[Federal Register Volume 59, Number 248 (Wednesday, December 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31705]


[Federal Register: December 28, 1994]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 303

RIN 3064-AA54


Applications, Requests, Submittals, Delegations of Authority, and 
Notices Required to be Filed by Statute or Regulation

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: This regulation amends the FDIC's requirements for publishing 
notice of the filing of an application for a merger transaction under 
the Bank Merger Act. If an emergency exists requiring expeditious 
action, an applicant will be required to publish only twice during the 
statutory 10 day period, with the second publication on the 10th day or 
the newspaper's publication date closest to 10 days after the first 
publication, instead of daily for 10 days as required by the current 
regulation. In non-emergency cases, the FDIC will require publication 
only three times at approximately two week intervals, with the last 
publication on the 30th day or the newspaper's publication date closest 
to 30 days after the first publication, instead of once a week for five 
consecutive weeks and, when published in a daily newspaper, on the 30th 
day from first publication as required by the current regulation. The 
regulation clarifies that the public comment period on the application 
begins when the first notice is published and is a minimum of 30 days 
for non-emergency merger transactions and a minimum of 10 days for 
emergency merger transactions. This regulation also brings the FDIC's 
notice requirements into greater conformance with those of the other 
federal banking agencies, gives applicants more flexibility, and 
lessens the regulatory burden imposed by the FDIC's current notice 
requirements.

EFFECTIVE DATE: December 28, 1994

FOR FURTHER INFORMATION CONTACT: Jesse G. Snyder, Assistant Director, 
Division of Supervision (202) 898-6915; or Ann Loikow, Counsel, Legal 
Division, (202) 898-3796, FDIC, 550 17th Street, N.W., Washington, 
D.C., 20429.
SUPPLEMENTARY INFORMATION:

Background

    The Bank Merger Act (12 U.S.C. 1828(c)) (Act) prohibits any insured 
depository institution from merging or consolidating with, or directly 
or indirectly acquiring the assets or assuming the liabilities of, 
another insured depository institution or any noninsured bank or 
institution without the prior written approval of the responsible 
federal banking agency. The Act requires notice of a proposed merger 
transaction to be published prior to approval of the transaction and at 
appropriate intervals during a period at least as long as that allowed 
the Attorney General and other banking agencies to comment on the 
competitive factors involved (12 U.S.C. 1828(c)(3)). Except when the 
responsible agency finds that it must act immediately to prevent the 
probable failure of a depository institution, in which case no public 
notice is required, the statutory notice period is 30 days. If the 
responsible agency advises the Attorney General and other banking 
agencies of the existence of an emergency requiring expeditious action, 
the notice period is 10 days (12 U.S.C. 1828(c)(4)).
    This provision of law is implemented by Sec. 303.6(f) of the FDIC's 
rules and regulations (12 CFR 303.6(f)). Those regulations currently 
require applicants for non-emergency merger transactions to publish 
notice of the filing of the application at least once a week on the 
same day for five consecutive weeks and, when published in a daily 
newspaper, on the 30th day from first publication. Where the FDIC's 
Board of Directors (Board) determines that an emergency exists 
requiring expeditious action, applicants must publish daily for at 
least 10 days.

Proposed Rule

    On June 9, 1993, the Board proposed amending Sec. 303.6(f) by 
deleting the requirement that notice of non-emergency merger 
transactions be published on the same day each week and that, if 
published in a daily newspaper, notice be published on the 30th day. 
The Board also proposed reducing the necessary publication in 
emergencies requiring expeditious action to twice during a 10 day 
period, first as soon as possible after the Corporation notified the 
applicant that the merger would be processed as an emergency requiring 
expeditious action and, second, on the newspaper's publication date one 
week, or the day closest to one week, after the date of first 
publication. The proposal also clarified that the public comment period 
for merger transaction applications ran from the date of first 
publication and would be a minimum of 30 days for non-emergency merger 
transactions and a minimum of 10 days for emergency merger 
transactions.
    The FDIC proposed these amendments in order to lessen the 
regulatory burden imposed on applicants, give applicants more 
flexibility, particularly those in small communities that do not have a 
daily newspaper, and bring its notice regulations into greater 
conformance with those of the other federal banking agencies. These 
purposes are consistent with Congress's direction in section 304 of the 
recently enacted Riegle Community Development and Regulatory 
Improvement Act of 1994, Pub. L. 103-325, 108 Stat. 2160, 2215-2216 (12 
U.S.C. 4804). That section directs the FDIC and the other Federal 
banking agencies ``to harmonize, to the extent practicable, any 
inconsistent publication and public notice requirements.''
    The FDIC invited public comment on the proposal, which was 
published in the Federal Register on June 15, 1993 (58 FR 33050).

Public Comment Summary

    The FDIC received eight comment letters, five from major bank 
holding companies and three from banking trade associations. All 
supported streamlining the notice requirements for merger transactions 
and agreed that the proposal would reduce regulatory burdens and costs, 
add flexibility, especially for applicants located in small 
communities, and reduce delays without significantly affecting the 
opportunity for public comment. Most commenters also encouraged the 
FDIC to work with the other federal banking agencies toward achieving 
greater consistency in notice requirements under the Act.

Alternate Regulatory Approaches

    The FDIC examined the notice requirements of the other federal 
banking agencies. Because some proposed merger transactions are part of 
transactions subject to approval by more than one agency, different 
notice requirements may apply. This can confuse applicants and delay 
action on applications, which can have a particularly adverse impact on 
transactions for which an emergency exists requiring expeditious 
action.
    The Comptroller of the Currency (OCC) currently requires three 
publications for non-emergency merger transactions: first, the day the 
application is filed and then at two-week intervals with the final 
publication, if in a daily newspaper, on the 30th day or the closest 
day after that. Where there is an emergency requiring expeditious 
action, the OCC requires that notice be published twice, first on the 
day a request for emergency processing is approved and, second, on the 
10th day after the first publication or the closest day after that 
(Comptroller's Manual for Corporate Activities, p. 112 (Jan. 1992)).
    After the FDIC's notice of proposed rulemaking to revise its notice 
requirements for merger transactions was published, the Board of 
Governors of the Federal Reserve System revised its notice requirements 
for non-emergency merger transactions to require that notice be 
published on at least three occasions at appropriate intervals, with 
the last publication at least 30 days after the first (58 FR 47985, 
Sept. 14, 1993, codified as 12 CFR 262.3(b)(3)). The Board of Governors 
may also modify or waive compliance with these requirements when 
immediate action is necessary to prevent the probable failure of a bank 
or bank holding company or an emergency exists requiring expeditious 
action (12 CFR 225.14(h) and 262.3(l)).
    The Office of Thrift Supervision (OTS) requires an applicant to 
publish notice no more than three calendar days before or after filing 
an application for a merger transaction and thereafter on a weekly 
basis during the period allowed for furnishing competitive factors 
reports (12 CFR 563.22(d)(2)(i)). The same rule applies regardless of 
whether the required statutory period is 10 or 30 days. The FDIC's 
proposed regulation proposed a similar once a week publication 
requirement.

The Final Rule

    After reviewing the comment letters and the other agencies' 
publication requirements, the FDIC has decided to revise its proposal 
to provide that, in non-emergency cases, the FDIC will require 
publication only three times, at approximately two week intervals, with 
the last publication on the 30th day or the newspaper's publication 
date closest to 30 days after the first publication. If an emergency 
exists requiring expeditious action, an applicant need publish only 
twice during the statutory 10 day period, with the second publication 
on the 10th day or the newspaper's publication date closest to 10 days 
after the first publication. The regulation also clarifies that the 
public comment period on an application begins when the first notice is 
published and is a minimum of 30 days for non-emergency merger 
transactions and a minimum of 10 days for emergency merger 
transactions.
    Responding to the tenor of the public comments, the final rule 
increases applicant flexibility, further reduces regulatory burden and 
costs and brings greater consistency with the notice requirements of 
the other federal banking agencies. For non-emergency merger 
transactions, the FDIC, like the OCC and the Board of Governors, will 
require only three, instead of five publications. Similarly, like the 
OCC and the OTS, the FDIC will require only two publications for 
emergency merger transactions.
    The final rule also retains the flexibility in timing provided in 
the proposal. It requires an applicant to publish on the last day of 
the applicable period or on the newspaper's publication date closest to 
such date. This will allow banks to publish in a local weekly newspaper 
even though the newspaper does not publish on the 10th or 30th day if 
the weekly newspaper better serves a small community than the closest 
daily newspaper. Because the regulation decouples the length of the 
public comment period (a minimum of 10 or 30 days) from the publication 
dates, publishing in a weekly newspaper would not automatically extend 
the comment period. Thus, a bank publishing in a weekly newspaper could 
publish its final notice of a non-emergency merger transaction on the 
29th day (or 8th day for an emergency transaction), even though that is 
prior to the expiration of the minimum comment period, since that would 
be the newspaper's publication date closest to the 30th (or 10th) day 
after the first publication.
    In crafting the final regulation, the FDIC was concerned that the 
opportunity for public comment on an application for a merger 
transaction not be adversely affected. It should be noted that the 
final rule does not affect the length of the statutory public comment 
period; rather, it decreases the number of times publication is 
required during the statutory periods and liberalizes when notice must 
be published. The commenters agreed that frequency of required 
publication could be reduced without adversely affecting the 
opportunity for public comment.

Paperwork Reduction Act

    No additional collections of information pursuant to Sec. 3504 of 
the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) are contained in 
this notice. The Board concluded that the notices required of 
depository institutions seeking approval of a merger transaction under 
the final regulation will not constitute a ``collection of 
information'' as defined in 5 CFR 1320.7. See also Dole v. United 
Steelworkers of America, 110 S. Ct. 929, 938 (1990). Consequently, no 
information has been submitted to the Office of Management and Budget 
for review.

Regulatory Flexibility Act Statement

    The Board hereby certifies that the final rule will not have a 
significant adverse economic impact on a substantial number of small 
entities within the meaning of the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.). Instead, it will reduce certain regulatory burdens and 
costs for all depository institutions, including small depository 
institutions, for which the FDIC is the responsible agency under the 
Act and will have no particular adverse impact on other small entities. 
Accordingly, the Act's requirements regarding an initial and final 
regulatory flexibility analysis are not applicable.

Effective Date

    The Board hereby finds that the 30 day delay in effective date 
required under the Administrative Procedure Act, 5 U.S.C. 553(d), may 
be waived for this final rule since the rule relieves a restriction. In 
particular, it decreases the number of times an applicant must publish 
notice of a proposed merger transaction and liberalizes when such 
notice must be published. As a result, the final rule will be effective 
upon publication in the Federal Register and will apply to all 
applications for merger transactions filed on or after that date.
    Section 302 of the RCDRIA, 12 U.S.C. 4802(b), requires that all new 
regulations and amendments to regulations prescribed by a Federal 
banking agency which impose additional reporting, disclosures, or other 
new requirements on insured depository institutions shall take effect 
on the first day of a calendar quarter. This provision was designed to 
assist institutions by establishing a consistent date for complying 
with new regulations so that institutions would be more regularly 
informed of new rules and be able to effectuate necessary training, 
software, and other operational modifications in an orderly manner. 
However, this final rule does not impose additional regulatory 
requirements, rather it relieves regulatory burden by decreasing 
previously imposed requirements. As a result, an institution that has 
complied with the FDIC's existing notice requirements will also have 
complied with these amendments to those requirements. For these 
reasons, the FDIC has determined that Sec. 302 of RCDRIA does not apply 
and that this final regulation should become effective upon publication 
in the Federal Register.

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 Federal Deposit Insurance Corporation 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'', ``Eighth'' and ``Tenth''), 1828, 
1831e, 1831o, 1831p-1(a); 15 U.S.C. 1607.

    2. Section 303.6 is amended by revising paragraphs (f)(1)(i), 
(f)(3), and (f)(4) to read as follows:


Sec. 303.6  Application procedures.

* * * * *
    (f)* * *
    (1)* * *
    (i) In the case of applications in connection with a merger 
transaction (as defined by the Bank Merger Act, 12 U.S.C. 1828(c)(3)), 
unless the Corporation determines it must act immediately in order to 
prevent the probable failure of one of the depository institutions 
involved, the applicant must publish notice of the proposed transaction 
on at least three occasions at approximately two week intervals in a 
newspaper of general circulation in the community or communities where 
the main offices of the banks or institutions involved are located, or 
if there is no such newspaper in the community, then in the newspaper 
of general circulation published nearest thereto. The last publication 
of the notice shall appear on the 30th day or the newspaper's 
publication date closest to 30 days after the first publication. The 
public shall have a minimum of 30 days from the date of first 
publication to comment on the application. Where the Corporation 
determines that an emergency exists which requires expeditious action, 
then notice shall be published twice during a 10 day period, first, as 
soon as possible after the Corporation notifies the applicant that the 
merger will be processed as an emergency requiring expeditious action 
and, second, on the 10th day or the newspaper's publication date 
closest to 10 days after the date of first publication. The public 
shall have a minimum of 10 days from the date of first publication to 
comment on the application. The published notice shall include the name 
and main office location of all banks or institutions involved in the 
transactions and the subject matter of the application. If it is 
contemplated that the continuing bank will operate the offices of the 
other depository institution(s) as branches, the following statement 
shall be added to the notice:

    It is contemplated that all of the offices of the above named 
institutions will continue to be operated (with the exception of 
[identity and location of each office which will not be operated]).
* * * * *
    (3) Comments. Anyone who wishes to comment on an application may do 
so by filing comments in writing with the appropriate regional director 
at any time before the Corporation has completed processing the 
application. Processing will be completed, for applications other than 
applications to move a main office, to relocate a remote service 
facility and to merge, not less than 15 days after the publication of 
the notice required by paragraph (f)(1) of this section or 15 days 
after the Corporation's receipt of the application, whichever is later; 
for applications to move a main office or relocate a remote service 
facility, not less than 21 days after the last publication or 21 days 
after the Corporation's receipt of the application, whichever is later; 
for merger applications for which the Corporation has not determined it 
must act immediately in order to prevent the probable failure of one of 
the depository institutions involved, not less than 30 days after the 
first publication or, if the Corporation has determined that an 
emergency exists which requires expeditious action, not less than 10 
days after the first publication. This time period may be extended by 
the appropriate regional director for good cause. Such regional 
director shall report the reasons for such action to the Board of 
Directors.
    (4) Notice of right to comment. In order to fully apprise the 
public of its rights under paragraph (f)(3) of this section, the notice 
described in paragraph (f)(1) of this section shall include a statement 
describing the right to comment upon, or protest the granting of, the 
application. This notice shall consist of the following statement:

    Any person wishing to comment on this application may file his 
or her comments in writing with the regional director of the Federal 
Deposit Insurance Corporation at its regional office (address of the 
regional office) before processing of the application has been 
completed. Processing will be completed no earlier than the (main 
office moves and remote service facility relocations--21st; non-
emergency mergers--30th; emergency mergers--10th; other applications 
described in paragraph (a) of this section--15th) day following 
(mergers--the first required publication; all other applications 
described in paragraph (a) of this section--either the date of the 
last required publication or the date of receipt of the application 
by the FDIC, whichever is later). The period may be extended by the 
regional director for good cause. The nonconfidential portion of the 
application file is available for inspection within one day 
following the request for such file. It may be inspected in the 
Corporation's regional office during regular business hours. 
Photocopies of information in the nonconfidential portion of the 
application file will be made available upon request. A schedule of 
charges for such copies can be obtained from the regional office.
* * * *
    By Order of the Board of Directors.

    Dated at Washington, D.C. this 20th day of December, 1994.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 94-31705 Filed 12-27-94; 8:45 am]
BILLING CODE 6714-01-P