with local zoning laws 
and regulations and the effect on traffic patterns, for purposes of 
complying with the applicable provisions of the NEPA;
    (iv) A statement as to whether the site is included in or is 
eligible for inclusion in the National Register of Historic Places, 
including a statement that clearance has been or will be obtained from 
the State Historic Preservation Officer, for purposes of complying with 
the applicable provisions of the NHPA;
    (v) Comments on any changes in services to be offered, the 
community to be served, or any other effect the proposal may have on 
the applicant's compliance with the CRA; and
    (vi) A copy of the newspaper publication required by paragraph (c) 
of this section, as well as the name and address of the newspaper and 
the date of the publication.
    (3) Comptroller's application. If the applicant is filing an 
application with the Comptroller which contains the information 
required by paragraph (a)(2) of this section, the applicant may submit 
a copy to the FDIC in lieu of a separate application.
    (4) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (b) Processing.--(1) Expedited processing for eligible insured 
branches. An application filed by an eligible insured branch as defined 
in Sec. 303.181(c) of this part will be acknowledged in writing by the 
FDIC and will receive expedited processing, unless the applicant is 
notified to the contrary and provided with the basis for that decision. 
The FDIC may remove an application from expedited processing for any of 
the reasons set forth in Sec. 303.11(c)(2) of this part. Absent such 
removal, an application processed under expedited processing will be 
deemed approved on the latest of the following:
    (i) The 21st day after the FDIC's receipt of a substantially 
complete application; or
    (ii) The 5th day after expiration of the comment period described 
in paragraph (c) of this section.
    (2) Standard processing. For those applications that are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action as soon as 
the decision is rendered.
    (c) Publication requirement and comment period.--(1) Newspaper 
publications. The applicant must publish a notice of its proposal to 
move from one location to another, as described in Sec. 303.7(b), in a 
newspaper of general circulation in the community in which the insured 
branch is located prior to its being moved and in the community to 
which it is to be moved. The notice must include the insured branch's 
current and proposed addresses.
    (2) Public comments. All public comments must be received by the 
appropriate regional director (DOS) within 15 days after the date of 
the last newspaper publication required by paragraph (c)(1) of this 
section, unless the comment period has been extended or reopened in 
accordance with Sec. 303.9(b)(2).

[[Page 52855]]

    (3) Lobby notices. If the insured branch has a public lobby, a copy 
of the newspaper publication must be posted in the public lobby for at 
least 15 days beginning on the date of the publication required by 
paragraph (c)(1) of this section.
    (d) Delegation of authority. (1) Authority is delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to an associate director and the appropriate regional 
director and deputy regional director to approve an application under 
this section. For the Director, Deputy Director or associate director 
(DOS) to exercise this authority, paragraphs (d)(1)(i) through 
(d)(1)(iv) and (d)(1)(vi) of this section must be satisfied. For the 
regional director or deputy regional director (DOS) to exercise this 
authority, paragraphs (d)(1)(i) through (d)(1)(vi) of this section must 
be satisfied.
    (i) The factors set forth in section 6 of the FDI Act (12 U.S.C. 
1816) have been considered and favorably resolved;
    (ii) The applicant is at least adequately capitalized as defined in 
subpart B of part 325 of this chapter;
    (iii) Any financial arrangements which have been made in connection 
with the proposed relocation and which involve the applicant's 
directors, officers, major shareholders, or their interests are fair 
and reasonable in comparison to similar arrangements that could have 
been made with independent third parties;
    (iv) Compliance with the CRA, the NEPA, the NHPA and any applicable 
related regulations, including 12 CFR part 345, has been considered and 
favorably resolved;
    (v) No CRA protest as defined in Sec. 303.2(l) of this part has 
been filed which remains unresolved or, where such a protest has been 
filed and remains unresolved, the Director (DCA), Deputy Director 
(DCA), an associate director (DCA) or the appropriate regional director 
or deputy regional director (DCA) concurs that approval is consistent 
with the purposes of the CRA and the applicant agrees in writing to any 
conditions imposed regarding the CRA; and
    (vi) The applicant agrees in writing to comply with any conditions 
imposed by the delegate, other than the standard conditions defined in 
Sec. 303.2(ff) of this part which may be imposed without the 
applicant's written consent.
    (2) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director, to approve applications under this section which meet all 
criteria in paragraph (d)(1) of this section except that the applicant 
does not agree in writing to comply with any condition imposed by the 
delegate, other than the standard conditions defined in Sec. 303.2(ff) 
which may be imposed without the applicant's written consent; or
    (3) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director, to deny applications under this section.


Sec. 303.185  Mergers involving an insured branch of a foreign bank.

    (a) Applicability of subpart D. Mergers requiring the FDIC's prior 
approval as set forth in Sec. 303.62 of this part include any merger in 
which the resulting institution is an insured branch of a foreign bank 
which is not a federal branch, or any merger which involves any insured 
branch and any uninsured institution. In such cases:
    (1) References to an eligible depository institution in subpart D 
of this part include an eligible insured branch as defined in 
Sec. 303.181 of this subpart;
    (2) The definition of a corporate reorganization in Sec. 303.61(b) 
of this part includes a merger between an insured branch and other 
branches, agencies, or subsidiaries in the United States of the same 
foreign bank; and
    (3) For the purposes of Sec. 303.62(b)(1) of this part on 
interstate mergers, a merger transaction involving an insured branch is 
one involving the acquisition of a branch of an insured bank without 
the acquisition of the bank for purposes of section 44 of the FDI Act 
(12 U.S.C. 1831u) only when the merger transaction involves fewer than 
all the insured branches of the same foreign bank in the same state.


Sec. 303.186  Exemptions from insurance requirement for a state branch 
of a foreign bank.

    (a) Filing procedures.--(1) Where to file. An application by a 
state branch for consent to operate as a noninsured state branch, as 
required by Sec. 346.6(b) of this chapter, must be submitted in writing 
to the appropriate regional director (DOS).
    (2) Content of filing. A complete letter filing must include the 
following information:
    (i) The kinds of deposit activities in which the state branch 
proposes to engage;
    (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 all sectors of the United States economy, including the 
international trade finance sector;
    (v) That the activity will not give the foreign bank an unfair 
competitive advantage over United States banking organizations; and
    (vi) A resolution by the applicant's board of directors, or 
evidence of approval by senior management if a resolution is not 
required pursuant to the applicant's organizational documents, 
authorizing the filing of the application.
    (2) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (b) Processing. The FDIC will provide the applicant with written 
notification of the final action taken.


Sec. 303.187  Approval for an insured state branch of a foreign bank to 
conduct activities not permissible for federal branches.

    (a) Filing procedures.--(1) Where to file. An application by an 
insured state branch seeking approval to conduct activities not 
permissible for a federal branch, as required by Sec. 346.101(a) of 
this chapter, must be submitted in writing to the appropriate regional 
director (DOS).
    (2) Content of filing. A complete letter filing must include the 
following information:
    (i) A brief description of the activity, including the manner in 
which it will be conducted and an estimate of the expected dollar 
volume associated with the activity;
    (ii) An analysis of the impact of the proposed activity on the 
condition of the United States operations of the foreign bank in 
general and of the branch in particular, including a copy of the 
feasibility study, management plan, financial projections, business 
plan, or similar document concerning the conduct of the activity;
    (iii) A resolution by the applicant's board of directors, or 
evidence of approval by senior management if a resolution is not 
required pursuant to the applicant's organizational documents, 
authorizing the filing of the application;
    (iv) A statement by the applicant of whether it is in compliance 
with Secs. 346.19 and 346.20 of this chapter, Pledge of assets and 
Asset maintenance, respectively;
    (v) A statement by the applicant that it has complied with all 
requirements of the Board of Governors concerning applications to 
conduct the activity in question and the status of each such 
application, including a copy of the Board of Governors' disposition of 
such application, if applicable; and

[[Page 52856]]

    (vi) A statement of why the activity will pose no significant risk 
to the Bank Insurance Fund.
    (3) Board of Governors application. If the application to the Board 
of Governors contains the information required by paragraph (a) of this 
section, the applicant may submit a copy to the FDIC in lieu of a 
separate letter application.
    (4) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (b) Divestiture or cessation.--(1) Where to file. Divestiture plans 
necessitated by a change in law or other authority, as required by 
Sec. 346.101(f) of this chapter, must be submitted in writing to the 
appropriate regional director (DOS).
    (2) Content of filing. A complete letter filing must include the 
following information:
    (i) A detailed description of the manner in which the applicant 
proposes to divest itself of or cease the activity in question; and
    (ii) A projected timetable describing how long the divestiture or 
cessation is expected to take.
    (3) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (c) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve plans of divestiture 
and cessation submitted pursuant to paragraph (b) of this section.

Subpart K--Prompt Corrective Action


Sec. 303.200  Scope.

    (a) General. (1) This subpart covers applications filed pursuant to 
section 38 of the FDI Act (12 U.S.C. 1831o), which requires insured 
depository institutions that are not adequately capitalized to receive 
approval prior to engaging in certain activities. Section 38 restricts 
or prohibits certain activities and requires an insured depository 
institution to submit a capital restoration plan when it becomes 
undercapitalized. The restrictions and prohibitions become more severe 
as an institution's capital level declines.
    (2) Definitions for the capital categories referenced in this 
Prompt Corrective Action subpart may be found in subpart B of part 325 
of this chapter, Sec. 325.103(b) for banks and Sec. 325.103(c) for 
insured branches of foreign banks.
    (b) Institutions covered. Restrictions and prohibitions contained 
in subpart B of part 325 of this chapter apply primarily to insured 
state nonmember banks and insured branches of foreign banks, as well as 
to directors and senior executive officers of those institutions. 
Portions of subpart B of part 325 of this chapter also apply to all 
insured depository institutions that are deemed to be critically 
undercapitalized.


Sec. 303.201  Filing procedures.

    Applications shall be filed with the appropriate regional director 
(DOS). The application shall contain the information specified in each 
respective section of this subpart, and shall be in letter form as 
prescribed in Sec. 303.3 of this part. Additional information may be 
requested by the FDIC. Such letter shall be signed by the president, 
senior officer or a duly authorized agent of the insured depository 
institution and be accompanied by a certified copy of a resolution 
adopted by the institution's board of directors or trustees authorizing 
the application.


Sec. 303.202  Processing.

    The FDIC will provide the applicant with a subsequent written 
notification of the final action taken as soon as the decision is 
rendered.


Sec. 303.203  Applications for capital distribution.

    (a) Scope. An insured state nonmember bank and any insured branch 
of a foreign bank shall submit an application for capital distribution 
if, after having made a capital distribution, the institution would be 
undercapitalized, significantly undercapitalized, or critically 
undercapitalized.
    (b) Content of filing. An application to repurchase, redeem, retire 
or otherwise acquire shares or ownership interests of the insured 
depository institution shall describe the proposal, the shares or 
obligations which are the subject thereof, and the additional shares or 
obligations of the institution which will be issued in at least an 
amount equivalent to the distribution. The application also shall 
explain how the proposal will reduce the institution's financial 
obligations or otherwise improve its financial condition. If the 
proposed action also requires an application under section 18(i) of the 
FDI Act (12 U.S.C. 1828(i)) as implemented by Sec. 303.241 of this part 
regarding prior consent to retire capital, such application should be 
filed concurrently with, or made a part of, the application filed 
pursuant to section 38 of the FDI Act (12 U.S.C. 1831o).


Sec. 303.204  Applications for acquisitions, branching, and new lines 
of business

    (a) Scope. (1) Any insured state nonmember bank and any insured 
branch of a foreign bank which is undercapitalized or significantly 
undercapitalized, and any insured depository institution which is 
critically undercapitalized, shall submit an application to engage in 
acquisitions, branching or new lines of business.
    (2) A new line of business will include any new activity exercised 
which, although it may be permissible, has not been exercised by the 
institution.
    (b) Content of filing. Applications shall describe the proposal, 
state the date the institution's capital restoration plan was accepted 
by its primary federal regulator, describe the institution's status 
toward implementing the plan, and explain how the proposed action is 
consistent with and will further the achievement of the plan or 
otherwise further the purposes of section 38 of the FDI Act. If the 
FDIC is not the applicant's primary federal regulator, the application 
also should state whether approval has been requested from the 
applicant's primary federal regulator, the date of such request and the 
disposition of the request, if any. If the proposed action also 
requires applications pursuant to section 18 (c) or (d) of the FDI Act 
(mergers and branches) (12 U.S.C. 1828 (c) or (d)), such applications 
should be filed concurrently with, or made a part of, the application 
filed pursuant to section 38 of the FDI Act (12 U.S.C. 1831o).


Sec. 303.205  Applications for bonuses and increased compensation for 
senior executive officers.

    (a) Scope. Any insured state nonmember bank or insured branch of a 
foreign bank that is significantly or critically undercapitalized, or 
any insured state nonmember bank or any insured branch of a foreign 
bank that is undercapitalized and which has failed to submit or 
implement in any material respect an acceptable capital restoration 
plan, shall submit an application to pay a bonus or increase 
compensation for any senior executive officer.
    (b) Content of filing. Applications shall list each proposed bonus 
or increase in compensation, and for the latter shall identify 
compensation for each of the twelve calendar months preceding the 
calendar month in which the institution became undercapitalized. 
Applications also shall state the date the institution's capital 
restoration plan was accepted by the FDIC, and describe any progress 
made in implementing the plan.

[[Page 52857]]

Sec. 303.206  Application for payment of principal or interest on 
subordinated debt.

    (a) Scope. Any critically undercapitalized insured depository 
institution shall submit an application to pay principal or interest on 
subordinated debt.
    (b) Content of filing. Applications shall describe the proposed 
payment and provide an explanation of action taken under section 
38(h)(3)(A)(ii) of the FDI Act (action instead of receivership or 
conservatorship). The application also shall explain how such payments 
would further the purposes of section 38 of the FDI Act (12 U.S.C. 
1831o). Existing approvals pursuant to requests filed under section 
18(i)(1) of the FDI Act (12 U.S.C. 1828(i)(1)) (capital stock 
reductions or retirements) shall not be deemed to be the permission 
needed pursuant to section 38.


Sec. 303.207  Restricted activities for critically undercapitalized 
institutions.

    (a) Scope. Any critically undercapitalized insured depository 
institution shall submit an application to engage in certain restricted 
activities.
    (b) Content of filing. Applications to engage in any of the 
following activities, as set forth in sections 38(i)(2)(A) through (G) 
of the FDI Act, shall describe the proposed activity and explain how 
the activity would further the purposes of section 38 of the FDI Act 
(12 U.S.C. 1831o):
    (1) Enter into any material transaction other than in the usual 
course of business including any action with respect to which the 
institution is required to provide notice to the appropriate federal 
banking agency. Materiality will be determined on a case-by-case basis;
    (2) Extend credit for any highly leveraged transaction (as defined 
in part 325 of this chapter);
    (3) Amend the institution's charter or bylaws, except to the extent 
necessary to carry out any other requirement of any law, regulation, or 
order;
    (4) Make any material change in accounting methods;
    (5) Engage in any covered transaction (as defined in section 23A(b) 
of the Federal Reserve Act (12 U.S.C. 371c(b));
    (6) Pay excessive compensation or bonuses. Part 359 of this chapter 
provides guidance for determining excessive compensation. The FDIC will 
consider the existing compensation levels of an institution's executive 
officers directors and principal shareholders (as defined in Regulation 
O, 12 CFR part 215) on a case-by-case basis, and will require prior 
written approval for any change in their compensation levels; or
    (7) Pay interest on new or renewed liabilities at a rate that would 
increase the institution's weighted average cost of funds to a level 
significantly exceeding the prevailing rates of interest on insured 
deposits in the institution's normal market area. Section 337.6 of this 
chapter (Brokered deposits) provides guidance for defining the relevant 
terms of this provision; however this provision does not supersede the 
general prohibitions contained in Sec. 337.6.


Sec. 303.208  Delegation of authority.

    Authority is delegated to the Director and Deputy Director (DOS) 
and, where confirmed in writing by the Director, to an associate 
director and the appropriate regional director and deputy regional 
director, to approve or deny the following applications, requests or 
petitions submitted pursuant to this subpart:
    (a) Applications filed pursuant to section 38 of the FDI Act (12 
U.S.C. 1831o) (prompt corrective action), including applications to 
make a capital distribution;
    (b) Applications for acquisitions, branching, and new lines of 
business (except that the delegation is limited to the authority as 
delegated to approve or deny any concurrent application filed pursuant 
to section 18(c) or (d) of the FDI Act (12 U.S.C. 1828(c) or (d));
    (c) Applications to pay a bonus or increase compensation;
    (d) Applications for an exception to pay principal or interest on 
subordinated debt; and
    (e) Applications by critically undercapitalized insured depository 
institutions to engage in any restricted activity listed in this 
subpart.

Subpart L--Section 19 of the FDI Act (Consent to Service of Persons 
Convicted of Certain Criminal Offenses)


Sec. 303.220  Scope.

    This subpart covers applications under section 19 of the FDI Act 
(12 U.S.C. 1829).
    Pursuant to section 19, any person who has been convicted of any 
criminal offense involving dishonesty, breach of trust, or money 
laundering, or has agreed to enter into a pretrial diversion or similar 
program in connection with a prosecution for such offense, may not 
become, or continue as, an institution-affiliated party of an insured 
depository institution; own or control, directly or indirectly, any 
insured depository institution; or otherwise participate, directly or 
indirectly, in the conduct of the affairs of any insured depository 
institution without the prior written consent of the FDIC.


Sec. 303.221  Filing procedures.

    (a) Regional office. An application under section 19 shall be filed 
with the appropriate FDIC regional director (DOS).
    (b) Contents of filing. Application forms may be obtained from any 
FDIC regional office. The FDIC may require additional information 
beyond that sought in the form or questionnaire, as warranted, in 
individual cases.


Sec. 303.222  Service at another insured depository institution.

    In the case of a person who has already been approved by the FDIC 
under this subpart or section 19 of the Act in connection with a 
particular insured depository institution, such person may not become 
an institution affiliated party, or own or control directly or 
indirectly another insured depository institution, or participate in 
the conduct of the affairs of another insured depository institution, 
without the prior written consent of the FDIC.


Sec. 303.223  Applicant's right to hearing following denial.

    An applicant may request a hearing following a denial of an 
application in accordance with the provisions of part 308 of this 
chapter.


Sec. 303.224  Delegation of authority.

    (a) Approvals. Authority is delegated to the Director and Deputy 
Director (DOS) or, where confirmed in writing by the Director, to an 
associate director or to the appropriate regional director or deputy 
regional director, to approve applications made by insured depository 
institutions pursuant to section 19 of the FDI Act, after consultation 
with the Legal Division; provided however, that authority may not be 
delegated to the regional director or deputy regional director where 
the applicant's primary supervisory authority interposes any objection 
to such application.
    (b) Denials. Authority is delegated to the Director and Deputy 
Director (DOS) or, where confirmed in writing by the Director, to an 
associate director, to deny applications made by insured depository 
institutions pursuant to section 19 of the Act.
    (c) Concurrent legal certification. The authority to deny 
applications delegated under this section shall be exercised only upon 
the concurrent certification by the General Counsel or, where confirmed 
in writing by the General Counsel, his or her designee, that the action 
taken is not inconsistent with section 19 of the FDI Act.

[[Page 52858]]

    (d) Conditions on application approvals. Regional directors and 
deputy regional directors acting under delegated authority under this 
subpart may impose any of the following conditions on the approval of 
applications, as appropriate in individual cases:
    (1) A participant or institution-affiliated party of an institution 
shall be bonded to the same extent as others in similar positions; and/
or
    (2) When deemed necessary, the prior consent of the appropriate 
regional director (DOS) shall be required for any proposed significant 
changes in duties and/or responsibilities of the person who is the 
subject of the application.
    (e) Authority not delegated by FDIC Board of Directors. The FDIC 
Board of Directors has not delegated its authority to consider and act 
upon an application under section 19 of the FDI Act after a hearing 
held in accordance with the provisions of part 308 of this chapter.

Subpart M--Other Filings


Sec. 303.240  General.

    This subpart sets forth the filing procedures to be followed when 
seeking the FDIC's consent to engage in certain activities or 
accomplish other matters as specified in the individual sections 
contained herein. For those matters covered by this subpart that also 
have substantive FDIC regulations or related statements of policy, 
references to the relevant regulations or statements of policy are 
contained in the specific sections.


Sec. 303.241  Reduce or retire capital stock or capital debt 
instruments.

    (a) Scope. This section contains the procedures to be followed by 
an insured state nonmember bank to seek the prior approval of the FDIC 
to reduce the amount or retire any part of its common or preferred 
stock, or to retire any part of its capital notes or debentures 
pursuant to section 18(i)(1) of the Act (12 U.S.C. 1828(i)(1)).
    (b) Filing procedures. Applicants shall submit a letter application 
to the appropriate regional director (DOS).
    (c) Content of filing. The application shall contain the following:
    (1) The type and amount of the proposed change to the capital 
structure and the reason for the change;
    (2) A schedule detailing the present and proposed capital 
structure;
    (3) The time period that the proposal will encompass;
    (4) If the proposal involves a series of transactions affecting 
Tier 1 capital components which will be consummated over a period of 
time which shall not exceed 12 months, the application shall certify 
that the insured depository institution will maintain itself as a well 
capitalized institution as defined in part 325 of this chapter, both 
before and after each of the proposed transactions;
    (5) If the proposal involves the repurchase of capital instruments, 
the amount of the repurchase price and the basis for establishing the 
fair market value of the repurchase price;
    (6) A statement that the proposal will be available to all holders 
of a particular class of outstanding capital instruments on an equal 
basis, and if not, the details of any restrictions; and
    (7) The date that the applicant's board of directors approved the 
proposal.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the application.
    (e) Undercapitalized institutions. Procedures regarding 
applications by an undercapitalized insured depository institution to 
retire capital stock or capital debt instruments pursuant to section 38 
of the FDI Act (12 U.S.C. 1831o) are set forth in subpart K (Prompt 
Corrective Action), Sec. 303.203 of this part. Applications pursuant to 
section 38 and 18(i) may be filed concurrently, or as a single 
application.
    (f) Expedited processing for eligible depository institutions. An 
application filed under this section by an eligible depository 
institution as defined in Sec. 303.2(r) of this part will be 
acknowledged in writing by the FDIC and will receive expedited 
processing, unless the applicant is notified in writing to the contrary 
and provided with the basis for that decision. The FDIC may remove an 
application from expedited processing for any of the reasons set forth 
in Sec. 303.11(c)(2) of this part. Absent such removal, an application 
processed under expedited processing will be deemed approved 20 days 
after the FDIC's receipt of a substantially complete application.
    (g) Standard processing. For those applications that are not 
processed pursuant to expedited procedures, the FDIC will provide the 
applicant with written notification of the final action as soon as the 
decision is rendered.
    (h) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve or deny an 
application pursuant to section 18(i)(1) of the FDI Act (12 U.S.C. 
1828(i)) to reduce the amount or retire any part of common or preferred 
capital stock, or to retire any part of capital notes or debentures.


Sec. 303.242  Exercise of trust powers.

    (a) Scope. This section contains the procedures to be followed by a 
state nonmember bank to seek the FDIC's prior consent to exercise trust 
powers. The FDIC's prior consent to exercise trust powers is not 
required in the following circumstances:
    (1) Where a state nonmember bank received authority to exercise 
trust powers from its chartering authority prior to December 1, 1950; 
or
    (2) Where an insured depository institution continues to conduct 
trust activities pursuant to authority granted by its chartering 
authority subsequent to a charter conversion or withdrawal from 
membership in the Federal Reserve System.
    (b) Filing procedures. Applicants should submit to the appropriate 
regional director (DOS) a completed form, ``Application for Consent To 
Exercise Trust Powers.'' This form may be obtained from any FDIC 
regional office.
    (c) Content of filing. The filing should consist of the completed 
trust application form.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Expedited processing for eligible depository institutions. An 
application filed under this section by an eligible depository 
institution as defined in Sec. 303.2(r) of this part will be 
acknowledged in writing by the FDIC and will receive expedited 
processing, unless the applicant is notified in writing to the contrary 
and provided with the basis for that decision. The FDIC may remove an 
application from expedited processing for any of the reasons set forth 
in Sec. 303.11(c)(2) of this part. Absent such removal, an application 
processed under expedited procedures will be deemed approved 30 days 
after the FDIC's receipt of a substantially complete application.
    (f) Standard processing. For those applications that are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action as soon as 
the decision is rendered.
    (g) Delegation of authority. (1) Where the criteria listed in 
paragraph (g)(2) of this section are satisfied and the applicant agrees 
in writing to comply with any conditions imposed by the approving FDIC 
official, other than the standard conditions defined in Sec. 303.2(ff) 
of this part, which may be imposed without the applicant's written

[[Page 52859]]

consent, authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director and the appropriate regional director and deputy regional 
director, to approve applications for the FDIC's consent to exercise 
trust powers.
    (2) The following criteria must be satisfied before the authority 
delegated in paragraph (g)(1) of this section may be exercised:
    (i) The factors set forth in section 6 of the FDI Act (12 U.S.C. 
1816) have been considered and favorably resolved;
    (ii) The proposed management of the trust business is determined to 
be capable of satisfactorily handling the anticipated business; and
    (iii) The applicant's board of directors formally has adopted the 
FDIC Statement of Principles of Trust Department Management available 
from any FDIC regional office.
    (h) Denials and certain conditional approvals. Authority is 
delegated to the Director and Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director to:
    (1) Deny applications for trust powers; and
    (2) Approve applications for trust powers where the criteria listed 
in paragraph (g)(2) of this section are satisfied but the applicant 
does not agree in writing to comply with any condition imposed by the 
delegate, other than the standard conditions defined in Sec. 303.2(ff) 
of this part which may be imposed without the applicant's written 
consent.


Sec. 303.243  Brokered deposit waivers.

    (a) Scope. Pursuant to section 29 of the FDI Act (12 U.S.C. 1831f) 
and Sec. 337.6 of this chapter, an adequately capitalized insured 
depository institution may not accept, renew or roll over any brokered 
deposits unless it has obtained a waiver from the FDIC. A well 
capitalized insured depository institution may accept brokered deposits 
without a waiver, and an undercapitalized insured depository 
institution may not accept, renew or roll over any brokered deposits 
under any circumstances. This section contains the procedures to be 
followed to file with the FDIC for a brokered deposit waiver. The FDIC 
will provide notice to the depository institution's appropriate federal 
banking agency and any state regulatory agency, as appropriate, that a 
request for a waiver has been filed and will consult with such agency 
or agencies, prior to taking action on the institution's request for a 
waiver. Prior notice and/or consultation shall not be required in any 
particular case if the FDIC determines that the circumstances require 
it to take action without giving such notice and opportunity for 
consultation.
    (b) Filing procedures. Applicants should submit a letter 
application to the appropriate regional director (DOS).
    (c) Content of filing. The application should contain the 
following:
    (1) The time period for which the waiver is requested;
    (2) A statement of the policy governing the use of brokered 
deposits in the institution's overall funding and liquidity management 
program;
    (3) The volume, rates and maturities of the brokered deposits held 
currently and anticipated during the waiver period sought, including 
any internal limits placed on the terms, solicitation and use of 
brokered deposits;
    (4) How brokered deposits are costed and compared to other funding 
alternatives and how they are used in the institution's lending and 
investment activities, including a detailed discussion of asset growth 
plans;
    (5) Procedures and practices used to solicit brokered deposits, 
including an identification of the principal sources of such deposits;
    (6) Management systems overseeing the solicitation, acceptance and 
use of brokered deposits;
    (7) A recent consolidated financial statement with balance sheet 
and income statements; and
    (8) The reasons the institution believes its acceptance, renewal or 
rollover of brokered deposits would pose no undue risk.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the application.
    (e) Expedited processing for eligible depository institutions. An 
application filed under this section by an eligible depository 
institution as defined in this Sec. 303.243(e) will be acknowledged in 
writing by the FDIC and will receive expedited processing, unless the 
applicant is notified in writing to the contrary and provided with the 
basis for that decision. For the purpose of this section, an applicant 
will be deemed an eligible depository institution if it satisfies all 
of the criteria contained in Sec. 303.2(r) except that the applicant 
may be adequately capitalized rather than well capitalized. The FDIC 
may remove an application from expedited processing for any of the 
reasons set forth in Sec. 303.11(c)(2) of this part. Absent such 
removal, an application processed under expedited procedures will be 
deemed approved 21 days after the FDIC's receipt of a substantially 
complete application.
    (f) Standard processing. For those filings which are not processed 
pursuant to the expedited procedures, the FDIC will provide the 
applicant with written notification of the final action as soon as the 
decision is rendered.
    (g) Conditions for approval. A waiver issued pursuant to this 
section shall:
    (1) Be for a fixed period, generally no longer than two years, but 
may be extended upon refiling; and
    (2) May be revoked by the FDIC at any time by written notice to the 
institution.
    (h) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve or deny brokered 
deposit waiver applications. Based upon a preliminary review, any 
delegate may grant a temporary waiver for a short period in order to 
facilitate the orderly processing of a filing for a waiver.


Sec. 303.244  Golden parachute and severance plan payments.

    (a) Scope. Pursuant to section 18(k) of the FDI Act (12 U.S.C. 
1828(k)) and part 359 of this chapter (12 CFR part 359), an insured 
depository institution or depository institution holding company may 
not make golden parachute payments or excess nondiscriminatory 
severance plan payments unless the depository institution or holding 
company obtains permission to make such payments in accordance with the 
rules contained in part 359 of this chapter. This section contains the 
procedures to file for the FDIC's consent when such consent is 
necessary under part 359 of this chapter, as described below:
    (1) Golden parachute payments. A golden parachute payment is 
defined in Sec. 359.1(f)(1) of this chapter as a payment by a troubled 
insured depository institution or troubled depository institution 
holding company. A troubled insured depository institution or a 
troubled depository institution holding company is prohibited from 
making golden parachute payments unless it obtains the consent of the 
appropriate federal banking agency and the written concurrence of the 
FDIC. Therefore, in the case of golden parachute payments, the 
procedures in this section apply to all troubled insured depository 
institutions and troubled depository institution holding companies.
    (2) Excess nondiscriminatory severance plan payments. In the case 
of excess nondiscriminatory severance plan payments as provided by 
Sec. 359.1(f)(2)(v) of this chapter, the

[[Page 52860]]

FDIC's consent is necessary for state nonmember banks that meet the 
criteria set forth in Sec. 359.1(f)(1)(ii) of this chapter. In 
addition, the FDIC's consent is required for all insured depository 
institutions or depository institution holding companies that meet the 
same criteria and seek to make payments in excess of the 12-month 
amount specified in Sec. 359.1(f)(2)(v).
    (b) Filing procedures. Applicants should submit a letter 
application to the appropriate FDIC regional director (DOS).
    (c) Content of filing. The application should contain the 
following:
    (1) The reasons why the applicant seeks to make the payment;
    (2) An identification of the institution-affiliated party who will 
receive the payment;
    (3) A copy of any contract or agreement regarding the subject 
matter of the filing;
    (4) The cost of the proposed payment and its impact on the 
institution's capital and earnings; and
    (5) The reasons why consent to the payment should be granted.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Processing. The FDIC will provide the applicant with a 
subsequent written notification of the final action taken as soon as 
the decision is rendered.
    (f) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve or to deny filings to 
make:
    (1) Excess nondiscriminatory severance plan payments as provided by 
12 CFR 359.1(f)(2)(v); and
    (2) Golden parachute payments permitted by 12 CFR 359.4.


Sec. 303.245  Waiver of liability for commonly controlled depository 
institutions.

    (a) Scope. Section 5(e) of the FDI Act (12 U.S.C. 1815(e)) creates 
liability for commonly controlled insured depository institutions for 
losses incurred or anticipated to be incurred by the FDIC in connection 
with the default of a commonly controlled insured depository 
institution or any assistance provided by the FDIC to any commonly 
controlled insured depository institution in danger of default. In 
addition to certain statutory exceptions and exclusions contained in 
sections 5(e)(6), (7) and (8), the FDI Act also permits the FDIC, in 
its discretion, to exempt any insured depository institution from this 
liability if it determines that such exemption is in the best interests 
of the Bank Insurance Fund (BIF) or the Savings Association Insurance 
Fund (SAIF). This section describes procedures to request a conditional 
waiver of liability pursuant to 12 U.S.C. 1815(e)(5)(A).
    (b) Definition. Conditional waiver of liability means an exemption 
from liability pursuant to section 5(e) of the FDI Act (12 U.S.C. 
1815(e)) subject to terms and conditions.
    (c) Filing procedures. Applicants should submit a letter 
application to the appropriate regional director (DOS).
    (d) Content of filing. The application should contain the following 
information:
    (1) The basis for requesting a waiver;
    (2) The existence of any significant events (e.g., change of 
control, capital injection, etc.) that may have an impact upon the 
applicant and/or any potentially liable institution;
    (3) Current, and if applicable, pro forma financial information 
regarding the applicant and potentially liable institution(s); and
    (4) The benefits to the appropriate FDIC insurance fund resulting 
from the waiver and any related events.
    (e) Additional information. The FDIC may request additional 
information at any time during the processing of the filing.
    (f) Processing. The FDIC will provide the applicant with written 
notification of the final action as soon as the decision is rendered.
    (g) Failure to comply with terms of conditional waiver. In the 
event a conditional waiver of liability is issued, failure to comply 
with the terms specified therein may result in the termination of the 
conditional waiver of liability. The FDIC reserves the right to revoke 
the conditional waiver of liability after giving the applicant written 
notice of such revocation and a reasonable opportunity to be heard on 
the matter.
    (h) Authority retained by FDIC Board of Directors. The FDIC Board 
of Directors retains the authority to act on any application for waiver 
of liability of commonly controlled depository institutions.


Sec. 303.246  Insurance fund conversions.

    (a) Scope. This section contains the procedures to be followed by 
an insured depository institution to seek the FDIC's prior approval to 
engage in an insurance fund conversion that involves the transfer of 
deposits between the SAIF and the BIF. Optional conversion 
transactions, commonly referred to as Oakar transactions, pursuant to 
section 5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)) which do not 
involve the transfer of deposits between the SAIF and the BIF are 
governed by the procedures set forth in subpart D (Merger Transactions) 
of this part.
    (b) Filing procedures. Applicants should submit a letter 
application to the appropriate FDIC regional director (DOS). The filing 
should be signed by representatives of each institution participating 
in the transaction. Insurance fund conversions which are proposed in 
conjunction with a merger application filed pursuant to section 18(c) 
of the FDI Act (12 U.S.C. 1828(c)) should be included with that filing.
    (c) Content of filing. The application should include the following 
information:
    (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 
institution upon consummation of the transaction; and
    (4) Certification by each party to the transaction that applicable 
entrance and exit fees will be paid pursuant to part 312 of this 
chapter.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Processing. The FDIC will provide the applicant with written 
notification of the final action as soon as the decision is rendered.
    (f) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve or deny filings for 
insurance fund conversions involving the transfers of deposits between 
the Savings Association Insurance Fund and the Bank Insurance Fund.


Sec. 303.247  Conversion with diminution of capital.

    (a) Scope. This section contains the procedures to be followed by 
an insured federal depository institution seeking the prior written 
consent of the FDIC pursuant to section 18(i)(2) of the FDI Act (12 
U.S.C. 1828(i)(2)) to convert from an insured federal depository 
institution to an insured state nonmember bank (except a District bank) 
where the capital stock or surplus of the resulting bank will be less 
than the capital stock or surplus, respectively, of the converting 
institution at the time of the shareholders' meeting approving such 
conversion.
    (b) Filing procedures. Applicants should submit a letter 
application to the appropriate regional director (DOS).

[[Page 52861]]

    (c) Content of filing. The application should contain the following 
information:
    (1) A description of the proposed transaction;
    (2) A schedule detailing the present and proposed capital 
structure; and
    (3) A copy of any documents submitted to the state chartering 
authority with respect to the charter conversion.
    (d) Additional information. The FDIC may request additional 
information at any time during the processing.
    (e) Processing. The FDIC will provide the applicant with written 
notification of the final action as soon as the decision is rendered.
    (f) Delegation of authority--(1) Approvals. Authority is delegated 
to the Director and Deputy Director (DOS) and, where confirmed in 
writing by the Director, to an associate director and the appropriate 
regional director and deputy regional director, to approve applications 
to convert with diminution of capital.
    (2) Denials. Authority is delegated to the Director and Deputy 
Director (DOS) and, where confirmed in writing by the Director, to an 
associate director to deny applications to convert with diminution of 
capital.


Sec. 303.248  Continue or resume status as an insured institution 
following termination under section 8 of the FDI Act.

    (a) Scope. This section relates to applications by depository 
institutions whose insured status has been terminated under section 8 
of the FDI Act (12 U.S.C. 1818) for permission to continue or resume 
its status as an insured depository institution. This section covers 
institutions whose deposit insurance continues in effect for any 
purpose or for any length of time under the terms of an FDIC order 
terminating deposit insurance, but does not cover operating non-insured 
depository institutions which were previously insured by the FDIC, or 
any non-insured, non-operating depository institution whose charter has 
not been surrendered or revoked.
    (b) Filing procedures. Applicants should submit a letter 
application to the appropriate regional director (DOS).
    (c) Content of filing. The filing should contain the following 
information:
    (1) A complete statement of the action requested, all relevant 
facts, and the reason for such requested action; and
    (2) A certified copy of the resolution of the depository 
institution's board of directors authorizing submission of the filing.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Processing. The FDIC will provide the applicant with written 
notification of the final action as soon as the decision is rendered.
    (f) Authority retained by FDIC Board of Directors. The FDIC Board 
of Directors retains the authority to act on any application to 
continue or resume status as an insured institution following 
termination under section 8 of the FDI Act.


Sec. 303.249  Truth in Lending Act--Relief from reimbursement.

    (a) Scope. This process applies to requests for relief from 
reimbursement pursuant to the Truth in Lending Act (15 U.S.C. 1601 et 
seq.) and Regulation Z (12 CFR part 226).
    (b) Procedures to be followed in filing initial requests for 
relief. Requests for relief from reimbursement should be filed with the 
appropriate regional director (DCA) within 60 days after receipt of the 
compliance report of examination containing the request to conduct a 
file search and make restitution to affected customers. The filing 
should contain a complete and concise statement of the action 
requested, all relevant facts, the reasons and analysis relied upon as 
the basis for such requested action, and all supporting documentation.
    (c) Additional information. The FDIC may request additional 
information at any time during processing of any such requests.
    (d) Processing. The FDIC will acknowledge receipt of the request 
and provide the applicant with a subsequent written notification of its 
determination as soon as the decision is rendered.
    (e) Delegation of authority--(1) Denial of initial requests for 
relief. Authority is delegated to the Director and Deputy Director 
(DCA), and where confirmed in writing by the Director, to an associate 
director, or to the appropriate regional director or deputy regional 
director, to deny requests for relief from the requirements for 
reimbursement under section 608(a)(2) of the Truth in Lending 
Simplification and Reform Act (15 U.S.C. 1607(e)(2)); provided however, 
that a regional director or deputy regional director is not authorized 
to deny any request where the estimated amount of reimbursement is 
greater than $25,000.
    (2) Approval of initial requests for relief. Authority is delegated 
to the Director and Deputy Director (DCA), and where confirmed in 
writing by the director, to a deputy director or an associate director 
to approve requests for relief from the requirements for reimbursement 
under section 608(a)(2) of the Truth in Lending Simplification and 
Reform Act (15 U.S.C. 1607(a)(2)).
    (f) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, or, in cases where a regional director or deputy 
regional director denies requests for relief, by the appropriate 
regional counsel, that the action taken is not inconsistent with the 
Truth in Lending Simplification and Reform Act.
    (g) Procedures to be followed in filing requests for 
reconsideration. Within 15 days of receipt of written notice that its 
request for relief has been denied, the requestor may petition the 
appropriate regional director (DCA) for reconsideration of such request 
in accordance with the procedures set forth in Sec. 303.11(f) of this 
part.


Sec. 303.250  Modification of conditions.

    (a) Scope. This section contains the procedures to be followed by 
an insured depository institution to seek the prior consent of the FDIC 
to modify the requirements of a prior approval of a filing issued by 
the FDIC.
    (b) Filing procedures. Applicants should submit a letter 
application to the appropriate FDIC regional director (DOS).
    (c) Content of filing. The application should contain the following 
information:
    (1) A description of the original approval;
    (2) A description of the modification requested; and
    (3) The reason for the request.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Processing. The FDIC will provide the applicant with a 
subsequent written notification of the final action as soon as the 
decision is rendered.
    (f) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve or deny requests to 
modify the requirements of a prior approval of a filing issued by the 
FDIC subject to the following criteria:
    (1) The Legal Division is consulted to the same extent as was 
required for approval of the original filing; and
    (2) The approving delegate had the authority to approve the 
original filing.


Sec. 303.251  Extension of time.

    (a) Scope. This section contains the procedures to be followed by 
an insured

[[Page 52862]]

depository institution to seek the prior consent of the FDIC for 
additional time to fulfill a condition required in an approval of a 
filing issued by the FDIC or to consummate a transaction which was the 
subject of an approval by the FDIC.
    (b) Filing procedures. Applicants should submit a letter 
application to the appropriate regional director (DOS).
    (c) Content of filing. The application should contain the following 
information:
    (1) A description of the original approval;
    (2) Identification of the original time limitation;
    (3) The additional time period requested; and
    (4) The reason for the request.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Processing. The FDIC will provide the applicant with written 
notification of the final action as soon as the decision is rendered.
    (f) Delegation of authority. (1) Except as provided in paragraph 
(f)(2) of this section, authority is delegated to the Director and 
Deputy Director (DOS) and, where confirmed in writing by the Director, 
to an associate director and the appropriate regional director and 
deputy regional director, to approve or deny requests for extensions of 
time within which to perform acts or fulfill conditions required by a 
prior FDIC action on a filing of the insured depository institution.
    (2) Limits on exercise of delegated authority. (i) Extensions of 
time approved may not exceed one year.
    (ii) Notwithstanding the delegations in paragraph (f)(1) of this 
section, no delegate shall have the authority to deny an extension of 
time request unless that delegate has the authority under this part to 
deny the original filing upon which the extension of time is 
predicated.

Subpart N--Enforcement Delegations


Sec. 303.260  Scope.

    This subpart contains delegations of authority relating to the 
initiation, prosecution, and settlement of administrative enforcement 
actions under the FDI Act and other laws and regulations enforced by 
the FDIC, including investigations and subpoenas.


Sec. 303.261  Issuance of notification to primary regulator under 
section 8(a) of the FDI Act (12 U.S.C. 1818(a)).

    (a) Book capital less than 2 percent. Authority is delegated to the 
Director and Deputy Director (DOS), and where confirmed in writing by 
the Director, to an associate director or to the appropriate regional 
director or deputy regional director, to issue notifications to primary 
regulator when the respondent depository institution's book capital is 
less than 2 percent of total assets; provided that authority may not be 
delegated to the regional director or deputy regional director whenever 
the respondent depository institution has issued any mandatory 
convertible debt or any form of Tier 2 capital (such as limited life 
preferred stock, subordinated notes and debentures).
    (b) Tier 1 capital less than 2 percent. Authority is delegated to 
the Director and Deputy Director (DOS) and, where confirmed in writing 
by the Director, to an associate director, to issue notifications to 
primary regulator when the respondent depository institution's adjusted 
Tier 1 capital is less than 2 percent of adjusted part 325 total assets 
as defined in Sec. 303.2(b) of this part.
    (c) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, or, in cases where a regional director or deputy 
regional director issues notifications to primary regulator, by the 
appropriate regional counsel, that the allegations contained in the 
findings of violations of law or regulation and/or unsafe or unsound 
practices and/or unsafe or unsound condition, if proven, constitute a 
basis for the issuance of a notification to primary regulator pursuant 
to section 8(a) of the FDI Act (12 U.S.C. 1818(a)).


Sec. 303.262  Issuance of notice of intention to terminate insured 
status under section 8(a) of the FDI Act (12 U.S.C. 1818(a)).

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS), and where confirmed in writing by the Director, to an 
associate director, to issue notices of intent to terminate insured 
status when the respondent depository institution has failed to correct 
any violations of law or regulation and/or unsafe or unsound practices 
and/or unsafe or unsound condition as specified in the relevant 
notification to primary regulator.
    (b) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the allegations contained in the findings in the 
notice of intention to terminate insured status of violations of law or 
regulation and/or unsafe or unsound practices and/or unsafe or unsound 
condition, if proven, constitute a basis for termination of the insured 
status of the respondent depository institution pursuant to section 
8(a) of the FDI Act (12 U.S.C. 1818(a)).


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

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS), to the Director and Deputy Director (DCA), and where 
confirmed in writing by the appropriate Director, to an associate 
director or to the appropriate regional director or deputy regional 
director to issue:
    (1) Notices of charges; and
    (2) Cease-and-desist orders (with or without a prior notice of 
charges) where the respondent depository institution or individual 
respondent consents to the issuance of the cease-and-desist order prior 
to the filing by an administrative law judge of proposed findings of 
fact, conclusions of law and recommended decision with the Executive 
Secretary of the FDIC.
    (b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA) 
may issue a joint notice of charges or cease-and-desist order under 
this section, where such notice or order addresses both safety and 
soundness and consumer compliance matters. A joint notice or order will 
require the signatures of both Directors or their Deputy Directors or 
associate directors, regional directors or deputy regional directors.
    (c) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, or, in cases where a regional director or deputy 
regional director issues the notice of charges or the stipulated cease-
and-desist order, by the appropriate regional counsel, that the 
allegations contained in the notice of charges, if proven, constitute a 
basis for the issuance of a section 8(b) order, or that the stipulated 
cease-and-desist order is authorized under section 8(b) of the FDI Act, 
and, upon its effective date, shall be a cease-and-desist order which 
has become final for purposes of enforcement pursuant to the FDI Act.


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

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS) and to the Director and Deputy Director (DCA), and where 
confirmed in writing

[[Page 52863]]

by the appropriate Director, to an associate director, to issue 
temporary cease-and-desist orders.
    (b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA) 
may issue a joint temporary cease-and-desist order where such order 
addresses both safety and soundness and consumer compliance matters. A 
joint notice or order will require the signatures of both Directors or 
their Deputy Directors or associate directors.
    (c) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the action is not inconsistent with section 8(c) 
of the FDI Act (12 U.S.C. 1818(c)) and the temporary cease-and-desist 
order is enforceable in a United States District Court.


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

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS) or the Director and Deputy Director (DCA) and, where 
confirmed in writing by the appropriate Director, to an associate 
director, to issue:
    (1) Notices of intention to remove an institution-affiliated party 
from office or to prohibit an institution-affiliated party from further 
participation in the conduct of the affairs of an insured depository 
institution pursuant to sections 8(e)(1) and (2) of the FDI Act (12 
U.S.C. 1818(e)(1) and (2)), and temporary orders of suspension pursuant 
to section 8(e)(3) of the FDI Act (12 U.S.C. 1818(e)(3)); and
    (2) Orders of removal, suspension or prohibition from participation 
in the conduct of the affairs of an insured depository institution 
where the institution-affiliated party consents to the issuance of such 
orders prior to the filing by an administrative law judge of proposed 
findings of fact, conclusions of law and a recommended decision with 
the Executive Secretary of the FDIC.
    (b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA) 
may issue joint notices and orders pursuant to this section where such 
notice or order addresses both safety and soundness and consumer 
compliance matters. A joint notice or order will require the signatures 
of both directors or their deputy directors or associate directors.
    (c) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the allegations contained in the notice of 
intent, if proven, constitute a basis for the issuance of a notice of 
intent pursuant to section 8(e) of the FDI Act, or that the stipulated 
section 8(e) order is not inconsistent with section 8(e) of the FDI 
Act, and, upon issuance, shall be an order which has become final for 
purposes of enforcement pursuant to the FDI Act.


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

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS), to the Director and Deputy Director (DCA), and where 
confirmed in writing by the appropriate Director, to an associate 
director, to issue orders of suspension or prohibition to an 
institution-affiliated party who is charged in any information, 
indictment, or complaint, or who is convicted of or enters a pretrial 
diversion or similar program, as to any criminal offense cited in or 
covered by section 8(g) of the FDI Act, when such institution-
affiliated party consents to the suspension or prohibition.
    (b) Delegation of authority where suspension or prohibition 
mandated. Authority is delegated to the Director and Deputy Director 
(DOS), to the Director and Deputy Director (DCA), and where confirmed 
in writing by the appropriate Director, to an associate director, to 
issue orders of suspension and prohibition to any institution-
affiliated party who is charged in any information, indictment, or 
complaint, or who is convicted or enters a pretrial diversion or 
similar program, as to any criminal offense involving mandatory 
suspension or prohibition under sections 8(g)(1)(A)(ii) and (C)(ii) of 
the FDI Act (12 U.S.C. 1818(g)(1)(A)(ii) and (C)(ii)), whether or not 
such institution-affiliated party consents to the suspension or 
prohibition.
    (c) Joint DOS-DCA action. The Director (DOS) and the Director (DCA) 
may issue joint orders pursuant to this section where such order 
addresses both safety and soundness and consumer compliance matters. A 
joint order will require the signatures of both Directors or their 
Deputy Directors or associate directors.
    (d) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the action taken is not inconsistent with section 
8(g) of the FDI Act (12 U.S.C. 1818(g)) and the order is enforceable in 
a United States District Court pursuant to sections 8(i) and 8(j) of 
the FDI Act (12 U.S.C. 1818(i) and (j)).


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

    (a) General. Authority is delegated to the Executive Secretary to 
issue consent orders terminating the insured status of insured 
depository institutions that have ceased to engage in the business of 
receiving deposits other than trust funds pursuant to section 8(p) of 
the FDI Act (12 U.S.C. 1818(p)).
    (b) DOS and legal concurrence. The authority delegated under this 
section shall be exercised only upon the recommendation and concurrence 
of the Director or Deputy Director (DOS) or, when confirmed in writing 
by the Director, an associate director, and upon the certification of 
the General Counsel or, where confirmed in writing by the General 
Counsel, by his or her designee, that the action taken is not 
inconsistent with section 8(p) of the FDI Act (12 U.S.C. 1818(p)).


Sec. 303.268  Termination of insured status under section 8(q) of the 
FDI Act (12 U.S.C. 1818(q)).

    (a) General. Authority is delegated to the Executive Secretary to 
issue consent orders terminating the insured status of an insured 
depository institution where the liabilities of the insured institution 
for deposits shall have been assumed by another insured depository 
institution or depository institutions, whether by way of merger, 
consolidation, or other statutory assumption, or pursuant to contract, 
pursuant to section 8(q) of the FDI Act (12 U.S.C. 1818(q)).
    (b) DOS and legal concurrence. The authority delegated under this 
section shall be exercised only upon the recommendation and concurrence 
of the Director or Deputy Director (DOS) or, when confirmed in writing 
by the Director, an associate director, and upon the certification of 
the General Counsel or, where confirmed in writing by the General 
Counsel, by his or her designee, that the action taken is not 
inconsistent with section 8(q) of the FDI Act (12 U.S.C. 1818(q)).


Sec. 303.269  Civil money penalties.

    (a) General. Except as provided otherwise in this section, 
authority is delegated to the Director and Deputy Director (DOS), to 
the Director and Deputy Director (DCA), and where confirmed in writing 
by the appropriate Director, to an associate director, to issue:
    (1) Notice of assessment of civil money penalties; and

[[Page 52864]]

    (2) Final orders to pay (with or without a prior notice of 
assessment of civil money penalty) where the insured depository 
institution or institution-affiliated party consents to the issuance of 
the order to pay and waives, as applicable, receipt of a notice of 
assessment of civil money penalty and the right to an administrative 
hearing.
    (b) Legal concurrence. The authority delegated under paragraph (a) 
of this section shall be exercised only upon concurrent certification 
by the General Counsel or, where confirmed in writing by the General 
Counsel, by his or her designee, that the allegations contained in the 
notice of assessment, if proven, constitute a basis for assessment of 
civil money penalties, or that the stipulated final order to pay is 
authorized under the FDI Act, and upon its effective date, shall be an 
order to pay which has become final for purposes of enforcement 
pursuant to the FDI Act.
    (c) Joint DOS-DCA action. The Director (DOS) and the Director (DCA) 
may issue joint notices pursuant to paragraph (a) of this section where 
such notice addresses both safety and soundness and consumer compliance 
matters. A joint notice will require the signatures of both Directors 
or their Deputy Directors or associate directors.
    (d) Required reports. (1) Authority is delegated to the General 
Counsel or his or her designee for the levying and enforcement of civil 
money penalties under:
    (i) Section 7(a)(1) of the FDI Act (12 U.S.C. 1817(a)(1)) for the 
late, inaccurate, false or misleading filing of Reports of Condition 
and Reports of Income;
    (ii) Section 8(i) of the FDI Act (12 U.S.C. 1818(i)) for the late, 
inaccurate, false or misleading filing of Home Mortgage Disclosure Act 
(HMDA) reports;
    (iii) Section 8(i) of the FDI Act (12 U.S.C. 1818(i)) for the late, 
inaccurate, false or misleading filing of Community Reinvestment Act 
(CRA) loan data reports; and
    (iv) Such other reports as the Board of Directors may require.
    (2) In the exercise of this delegated authority, the General 
Counsel or his or her designee shall consult with the appropriate 
Director, Deputy Director, or associate director before imposing any 
penalty.


Sec. 303.270  Notices of assessment under section 5(e) of the FDI Act 
(12 U.S.C. 1815(e)).

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS), and where confirmed in writing by the Director, to an 
associate director, to issue notices of assessment of liability to 
commonly controlled insured depository institutions for the estimated 
amount of loss to the deposit insurance funds.
    (b) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the action taken is not inconsistent with section 
5(e) of the FDI Act (12 U.S.C. 1815(e)).


Sec. 303.271  Prompt corrective action directives and capital plans 
under section 38 of the FDI Act (12 U.S.C. 1831o) and part 325 of this 
chapter.

    (a) General--Notices, directives and orders. Authority is delegated 
to the Director and Deputy Director (DOS), and where confirmed in 
writing by the Director, to an associate director, or to the 
appropriate regional director or deputy regional director, to accept, 
reject, require new or revised capital restoration plans, or make any 
other determinations with respect to the implementation of capital 
restoration plans and, in accordance with subpart Q of part 308 of this 
chapter, to issue:
    (1) Notices of intent to issue capital directives;
    (2) Directives to insured state nonmember banks that fail to 
maintain capital in accordance with the requirements contained in part 
325 of this chapter;
    (3) Notices of intent to issue prompt corrective action directives, 
except directives issued pursuant to section 38(f)(2)(F)(ii) of the FDI 
Act (12 U.S.C. 1831(f)(2)(F)(ii));
    (4) Directives to insured depository institutions pursuant to 
section 38 of the FDI Act (12 U.S.C. 1831o), with or without the 
consent of the respondent bank to the issuance of the directive, except 
directives issued pursuant to section 38(f)(2)(F)(ii) of the FDI Act 
(12 U.S.C. 1831o(f)(2)(F)(ii));
    (5) Directives to insured depository institutions requiring 
immediate action or imposing proscriptions pursuant to section 38 of 
the FDI Act (12 U.S.C. 1831o) and part 325 of this chapter, and in 
accordance with the requirements contained in Sec. 308.201(a)(2) of 
this chapter;
    (6) Notices of intent to reclassify insured banks pursuant to 
Secs. 325.103(d) and 308.202 of this chapter;
    (7) Directives to reclassify insured banks pursuant to 
Secs. 325.103(d) and 308.202 of this chapter with the consent of the 
respondent bank to the issuance of the directive; and
    (8) Orders on request for informal hearings to reconsider 
reclassifications and designate the presiding officer at the hearing 
pursuant to Sec. 308.202 of this chapter.
    (b) Notices--Dismissal of director and officer. Authority is 
delegated to the Director and Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director, to:
    (1) Issue notices of intent to issue a prompt corrective action 
directive ordering the dismissal from office of a director or senior 
executive officer pursuant to section 38(f)(2)(F)(ii) of the FDI Act 
(12 U.S.C. 1831o(f)(2)(F)(ii)) and in accordance with the requirements 
contained in Sec. 308.203 of this chapter;
    (2) Issue directives ordering the dismissal from office of a 
director or senior executive officer pursuant to section 
38(f)(2)(F)(ii) of the FDI Act (12 U.S.C. 1831o(f)(2)(F)(ii)); and
    (3) Issue orders of dismissal from office of a director or senior 
executive officer pursuant to section 38(f)(2)(F)(ii) of the FDI Act 
(12 U.S.C. 1831o(f)(2)(F)(ii)) where the individual consents to the 
issuance of such order prior to the filing of a recommendation by the 
presiding officer with the FDIC.
    (c) Reclassification of institution other than on basis of capital. 
Authority is delegated to the Director and Deputy Director (DOS), and 
where confirmed in writing by the Director, to an associate director, 
to:
    (1) Act on recommended decisions of presiding officers pursuant to 
a request for reconsideration of a reclassification in accordance with 
the requirements contained in Sec. 308.202 of this chapter; and
    (2) Act on requests for rescission of a reclassification.
    (d) Appeals of immediately effective PCA directives. Authority is 
delegated to the Director and Deputy Director (DOS), and where 
confirmed in writing by the Director, to an associate director, to act 
on appeals from immediately effective directives issued pursuant to 
section 38 of the FDI Act (12 U.S.C. 1831o) and Sec. 308.201 of this 
chapter.
    (e) Informal hearings. Authority is delegated to the Executive 
Secretary of the FDIC to issue orders for informal hearings and 
designate presiding officers on directives issued pursuant to section 
38(f)(2)(F)(ii) of the FDI Act (12 U.S.C. 1831o(f)(2)(F)(ii)).
    (f) Legal concurrence. The authority delegated under this section 
shall be exercised only upon the concurrent certification by the 
General Counsel or, where confirmed in writing by the General Counsel, 
by his or her designee, or, in cases where a regional director or 
deputy regional director issues a notice, directive, or order, by the 
appropriate regional counsel, that the action taken is

[[Page 52865]]

not inconsistent with section 38 of the FDI Act (12 U.S.C. 1831o) and 
part 325 of this chapter.


Sec. 303.272  Investigations under section 10(c) of the FDI Act (12 
U.S.C. 1820(c)).

    (a) Authority of division directors. Authority is delegated to the 
Director and Deputy Director (DOS), to the Director and Deputy Director 
(DCA), to the Director and Deputy Director of the Division of 
Resolutions and Receiverships, and where confirmed in writing by the 
appropriate Director, to an associate director, or to the appropriate 
regional director and deputy regional director, to issue an order of 
investigation pursuant to section 10(c) of the FDI Act (12 U.S.C. 
1820(c)) and subpart K of part 308 of this chapter (12 CFR 308.144 
through 308.150).
    (b) Authority of General Counsel. Authority is delegated to the 
General Counsel, and where confirmed in writing by the General Counsel, 
to his or her designee, to issue an order of investigation pursuant to 
sections 8 through 13 of the FDI Act (12 U.S.C. 1818-1823), as 
appropriate, and subpart K of part 308 of this chapter (12 CFR 308.144 
through 308.150).
    (c) Concurrence in certain situations. In issuing an order of 
investigation that pertains to an open insured depository institution 
or an institution making application to become an insured depository 
institution, or a post-conservatorship or post-receivership order of 
investigation, the authority delegated under this section shall be 
exercised only upon the concurrent execution of the order of 
investigation by the Director or Deputy Director (DOS), or the Director 
or Deputy Director (DCA), or the Director or Deputy Director of the 
Division of Resolutions and Receiverships, their respective associate 
directors, and the General Counsel or his or her designee. In the case 
of a joint order of investigation, such authority shall be exercised 
only upon the concurrent execution of the order of investigation by 
both Directors or Deputy Directors, or their associate directors, and 
upon the certification and execution of the order by the General 
Counsel or his or her designee.


Sec. 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 writing by the appropriate Director, to an associate 
director, to accept, deny or enter into negotiations for or regarding 
settlement and settlement offers with insured depository institutions, 
or with an institution-affiliated party, pertaining to or arising in 
connection with a proceeding under part 308 of this chapter. In cases 
where a proceeding under part 308 of this chapter was issued jointly by 
DOS and DCA, both Directors or Deputy Directors, or their associate 
directors, must agree to accept, deny or enter into negotiations 
regarding settlement and settlement offers with insured depository 
institutions or with an institution-affiliated party.
    (b) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the action taken is not inconsistent with the FDI 
Act.


Sec. 303.274  Acceptance of written agreements.

    (a) Written agreements under section 8(a) of the FDI Act. Authority 
is delegated to the Director and Deputy Director (DOS), and where 
confirmed in writing by the Director, to an associate director, to 
accept or enter into any written agreements with insured depository 
institutions, or any institution-affiliated party pertaining to any 
matter which may be addressed by the FDIC pursuant to section 8(a) of 
the FDI Act (12 U.S.C. 1818(a)).
    (b) Written agreements in lieu of cease-and-desist orders. 
Authority is delegated to the Director and Deputy Director (DOS) and to 
the Director and Deputy Director (DCA), and where confirmed in writing 
by the appropriate Director, to an associate director, to accept or 
enter into any written agreements with insured depository institutions, 
or any institution-affiliated party pertaining to any safety and 
soundness or consumer compliance matter which may be addressed by the 
FDIC pursuant to section 8(b) of the FDI Act (12 U.S.C. 1818(b)) or any 
other provision of the FDI Act which addresses safety and soundness or 
consumer compliance matters. In cases which would address both safety 
and soundness and consumer compliance matters, the Directors, or their 
designees, may accept or enter into joint written agreements with 
insured depository institutions or any institution-affiliated party.
    (c) Written agreements as conditions attendant to FDIC filings 
contained in this part. Authority is delegated to the Director and 
Deputy Director (DOS), and to the Director and Deputy Director (DCA) 
and, where confirmed in writing by the appropriate Director, to an 
associate director, or to the appropriate regional director or deputy 
regional director, to accept or enter into any written agreements with 
insured depository institutions, any institution-affiliated party or 
any other petitioner which contains conditions precedent to the FDIC's 
non-objection to a filing pursuant to this part.
    (d) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the action taken is not inconsistent with the FDI 
Act.


Sec. 303.275  Modifications and terminations of enforcement actions and 
orders.

    (a) Termination of section 8(a) (12 U.S.C. 1818(a)) orders and 
agreements. Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director, or to the appropriate regional director or deputy regional 
director, to terminate outstanding section 8(a) orders and agreements 
and to terminate actions and agreements which are pending pursuant to 
section 8(a) of the FDI Act when the depository institution is closed 
by a federal or state authority or merges into another institution.
    (b) Termination of section 8(a) (12 U.S.C. 1818(a)) notification to 
primary regulator issued by Board of Directors. Authority is delegated 
to the Director and Deputy Director (DOS), and where confirmed in 
writing by the Director, to an associate director, or to the 
appropriate regional director or deputy regional director, to terminate 
notifications to primary regulator issued by the Board of Directors 
pursuant to section 8(a) of the FDI Act where the respondent depository 
institution is in material compliance with such notification or for 
good cause shown.
    (c) Termination of section 8(a) (12 U.S.C. 1818(a)) notice of 
intent to terminate insured status. In cases where the Board of 
Directors has issued a notice of intent to terminate insured status 
pursuant to section 8(a) of the FDI Act, authority is delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to an associate director, or to the appropriate regional 
director or deputy regional director, to terminate the actions pending 
pursuant to such notice of intent to terminate insured status where the 
respondent depository institution is in material compliance with the 
applicable notification to primary regulator or for good cause shown.

[[Page 52866]]

    (d) Sections 8(b) and 8(c)(12 U.S.C. 1818(b) and (c)) actions and 
orders. (1) Authority is delegated to the Director and Deputy Director 
(DOS) and to the Director and Deputy Director (DCA), as appropriate 
and, where confirmed in writing by the appropriate Director, to an 
associate director, or to the appropriate regional director or deputy 
regional director, to terminate outstanding section 8(b) and section 
8(c) orders and agreements and to terminate actions and agreements 
which are pending pursuant to sections 8(b) and 8(c) of the FDI Act 
when the depository institution is closed by a federal or state 
authority or merges into another institution. In cases where a joint 
order was issued by DOS and DCA, both Directors, or their Deputy 
Directors or associate directors, or the appropriate regional directors 
or deputy regional directors, must execute the order of termination.
    (2) Authority is delegated to the Director and Deputy Director 
(DOS) and to the Director and Deputy Director (DCA), as appropriate, 
and where confirmed in writing by the appropriate Director, to an 
associate director, or to the appropriate regional director or deputy 
regional director, to terminate outstanding section 8(b) orders issued 
by the Board of Directors either where material compliance with the 
section 8(b) order has been achieved by the respondent depository 
institution or individual respondent or for good cause shown. In cases 
where an order issued by the Board of Directors addresses both safety 
and soundness and consumer compliance matters, both Directors or Deputy 
Director, or the designees of the Directors, must execute the order of 
termination.
    (e) Modification and termination of section 8(e) (12 U.S.C. 
1818(e)) orders and actions. Authority is delegated to the Director and 
Deputy Director (DOS) and the Director and Deputy Director (DCA), as 
appropriate, and where confirmed in writing by the appropriate 
Director, to an associate director, to modify or terminate outstanding 
section 8(e) orders and pending actions and to grant consent under 
section 8(e)(7)(B) of the Act (12 U.S.C. 1818(e)(7)(B)) for the 
modification or termination of an outstanding section 8(e) order issued 
by another Federal financial institution regulatory agency where:
    (1) The respondent has demonstrated his or her fitness to 
participate in any manner in the conduct of the affairs of an insured 
depository institution;
    (2) The respondent has shown that his or her participation would 
not pose a risk to the institution's safety and soundness; or
    (3) The respondent has proven that his or her participation would 
not erode public confidence in the institution.
    (f) Modification and termination of section 8(g) (12 U.S.C. 
1818(g)) orders and actions. Pursuant to section 8(j) of the FDI Act 
(12 U.S.C. 1818(j)), authority is delegated to the Director and Deputy 
Director (DOS) and the Director and Deputy Director (DCA), as 
appropriate, and where confirmed in writing by the appropriate 
Director, to an associate director, to approve requests for 
modifications or terminations of section 8(g) orders issued by either 
the Board of Directors or under delegated authority.
    (g) Other matters not specifically addressed. For all outstanding 
or pending notices, actions, orders, directives and agreements not 
specifically addressed in this subpart, the delegations of authority 
contained in this subpart shall include the authority to modify or 
terminate any outstanding or pending notice, order, directive or 
agreement issued pursuant to delegated authority, as may be 
appropriate.
    (h) Termination of pending actions--general. Any pending 
enforcement action may be dismissed or terminated by the Director or 
Deputy Director of DOS or DCA, as appropriate, at any time prior to the 
commencement of a hearing on the merits by an administrative law judge. 
Once a hearing on the merits has been convened by an administrative law 
judge, a pending enforcement action may be dismissed or terminated by 
stipulation or consent of the affected parties no later than 14 days 
after the administrative law judge has closed the record of the 
hearing. Only the FDIC Board of Directors may terminate or dismiss an 
enforcement action more than 14 days after the record has been closed 
by an administrative law judge.
    (i) Legal concurrence. Any dismissals, modifications or 
terminations pursuant to this section shall be exercised only upon 
concurrent certification by the General Counsel or, where confirmed in 
writing by the General Counsel, by his or her designee, or, in cases 
where a regional director or deputy regional director acts under 
delegated authority, by the appropriate regional counsel, that the 
action taken is not inconsistent with the FDI Act.


Sec. 303.276  Enforcement of outstanding enforcement orders.

    After consultation with the Director (DOS) or the Director (DCA), 
or a Deputy Director or an associate director, or the appropriate 
regional director or deputy regional director, as may be appropriate, 
the General Counsel or designee is authorized to initiate and prosecute 
any action to enforce any effective and outstanding order or temporary 
order issued under 12 U.S.C. 1817, 1818, 1820, 1828, 1829, 1831l, 
1831o, 1972, or 3909, or any provision thereof, in the appropriate 
United States District Court.


Sec. 303.277  Compliance plans under section 39 of the FDI Act (12 
U.S.C. 1831p-1) (standards for safety and soundness) and part 308 of 
this chapter.

    (a) Compliance plans. Authority is delegated to the Director and 
Deputy Director (DOS), and where confirmed in writing by the Director, 
to an associate director, or to the appropriate regional director or 
deputy regional director, to accept, to reject, to require new or 
revised compliance plans, or to make any other determinations with 
respect to the implementation of compliance plans pursuant to subpart R 
of part 308 of this chapter.
    (b) Notices, orders, and other action. Authority is delegated to 
the Director and Deputy Director (DOS) and, where confirmed in writing 
by the Director, to an associate director, to:
    (1) Issue notices of intent to issue an order requiring the bank to 
correct a safety and soundness deficiency or to take or refrain from 
taking other actions pursuant to section 39 of the FDI Act (12 U.S.C. 
1831p-1) and in accordance with the requirements contained in 
Sec. 308.304(a)(1) of this chapter;
    (2) Issue an order requiring the bank immediately to correct a 
safety and soundness deficiency or to take or refrain from taking other 
actions pursuant to section 39 of the FDI Act (12 U.S.C. 1831p-1) and 
in accordance with the requirements contained in Sec. 308.304(a)(2) of 
this chapter; and
    (3) Act on requests for modification or rescission of an order.
    (c) Legal concurrence--compliance plans. The authority delegated 
under this section as to compliance plans shall be exercised only upon 
the concurrent certification by the General Counsel or, where confirmed 
in writing by the General Counsel, by his or her designee, or, in cases 
where a regional director or deputy regional director accepts, rejects 
or requires new or revised compliance plans or makes any other 
determinations with respect to compliance plans, by the appropriate 
regional counsel, that the action taken is not inconsistent with the 
FDI Act.
    (d) Legal concurrence--notices and orders. The authority delegated 
under this section as to notices and orders shall be exercised only 
upon the concurrent certification by the General Counsel or, where 
confirmed in writing by the General Counsel, by his or her

[[Page 52867]]

designee that the allegations contained in the notice of intent, if 
proven, constitute a basis for the issuance of a final order pursuant 
to section 39 of the FDI Act or that the issuance of a final order is 
not inconsistent with section 39 of the FDI Act or that the stipulated 
section 39 order is not inconsistent with section 39 of the FDI Act and 
is an order which has become final for purposes of enforcement pursuant 
to the FDI Act.


Sec. 303.278  Enforcement matters where authority is not delegated.

    Without limiting the Board of Directors' authority, the Board of 
Directors has retained the authority to act upon the following 
enforcement matters:
    (a) Notifications to primary regulator under section 8(a) of the 
FDI Act (12 U.S.C. 1818(a)) when the respondent bank's book capital is 
at or above 2 percent of total assets and adjusted Tier 1 capital is at 
or above 2 percent of adjusted part 325 total assets as defined in 
Sec. 303.2(b) of this part;
    (b) Orders terminating insured status under section 8(a) of the FDI 
Act (12 U.S.C. 1818(a));
    (c) Cease-and-desist orders under section 8(b) of the FDI Act (12 
U.S.C. 1818(b)) when the respondent depository institution or 
individual does not consent to the issuance of such orders;
    (d) Temporary orders of suspension and prohibition under section 
8(e) of the FDI Act (12 U.S.C. 1818(e));
    (e) Orders of removal, suspension or prohibition from participation 
in the conduct of the affairs of an insured depository institution 
under section 8(e) of the FDI Act (12 U.S.C. 1818(e)) when the 
individual does not consent to the issuance of such orders;
    (f) Orders of suspension or prohibition to an indicted director, 
officer or person participating in the conduct of the affairs of an 
insured depository institution and orders of removal or prohibition to 
a convicted director, officer or person participating in the conduct of 
the affairs of an insured depository institution under section 8(g) of 
the FDI Act (12 U.S.C. 1818(g)) when such director, officer or person 
does not consent to the suspension or removal;
    (g) Final orders to pay civil money penalties where respondents do 
not consent to the assessment of civil money penalties and hearings 
have been held;
    (h) Denials of requests for modifications or terminations of orders 
issued pursuant to section 8(g) of the FDI Act;
    (i) Grants or denials of requests for reinstatement to office, 
whether or not an informal hearing has been requested, pursuant to 
Sec. 308.203 of this chapter; and
    (j) Grants or denials of requests for waivers of liability of 
commonly controlled insured depository institutions as to assessments 
under section 5(e) of the FDI Act (12 U.S.C. 1815(e)).

PART 337--UNSAFE AND UNSOUND BANKING PRACTICES

    2. The authority citation for part 337 is 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 by revising paragraph (a)(5)(iii), 
adding a sentence at the end of paragraph (c), removing paragraphs (d) 
and (e), and redesignating paragraphs (g) and (h) as (d) and (e), 
respectively, to read as follows:


Sec. 337.6  Brokered deposits.

    (a) * * *
    (5) * * *
    (iii) Notwithstanding paragraph (a)(5)(ii) of this section, the 
term deposit broker includes any insured depository institution that is 
not well capitalized, and any employee of any such insured depository 
institution, which engages, directly or indirectly, in the solicitation 
of deposits by offering rates of interest (with respect to such 
deposits) which are significantly higher than the prevailing rates of 
interest on deposits offered by other insured depository institutions 
in such depository institution's normal market area.
* * * * *
    (c) * * * For filing requirements, consult 12 CFR 303.243.
* * * * *

PART 341--REGISTRATION OF TRANSFER AGENTS

    4. The authority citation for part 341 continues 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 as follows:


Sec. 341.7  Delegation of authority.

    (a) Except as provided in paragraph (b) of this section, authority 
is delegated to the Director and Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director and 
appropriate regional director and deputy regional director, to act on 
disclosure matters under and pursuant to sections 17 and 17A of the 
Securities Exchange Act of 1934 (15 U.S.C. 78).
    (b) Authority to act on disclosure matters is retained by the Board 
of Directors when such matters involve exemption from registration 
requirements pursuant to section 17A(c)(1) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78q-1(c)(1)).

PART 346--FOREIGN BANKS

    6. The authority citation for part 346 continues to read as 
follows:

    Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820, 3103, 3104, 
3105, 3108.

    7. Section 346.19 of subpart C is amended by adding a new paragraph 
(e)(14) to read as follows:


Sec. 346.19  Pledge of assets.

* * * * *
    (e) * * *
    (14) Delegation of authority. (i) Authority is delegated to the 
Director and Deputy Director of the Division of Supervision and, where 
confirmed in writing by the Director, to an associate director and the 
appropriate regional director and deputy regional director of the 
region in which the insured branch is located, to enter into pledge 
agreements with foreign banks and depositories under this section. This 
authority also shall extend to the power to revoke such approval and 
require the dismissal of the depository.
    (ii) Authority is delegated to the General Counsel or designee to 
modify the terms of the model deposit agreement used under this 
section.
* * * * *

PART 348--MANAGEMENT OFFICIAL INTERLOCKS

    8. The authority citation for part 348 continues to read as 
follows:

    Authority: 12 U.S.C. 3207, 12 U.S.C. 1823(k).

    9. Section 348.9 is added to read as follows:


Sec. 348.9  Delegation of authority.

    (a) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director and appropriate regional director and deputy regional 
director, to approve or deny requests to establish management official 
interlocks pursuant to Sec. 348.6 or section 205(8) of the Depository 
Institutions Management Interlocks Act (except that a regional director 
or deputy regional director may deny such a request only if the request 
was made pursuant to 348.6(b)(4)); and

[[Page 52868]]

    (b) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director to deny a request to establish a management official interlock 
pursuant to any provision of either Sec. 348.6 or section 205(8) of the 
Depository Institutions Management Interlocks Act.

PART 359--GOLDEN PARACHUTE AND INDEMNIFICATION PAYMENTS

    10. The authority citation for part 359 continues to read as 
follows:

    Authority: 12 U.S.C. 1828(k).

    11. Section 359.6 is revised to read as follows:


Sec. 359.6  Filing instructions.

    Requests to make excess nondiscriminatory severance plan payments 
pursuant to Sec. 359.1(f)(2)(v) and golden parachute payments permitted 
by Sec. 359.4 shall be submitted in writing to the appropriate regional 
director (DOS). For filing requirements, consult 12 CFR 303.244. In the 
event that the consent of the institution's primary federal regulator 
is required in addition to that of the FDIC, the requesting party shall 
submit a copy of its letter to the FDIC to the institution's primary 
federal regulator. In the case of national banks, such written requests 
shall be submitted to the OCC. In the case of state member banks and 
bank holding companies, such written requests shall be submitted to the 
Federal Reserve district bank where the institution or holding company, 
respectively, is located. In the case of savings associations and 
savings association holding companies, such written requests shall be 
submitted to the OTS regional office where the institution or holding 
company, respectively, is located. In cases where only the prior 
consent of the institution's primary federal regulator is required and 
that agency is not the FDIC, a written request satisfying the 
requirements of this section shall be submitted to the primary federal 
regulator as described in this section.

    By order of the Board of Directors.

    Dated at Washington, DC., this 23rd day of September, 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


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