[Federal Register Volume 59, Number 80 (Tuesday, April 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9580]


[[Page Unknown]]

[Federal Register: April 26, 1994]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 303

RIN 3064-AB36

 

Applications and Publication Requirements; Establishment and 
Relocation of Remote Service Facilities

AGENCY: Federal Deposit Insurance Corporation (FDIC or Corporation).

ACTION: Proposed rule.

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SUMMARY: The Board of Directors (Board) of the FDIC is proposing to 
revise its application and publication requirements for the 
establishment and relocation of remote service facilities (RSFs). The 
intended effect of this rule is to lessen the regulatory burden on 
state nonmember banks and state-licensed branches of foreign banks.

DATES: Written comments must be received by the FDIC on or before June 
27, 1994.

ADDRESSES: Written comments shall be addressed to the Office of the 
Executive Secretary, Federal Deposit Insurance Corporation, 550 17th 
Street NW., Washington, DC 20429. Comments may be hand-delivered to 
room F-400, 1776 F Street NW., Washington, DC 20429, on business days 
between 8:30 a.m. and 5 p.m. (FAX number: (202) 898-3838). Comments 
will be available for inspection in room 7118, 550 17th Street NW., 
Washington, DC 20429, between 9 a.m. and 4:30 p.m. on business days.

FOR FURTHER INFORMATION CONTACT: Curtis L. Vaughn, Examination 
Specialist, Division of Supervision (202/898-6759), Federal Deposit 
Insurance Corporation, 1776 F Street NW., Washington, DC 20429; or 
Jeffrey M. Kopchik, Counsel, Legal Division, (202/898-3872), Federal 
Deposit Insurance Corporation, 550 17th Street NW., Washington, D.C. 
20429.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    No additional collections of information pursuant to section 
3504(h) of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) are 
contained in the proposed rule. The Board of Directors of the FDIC has 
concluded that the notices required of depository institutions which 
seek to establish or relocate a remote service facility under the 
proposed regulation will not constitute a ``collection of information'' 
as defined in 5 CFR 1320.7 which has not already been approved by the 
Office of Management and Budget. Consequently, no information has been 
submitted to the Office of Management and Budget for review.

Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b), the FDIC hereby certifies that the proposed rule will 
not have a significant impact on a substantial number of small 
entities.
    The FDIC has reached this conclusion because the effect of the 
rule, if it is ultimately promulgated in its current form, will be to 
reduce the recordkeeping, reporting and compliance requirements that 
are imposed upon small entities rather than to increase them. This is 
because the proposed rule seeks to create a blanket approval process 
for requests that must receive the prior written consent of the FDIC. 
The proposed rule imposes no new recordkeeping or reporting 
requirements upon small entities since notices required are abbreviated 
versions of letter applications currently required of banks. 
Furthermore, most institutions would not be required to give public 
notice of the transaction which would reduce burden on the requesting 
institutions.

Discussion

    The FDIC desires to reduce the regulatory burden on banks seeking 
to establish or relocate RSFs. Currently, banks desiring to establish 
an initial RSF must comply with all the application and publication 
requirements applicable to the establishment of a ``brick and mortar'' 
branch office. See 12 CFR 303.2(a) & (c). Successive RSFs may be 
established or relocated without a formal application pursuant to 
somewhat less involved requirements. See 12 CFR 303.2(c). The existing 
regulation does not differentiate based upon the condition of the 
institution submitting the application; the only difference it 
recognizes is whether or not this is an initial application.
    In view of the limited investment represented by an RSF and the 
fact that all the information in the FDIC's possession indicates that 
consumers are of the opinion that RSFs are a convenient and desirable 
banking service, the FDIC is proposing that its existing regulation 
concerning the establishment and relocation of RSFs be revised to 
lessen the application and notice requirements which an institution 
must satisfy before it may establish or relocate an RSF. Furthermore, 
unlike the existing regulation, the proposal sets forth even more 
streamlined procedures for banks with Community Reinvestment Act (CRA) 
ratings of satisfactory or better.
    Specifically, the proposal revises Sec. 303.2(c) of the FDIC's 
regulations to provide that a state nonmember bank or an insured state-
licensed branch of a foreign bank whose most recent CRA rating is 
Satisfactory or better may establish and operate or relocate an RSF by 
filing a letter with the appropriate FDIC regional director. The letter 
shall contain the location of the RSF and either a representation that 
the site is not included in or eligible for inclusion in the National 
Register of Historic Places or written verification that in the opinion 
of the appropriate state historic preservation officer the 
establishment or relocation of the RSF will have no adverse effect on a 
historic site. Unless the institution is notified otherwise by the FDIC 
within seven days of receipt of the letter, the institution may 
establish or relocate the RSF. The FDIC is proposing that the existing 
public notice requirements be dispensed with in this case. See proposed 
Sec. 303.2(c)(2). However, if the institution cannot make such 
representations concerning compliance with the National Historic 
Preservation Act, 16 U.S.C. 470 et seq., it shall proceed pursuant to 
Sec. 303.2(c)(3).
    In the event that the state nonmember bank or insured state-
licensed branch's most recent CRA rating is not Satisfactory or better, 
proposed Sec. 303.2(c)(3) provides that the institution shall file the 
letter described in Sec. 303.2(c)(2) of the proposal and comply with 
the existing notice provisions of Sec. 303.6(f). Unless the institution 
is notified otherwise within fifteen days after completion of 
processing of the letter, the institution may establish or relocate the 
RSF. In the event that a protest is filed or other objection is taken, 
the institution may not proceed until the FDIC provides written notice 
of its approval.
    The remaining proposed revisions are to Sec. 303.6 (a) and (f) of 
the FDIC's regulations. They are technical in nature in order to 
conform these sections, which concern application procedures and public 
notices of application filings, to the new procedures set forth in 
proposed Sec. 303.2. First, the proposal revises Sec. 303.6(a) (2) and 
(3) to take into account the different procedures set forth in 
Sec. 303.2(c) for institutions with CRA ratings of Satisfactory or 
better as opposed to institutions with CRA ratings of less than 
Satisfactory. Second, the heading of Sec. 303.6(f)(1)(A) would be 
revised under the proposal to make it clear that section applies to 
applications to establish an RSF. Third, the proposal amends 
Sec. 303.6(f)(2) to delete any reference to remote service facilities. 
This is being proposed in order to conform this section of the 
regulation with the proposed revision to Sec. 303.6(a) which deletes 
the publication requirement for applicants with CRA ratings of 
satisfactory or better.
    The Board is of the opinion that this is a sensible proposal which 
will substantially reduce the regulatory burden imposed on state 
nonmember banks and insured state-licensed branches of foreign banks 
that desire to establish or relocate an RSF without adversely affecting 
the FDIC's ability to assure the safety and soundness of the insured 
financial institutions it regulates or its responsibilities under the 
CRA. The Board also requests comment on whether the proposal should 
treat different types of RSFs differently, i.e., an RSF which caters 
exclusively to one bank's customers as opposed to a shared RSF which is 
utilized by customers of many banks.

List of Subjects in 12 CFR Part 303

    Administrative practice and procedure, Authority delegations 
(Government agencies), Bank deposit insurance, Banks, banking, 
Reporting and recordkeeping requirements, Savings associations.
    For the reasons set forth in the preamble, the Board of Directors 
of the Federal Deposit Insurance Corporation hereby proposes to amend 
part 303 of title 12 of the Code of Federal Regulations as follows:

PART 303--APPLICATIONS, REQUESTS, SUBMITTALS, DELEGATIONS OF 
AUTHORITY, AND NOTICES REQUIRED TO BE FILED BY STATUTE OR 
REGULATION

    1. The authority citation for part 303 continues to read as 
follows:

    Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817(a)(2)(b), 
1817(j), 1818, 1819 (``Seventh'', ``Eighth'' and ``Tenth''), 1828, 
1831e, 1831o, 1831p-1(a); 15 U.S.C. 1607.

    2. In Sec. 303.2, paragraph (a) introductory text is amended by 
removing the second parenthetical in the first sentence, the 
parentheticals in the second and third sentences, and by removing ``, 
relocate a remote service facility'' and ``other than a remote service 
facility'' from the fourth sentence, and paragraph (c) is revised to 
read as follows:


Sec. 303.2  Applications by insured state nonmember bank to establish a 
branch, move its main office or relocate a branch.

* * * * *
    (c) Special procedures for remote service facilities. (1) For 
purposes of this section, establishing means owning or leasing a remote 
service facility either individually or jointly.
    (2) An insured state nonmember bank or an insured state-licensed 
branch of a foreign bank whose most recent Community Reinvestment Act 
rating is Satisfactory or better and who desires to establish and 
operate or relocate a remote service facility (RSF) shall file a letter 
with the appropriate regional director. The letter shall contain the 
exact location of the proposed or relocated RSF, including street 
address (unless one has not been assigned to the location), and either 
a representation that the site of the proposed or relocated RSF is not 
included in or eligible for inclusion in the National Register of 
Historic Places or written verification that in the opinion of the 
appropriate state historic preservation officer the establishment or 
relocation of the RSF will have no adverse effect on a historic site. 
Unless the institution is notified otherwise by the FDIC within seven 
days of receipt of the letter, the institution may establish and 
operate or relocate the RSF. In the event that the institution cannot 
represent in good faith that the site of the proposed or relocated RSF 
is not included in or eligible for inclusion in the National Register 
of Historic Places or evidence that written verification has been 
obtained from the appropriate state historic preservation officer, the 
institution shall proceed pursuant to paragraph (c)(3) of this section.
    (3) An insured state nonmember bank or an insured state-licensed 
branch of a foreign bank whose most recent Community Reinvestment Act 
rating is not Satisfactory or better and who desires to establish and 
operate or relocate an RSF shall file the letter described in paragraph 
(c)(2) of this section and comply with the notice provisions of 
Sec. 303.6(f). Unless the institution is notified otherwise by the FDIC 
within 15 days after completion of processing of the letter, the 
institution may establish and operate or relocate the RSF; provided 
however, that in the event that a protest is filed with the FDIC or 
other objection is taken prior to completion of processing the letter, 
the institution shall not establish and operate or relocate the RSF 
until the FDIC provides written notice of its approval.
    3. Section 303.6 is amended by revising paragraphs (a)(2), (a)(3), 
the heading of paragraph (f)(1)(ii)(A), and paragraph (f)(2) to read as 
follows:


Sec. 303.6  Application procedures.

    (a) * * *
    (2) Applications by insured state nonmember banks to establish 
branches, including applications to establish remote service facilities 
by banks whose most recent Community Reinvestment Act rating is not 
Satisfactory or better or who cannot represent compliance with the 
National Historic Preservation Act;
    (3) Applications by insured state nonmember banks to move their 
main office or relocate their branch offices, including applications to 
relocate remote service facilities by banks whose most recent Community 
Reinvestment Act rating is not Satisfactory or better or who cannot 
represent compliance with the National Historic Preservation Act;
* * * * *
    (f) * * *
    (1) * * *
    (ii) * * *
    (A) Applications to establish a branch, including a remote service 
facility. * * *
* * * * *
    (2) Notice by posting. In the case of applications to move a main 
office or relocate a branch, in addition to the notice by publication 
described in paragraph (f)(1) of this section, notice of the 
publication shall be posted in the public lobby of the office(s) to be 
moved or relocated, if such public lobby exists, for at least 21 days 
beginning with the date of the last published notice required by 
paragraph (f)(1) of this section for applications to move a main 
office; and for at least 15 days beginning with the date of the 
publication notice required by paragraph (f)(1) of this section for 
applications to relocate a branch.
* * * * *
    By order of the Board of Directors.

    Dated at Washington, DC, this 12th day of April, 1994.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 94-9580 Filed 4-25-94; 8:45 am]
BILLING CODE 6714-01-P