[Federal Register Volume 59, Number 162 (Tuesday, August 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20535]


  Federal Register / Vol. 59, No. 162 / Tuesday, August 23, 1994 /
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[[Page Unknown]]

[Federal Register: August 23, 1994]


                                                   VOL. 59, NO. 162

                                           Tuesday, August 23, 1994

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: Final rule.

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SUMMARY: The Board of Directors (Board) of the FDIC is revising 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.

EFFECTIVE DATE: This rule is effective August 23, 1994.

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, DC 
20429.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    No additional collections of information pursuant to Sec. 3504(h) 
of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) are contained 
in the final rule. Consequently, no information was 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 final 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 
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 final rule seeks to create a blanket 
approval process for requests that must receive the prior written 
consent of the FDIC. The final 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.

Effective Date

    The necessity for a 30-day delay in effective date has been waived 
since this rule relieves a restriction. 5 U.S.C. 553(d)(1).

Discussion

    On April 26, 1994 the FDIC published for public comment a proposed 
revision to part 303 of its regulations concerning the application and 
publication requirements for the establishment and relocation of remote 
service facilities. 59 FR 21676 (April 26, 1994). In general, the 
proposal sought to reduce the regulatory burden on state nonmember 
banks and state-licensed branches of foreign banks by lessening the 
application and notice requirements which an institution must satisfy 
before it may establish or relocate an RSF. Even more streamlined 
procedures were set forth for banks with Community Reinvestment Act 
(CRA) ratings of satisfactory or better.
    The FDIC received a total of eight comment letters in response to 
its proposal. Five of the letters were from banks or their holding 
companies and three were from industry trade associations. All of the 
letters enthusiastically supported the proposed revisions.
    The FDIC Board specifically requested comment on whether the 
proposed revision 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. 
The four of eight commenters which addressed this question all urged 
the FDIC to adopt the same standards for all types of RSFs, which is 
the approach that was taken in the proposal and has been retained in 
the final rule.
    Under the prior regulation, banks desiring to establish an initial 
RSF were required to comply with all the application and publication 
requirements applicable to the establishment of a ``brick and mortar'' 
branch office. Successive RSFs could be established or relocated 
without a formal application pursuant to somewhat less involved 
requirements. The prior regulation did not differentiate based upon the 
condition of the institution submitting the application; the only 
difference it recognized was whether or not this was an initial 
application.
    In view of the limited investment represented by an RSF, 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 and the support expressed by all the commenters, the 
FDIC is amending its regulation concerning the establishment and 
relocation of RSFs to lessen the application and notice requirements 
which an institution must satisfy before it may establish or relocate 
an RSF. Furthermore, the final regulation sets forth even more 
streamlined procedures for banks with CRA ratings of satisfactory or 
better.
    Specifically, Sec. 303.2(c) provides 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 public 
notice requirements are being dispensed with in this case. See 
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, 
Sec. 303.2(c)(3) provides that the institution shall file the letter 
described in Sec. 303.2(c)(2) 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 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 Sec. 303.2. 
First, Sec. 303.6(a)(2) and (3) have been revised 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) has been revised to make it clear that section 
applies to applications to establish an RSF. Third, Sec. 303.6(f)(2) 
has been amended to delete any reference to remote service facilities. 
This is being done in order to conform this section of the regulation 
with the 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 revision 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. Thus, the proposal is being adopted in final form without change.

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 amends 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'' and ``Tenth''), 1828, 1831(e), 
1831(o), 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 removing and reserving footnote 5 
and 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, D.C., this 9th day of August, 1994.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 94-20535 Filed 8-22-94; 8:45 am]
BILLING CODE 6714-01-P