[Federal Register Volume 59, Number 227 (Monday, November 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29241]


[Federal Register: November 28, 1994]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 346

RIN 3064-AA78


Foreign Banks

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

ACTION: Final rule.

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SUMMARY: The FDIC is amending its regulations concerning the 
permissible activities of state-licensed insured branches of foreign 
banks. Section 202 of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (Improvement Act) provides that after December 
19, 1992, a state-licensed insured branch of a foreign bank may not 
engage in any activity which is not permissible for a federal branch of 
a foreign bank unless the Board of Governors of the Federal Reserve 
System (Board) has determined that the activity is consistent with 
sound banking practice, and the FDIC has determined that the activity 
would pose no significant risk to the Bank Insurance Fund (BIF). The 
amendments cover application procedures and divestiture or cessation 
plans. Foreign banks are required to seek both the FDIC's and the 
Board's approval for an insured state branch to engage in or continue 
to engage in an activity which is not permissible for a federal branch 
of a foreign bank. In the event such an application is denied or the 
foreign bank elects not to continue the activity, a plan of divestiture 
or cessation must be submitted and such divestiture or cessation must 
be completed within one year, or sooner if the FDIC so directs.

EFFECTIVE DATE: The final regulation is effective January 1, 1995.

FOR FURTHER INFORMATION CONTACT: Charles V. Collier, Assistant 
Director, Division of Supervision, (202) 898-6850; Jeffrey M. Kopchik, 
Counsel, Legal Division, (202) 898-3872; Federal Deposit Insurance 
Corporation, 550 17th Street, N.W., Washington, D.C. 20429.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information contained in this final rule has been 
reviewed and approved by the Office of Management and Budget under 
control no. 3064-0114 pursuant to section 3504(h) of the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.). Comments on the accuracy of the 
burden estimate, and suggestions for reducing the burden, should be 
directed to the Office of Management and Budget, Paperwork Reduction 
Project (3064-0114), Washington, D.C., 20503, with copies of such 
comments to Steven F. Hanft, Office of the Executive Secretary, Room F-
453, Federal Deposit Insurance Corporation, 550 17th Street, N.W., 
Washington, D.C. 20429. The collections of information in this 
regulation are found in Secs. 346.101(a), (d), (e) and (f) and take the 
form of a requirement that foreign banks (1) file an application with 
the FDIC requesting permission for an insured state branch to engage in 
or to continue engaging in any activity which is not permissible for a 
federal branch of a foreign bank and (2) submit a plan of divestiture 
or cessation in the event that the application is not approved, the 
foreign bank elects not to apply to the FDIC for permission to continue 
the activity, or a permissible activity becomes impermissible due to a 
subsequent change in statute, regulation or formal order or 
interpretation. The information contained in the application will allow 
the FDIC to properly discharge its responsibilities under section 7 of 
the International Banking Act of 1978 (12 U.S.C. 3101 et seq.) (IBA), 
as amended by section 202 of the Improvement Act. The information in 
the application will be used by the FDIC as part of the process of 
determining whether conduct of the activity in question by the 
applicant will pose a significant risk to the Bank Insurance Fund. The 
information in the divestiture or cessation plan will be used by the 
FDIC to make judgments concerning the reasonableness of the 
institution's actions to discontinue activities deemed to pose 
significant risk to the insurance fund.
    The estimated annual reporting burden for the collection of 
information from foreign banks in this proposed amendment is summarized 
as follows:

Number of respondents:                                                  
  Application..................................................       27
  Plan to discontinue or cease.................................        5
                                                                --------
      Total....................................................       32
Number of responses per respondent.............................        1
Total annual responses.........................................       32
Hours per response.............................................        8
Total annual burden hours......................................      256
                                                                        

Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act (Pub. 
L. 96-354, 5 U.S.C. 601 et seq.), it is certified that this final rule 
will not have a significant impact on a substantial number of small 
entities.

Discussion

    Section 202 of the Improvement Act (Pub. L. 102-242, 12 U.S.C. 
3105) amended section 7 of the IBA by adding new subsection (h) which 
provides that after December 19, 1992 a state branch or state agency of 
a foreign bank may not engage in any type of activity that is not 
permissible for a federal branch of a foreign bank unless the Board of 
Governors of the Federal Reserve System has determined that such 
activity is consistent with sound banking practice; and in the case of 
an insured branch, the Federal Deposit Insurance Corporation has 
determined that the activity would pose no significant risk to the 
deposit insurance fund. 12 U.S.C. 3105(h)(1).
    On March 2, 1993, the FDIC proposed an amendment to part 346 of its 
regulations (12 CFR part 346), ``Foreign Banks'', in order to implement 
this new statutory provision. This proposal was published for a sixty-
day comment period in the Federal Register. (58 FR 11992, March 2, 
1993).1 The proposal sought to amend subpart A, Sec. 346.1, to 
include a definition of ``significant risk to the deposit insurance 
fund'' and to add a new subpart D, ``Applications Seeking Approval for 
Insured State Branches to Conduct Activities Not Permissible for 
Federal Branches''.2
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    \1\Similarly, the Board proposed an amendment to its Regulation 
K (12 CFR part 211), ``International Banking Operations'', to 
implement section 202 of the Improvement Act on January 6, 1993. (58 
FR 513, January 6, 1993).
    \2\Because Sec. 346.101 of the FDIC's regulations is obsolete, 
the FDIC proposed to remove the existing Sec. 346.101 and to add a 
new Sec. 346.101 which will comprise a new subpart D.
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    The proposed new subpart provided that a foreign bank operating an 
insured state branch which desires to engage in or continue an activity 
that is not permissible for a federal branch, pursuant to statute, 
regulation, official bulletin or circular, or any order or 
interpretation issued in writing by the Office of the Comptroller of 
the Currency (OCC), shall file with the FDIC a prior written 
application for permission to conduct or continue such activity. 
(Proposed Sec. 346.101(a)). The proposal went on to provide that the 
application shall be filed with the FDIC Regional Director of the 
Division of Supervision for the region in which the insured state 
branch is located. (Proposed Sec. 346.101(c)). Since section 202(a) of 
the Improvement Act became effective December 19, 1992, the FDIC 
proposed to allow existing insured state branches of foreign banks to 
continue activities (at existing levels) which may not be permissible 
for a federal branch until the regulation is promulgated in final form 
and the FDIC acts on their application. The proposal provided that the 
FDIC would expect all foreign banks engaged in an impermissible 
activity to file the required application no later than 60 days after 
the effective date of the final rule. (58 FR 11993, column three).
    Section 346.101(b) of the proposed regulation provided that the 
application shall be in letter form and shall contain certain 
information, including a description of the activity in which the 
branch desires to engage or in which it is already engaged, the foreign 
bank's financial condition, the branch's assets and liabilities, the 
projected effect of the proposed activity on the financial condition of 
the foreign bank and the branch, and a statement of why the proposed 
activity will pose no significant risk to the deposit insurance fund.

Comment Letters

    The FDIC received two comment letters concerning the proposed 
amendments. Both comment letters were supportive of the FDIC's efforts 
to coordinate its application procedures with the Board and to minimize 
the administrative burden on state-licensed insured branches which 
apply for permission to conduct or continue to conduct an activity 
which is not permissible for a federal branch.
    The commenters raised four primary concerns with the Corporation's 
proposed regulation. First, the comments urged the FDIC to approve 
activities on an ``activity by activity'' basis, in addition to its 
approval of individual applications by specific banks requesting 
permission to conduct a particular activity. One commenter noted that 
such ``activity'' applications could be submitted by trade groups and 
state bank supervisors. Second, both commenters requested that the FDIC 
publish a list of ``pre-approved'' activities for state-licensed 
insured branches which the FDIC determines pose no significant risk to 
the BIF. They envision that once an activity is on this list, an 
insured state branch could engage in it without the necessity of 
applying to the FDIC. Third, it was suggested that the scope of the 
information required to be included in a branch's application (Proposed 
Sec. 346.101(b)) be reduced in order to decrease even further the 
administrative burden on applicants. Fourth, the commenters urged the 
FDIC not to carry over quantitative restrictions which the OCC places 
on federal branches to activities permitted to state-licensed insured 
branches which pose no significant risk of loss to the BIF. These 
points are discussed below.

Approval of Activities Versus Applicants

    Both commenters urged the FDIC to approve generic activities, in 
addition to individual applications. One commenter expanded on this 
recommendation by suggesting that the FDIC accept applications from 
industry trade groups and state bank supervisors requesting approval of 
a certain activity or activities on behalf of state-licensed insured 
branches. That same commenter also argued that the intent of Congress 
in enacting the statute was not to require the FDIC, as a general rule, 
to review and approve applications from particular institutions to 
engage in specific activities. Rather, the commenter argued that 
Congress intended the FDIC to approve generic activities on an activity 
by activity basis as being permissible for all state-licensed insured 
branches.
    The Corporation is of the opinion that the regulatory scheme 
represented in the final regulation is consistent with the views 
expressed by the commenters as described immediately above. In its 
proposal, the FDIC explicitly requested interested parties to describe 
activities which, even though they are not permissible for federal 
branches, clearly pose no significant risk to the BIF when conducted by 
an insured state branch. (58 FR 11994, column two). The FDIC went on to 
request that commenters discuss the proposed application process as it 
related to such activities and whether a more limited notice procedure 
might be more appropriate in such cases. Id. After carefully 
considering the comments and referring to its recently enacted 
regulation concerning ``Activities and Investments of Insured State 
Banks'', 12 CFR part 362 (58 FR 64462, December 8, 1993), the FDIC has 
concluded that there are certain activities which, even though they may 
not be permissible for a federal branch, clearly pose no significant 
risk to the BIF when conducted by an insured state branch. Thus, in the 
event that an insured state-licensed branch is conducting or desires to 
conduct such an activity, no application or notice to the FDIC will be 
required. The precise nature of these activities is discussed below.

Joint Application Procedure

    The FDIC is sensitive to the administrative burden on applicants of 
gathering the requested information and preparing an application. Since 
section 202 of the Improvement Act requires all state branches and 
state agencies that desire to engage in, or to continue to engage in, 
any activity which is not permissible for a federal branch to secure 
the approval of the Board, the FDIC will permit insured state branches 
to submit a copy of their application to the Board to the FDIC instead 
of preparing a completely separate submission. The FDIC and the Board 
will review such applications simultaneously.
    The commenters urged the FDIC to reduce the scope of the 
information required to be submitted in a foreign bank's application in 
view of the fact that some of this information may already be available 
to the FDIC through the general examination and supervisory process. 
After careful consideration, the FDIC has decided to accept this 
recommendation. Therefore, Sec. 346.101(b) of the proposed regulation 
has been revised to delete paragraphs (b)(3), (b)(4) and (b)(5). 
Applicants will not be required to submit a current statement of the 
applicant's assets, liabilities and capital, a current statement of the 
branch's assets and liabilities or a copy of the applicant's most 
recent audited financial statements. (Final Sec. 346.101(d)).

Permissible Activities

    Section 346.101(a) of the final regulation is identical to 
Sec. 346.101(a) of the proposed regulation. It provides that a state-
licensed insured branch which desires to engage in or continue to 
engage in certain activities not permissible for a federal branch must 
obtain the FDIC's permission. More specifically, it refers to ``any 
type of activity that is not permissible for a federal branch, pursuant 
to the National Bank Act (12 U.S.C. 21 et seq.) or any other federal 
statute, regulation, official bulletin or circular, or order or 
interpretation issued in writing by the Office of the Comptroller of 
the Currency.* * *'' Written staff opinions will be considered to 
evidence the position of the Comptroller so long as the opinion is 
still considered valid, i.e., it has not been overruled by the OCC or 
found invalid by a court of competent jurisdiction.
    This section of the final regulation is substantially similar to 
Sec. 362.2(b) of the Corporation's regulation concerning the activities 
of state chartered banks. (12 CFR 362.2(b)). The FDIC is of the opinion 
that Sec. 346.101(a) of the final regulation should parallel 
Sec. 362.2(b) concerning the activities of state banks with regard to 
the determination of permissible activities and the commenters 
agreed.3
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    \3\In May 1993, the FDIC published a booklet entitled ``Equity 
Investments Permissible for National Banks and Activities 
Permissible for National Banks and Their Subsidiaries''. This 
booklet, which is available from the FDIC's Office of Corporate 
Communications, lists activities which have been found by the OCC to 
be permissible for national banks. While the booklet is not 
necessarily comprehensive and while the FDIC has not committed to 
update it on any regular basis, it may prove a useful guide for 
state-licensed branches of foreign banks who are attempting to 
ascertain what activities are and are not permissible for federal 
branches since, generally speaking, a federal branch is empowered to 
do whatever a national bank can do.
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    The commenters suggested that the FDIC should approve activities 
which, though not permissible for federal branches, pose no significant 
risk to the BIF and thus would be permissible for state-licensed 
insured branches assuming that the Board determines that such 
activities are consistent with sound banking practice and that state 
law as well as any other applicable federal law or regulation permits 
the branch to engage in such activities. In its preamble to the 
proposed regulation, the Corporation specifically requested commenters 
to describe such activities. (58 FR 11994, column two). Only one 
commenter put forth a specific recommendation in this regard. That 
comment letter urged the FDIC to issue a blanket approval for agency 
activities and any activity approved as an exception pursuant to 
Sec. 362.4(c)(3) of the Corporation's regulations governing the 
activities of state banks. 12 CFR 362.4(c)(3). With regard to 
activities approved as exceptions pursuant to Sec. 362.4(c)(3) of the 
Corporation's regulations, the Corporation agrees with the position set 
forth by the commenter that activities approved as exceptions for 
state-chartered domestic banks on the basis that they pose no 
significant risk to the deposit insurance funds should also be 
permissible for state-licensed insured branches of foreign banks, 
without the necessity of filing an application or notice pursuant to 
this part, provided the activity in question is also permissible for a 
state licensed branch of a foreign bank under state law and any other 
applicable federal law or regulation. See Final Sec. 346.101(b).

Engaging in an Activity as Agent

    Section 202(a) of the Improvement Act does not distinguish between 
activities which a foreign branch conducts as principal versus those 
conducted as agent, nor does it distinguish between activities which a 
foreign branch conducts directly versus those it conducts indirectly. 
The FDIC is of the opinion that the absence of such distinctions in 
section 202 is significant especially in light of the inclusion of such 
distinctions in other sections of the Improvement Act. For example, 
section 303 of the Improvement Act, which added section 24 to the FDI 
Act, provides that an insured state bank may not engage as principal in 
any type of activity that is not permissible for a national bank. 12 
U.S.C. 1831a(a). Similarly, section 24(c) of the FDI Act, which was 
also added by section 303 of the Improvement Act, provides that an 
insured state bank may not, directly or indirectly, acquire or retain 
any equity investment of a type that is not permissible for a national 
bank. 12 U.S.C. 1831a(c). Part 362 of the Corporation's regulations, 12 
CFR part 362, reflects the clear statutory intent of FDI Act section 
24. The prohibition on foreign branches contained in section 7(h) of 
the IBA is broader than the similar prohibitions contained in sections 
24(a) and (c) of the FDI Act. Thus, the FDIC interprets section 7(h) of 
the IBA to apply to any activity in which an insured state branch 
desires to engage which is not permissible for a federal branch 
regardless of the capacity or manner in which the branch seeks to 
conduct the activity.
    However, the Corporation's determination that agency activities are 
covered by section 202 of the Improvement Act does not mean that some 
or all agency activities cannot be found to be permissible, provided 
the Board determines that the activity is consistent with sound banking 
practice and the FDIC determines that the activity would pose no 
significant risk to the BIF. After careful consideration, the FDIC is 
of the opinion that a state-licensed insured branch may engage in an 
activity as agent provided that such agency activity is permissible for 
a state-chartered bank headquartered in the state in which the insured 
branch of the foreign bank is located and is also a permissible 
activity for a state-licensed branch of a foreign bank. Thus, state-
licensed insured branches which desire to engage in such agency 
activities will not be required to file an application or notice with 
the FDIC pursuant to the final regulation. Of course, the activity in 
question must also be permissible pursuant to any other applicable 
federal law or regulation. See Final Sec. 346.101(c).

Substantive Limitations on Permissible Activities

    In the preamble to the proposed regulation, the FDIC noted that it 
would ``generally expect any conditions or restrictions set out in the 
OCC's regulations, bulletins, circulars, orders and interpretations to 
be met if the activity is to be considered permissible when conducted 
by an insured branch''. (58 FR 11994, column two). The commenters 
expressed some confusion as to the precise meaning and scope of this 
standard. They also contrasted the FDIC's position with the Board's 
apparent position on this issue as briefly discussed in its proposed 
amendments to Regulation K. (58 FR 513, January 6, 1993).
    After careful consideration, the FDIC has decided to adopt a 
position consistent with that of the Board. That is, an application 
under this section will not normally be required where an activity is 
permissible for a federal branch, but the OCC imposes a quantitative 
restriction on the conduct of such an activity. The FDIC is of the 
opinion that appropriate quantitative restrictions can be addressed on 
a case-by-case basis as part of the ongoing supervisory process.

Significant Risk to the Fund

    In approving an application to conduct or to continue to conduct an 
activity which is not permissible for a federal branch, the FDIC must 
determine that the activity in question ``would pose no significant 
risk to the deposit insurance fund''. The phrase ``significant risk to 
the deposit insurance fund'' is defined in Sec. 346.1(r) of the final 
regulation. Significant risk to the deposit insurance fund shall be 
understood to be present whenever there is a high probability that the 
BIF may suffer a loss. It is not necessary that engaging in the 
activity in question will result in the insolvency or threatened 
insolvency of the insured state branch before a significant risk of 
loss to the BIF is considered to be present. This definition is 
substantially similar to the definition that is used in Sec. 362.2(m) 
of the FDIC's regulation governing the activities of state banks and 
the FDIC is of the opinion that the definition in the final regulation 
should parallel the part 362 definition. None of the commenters 
addressed this issue. Thus, the definition contained in the proposed 
regulation is being adopted without change.

Divestiture or Cessation

    In the event that an insured state branch is required to cease 
conducting an activity, Sec. 346.101(d) of the proposed regulation set 
forth the guidelines that must be followed to divest or cease the 
impermissible activity. Generally, this section provides that the 
insured state branch shall submit a written plan of divestiture or 
cessation within 60 days of (1) being notified by the FDIC or the Board 
that an application to continue to conduct the activity has been 
denied, (2) the effective date of the regulation in the event that the 
foreign bank elects not to apply for permission to continue to conduct 
the activity, and (3) any change in statute, regulation, official 
bulletin or circular, order or interpretation issued in writing by the 
Office of the Comptroller of the Currency, or decision of a court of 
competent jurisdiction that renders the activity impermissible. 
Divestiture or cessation shall be completed within one year, or sooner 
if the FDIC so directs. (Sec. 346.101(f)(1)). The commenters did not 
address this issue. Therefore, this section of the proposed regulation 
is being adopted without substantive change.

Delegation of Authority

    Section 346.101(g) of the final regulation delegates authority to 
review and approve divestiture and cessation plans to the Executive 
Director, Compliance, Resolutions and Supervision, and the Director of 
the Division of Supervision, and where confirmed in writing by the 
Director, to an associate director, or to the appropriate regional 
director or deputy regional director. The FDIC received no comment on 
this section of the proposed regulation and, thus, it has been adopted 
unchanged.

Effective Date

    Section 302 of the Riegle Community Development and Regulatory 
Improvement Act of 1994, Pub. L. 103-325, provides that amendments to 
regulations which impose additional reporting or other new requirements 
on insured depository institutions shall take effect on the first day 
of a calendar quarter which begins on or after the date on which the 
regulation is published in final form, with certain exception which are 
not applicable in this case. Thus, this final amendment to Part 346 
shall become effective on January 1, 1995.

List of Subjects in 12 CFR Part 346

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

    For the reasons set out in the preamble, 12 CFR Part 346 is amended 
as follows:

PART 346--FOREIGN BANKS

    1. The authority citation for Part 346 is revised to read as 
follows:

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

    2. Section 346.1 of subpart A is amended by adding a new paragraph 
(r) to read as follows:


Sec. 346.1  Definitions.

* * * * *
    (r) Significant risk to the deposit insurance fund shall be 
understood to be present whenever there is a high probability that the 
Bank Insurance Fund administered by the FDIC may suffer a loss.
    3. Section 346.101 of subpart C is removed.
    4. Part 346 is amended by adding a new subpart D to read as 
follows:

Subpart D--Applications Seeking Approval for Insured State Branches 
To Conduct Activities Not Permissible for Federal Branches


Sec. 346.101  Applications.

    (a) Scope. A foreign bank operating an insured state branch which 
desires to engage in or continue to engage in any type of activity that 
is not permissible for a federal branch, pursuant to the National Bank 
Act (12 U.S.C. 21 et seq.) or any other federal statute, regulation, 
official bulletin or circular, or order or interpretation issued in 
writing by the Office of the Comptroller of the Currency, or which is 
rendered impermissible due to a subsequent change in statute, 
regulation, official bulletin or circular, written order or 
interpretation, or decision of a court of competent jurisdiction (each 
an impermissible activity), shall file a written application for 
permission to conduct such activity with the FDIC pursuant to this 
section. An applicant may submit to the FDIC a copy of its application 
to the Board of Governors of the Federal Reserve System (Board of 
Governors), provided that such application contains the information 
described in paragraph (d) of this section.
    (b) Exceptions. A foreign bank operating an insured state branch 
which would otherwise be required to submit an application pursuant to 
paragraph (a) of this section will not be required to submit such an 
application if the activity it desires to engage in or continue to 
engage in has been determined by the FDIC not to present a significant 
risk to the affected deposit insurance fund pursuant to 12 CFR Part 
362, ``Activities and Investments of Insured State Banks''.
    (c) Agency activities. A foreign bank operating an insured state 
branch which would otherwise be required to submit an application 
pursuant to paragraph (a) of this section will not be required to 
submit such an application if it desires to engage in or continue to 
engage in an activity conducted as agent which would be a permissible 
agency activity for a state-chartered bank located in the state in 
which the state-licensed insured branch of the foreign bank is located 
and is also permissible for a state-licensed branch of a foreign bank 
located in that state; provided, however, that the agency activity must 
be permissible pursuant to any other applicable federal law or 
regulation.
    (d) Content of application. An application submitted pursuant to 
paragraph (a) of this section shall be in letter form and shall contain 
the following information:
    (1) A brief description of the activity, including the manner in 
which it will be conducted and an estimate of the expected dollar 
volume associated with the activity;
    (2) An analysis of the impact of the proposed activity on the 
condition of the United States operations of the foreign bank in 
general and of the branch in particular, including a copy, if 
available, of any feasibility study, management plan, financial 
projections, business plan, or similar document concerning the conduct 
of the activity;
    (3) A resolution by the applicant's board of directors or, if a 
resolution is not required pursuant to the applicant's organizational 
documents, evidence of approval by senior management authorizing the 
conduct of such activity and the filing of this application;
    (4) A statement by the applicant of whether or not it is in 
compliance with Secs. 346.19 and 346.20, Pledge of Assets and Asset 
Maintenance, respectively;
    (5) A statement by the applicant that it has complied with all 
requirements of the Board of Governors concerning applications to 
conduct the activity in question and the status of such application, 
including a copy of the Board of Governors' disposition of such 
application, if applicable;
    (6) A statement of why the activity will pose no significant risk 
to the deposit insurance fund; and
    (7) Any other information which the regional director deems 
appropriate.
    (e) Application procedures. Applications pursuant to this section 
shall be filed with the Regional Director of the Division of 
Supervision for the region in which the insured state branch is 
located. An application shall not be deemed complete until it contains 
all the information requested by the Regional Director and has been 
accepted. Approval of such an application may be conditioned on the 
applicant's agreement to conduct the activity subject to specific 
limitations, such as but not limited to the pledging of assets in 
excess of the requirements of Sec. 346.19 and/or the maintenance of 
eligible assets in excess of the requirements of Sec. 346.20. In the 
case of an application to conduct an activity, as opposed to an 
application to continue to conduct an activity, the insured branch 
shall not commence the activity until it has been approved in writing 
by the FDIC pursuant to this part and the Board of Governors, and any 
and all conditions imposed in such approvals have been satisfied.
    (f) Divestiture or cessation. (1) If an application for permission 
to continue to conduct an activity is not approved by the FDIC or the 
Board of Governors, the applicant shall submit a detailed written plan 
of divestiture or cessation of the activity to the Regional Director of 
the Division of Supervision for the region where the insured branch is 
located within 60 days of the disapproval. The divestiture or cessation 
plan shall describe in detail the manner in which the applicant will 
divest itself of or cease the activity in question and shall include a 
projected timetable describing how long the divestiture or cessation is 
expected to take. Divestitures or cessations shall be completed within 
one year from the date of the disapproval, or within such shorter 
period of time as the Corporation shall direct.
    (2) A foreign bank operating an insured state branch which elects 
not to apply to the FDIC for permission to continue to conduct an 
impermissible activity shall submit a written plan of divestiture or 
cessation, in conformance with paragraph (f)(1) of this section, within 
60 days of January 1, 1995, or of any change in statute, regulation, 
official bulletin or circular, written order or interpretation, or 
decision of a court of competent jurisdiction rendering such activity 
impermissible.
    (g) Delegation of authority. Authority is hereby delegated to the 
Executive Director, Compliance, Resolutions and Supervision, and the 
Director of the Division of Supervision, and where confirmed in writing 
by the Director, to an associate director, or to the appropriate 
regional director or deputy regional director, to approve plans of 
divestiture and cessation submitted pursuant to paragraph (f) of this 
section.

    By order of the Board of Directors.

    Dated at Washington, D.C. this 22nd day of November, 1994.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 94-29241 Filed 11-25-94; 8:45 am]
BILLING CODE 6714-01-P