International Banking Act
PL 95-369 (H.R.10899), enacted 09/17/1978

PUBLIC LAW 95-369—SEPT. 17, 1978 
92 STAT. 607 
Public Law 95-369 
95th Congress 
An Act 
To provide for Federal regulation of participation by foreign banks in domestic 
financial markets. 
Be it eTiacted iy the Senate aind Hcyase of Representatives of the 
United States of America in Congress assembled, 
SHORT TITLE; DEFINITIONS AND RULES OF CONSTRUCTION 
SECTION 1. (a) This Act may be cited as the "International Banking 
Act of 1978". 
(b) For the purposes of this Act— 
(1) "agency" means any office or any place of business of a 
foreign bank located in any State of the United States at which 
credit balances are maintained incidental to or arising out of the 
exercise of banking powers, checks are paid, or money is lent but 
at which deposits may not be 'accepted from citizens or residents 
of the United States; 
(2) "Board" means the Board of Governors of the Federal 
Reserve System; 
(3) "branch" means any office or any place of business of a 
foreign bank located in any State of the United States at which 
deposits are received; 
(4) "Comptroller" means the Comptroller of the Currency; 
(5) "Federal agency" means an agency of a foreign bank 
established and operating under section 4 of this Act; 
(6) "Federal branch" means a branch of a foreign bank estab-
lished and operating under section 4 of this Act; 
(7) "foreign bank" means any company organized under the 
laws of a foreign country, a territory of the United States, Puerto 
Rico, Guam, American Samoa, or the Virgin Islands, which 
engages in the business of banking, or any subsidiary or affiliate, 
organized under such laws, of any such company. For the pur-
poses of this Act the term "foreign bank" includes, without 
limitation, foreign commercial banks, foreign merchant banks 
and other forei^ institutions that engage in banking activities 
usual in connection with the business of banking in the countries 
where such foreign institutions are organized or operating; 
(8) "foreign country" means any country other than the 
United States, and includes any colony, dependency, or posses-
sion of any such country; 
(9) "commercial lending company" means any institution, 
other than a bank or an organization operating under section 25 
of the Federal Reserve Act, organized under the laws of any 
State of the United States, or the District of Columbia which 
maintains credit balances incidental to or arising out of the exer-
cise of banking powers and engages in the business of making 
commercial loans; 
(10) "State" means any State of the United States or the Dis-
trict of Columbia; 
(11) "State agency" means an agency of a foreign bank estab-
lished and operating under the laws of any State; 
Sept. 17, 1978 
[H.R. 10899] 
International 
Banking Act 
of 1978. 
12 use 3101 
note. 
12 use 3101. 
92 STAT. 608 
PUBLIC LAW 95-369—SEPT. 17, 1978 
(12) "State branch" means a branch of a foreign bank estab-
lished and operating under the laws of any State; 
(13) the terms "bank", "bank holding company", "company", 
"control", and "subsidiary" have the same meanings assigned to 
those terms in the Bank Holding Company Act of 1956, and the 
terms "controlled" and "controlling" shall be construed con-
sistently with the term "control" as defined in section 2 of the 
12USCI841. 
Bank Holding Company Act of 1956; and 
(14) "consolidated" means consolidated in accordance with 
generally accepted accounting principles in the United States 
consistently applied. 
DIRECTORS OF NATIONAL BANKS 
SEC. 2. Section 5146 of the Kevised Statutes (12 U.S.C. 72) is 
amended by striking out the period at the end of the first sentence and 
adding the following new provision: ", except that in the case of an 
association which is a subsidiary or affiliate of a foreign bank, the 
Comptroller of the Currency may in his discretion waive the require-
ment of citizenship in the case of not more than a minority of the total 
number of directors.". 
EDGE ACT CORPORATIONS 
12 use 611a 
SEC 3. (a) It is the purpose of this section to eliminate or modify 
oote. 
provisions in section 25(a) of the Federal Eeserve Act that (1) dis-
611 6^1 
criminate against foreign-owned banking institutions, (2) disadvant-
age or unnecessarily restrict or limit corporations organized under 
section 25(a) of the Federal Reserve Act in competing with foreign-
owned banking institutions in the United States or abroad or (3) 
impede the attainment of the Congressional purposes set forth in sec-
tion 26(a) of the Federal Reserve Act as amended by subsection (b) 
of this section. In furtherance of such purpose, the Congress believes 
that the Board should review and revise its rules, regulations, and 
interpretations issued pursuant to section 25(a) of the Federal 
Reserve Act to eliminate or modify any restrictions, conditions, or 
limitations not required by section 25(a) of the Federal Reserve Act, 
as amended, that (1) discriminate against foreign-owned banking 
institutions, (2) disadvantage or unnecessarily restrict or limit corpo-
rations organized under section 25(a) of the Federal Reserve Act in 
competing with foreign-owned banking institutions in the United 
States or abroad, or (3) impede the attainment of the Congressional 
purposes set forth in section 25(a) of the Federal Reserve Act as 
Effective date. 
amended by subsection (b) of this section. Rules and regulations pur-
suant to this subsection and section 25(a) of the Federal Reserve Act 
shall be issued not later than 150 days after the date of enactment of 
this section and shall be issued in final form and become effective not 
later than 120 days after they are first issued. 
^ 
(b) Section 25 (a) of the Federal Reserve Act is amended by adding 
after the first paragraph (12 U.S.C. 611), the following new 
paragraph: 
12 use 6Ila. 
"The Congress hereby declares that it is the purpose of this section 
to provide for the establishment of international banking and financial 
corporations operating under Federal supervision with powers suffi-
ciently broad to enable them to compete effectively with similar for-
eign-owned institutions in the United States and abroad; to afford to 
the United States exporter and importer in particular, and to United 
PUBLIC LAW 95-369—SEPT. 17, 1978 
92 STAT. 609 
States commerce, industry, and agriculture in general, at all times a 
means of financing international trade, especially United States 
exports; to foster the participation by regional and smaller banks 
throughout the United States m the provision of international bank-
ing and financing services to all segments of United States agricul-
ture, commerce, and industry, and, in particular small business and 
farming concerns; to stimulate competition in the provision of inter-
national banking and financing services throughout the United States; 
and, in conjunction with each of the preceding purposes, to facilitate 
and stimulate the export of United States goods, wares, merchandise, 
commodities, and services to achieve a sound United States interna-
tional trade position. The Board of Governors of the Federal Reserve Regulations. 
System shall issue rules and regulations under this section consistent 
with and in furtherance of the purposes described in the preceding sen-
tence, and, in accordance therewith, shall review and revise any such 
rules and regulations at least once every five years, the first such period 
commencing with the effective date of rules and regulations issued 
pursuant to section 3(a) of the International Banking Act of 1978, in 
order to ensure that such purposes are being served in light of prevail-
ing economic conditions and banking practices.". 
(c) The second sentence of the fourth paragraph of section 25(a) 
of the Federal Reserve Act (12 U.S.C. 614) is amended by striking out 
", all of whom shall be citizens of the United States" after "to elect or 
appoint directors". 
(d) The first sentence of the ^ixth paragraph of section 25 (a) of the 
'• 
Federal Reserve Act (12 U.S.C. 615(a)) is amended by striking 
", but in no event having liabilities outstanding thereon at any one time 
exceeding ten times its capital stock and surplus"; and the first sen-
tence of the twelfth paragraph of section 25 (a) of the Federal Reserve 
Act (12 U.S.C. 618) is amended by inserting a period after "and in 
section 25 of the Federal Reserve Act as amended", and by striking the 
remainder of the sentence. 
(e) The third sentence of the sixth paragraph of section 25(a) of 
the Federal Reserve Act (12 U.S.C. 615(a)) is amended by striking 
", but in no event less than ten per centum of its deposits" and inserting 
in lieu thereof "for member banks of the Federal Reserve System". 
(f) The thirteenth paragraph of section 25(a) of the Federal 
Reserve Act (12 U.S.C. 619) is deleted and the following paragraph is 
inserted in lieu thereof: 
"Except as otherwise provided in this section, a majority of the 
shares of the capital stock of any such corporation shall at all times 
' 
be held and owned by citizens of the United States, by corporations 
the controlling interest in which is owned by citizens of the United 
States, chartered under the laws of the United States or of a State 
of the United States, or by firms or companies, the controlling interest 
in which is owned by citizens of the United States. Notwithstanding 
any other provisions of this section, one or more foreign banks, 
institutions organized under the laws of foreign countries which own 
or control foreign banks, or banks organized under the laws of the 
United States, the States of the United States, or the District of 
Columbia, the controlling interests in which are owned by any such 
foreign banks or institutions, may, with the prior approval of the 
Board of Governors of the Federal Reserve System and upon such 
terms and conditions and subject to such rules and regulations as the 
Board of Governors of the Federal Reserve System may prescribe, own 
and hold 50 per centum or more of the shares of the capital stock of 
92 STAT. 610 
PUBLIC LAW 95-369—SEPT. 17, 1978 
Definitions. 
12 use 1841. 
Report to 
Congress. 
12 u s e 247 note. 
12 use 
601-631. 
12 u s e 247 note. 
12 use 
241-247. 
12 use 
601-631. 
any corporation organized under this section, and any such corpora-
tion shall be subject to the same provisions of law as any other corpo-
ration organized under this section, and the terms 'controls' and 
'controlling interest' shall be construed consistently with the defini-
tion of 'control' in section 2 of the Bank Holding Company Act of 
1956. For the purposes of the preceding sentence of this paragraph 
the term 'foreign bank' shall have the meaning assigned to it in the 
International Banking Act of 1978.". 
(g) The Board shall report to the Congress not later than 270 
days after the date of enactment of this Act its recommendations 
with respect to permitting corporations organized or operating under 
section 25 or 25(a) of the Federal Reserve Act, to become members of 
Federal Reserve Banks. 
(h) As part of its annual report pursuant to section 10 of the 
Federal Reserve Act, the Board shall include its assessment of the 
effects of the amendments made by this Act on the capitalization and 
activities of corporations organized or operating under section 25 or 
25(a) of the Federal Reserve Act, and on commercial banks and 
the banking system. 
FEDERAL BRANCHES AND AGENCIES 
12 use 3102. 
SEC. 4. (a) Except as provided in section 5, a foreign bank which 
engages directly in a banking business outside the United States 
may, with the approval of the Comptroller, establish one or more 
Federal branches or agencies in any State in which (1) it is not 
operating a branch or agency pursuant to State law and (2) the 
establishment of a branch or agency, as the case may be, by a foreign 
bank is not prohibited by State law. 
Regulations. 
(b) In establishing and operating a Federal branch or agency, a 
foreign bank shall be subject to such rules, regulations, and orders as 
the Comptroller considers appropriate to carry out this section, which 
shall include provisions for service of process and maintenance of 
branch and agency accounts separate from those of the parent bank. 
Except as otherwise specifically provided in this Act or in rules, 
regulations, or orders adopted by the Comptroller under this section, 
operations of a foreign bank at a Federal branch or agency shall be 
conducted with the same rights and privileges as a national bank at 
the same location and shall be subject to all the same duties, restric-
tions, penalties, liabilities, conditions, and limitations that would 
12 use 38. 
apply under the National Bank Act to a national bank doing business 
at the same location, except that (1) the requirements of section 5240 
of the Revised Statutes (12 U.S.C. 481) shall be met with respect to 
a Federal branch or agency if it is examined at least once in each 
calendar year; (2) any limitation or restriction based on the capital 
stock and surplus of a national bank shall be deemed to refer, as 
applied to a Federal branch or agency, to the dollar equivalent of 
the capital stock and surplus of the foreign bank, and if the foreign 
bank has more than one Federal branch or agency the business 
transacted by all such branches and agencies shall be aggregated in 
determining compliance with the limitation; (3) a Federal branch 
or agency shall not be required to become a member bank, as that 
12 use 221. 
term is defined in section 1 of the Federal Reserve Act; and (4) a 
Federal agency shall not be required to become an insured bank as 
that term is defined in section 3(h) of the Federal Deposit Insurance 
12 u s e 1813. 
A c t . 
.U ^U.U^ ..i ,.«U-,-U*J . . . 
.^^ .:,. i.M:. 
PUBLIC LAW 95-369—SEPT. 17, 1978 
92 STAT. 611 
(c) In acting on any application to establish a Federal branch or 
agency, the Comptroller shall take into account the effects of the pro-
posal on competition in the domestic and foreign commerce of the 
United States, the financial and managerial resources and future 
prospects of the applicant foreign bank and the branch or agency, and 
the convenience and needs of the community to be served. 
(d) Notwithstanding any other provision of this section, a foreign 
bank shall not receive deposits or exercise fiduciary powers at any 
Federal agency. A foreign bank may, however, maintain at a Federal 
agency for the account of others credit balances incidental to, or aris- 
^ 
ing out of, the exercise of its lawful powers. 
(e) No forei^ bank may maintain both a Federal branch and a 
Federal agency m the same State. 
(f) Any branch or agency operated by a foreign bank in a State 
pursuant to State law and any commercial lending company controlled 
by a foreign bank may be converted into a Federal branch or agency 
with the approval of the Comptroller. In the event of any conversion 
pursuant to this subsection, all of the liabilities of such foreign bank 
previously payable at the State branch or agency, or all of the liabili-
ties of the commercial lending company, shall thereafter be payable 
by such foreign bank at the branch or agency established under this 
subsection. 
(g) (1) Upon the opening of a Federal branch or agency in any Regulations. 
State and thereafter, a foreign bank, in addition to any deposit require-
ments imposed under section 6 of this Act, shall keep on deposit, in 
accordance with such rules and regulations as the Comptroller may 
prescribe, with a member bank designated by such foreign bank, 
dollar deposits or investment securities of the type that may be held 
by national banks for their own accounts pursuant to paragraph 
"Seventh" of section 5136 of the Revised Statutes, as amended, in an 12 USC 24. 
amount as hereinafter set forth. Such depository bank shall be 
located in the State where such branch or agency is located and shall 
be approved by the Comptroller if it is a national bank and by the 
Board of Governors of the Federal Reserve System if it is a State 
Bank. 
(2) The aggregate amount of deposited investment securities (cal-
culated on the basis of principal amount or market value, whichever 
is lower) and dollar deposits for each branch or agency established 
and operating under this section shall be not less than the greater of 
(1) that amount of capital (but not surplus) which would be required 
of a national bank being organized at this location, or (2) 6 per 
centum of the total liabilities of such branch or agency, includmg 
X;-i-r.*?}! 
acceptances, but excluding (A) accnied expenses, and (B) amounts 
due and other liabilities to offices, branches, agencies, and subsidi-
aries of such foreign bank. The Comptroller may require that the 
assets deposited pursuant to this subsection shall be maintained in 
such amounts as he may from time to time deem necessary or desir-
able, for the maintenance of a soimd financial condition, the protec-
tion of depositors, and the public interest, but such additional 
amount shall in no event be greater than would be required to conform 
to generally accepted banking practices as manifested by banks in 
the area in which the branch or agency is located. 
(3) The deposit shall be maintained with any such member bank 
pursuant to a deposit agreement in such form and containing such 
limitations and conditions as the Comptroller may prescribe. So long 
92 STAT. 612 
PUBLIC LAW 95-369—SEPT. 17, 1978 
as it continues business in the ordinary course such foreign bank shall, 
however, be permitted to collect income on the securities and funds 
so deposited and from time to time examine and exchange such 
securities. 
Conditions and 
(4) Subject to such conditions and requirements as may be pre-
requirements. 
scribed by the Comptroller, each foreign bank shall hold in each State 
in which it has a Federal branch or agency, assets of such types and 
in such amount as the Comptroller may prescribe by general or specific 
regulation or ruling as necessary or desirable for the maintenance of 
a sound financial condition, the protection of depositors, creditors and 
the public interest. In determining compliance with any such pre-
scribed asset requirements, the Comptroller shall give credit t
x
> (A) 
assets required to be maintained pursuant to paragraphs (1) and (2) 
of this subsection, (B) reserves required to be maintained pursuant to 
, 
section 7(a) of this Act, and (C) assets pledged, and surety bonds 
payable, to the Federal Deposit Insurance Corporation to secure the 
payment of domestic deposits. The Comptroller may prescribe differ-
ent asset requirements for branches or agencies in different States, 
in order to ensure competitive equality of Federal branches and agen-
cies with State branches and agencies and domestic banks in those 
States. 
(h) A foreign bank with a Federal branch or agency operating in 
any State may (1) with the prior approval of the Comptroller estab-
lish and operate additional branches or agencies in the State in which 
such branch or agency is located on the same terms and conditions and 
subject to the same limitations and restrictions as are applicable to 
the establishment of branches by a national bank if the principal office 
of such national bank were located at the same place as the initial 
branch or agency in such State of such foreign bank and (2) change 
the designation of its initial branch or agency to any other branch or 
agency subject to the same limitations and restrictions as are applica-
ble to a change in the designation of the principal office of a national 
bank if such principal office were located at the same place as such 
initial branch or agency. 
(i) Authority to operate a Federal branch or agency shall terminate 
when the parent foreign bank voluntarily relinquishes it or Avhen such 
parent foreign bank is dissolved or its authority or existence is other-
wise terminated or canceled in the country of its organization. If (1) 
at any time the Comptroller is of the opinion or has reasonable cause 
to believe that such foreign bank has violated or failed to comply with 
any of the provisions of this section or any of the rules, regulations. 
Hearing. 
or orders of the Comptroller made pursuant to this section, or (2) a 
conservator is appointed for such foreign bank or a similar proceeding 
is initiated in the foreign bank's country of organization, the Comp-
troller shall have the power, after opportunity for hearing, to revoke 
the foreign bank's authority to operate a Federal branch or agency. 
The Comptroller may, in his discretion, deny such opportunity for 
hearing if he determines such denial to be in the public interest. The 
Comptroller may restore any such authority upon due proof of com-
pliance with the provisions of this section and the rules, regulations, 
or orders of the Comptroller made pursuant to this section. 
(j)(l) 
Whenever the Comptroller revokes a foreign bank's 
authority to operate a Federal branch or agency or whenever any 
creditor of any such foreign bank shall have obtained a judgment 
against it arising out of a transaction with a Federal branch or 
agency in any court of i-ecord of the United States or any State of 
PUBLIC LAW 95-369—SEPT. 17, 1978 
92 STAT. 613 
the United States and made application, accompanied by a certificate 
from the clerk of the court stating that such judgment has been 
rendered and has remained unpaid for the space of thirty days, or 
whenever the Comptroller shall become satisfied that such forei^ 
bank is insolvent, he may, after due consideration of its affairs, in 
any such case, appoint a receiver who shall take possession of all the 
property and assets of such foreign bank in the United States and 
exercise the same rights, privileges, powers, and authority with 
respect thereto as are now exercised by receivers of national banks 
appointed by the Comptroller. 
(2) In any receivership proceeding ordered pursuant to this sub-
section ( p , whenever there has been paid to each and every depositor 
and creditor of such foreign bank whose claim or claims shall have 
been proved or allowed, the full amount of such claims arising out 
of transactions had bjr them with any branch or agency of such 
foreign bank located in any State of the United States, except 
(A) claims that would not represent an enforceable legal obligation 
against such branch or agency if such branch or agency were a sepa-
rate legal entity, and (B) amounts due and other liabilities to other 
oiSices or branches or agencies of, and wholly owned (except for a 
nominal number of directors' shares) subsidiaries of, such foreign 
bank, and all expenses of the receivership, the Comptroller or the 
Federal Deposit Insurance Corporation, where that Corporation has 
been appointed receiver of the foreign bank, shall turn over the 
remainder, if any, of the assets and proceeds of such foreign bank 
to the head office of such foreign bank, or to the duly appointed 
domiciliary liquidator or receiver of such foreign bank. 
INTERSTATE BANKING OPERATIONS 
SEC. 5. (a) Except as provided by subsection (b), (1) no foreign 12 USC 3103. 
bank may directly or indirectly establish and operate a Federal 
branch outside of its home State unless (A) its operation is expressly 
permitted by the State in which it is to be operated, and (B) 
the foreign bank shall enter into an agreement or undertaking 
with the Board to receive only such deposits at the place of opera-
tion of such Federal branch as would be permissible for a corporation 
organized under section 25(a) of the Federal Reserve Act under rules 12 USC 
and regulations administered by the Board; (2) no foreign bank 611-^1. 
may directly or indirectly establish and operate a State branch out-
side of its home State unless (A) it is approved by the bank regu-
latory authority of the State in which such branch is to be operated, 
and (B) the foreign bank shall enter into an agreement or under-
taking with the Board to receive only such deposits at the place of 
operation of such State branch as would be permissible for a corpo-
ration organized under section 25(a) of the Federal Reserve Act 
under rules and regulations administered by the Board; (3) no for-
eign bank may directly or indirectly establish and operate a Federal 
agency outside of its home State unless its operation is expressly 
permitted by the State in which it is to be operated; (4) no foreign 
bank may directly or indirectly establish and operate a State agency 
or commercial lending company subsidiary outside of its home State, 
unless its establishment and operation is approved by the bank regu-
latory authority of the State in which it is to be operated; and 
(5) no foreign bank may directly or indirectly acquire any voting 
shares of, interest in, or substantially all of the assets of a bank 
92 STAT. 614 
PUBLIC LAW 95-369—SEPT. 17, 1978 
located outside of its home State if such acquisition would be pro-
hibited under section 3(d) of the Bank Holding Company Act of 
12 use 1842. 
1956 if the foreign bank were a bank holding company the operations 
of whose banking subsidiaries were principally conducted in the 
foreign bank's home State. Notwithstanding any other provisions 
of Federal or State law, deposits received by any Federal or State 
branch subject to the limitations of an agreement or undertaking 
imposed under this subsection shall not be subject to any requirement 
of mandatory insurance by the Federal Deposit Insurance Corpo-
ration. 
(b) Unless its authority to do so is lawfully revoked otherwise than 
pursuant to tbis section, a foreign bank, notwithstanding any restric-
tion or limitation imposed under subsection (a) of this section, may 
establish and operate, outside its home State, any State branch, State 
agency, or bank or commercial lending company subsidiary which 
commenced lawful operation or for which an application to commence 
business had been lawfully filed with the appropriate State or Federal 
authority, as the case may be, on or before July 27, 1978. 
(c) For the purposes of this section, the home State of a foreign 
bank that has branches, agencies, subsidiary commercial lending com-
panies, or subsidiary banks, or any combination thereof, in more than 
one State, is whichever of such States is so determined by election of 
the foreign bank, or, in default of such election, by the Board. 
INSURANCE OF DEPOSITS 
12 use 3104. 
SEC. 6. (a) No foreign bank may establish or operate a Federal 
branch which receives deposits of less than $100,000 unless the branch 
is an insured branch as defined in section 3(s) of the Federal Deposit 
12 use 1813. 
Insurance Act, or unless the Comptroller determines by order or 
regulation that the branch is not engaged in domestic retail deposit 
activities requiring deposit insurance protection, taking account of 
the size and nature of depositors and deposit accounts. 
(b) After the date of enactment of this Act no foreign bank may 
establish a branch, and after one year following such date no foreign 
bank may operate a branch, in any State in which the deposits of a 
bank organized and existing under the laws of that State would be 
required to be insured, unless the branch is an insured branch as defined 
in section 3(s) of the Federal Deposit Insurance Act, or unless the 
branch will not thereafter accept deposits of less than $100,000, or 
unless the Federal Deposit Insurance Corporation determines by order 
or regulation that the branch is not engaged in domestic retail deposit 
activities requiring deposit insurance protection, taking account of the 
size and nature of depositors and deposit accounts. 
(c) (1) The Federal Deposit Insurance Act (12 U.S.C. 1811-1832) 
is amended as set forth hereinafter in this subsection, in which section 
numbers not otherwise identified refer to sections of that Act. 
(2) Section 3(h) is amended by inserting "(including a foreign 
bank having an insured branch)" immediately after "(h) The term 
'insured bank' means any bank". 
(3) Section 3 (j) is amended by inserting "or of a branch of a foreign 
bank" immediately before the period at the end thereof. 
(4) Section 3(m) is amended (A) by changing "(m) The" to read 
" (m) (1) Subject to the provisions of paragraph (2) of this subsection, 
the", and (B) by adding at the end thereof the following new 
paragraph: 
PUBLIC LAW 95-369—SEPT. 17, 1978 
92 STAT. 615 
12 use 1813. 
"(2) In the case of any deposit in a branch of a foreign bank, the 
ther 'insured deposit' means an insured deposit as defined in paragraph 
(1) of this subsection which— 
" (A) is payable in the United States to— 
"(i) an individual who is a citizen or resident of the 
United States, 
"(ii) a partnership, corporation, trust, or other legally 
cognizable entity created under the laws of the United States 
or any State and having its principal place of business 
within the United States or any State, or 
"(iii) an individual, partnership, corporation, trust, or 
other legally cognizable entity which is determined by the 
Board of Directors in accordance with its regulations to have 
such business or financial relationships in the United States 
as to make the insurance of such deposit consistent with the 
purposes of this Act; 
and 
"(B) meets any other criteria prescribed by the Board of 
Directors by regulation as necessary or appropriate in its judg-
ment to carry out the purposes of this Act or to facilitate the 
administration thereof.". 
(5) Section 3 (q) is amended to read as follows: 
"(q) The term 'appropriate Federal banking agency' shall mean— 
"(1) the Comptroller of the Currency in the case of a national 
banking association, a District bank, or a Federal branch or 
agency of a foreign bank; 
" (2) the Board of Governors of the Federal Reserve System— 
"(A) in the case of a State member insured bank (except 
a District bank), 
"(B) in the case of any branch or agency of a foreign 
bank with respect to any provision of the Federal Reserve 
Act which is made applicable under the International Bank-
ing Act of 1978, 
"(C) in the case of any foreign bank which does not operate 
an insured branch, 
"(D) in the case of any agency or commercial lending 
company other than a Federal agency, and 
"(E) in the case of supervisory or regulatory proceedings 
arising from the authority given to the Board of Governors 
under section 7(c) (1) of the International Banking Act of 
1978, including such proceedings under the Financial In-
stitutions Supervisory Act, and 
"(3) the Federal Deposit Insurance Corporation in the case 
of a State nonmember insured Bank (except a District bank) or 
a foreign bank having an insured branch. 
Under the rule set forth in this subsection, more than one agency may 
be an appropriate Federal banking agency with respect to any given 
institution. For the purposes of subsections (b) through (n) of 
section 8 of this Act, the term 'insured bank' shall be deemed to include 
any uninsured branch or agency of a foreign bank or any commercial 
lending company owned or controlled by a foreign bank.". 
(6) Section 3 is amended by adding at the end thereof the following Definitions, 
new subsections: 
"(r) The terms 'foreign bank' and 'Federal branch' shall be con-
strued consistently with the usage of such terms in the International 
Banking Act of 1978. 
Insured 
bank. 
92 STAT. 616 
PUBLIC LAW 95-369—SEPT. 17, 1978 
"(s) The term 'insured branch' means a branch of a foreign bank 
any deposits in which are insured in accordance with the provisions 
of this Act." 
12 use 1815. 
(7) Section 5 is amended (A) by changing "SEC. 5." to read "SEC. 5. 
(a)" and (B) by adding at the end thereof the following new sub-
sections : 
" (b) Subject to the provisions of this Act and to such terms and con-
ditions as the Board of Directors may impose, any branch of a foreign 
bank, upon application by the bank to the Corporation, and examina-
tion by the Corporation of the branch, and approval by the Board of 
Directors, may become an insured branch. Before approving any such 
application, the Board of Directors shall give consideration to— 
" (1) the financial history and condition of the bank, 
" (2) the adequacy of its capital structure, 
" (3) its future earnings prospects, 
"(4) the general character of its management, including but 
not limited to the management of the branch proposed to be 
insured, 
"(5) the convenience and needs of the community to be served 
by the branch, 
"(6) whether or not its corporate powers, insofar as they will be 
exercised through the proposed insured branch, are consistent with 
the purposes of this Act, and 
"(7) the probable adequacy and reliability of information sup-
plied and to be supplied by the bank to the Corporation to enable 
it to carry out its functions under this Act. 
"(c) (1) Before any branch of a foreign bank becomes an insured 
branch, the bank shall deliver to the Corporation or as the Corporation 
may direct a surety bond, a pledge of assets, or both, in such amounts 
and of such types as the Corporation may require or approve, for the 
purpose set forth in paragraph (4) of this subsection. 
Regulations. 
" (2) After any branch of a foreign bank becomes an insured branch, 
the bank shall maintain on deposit with the Corporation, or as the 
Corporation may direct, surety bonds or assets or both, in such amounts 
and of such types as shall be determined from time to time in accord-
ance with such regulations as the Board of Directors may prescribe. 
Such regulations may impose differing requirements on the basis of 
any factors which in the judgment of the Board of Directors are rea-
sonably related to the purpose set forth in paragraph (4). 
" (3) The Corporation may require of any given bank larger deposits 
of bonds and assets than required under paragraph (2) of this subsec-
tion if, in the judgment of the Corporation, the situation of that bank 
or any branch thereof is or becomes such that the deposits of bonds 
and assets otherwise required under this section would not adequately 
fulfill the purpose set forth in paragraph (4). The imposition of any 
such additional requirements may be without notice or opportunity for 
hearing, but the Corporation shall afford an opportunity to any such 
bank to apply for a reduction or removal of any such additional 
requirements so imposed. 
" (4) The purpose of the surety bonds and pledges of assets required 
under this subsection is to provide protection to the deposit insurance 
fund against the risks entailed in insuring the domestic deposits of a 
foreign bank whose activities, assets, and personnel are in large part 
outside the jurisdiction of the United States. In the implementation 
of its authority under this subsection, however, the Corporation shall 
endeavor to avoid imposing requirements on such banks which would 
PUBLIC LAW 95-369—SEPT. 17, 1978 
92 STAT. 617 
5 use 701 
et seq. 
12 use 1817, 
unnecessarily place them at a competitive disadvantage in relation to 
domestically incorporated banks. 
"(5) In the case of any failure or threatened failure of a foreign Injunction 
bank to comply with any requirement imposed under this subsection 
(c), the Corporation, in addition to all other administrative and judi-
cial remedies, may apply to any United States district court, or United 
States court of any territory, within the jurisdiction of which any 
branch of the bank is located, for an injunction to compel such bank 
and any officer, employee, or a^ent thereof, or any other person having 
custody or control of any of its assets, to deliver to the Corporation 
such assets as may be necessary to meet such requirement, and to take 
any other action necessary to vest the Corporation with control of 
assets so delivered. If the court shall determine that there has been 
any such failure or threatened failure to comply with any such require-
ment, it shall be the duty of the court to issue such injunction. The 
propriety of the requirement may be litigated only as provided in 
chapter 7 of title 6 of the United States Code, and may not be made 
an issue in an action for an injunction under this paragraph.". 
(8) The first sentence of section 7(a) (1) is amended by inserting 
"and each foreign bank having an insured branch which is not a Fed-
eral branch" immediately before "shall make to the Corporation". 
(9) The first sentence of section 7(a) (3) is amended (A) by insert-
ing "and each foreign bank having an insured branch (other than a 
Federal branch)" immediately before "shall make to the Corporation" 
and (B) by inserting ", each foreign bank having an insured branch 
which is a Federal branch," immediately before "and each insured 
district". 
(10) Section 7(a) is amended by adding at the end thereof the fol-
lowing new paragraph: 
"(7) In respect of any report required or authorized to be supplied 
or published pursuant to this subsection or any other provision of law, 
the Board of Directors or the Comptroller of the Currency, as the case 
may be, may differentiate between domestic banks and foreign banks 
to such extent as, in their judgment, may be reasonably required to 
avoid hardship and can be done without substantial compromise of 
insurance risk or supervisory and regulatory effectiveness.". 
(11) Section 7(b) is amended (A) by changing "(4^ A bank's 
assessment base" to read " (4) (A) Except as providea in suoparagraph 
(B) of this paragraph, a bank's assessment base" and (B) by adding 
at the end thereof the following new subparagraph: 
"(B) In determining the assessment base and assessment base ReguUtion*. 
additions and deductions of a foreign bank having an insured 
branch, such adjustments shall be made as the Board of Directors 
may by regulation prescribe in order to provide equitable treatment 
for domestic and foreign banks.". 
(12) 
Section ( 7 ) g ) ( l ) is amended (A) by changing "(j)(l) 
Whenever" to read "(j) (1) (A) Except as provided in subparagraph 
(B) of this paragraph, whenever", and (B) by adding at the end 
thereof the following new subparagraph: 
"(B) The Board of Directors may by regulation exempt from the Regulations, 
reporting requirements of subparagraph (A) of this paragraph any 
transaction in the stock of a foreign bank to the extent that the making 
of any such report would be prohibited by the laws of the country of 
domicile of the foreign bank in effect at the time such bank makes its 
application under section 5(b) of this Act, or rendered impracticable 12 USC 1815, 
by the customs and usages of such country, but the Board of Directors 
92 STAT. 618 
PUBLIC LAW 95-369—SEPT. 17, 1978 
shall weigh the existence of any such prohibition or impracticability 
in connection with its consideration of the factors enumerated in 
12 use 1815. 
sections 5 (b) (4) and 5 (b) (7).". 
12 use 1817. 
(13) Section 7(j)(2) is amended by changing "(2) Whenever" 
to read "(2) (A) Except as provided in subparagraph (B) of this 
paragraph, whenever" and by adding at the end thereof the following 
new subparagraphs: 
"(B) The requirements of subparagraph (A) of this paragraph 
shall not apply in the case of a loan secured by the stock of a foreign 
bank if the lending bank is a foreign bank under the laws of whose 
domicile the report otherwise required by subparagraph (A) would 
be prohibited. 
"(C) No foreign bank under the laAvs of whose domicile a report 
in compliance with subparagraph (A) of this paragraph would be 
prohibited in the case of a loan to acquire the stock of an insured bank 
which is not a foreign bank may make, acquire, or retain any such 
loan. Each report of condition filed under subsection (a) by any 
foreign bank to which this subparagraph applies shall contain either 
a statement of the amount of each loan made, retained, or acquired by 
the foreign bank in violation of this subparagraph during the period 
from the date it became an insured bank or the date of its last report 
of condition, whichever is later, to the date of the report of condition, 
or a statement that no such loans were made and no such loans were 
outstanding during such period.". 
12 use 1818. 
(14) The first sentence of section 8(a) is amended by inserting ", a 
foreign bank having an insured branch which is a Federal branch, a 
foreign bank having an insured branch which is required to be 
insured under section 6 (a) or (b) of the International Banking Act 
of 1978," immediately after "(except a national member bank". 
(15) Section 8 is amended by adding at the end thereof the follow-
ing new subsection: 
"(r)(l) Except as otherwise specifically provided in this section, 
the provisions of this section shall be applied to foreign banks in 
accordance with this subsection. 
"(2) An act or practice outside the United States on the part of a 
foreign bank or any officer, director, employee, or agent therof may 
not constitute the basis for any action by any officer or agency of the 
United States under this section, unless— 
"(A) such officer or agency alleges a belief that such act or 
practice has been, is, or is likely to be a cause of or carried on in 
connection with or in furtherance of an act or practice within 
any one or more States which, in and of itself, would constitute 
an appropriate basis for action by a Federal officer or agency 
under this section; or 
"(B) the alleged act or practice is one which, if proven, would, 
in the judgment of the Board of Directors, adversely affect the 
insurance risk assumed by the Corporation. 
" (3) In any case in which any action or proceeding is brought pursu-
ant to an allegation under paragraph (2) of this subsection for the 
suspension or removal of any officer, director, or other person associ-
ated with a foreign bank, and such person fails to appear promptly as 
a party to such action or proceeding and to comply with any effective 
order or judgment therein, any failure by the foreign bank to secure 
his removal from any office he holds in such bank and from any further 
participation in its affairs shall, in and of itself, constitute grounds 
for termination of the insurance of the deposits in any branch of the 
bank. 
PUBLIC LAW 95-369—SEPT. 17, 1978 
92 STAT. 619 
"(4) Where the venue of any judicial or administrative proceeding 
under this section is to be determined by reference to the location of the 
home office of a bank, the venue of such a proceeding with respect to a 
foreign bank having one or more branches or agencies in not more 
than one judicial district or other relevant jurisdiction shall be within 
such jurisdiction. Where such a bank has branches or agencies in more 
than one such jurisdiction, the venue shall be in the jurisdiction within 
which the branch or branches or agency or agencies involved in the 
proceeding are located, and if there is more than one such jurisdiction, 
the venue shall be proper in any such jurisdiction in which the pro-
ceeding is brought or to which it may appropriately be transferred. 
"(5) Any service required or authorized to be made on a foreign 
bank may be made on any branch or agency located within any State, 
but if such service is in connection with an action or proceeding 
involving one or more branches or one or more agencies located in 
any State, service shall be made on at least one branch or agency so 
involved.". 
(16) (A) The first sentence of section 10(b) is amended (i) by 12 USC 1820. 
inserting "any insured State branch of a foreign bank, any State 
branch of a foreign bank making application to become an insured 
bank," immediately after "(except a District bank)", and (ii) by 
inserting "or branch" before the comma after "any closed insured 
bank". 
(B) The second sentence of section 10(b) is amended by inserting 
", msured Federal branch of a foreign bank," between the words 
"national bank" and "or District bank". 
' 
• 
• 
(C) The third sentence of section 10(b) is amended by inserting 
", and in the case of a foreign bank, a binding commitment by such 
bank to permit such examination to the extent determined by the 
Board of Directors to be necessary to carry out the purposes of this 
Act shall be required as a condition to the insurance of any deposits" 
-
immediately before the period at the end thereof. 
(17) Section 11(c) is amended by inserting ", insured Federal 12 USC 1821. 
branch of a foreign bank," immediately before "or insured District 
bank,". 
(18) The first sentence of section 11(e) is amended by inserting 
"or any insured branch (other than a Federal branch) of a foreign 
bank" immediately before "shall have been closed". 
(19) The second sentence of section 11(e) is amended by changing 
"such insured State bank," to read "such insured State bank or insured 
branch of a foreign bank,". 
(20) Section 11(f) is amended by inserting "or insured branch of 
a foreign bank" immediately before "shall have been closed". 
(21) The first sentence of section 11(g) is amended by inserting 
", insured branch of a foreign bank," immediately before "or District 
bank,". 
(22) The third sentence of section 11(g) is amended by changing 
"In the case of any closed insured bank," to read "In the case of any 
closed insured bank or closed insured branch of a foreign bank,". 
(23) Section 12(a) is amended by inserting ", branch of a foreign 12 USC 1822. 
bank," immediately after "a closed national bank". 
(24) Section 13 is amended by adding at the end thereof the follow- 12 USC 1823. 
ing new subsection: 
"(g) The powers conferred on the Board of Directors and the 
Corporation by this section to take action to reopen a closed insured 
bank or to avert the closing of an insured bank may be used with 
39-194 O—80—pt. 1 
43 : QL3 
92 STAT. 620 
PUBLIC LAW 95-369—SEPT. 17, 1978 
12 use 1828. 
12 use 1829b. 
12 use 1831b. 
12 use 3105. 
12 use 461, 
374a, 464-466, 
371a, 371b, 
371b-l, 374, 
463. 
12 use 221. 
respect to an insured branch of a foreign bank if, in the judgment of 
the Board of Directors, the public interest in avoiding the closing 
of such branch substantially outweighs any additional risk of loss 
to the insurance fund which the exercise of such powers would entail.". 
(25) Section 18(c) is amended by adding at the end thereof the 
following new para^aph: 
"(11) The provisions of this subsection do not apply to any mergei-
transaction involving a foreign bank if no party to the transaction 
is principally engaged in business in the United States.". 
(26) Section 18(d) is amended by inserting the following new 
sentence immediately after the first sentence thereof: "No foreign 
bank may move any insured branch from one location to another 
without such consent.". 
(27) The first sentence of section 18(g) is amended by inserting 
"and in insured branches of foreign banks" immediately after "in 
insured nonmember banks". 
(28) Section 18(j) is amended by adding at the end thereof the 
following new sentence: "The provisions of this subsection shall not 
apply to any foreign bank having an insured branch with respect to 
dealings between such bank and any affiliate thereof.". 
(29) Section 21 is amended by adding at the end thereof the 
following new subsection: 
"(i) The provisions of this section shall not apply to any foreign 
bank except with respect to the transactions and records of any 
insured branch of such a bank.". 
(30) The first sentence of section 25(a) is amended by inserting 
"insured branch of a foreign bank," immediately after "No insured 
bank,". 
AUTHORITY o r FEDERAI. RESERVE SYSTEM 
SEC. 7. (a)(1)(A) Except as provided in paragraph (2) of this 
subsection, subsections (a), (b), (c), (d), (f), (g), (i), (j), (k),and 
the second sentence of subsection (e) of section 19 of the Federal 
Reserve Act shall apply to every Federal branch and Federal agency of 
a foreign bank in the same manner and to the same extent as if the 
Federal branch or Federal agency were a member bank as that term is 
defined in section 1 of the Federal Reserve Act; but the Board either 
by general or specific regulation or ruling may waive the minimum 
and maximum reserve ratios prescribed under section 19 of the Federal 
Reserve Act and may prescribe any ratio, not more than 22 per centum, 
for any obligation of any such Federal branch or Federal agency that 
the Board may deem reasonable and appropriate, taking into con-
sideration the character of business conducted by such institutions and 
the need to maintain vigorous and fair competition between and among 
such institutions and member banks. The Board may impose reserve 
requirements on Federal branches and Federal agencies in such grad-
uated manner as it deems reasonable and appropriate. 
(B) After consultation and in cooperation with the State bank 
supervisory authorities, the Board may make applicable to any State 
branch or State agency any requirement made applicable to, or whicli 
the Board has authority to impose upon, any Federal branch or agency 
under subparagraph (A) of this paragraph. 
(2) A branch or agency shall be subject to this subsection only if 
(A) its parent foreign bank has total worldwide consolidated bank 
assets in excess of $1,000,000,000; (B) its parent foreign bank is con-
trolled by a foreign company which owns or controls foreign banks 
PUBLIC LAW 95-369—SEPT. 17, 1978 
92 STAT. 621 
that in the aggregate have total worldwide consolidated bank assets in 
excess of $1,000,000,000; or (C) its parent foreign bank is controlled 
by a group of foreign companies that own or control foreign banks 
that in the aggregate have total worldwide consolidated bank assets 
in excess of $1,000,000,000. 
(b) Section 13 of the Federal Reserve Act is amended by adding at 
the end thereof the following new paragraph: 
"Subject to such restrictions, limitations, and regulations as may 
be imposed by the Board of Governors of the Federal Reserve System, 
each Federal Reserve bank may receive deposits from, discount paper 
endorsed by, and make advances to any branch or agency of a foreign 
bank in the same manner and to the same extent that it may exercise 
such powers with respect to a member bank if such branch or agency 
is maintaining reserves with such Reserve bank pursuant to section 7 
of the International Banking Act of 1978. In exercising any such 
powers with respect to any such branch or agency, each Federal 
Reserve bank shall give due regard to account balances being main-
tained by such branch or agency with such Reserve bank and the pro-
portion of the assets of such branch or agency being held as reserves 
under section 7 of the International Banking Act of 1978. For the 
purposes of this paragraph, the terms 'branch', 'agency', and 'foreign 
bank' shall have the same meanings assigned to them in section 1 of 
the International Banking Act of 1978.". 
(c) (1) The Board may make examinations of each branch or agency 
of a foreign bank, and of each commercial lending company or bank 
controlled by one or more foreign banks or by one or more foreign 
companies that control a foreign bank, the cost of which shall be 
assessed against and paid by such foreign bank or company, as the 
case may be. The Board shall, insofar as possible, use the reports of 
examinations made by the Comptroller, the Federal Deposit Insurance 
Corporation, or the appropriate State bank supervisory authority for 
the purposes of this subsection. 
(2) Each branch or agency of a foreign bank, other than a Federal 
branch or agency, shall be subject to paragraph 20 and the provision 
requiring the reports of condition contained in paragraph 6 of sec-
tion 9 of the Federal Reserve Act (12 U.S.C. 335 and 324) to the 
same extent and in the same manner as if the branch or agency were 
a State member bank. In addition to any requirements imposed under 
section 4 of this Act, each Federal branch and agency shall be subject 
to subparagraph (a) of section 11 of the Federal Reserve Act (12 
U.S.C. 248(a)) and to paragraph 5 of section 21 of the Federal 
Reserve Act (12 U.S.C. 483) to the same extent and in the same 
manner as if it were a member bank. 
(d) On or before two years after enactment of this Act, the Board 
after consultation with the appropriate State bank supervisory 
authorities shall report to the Committee on Banking, Finance and 
Urban Affairs of the United States House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs of the United 
States Senate its recommendations with respect to the implementation 
of this Act, including any recommended requirements such as limita-
tions on loans to affiliates or capital adequacy requirements which 
should be imposed on foreign banks to carry out the purposes of this 
Act. Not later than one hundred and eighty days after the enactment 
of this Act, the Board shall report to such Committees the steps 
which have been taken to consult and cooperate with State bank 
supervisory authorities as required by subsection (a) (1) (B). 
12 use 347d. 
12 use 82, 
342-347, 
347c, 372. 
Definitions. 
12 use 3105. 
Report to 
congressional 
committees. 
92 STAT. 622 
PUBLIC LAW 95-369—SEPT. 17, 1978 
NONBANKING ACTIVITIES 
12 use 3106. 
SEC. 8. (a) Except as otherwise provided in this section (1) any 
foreign bank that maintains a branch or agency in a State, (2) any 
foreign bank or foreign company controlling a foreign bank that 
controls a commercial lending company organized under State law, 
and (3) any company of which any foreign bank or company referred 
to in (1) and (2) is a subsidiary shall be subject to the provisions 
12 use 1841 
of the Bank Holding Company Act of 1956, and to sections 105 and 
note. 
106 of the Bank Holding Company Act Amendments of 1970 in the 
iQ7i^T^Q7R^^' 
same manner and to the same extent that bank holding companies 
1971-1978. 
^^^ subject thereto, except that any such foreign bank or company 
shall not by reason of this subsection be deemed a bank holding 
company for purposes of section 3 of the Bank Holding Company 
12 use 1842. 
Act of 1956. 
(b) Until December 31, 1985, a foreign bank or other company 
to which subsection (a) applies on the date of enactment of this Act 
may retain direct or indirect ownership or control of any voting 
shares of any nonbanking company in the United States that it owned, 
controlled, or held with power to vote on the date of enactment of 
this Act or engage in any nonbanking activities in the United States 
in which it was engaged on such date. 
(c) After December 31, 1985, a foreign bank or other company to 
which subsection (a) applies on the date of enactment of this Act may 
continue to engage in nonbanking activities in the United States in 
which directly or through an affiliate it was lawfully engaged on 
July 26,1978 (or on a date subsequent to July 26,1978, in the case of 
activities carried on as the result of the direct or indirect acquisition, 
pursuant to a binding written contract entered into on or before July 26, 
1978, of another company engaged in such activities at the time of 
acquisition), and may engage directly or through an affiliate in non-
banking activities in the United States which are covered by an appli-
cation to engage in such activities which was filed on or before July 26, 
1978; except that the Board by order, after opportunity for hearing, 
may terminate the authority conferred by this subsection (c) on any 
such foreign bank or company to engage directly or through an affiliate 
in any activity otherwise permitted by this subsection (c) if it deter-
mines having due regard to the purposes of this Act and the Bank 
12 use 1841 
Holding Company Act of 1956, that such action is necessary to prevent 
no*®- 
undue concentration of resources, decreased or unfair competition, 
conflicts of interest, or unsound banking practices in the United States. 
Notwithstanding subsection (a) of this section, a foreign bank or com-
pany referred to in this subsection (c) may retain ownership or con-
trol of any voting shares (or, where necessaiy to prevent dilution of its 
voting interevSt, acquire additional voting shares) of any domestically-
controlled affiliate covered in 1978 which engages in the business of 
underwriting, distributing, or otherwise buying or selling stocks, 
bonds, and other securities in the United States. Except in the case of 
affiliates described in the preceding sentence, nothing in this subsection 
(c) shall be construed to authorize any foreign bank or company re-
ferred to in this subsection (c), or any affiliate thereof, to engage in 
activities authorized by this subsection (c) through the acquisition, 
pursuant to a contract entered into after July 26,1978, of any interest 
in or the assets of a going concern engaged in such activities. Any for-
eign bank or company that is authorized to engage in any activity pur-
suant to this subsection (c) but, as a result of action of the Board, is 
required to terminate such activity may retain the ownership of con-
PUBLIC LAW 95-369—SEPT. 17, 1978 
92 STAT. 623 
12 use 1841 
note. 
12 use 1850. 
12 use 
1971-1978. 
trol of shares in any company carrying on such activity for a period of 
two years from the date on which its authority was so terminated by 
the Board. As used in this subsection, the term "affiliate" shall mean Definitions, 
any company more than 5 per centum of whose voting shares is directly 
or indirectly owned or controlled or held with power to vote by the 
specified foreign bank or company, and the term "domesticallj^-con-
troUed affiliate covered in 1978" shall mean any affiliate the majority of 
whose voting shares is owned by a company or group of companies or-
ganized under the laws of the United States or any State thereof, if it 
has been under continuous domestic majority-controlling ownership 
since July 26, 1978, and if a foreign bank or group of foreign banks 
does not own or control, directly or indirectly, 25 per centum or more of 
its voting shares. 
(d) Nothing in this section shall be construed to define a branch or 
agency of a foreign bank or a commercial lending company controlled 
by a foreign bank or foreign company that controls a foreign bank as a 
"bank" for the purposes of any provisions of the Bank Holding Com-
pany Act of 1956, or section 105 of the Bank Holding Company Act 
Amendments of 1970, except that any such branch, agency or com-
mercial lending company subsidiary shall be deemed a "bank" or 
"banking subsidiary", as the case may be, for the purposes of applying 
the prohibitions of section 106 of the Bank Holding Company Act 
Amendments of 1970 and the exemptions provided in sections 4(c) (1), 
4(c) (2), 4(c) (3), and 4(c) (4) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1843(c) (1), (2), (3), and (4)) to any foreign bank 
or other company to which subsection (a) applies. 
(e) Section 2(h) of the Bank Holding Company Act of 1956 is 12 USC 1841 
amended (1) by striking out "(h) The" and inserting in lieu thereof 
"(h) (1) Except as provided by paragraph (2), the", (2) by striking 
out the proviso, and (3) by inserting at the end thereof the following: 
"(2) The prohibitions of section 4 of this Act shall not apply to 12 USC 1843 
shares of any company organized under the laws of a foreign country 
(or to shares held by such company in any company engaged in the 
same general line of business as the investor company or in a business 
related to the business of the investor company) that is principally 
engaged in business outside the United States if such shares are held 
or acquired by a bank holding company organized under the laws 
of a foreign country that is principally engaged in the banking busi-
ness outside the United States, except that (1) such exempt foreign 
company (A) may engage in or hold shares of a company engaged 
in the business of underwriting, selling or distributing securities in the 
United States only to the extent that a bank holding company may do 
so under this Act and under regulations or orders issued by the Board 
under this Act, and (B) may engage in the United States in any bank-
ing or financial operations or types of activities permitted under sec-
tion 4(c)(8) or in any order or regulation issued by the Board under 
such section only with the Board's prior approval under that section, 
and (2) no domestic office or subsidiary of a bank holding company 
or subsidiary thereof holding shares of such company may extend 
credit to a domestic office or subsidiary of such exempt company on 
terms more favorable than those afforded similar borrowers in the 
United States.". 
STUDY OF rOREIGN TREATMENT OF UNITED STATES BANKS 
SEC. 9. The Secretary of the Treasury, in conjunction with the Sec- 12 USC 601 
retary of State, the Board, the Comptroller, and the Federal Deposit note. 
Insurance Corporation shall within 90 days after enactment of this 
92 STAT. 624 
PUBLIC LAW 95-369—SEPT. 17, 1978 
bill commence a study of the extent to whicli banks orga-nized under 
the laws of the United States or any State thereof are denied, whether 
by law or practice, national treatment in conducting banking opera-
tions in foreign countries, and the effects, if any, of such discrimina-
Report to 
tion on United States exports to those countries. On or before one 
Congress. 
year after enactment of this section, the Secretary of the Treasury shall 
be required to report his findings, conclusions, and recommendations 
from such study to the Congress and describe the efforts undertaken 
by the United States to eliminate any foreign laws or practices that 
discriminate against banks organized under the laws of the United 
States or any State thereof, or that serve as a barrier to the financing 
of United States exports to any foreign country. 
Rules. 
12 use 3107. 
REPRESENTATIVE OFFICES 
SEC. 10. (a) Any foreign bank that maintains an office other than a 
branch or agency in any State shall register with the Secretary of 
the Treasury in accordance with rules prescribed by him, within one 
hundred and eighty days after the date of enactment of this Act or 
the date on which the office is established, whichever is later. 
(b) This Act does not authorize the establishment of any such 
office in any State in contravention of State law. 
"Subsidiary." 
12 use 1841. 
CEASE-AND-DESIST ORDERS 
SEC. 11. Subsection (b) of section 8 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1818(b)) is amended by adding at the end 
thereof the following new paragraph: 
"(4) This subsection and subsections (c), (d), (h), (i), (k), (1), 
(m), and (n) of this section shall apply to any foreign bank or com-
pany to which subsection (a) of section 8 of the International Bank-
ing Act of 1978 applies and to any subsidiary (other than a bank) 
of any such foreign bank or company in the same manner as they 
apply to a bank holding company and any subsidiary thereof (other 
than a bank) under subparagraph (3) of this subsection. For the 
purposes of this subparagraph, the term 'subsidiary' shall have the 
meaning assigned to it in section 2 of the Bank Holding Company 
Act of 1956.". 
AMENDMENT TO T H E BANKING ACT OF 1 9 3 3 
SEC. 12. Section 21 of the Banking Act of 1933 (12 U.S.C. 378) 
is amended by striking clause (B) of paragraph (2) of subsection 
(a) thereof and inserting in lieu thereof the following: "(B) shall 
be permitted by the United States, any State, territory, or district 
to engage in such business and shall be subjected by the laws of the 
United States, or such State, territory, or district to examination 
and regulations or,". 
REGULATION AND ENFORCEMENT 
12 use 3108. 
SEC. 13. (a) The Comptroller, the Board, and the Federal Deposit 
Insurance Corporation, are authorized and empowered to issue such 
rules, regulations, and orders as each of them may deem necessary in 
order to perform their respective duties and functions under this Act 
and to administer and carry out the provisions and purposes of this 
Act and prevent evasions thereof. 
PUBLIC LAW 95-369—SEPT. 17, 1978 
92 STAT. 625 
(b) In addition to any powers, remedies, or sanctions otherwise 
provided by law, compliance with the requirements imposed under 
this Act or any amendment made by this Act may be enforced under 
section 8 of the Federal Deposit Insurance Act by any appropriate 
Federal banking agency as defined in that Act. 
(c) In the case of any provision of the Federal Reserve Act to 
which a foreign bank or branch thereof is subject imder this Act, 
and which is made applicable to nonmember insured banks by the 
Federal Deposit Insurance Act, whether by cross-reference to the 
Federal Reserve Act or by a provision in substantially the same terms 
in the Federal Deposit Insurance Act, the administration, interpre-
tation, and enforcement of such provision, insofar as it relates to 
any foreign bank or branch thereof as to which the Board is an 
appropriate Federal banking agency, are vested in the Board, but 
where the making of any report to the Board or a Federal Reserve 
bank is required under any such provision, the Federal Deposit Insur-
ance Corporation may require that a duplicate of any such report be 
sent directly to it. This subsection shall not be construed to impair 
any power of the Federal Deposit Insurance Corporation to make 
regular or special examinations or to require special reports. 
12 use 1818. 
12 use 226. 
12 use 1811 
note. 
REPORT ON MC FADDEN ACT 
SEC. 14. (a) The President, in consultation with the Attorney 12USe36note. 
General, the Secretary of the Treasury, the Board, the Comptroller, 
and the Federal Deposit Insurance Corporation, shall transmit a 
report to the Congress containing his recommendations concerning 
the applicability of the McFadden Act to the present financial, bank- 44 Stat. 1224. 
ing, and economic environment, including an analysis of the effects of 
any proposed amendment to such Act on the structure of the banking 
industry and on the financial and economic environment in general. 
(b) The report required by subsection (a) shall be transmitted to the 
Congress not later than one year after the date of enactment of this 
Act. 
Transmittal to 
eongress, 
effective 
date. 
Approved September 17, 1978. 
LEGISLATIVE HISTORY: 
HOUSE REPORT No. 95-910 (eomm. on Banking, Finance and Urban Affairs). 
SENATE REPORT No. 95-1073 (eomm. on Banking, Housing, and Urban Affairs). 
eONGRESSIONAL REeORD, VoL 124 (1978): 
Apr. 6, considered and passed House. 
Aug. 15, considered and passed Senate, amended. 
Aug. 17, House concurred in Senate amendment.