[Federal Register Volume 62, Number 62 (Tuesday, April 1, 1997)]
[Notices]
[Pages 15479-15480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8171]


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FEDERAL DEPOSIT INSURANCE CORPORATION

Applications, Legal Fees, and Other Expenses

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Rescission of statement of policy.

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SUMMARY: As part of the FDIC's systematic review of its regulations and 
written policies under section 303(a) of the Riegle Community 
Development and Regulatory Improvement Act of 1994 (CDRI), the FDIC is 
rescinding its statement of policy concerning applications, legal fees, 
and other expenses (Statement of Policy). The Statement of Policy 
addresses unreasonable or excessive fees, insider fees, and contingency 
fee arrangements incidental to certain applications filed with the 
FDIC. The FDIC is rescinding the Statement of Policy because portions 
are now considered outmoded and similar information is duplicated or 
cross-referenced in other Statements of Policy. Remaining information 
that is relevant will be placed, in condensed form, into Statements of 
Policy regarding Applications for Deposit Insurance, and Bank Merger 
Transactions. The rescission does not reflect any substantive change in 
the FDIC's supervisory attitude toward excessive or unwarranted fees 
incident to an application.

EFFECTIVE DATE: This Statement of Policy is rescinded effective April 
1, 1997.

FOR FURTHER INFORMATION CONTACT: Jesse G. Snyder, Assistant Director, 
(202/ 898-6915), Division of Supervision; Susan van den Toorn, Counsel, 
(202/898-8707), Legal

[[Page 15480]]

Division, FDIC, 550 17th Street, N.W., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: The FDIC is conducting a systematic 
review of its regulations and written policies. Section 303(a) of 
the CDRI (12 U.S.C. 4803(a)) requires the FDIC, the Office of the 
Comptroller of the Currency, the Board of Governors of the Federal 
Reserve System, and the Office of Thrift Supervision (Federal 
banking agencies) to each streamline and modify its regulations and 
written policies in order to improve efficiency, reduce unnecessary 
costs, and eliminate unwarranted constraints on credit 
availability. Section 303(a) also requires each of the Federal 
banking agencies to remove inconsistencies and outmoded and 
duplicative requirements from its regulations and written policies.

    As a part of this review, the FDIC has determined that the 
Statement of Policy contains a substantial amount of information that 
is outmoded, and duplicated or cross-referenced elsewhere. The FDIC's 
written policies can be streamlined by eliminating the Statement of 
Policy. The relevant information contained in the Policy Statement will 
be condensed and placed into Statements of Policy regarding 
Applications for Deposit Insurance, and Bank Merger Transactions.
    On September 8, 1980, the Statement of Policy was adopted by the 
Board of the FDIC and was published on September 15, 1980 (45 FR 
61025). The Statement of Policy addresses unreasonable or excessive 
fees, insider fees, and contingency fee arrangements incidental to 
applications filed with the FDIC. Some of the information contained in 
the Statement of Policy is now also in other Statements of Policy 
addressing specific applications and, as a result, it is no longer 
necessary to have a Statement of Policy dealing specifically with legal 
fees and other expenses.
    Issues formerly dealt with in the Statement of Policy have now been 
condensed and placed into other application specific ``Statements of 
Policy''. The following specific statements are now included in 
relevant ``Statements of Policy'' published concurrently herein.

    ``The commitment to or payment of unreasonable or excessive fees 
and other expenses incident to an application reflects adversely 
upon the management of the applicant institution. Fees and other 
organizational expenses incurred or committed to should be fully 
supported.
    Expenses for professional or other services rendered by 
organizers, present or prospective board members, major shareholders 
or executive officers will receive special review for any indication 
of self-dealing to the detriment of the bank and its other 
shareholders. As a matter of practice, the FDIC expects full 
disclosure to all directors and shareholders of any material 
arrangement with an insider.
    In no case will an FDIC application be approved where the 
payment of a fee, in whole or in part, is contingent upon any act or 
forbearance by the FDIC or by any other federal or state agency or 
official.''

    The rescission does not reflect any substantive change in the 
FDIC's supervisory attitude toward excessive, unwarranted, or otherwise 
inappropriate fees incident to an application, and the relevant issues 
will continue to be addressed.
    For the above reasons, the Statement of Policy is hereby rescinded.

    By order of the Board of Directors.

    Dated at Washington, DC, this 25th day of March, 1997.

Federal Deposit Insurance Corporation
Robert E. Feldman,
Deputy Executive Secretary.
[FR Doc. 97-8171 Filed 3-31-97; 8:45 am]
BILLING CODE 6714-01-P