[Federal Register Volume 63, Number 161 (Thursday, August 20, 1998)]
[Rules and Regulations]
[Pages 44686-44751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21487]



[[Page 44685]]

_______________________________________________________________________

Part II





Federal Deposit Insurance Corporation





_______________________________________________________________________
12 CFR Part 303 et al.

Filing Procedures and Delegations of Authority; Unsafe and Unsound 
Banking Practices; Registration of Transfer Agents; International 
Banking; Management Official Interlocks; and Golden Parachutes and 
Indemnification Payments; Final Rule

Applications for Deposit Insurance; Notice

Bank Merger Transactions; Notice

Liability of Commonly Controlled Depository Institutions; Notice

Applications to Establish a Domestic Branch (Includes Remote Service 
Facilities); Rescission of Statement of Policy; Notice

Applications to Relocate Main Office or Branch (Includes Remote Service 
Facilities); Rescission of Statement of Policy; Notice

  Federal Register / Vol. 63, No. 161 / Thursday, August 20, 1998 / 
Rules and Regulations  

[[Page 44686]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 303, 333, 337, 341, 347, and 359

RIN 3064-AC02


Filing Procedures and Delegations of Authority; Unsafe and 
Unsound Banking Practices; Registration of Transfer Agents; 
International Banking; Management Official Interlocks; and Golden 
Parachutes and Indemnification Payments

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: The FDIC is amending its regulations governing application, 
notice and request procedures and delegations of authority by 
streamlining, modernizing, and clarifying current policies and 
practices. The final rule provides qualifying well-capitalized and 
well-managed insured depository institutions and their holding 
companies expedited processing procedures for several major types of 
filings, including deposit insurance, branch, and merger applications. 
The final rule also centralizes substantially all filing procedures 
found throughout the FDIC's regulations within this rule for ease of 
reference. It reorganizes the requirements of each major filing type 
into a separate regulatory subpart that will contain all information 
necessary to submit a filing to the agency, as well as any relevant 
internal agency delegations of authority. In addition the rule 
incorporates statutory changes to its application procedures made by 
the Economic Growth and Regulatory Paperwork Reduction Act of 1996 
(EGRPRA). Finally, technical changes are being made to related 
regulations to conform to these changes.
    This action is being taken in accordance with section 303(a) of the 
Riegle Community Development and Regulatory Improvement Act of 1994 
(CDRIA) which requires the federal banking agencies to review and 
streamline their regulations and policies in order to improve 
efficiency, reduce unnecessary regulatory burden, eliminate unwarranted 
constraints on credit availability, and remove inconsistencies and 
outmoded and duplicative requirements.
    The final rule seeks to reduce burden on insured depository 
institutions by imposing regulatory requirements only where needed to 
address safety and soundness concerns or accomplish other statutory 
responsibilities of the FDIC. The final rule also strives to more 
closely align the FDIC's application processing regulations with those 
of the other banking agencies.

DATES: These revisions are effective October 1, 1998. It is not 
considered practicable to permit early compliance with these revisions.

FOR FURTHER INFORMATION CONTACT: Division of Supervision: Christie A. 
Sciacca, Associate Director, (202) 898-3671; Mark S. Schmidt, Associate 
Director, (202) 898-6918; Jesse G. Snyder, Assistant Director, (202) 
898-6915; John M. Lane, Assistant Director, (202) 898-6771; Division of 
Compliance and Consumer Affairs: Steven D. Fritts, Associate Director, 
(202) 942-3454, and Louise N. Kotoshirodo, Review Examiner (202) 942-
3599. Legal Division: Susan van den Toorn, Counsel, Regulation and 
Legislation Section (202) 898-8707, and Nancy Schucker Recchia, 
Counsel, Regulation and Legislation Section (202) 898-8885. For 
administrative enforcement issues: Grovetta N. Gardineer, Counsel, 
Compliance and Enforcement Section (202) 898-3728, and Philip P. Houle, 
Counsel, Compliance and Enforcement Section (202) 898-3722. For 
international banking: Christopher Spoth, Assistant Director, Division 
of Supervision, (202) 898-6611, and Jamey G. Basham, Counsel, 
Regulation and Legislation Section, Legal Division (202) 898-7265, 
Federal Deposit Insurance Corporation, 550 17th Street, NW, Washington, 
DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

    Part 303 of the FDIC's regulations (12 CFR part 303) generally 
describes the procedures to be followed by both the FDIC and applicants 
with respect to applications, notices, or requests (collectively 
``filings'') required to be filed by statute or regulation. Additional 
information concerning processing is contained in related FDIC 
statements of policy. Part 303 also sets forth delegations of authority 
from the FDIC's Board of Directors to the Directors of the Division of 
Supervision (DOS), the Division of Compliance and Consumer Affairs 
(DCA), the General Counsel, the Executive Secretary, and, in some 
cases, their designees to act on certain filings and enforcement 
matters.
    The final rule makes comprehensive changes to part 303 as part of 
the FDIC's systematic review of its regulations and policy statements 
undertaken in accordance with section 303(a) of the CDRIA (12 U.S.C. 
4803(a)). Section 303(a) of CDRIA 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 streamline and modify their regulations and written 
policies in order to improve efficiency, reduce unnecessary costs, and 
eliminate unwarranted constraints of credit availability. The statute 
also requires each of the federal banking agencies to remove 
inconsistencies and outmoded and duplicative requirements from their 
regulations and written policies and to work together to make uniform 
regulations that implement common statutory or supervisory policies.

II. Discussion

    The final rule accomplishes the goals of section 303(a) of the 
CDRIA in several important ways.
     New expedited processing procedures have been introduced 
for certain well-capitalized and well-managed banks. Expedited 
procedures will reduce processing time for applications submitted by 
qualifying institutions and will add more certainty to the timing of 
regulatory action. They will also allow the FDIC to focus its resources 
on applications that do not fall within the new expedited review 
procedure and therefore are more likely to present safety and soundness 
risks or raise CRA or compliance concerns.
     Some applications are processed as notices. For example, 
applications to establish a branch or relocate a main office or a 
branch processed under expedited procedures generally will be deemed 
approved 21 days after receipt of a substantially complete application.
     Regulations and guidelines issued by the federal banking 
agencies implementing common statutes have been made more uniform. This 
is particularly true of filings regarding merger transactions, changes 
in bank control, and change in directors or senior executive officers.
     Filing contents have been clarified and streamlined 
wherever practical.
     The procedural requirements for virtually all applications 
and notices have been centralized in part 303.
     Delegations of authority from the FDIC's Board of 
Directors to the Directors of DOS and DCA, the General Counsel, and the 
Executive Secretary to act on certain filings and enforcement matters 
have been updated.
     Duplicative and outdated material has been removed from 
existing part 303. An example is the elimination of the requirement for 
an application to establish or relocate a remote service facility 
because a remote service facility is not a branch pursuant to section 
2204 of the Economic Growth and Regulatory

[[Page 44687]]

Paperwork Reduction Act of 1996 (12 U.S.C. 36).
    Concurrently with the adoption of this final rule, the FDIC is also 
publishing elsewhere in today's Federal Register three revised 
statements of policy relating to filing procedures. These statements of 
policy pertain to Applications for Deposit Insurance, Bank Merger 
Transactions, and Liability of Commonly Controlled Institutions. 
Additionally, notices of rescission of the statements of policy on 
Applications to Establish a Domestic Branch (includes Remote Service 
Facilities) and Applications to Relocate Main Office or Branch 
(includes Remote Service Facilities) are published elsewhere in today's 
Federal Register.

III. General Discussion of Comments

    The FDIC published in the Federal Register a notice soliciting 
comment on proposed part 303, 62 FR 52810, October 9, 1997. In response 
to that request, the FDIC received fifteen comment letters. Eight 
comment letters were received from community groups, five from bank 
trade associations, one from a law firm, and one from a bank holding 
company. Fourteen comment letters were received regarding five notices 
to amend, revise or rescind related statements of policy. These notices 
were published elsewhere in the Federal Register of October 9, 1997. In 
addition, one of the comment letters on part 303 contained comments on 
four of the related statements of policy. Final action on the five 
related statements of policy is published elsewhere in today's Federal 
Register.
    The FDIC carefully considered each of the comment letters and made 
a number of changes to the final regulation in response to such 
comments and suggestions. Virtually all the comments received on the 
proposed regulation directly or indirectly addressed the concept of 
expedited processing for well-managed and well-capitalized depository 
institutions. While numerous commenters expressed strong support for 
expedited processing, others expressed a concern that expediting the 
application process would have an adverse effect on the enforcement of 
the Community Reinvestment Act of 1977 (12 U.S.C. 1811 et seq.) (CRA).
    The agency wishes to stress that it is neither the intent nor 
effect of expedited processing to weaken review of an applicant's 
performance under the CRA. In response to concerns expressed, the FDIC 
has increased the period of time during which the public may comment on 
an application for federal deposit insurance from 15 days to 30 days. 
In addition, the FDIC is committed to placing a listing of all 
applications for deposit facilities subject to public comment on the 
agency's home page on the World Wide Web. The issues raised regarding 
expedited processing are addressed in more detail in the discussion of 
comments related to subpart A.
    Several commenters suggested that timelines be established for 
filings not eligible for expedited processing. On May 6, 1996, the FDIC 
issued a Financial Institutions Letter (FIL-26-96) to all FDIC-insured 
institutions listing target time frames for each type of filing. The 
FDIC intends to monitor processing of applications that do not qualify 
for expedited processing in accordance with these internal guidelines. 
These guidelines, however, generally do not apply to filings that raise 
novel legal or policy issues, are the subject of a CRA protest, or 
involve a historic site. It is the intent of the FDIC to act on all 
filings as promptly as resources and prudence permit.
    The following subpart by subpart discussion identifies and 
discusses comments and changes to the proposal that are being adopted. 
A table summarizing the sections of chapter 12 that are changed by the 
final rule is included at the end of this preamble.

IV. Final Rule

A. Subpart A--Rules of General Applicability

    Subpart A of the proposal clarified and simplified the rules 
generally applicable to the processing of filings required by 
regulation or statute by reorganizing the general rules of procedure 
into one subpart. Proposed subpart A explained the availability of 
expedited processing by defining which depository institutions would be 
eligible for such processing, setting forth the process itself, and the 
criteria under which the FDIC might remove a filing from expedited 
processing. Proposed subpart A also contained public notice 
requirements, provisions for public access to filings, hearing 
procedures, and appeals and nullification procedures. Additionally, 
subpart A set forth general principles governing delegations of 
authority from the Board of Directors to certain FDIC officials and 
defined certain terms used throughout the proposed rule.
    Definitions. Proposed Sec. 303.2 alphabetized the current 
definitions and added several new definitions utilized elsewhere in the 
proposal. With the exception of the comments discussed below regarding 
the definition of ``eligible depository institution,'' no comments were 
received on any of the definitions in proposed Sec. 303.2.
    The proposal defined ``eligible depository institution'' to 
establish criteria that institutions must meet to qualify for expedited 
processing, as set forth in Sec. 303.11. Proposed Sec. 303.2(r) defined 
the term ``eligible depository institution'' as a depository 
institution that meets the following five criteria: (1) received an 
FDIC-assigned composite rating of 1 or 2 under the Uniform Financial 
Institutions Rating System (UFIRS) as a result of its most recent 
federal or state examination;1 (2) received a satisfactory 
or better CRA rating from its primary federal regulator at its most 
recent examination; (3) received a compliance rating of 1 or 2 from its 
primary federal regulator at its most recent examination; (4) is well-
capitalized as defined in the appropriate capital regulation and 
guidance of the institution's primary federal regulator; and (5) is not 
subject to a cease and desist order, consent order, prompt corrective 
action directive, written agreement, memorandum of understanding, or 
other administrative agreement with its primary federal regulator or 
chartering authority. In the proposal the FDIC specifically sought 
comment on whether the above eligibility standards are appropriate.
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    \1\ An FDIC-assigned composite UFIRS rating may be based on the 
FDIC's own examination or based on the review of examination reports 
prepared by state banking authorities or the other federal banking 
agencies.
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    The FDIC received numerous comment letters on the definition of 
``eligible depository institution.'' The commenters were divided in 
their views as to the appropriateness of the eligibility criteria.
    Commenters who supported the proposed definition and the concept of 
expedited processing confirmed the FDIC's belief that the criteria for 
eligibility are appropriate to ensure that only well-capitalized and 
well-managed institutions that do not present any supervisory, 
compliance or CRA concerns receive expedited processing.
    A number of commenters expressed concern that by using CRA ratings 
as one of the criteria for an eligible depository institution, the FDIC 
was establishing a ``safe harbor'' against public challenge to an 
applicant's CRA performance. The commenters were further concerned that 
the FDIC's expedited processing of applications meeting the 
definitional criteria would have an adverse impact on the CRA and its 
enforcement. Two commenters opposing the use of CRA ratings as 
eligibility criteria for expedited processing cited concerns that CRA

[[Page 44688]]

ratings are not a suitable criteria because the CRA evaluation 
procedures are still being developed and are not yet uniformly 
rigorous.
    It is neither the purpose nor the effect of the eligible depository 
institution concept to adversely affect enforcement of the CRA. In 
fact, Sec. 303.11(c)(2) explicitly enables the FDIC to remove a filing 
from expedited processing if, among other things, the FDIC receives a 
CRA protest that warrants additional investigation or review, or the 
appropriate regional director (DCA) determines that the filing presents 
a significant CRA or compliance concern. Thus, as discussed in greater 
detail below, Sec. 303.11(c)(2) provides that the FDIC will fully and 
carefully consider all CRA protests and CRA or compliance concerns that 
are determined to be significant.
    The FDIC has taken a number of steps to promote consistent 
application of the CRA, both internally and on an interagency basis. 
Full implementation of the new CRA regulation was delayed for two years 
in order to collect uniform lending data upon which to base the FDIC's 
examination of large banks and thrifts. To familiarize examiners with 
the new standards and to promote their consistent application, the 
federal banking agencies conduct regular joint examiner training 
sessions. In addition, the agencies have jointly developed written 
guidance for examiners, financial institutions and the public. Further, 
the agencies are currently initiating an interagency review of a sample 
of each agency's CRA performance evaluations for large institutions and 
the agencies will also examine a limited number of large institutions 
using interagency teams of examiners.
    Two other commenters expressed concern that the CRA rating is an 
inappropriate criterion for determining the eligibility of a depository 
institution for expedited processing for any filing that is not an 
application for a deposit facility as defined by the CRA. The FDIC 
reserves expedited processing for well-capitalized and well-managed 
banks. An institution's performance under the CRA reflects on the 
quality of its management. While an institution must have a 
satisfactory or better CRA rating to be eligible for expedited 
processing, regardless of the type of application being made, the FDIC 
will not consider CRA performance in deciding upon the merits of an 
application if such application is not for a deposit facility. Proposed 
Sec. 303.5 sets forth those filings for which an institution's CRA 
record will be taken into account in deciding upon the merits of the 
application (deposit insurance, merger transactions, and establishment 
or relocation of a branch or main office, including the relocation of 
an insured branch of a foreign bank).
    The FDIC recently published a final rule which revises and 
consolidates its international banking regulations (12 CFR part 347) 
and a proposed rule for comment that would revise its regulations 
governing the activities and investments of insured state banks and 
savings associations (12 CFR part 362). 63 FR 17056, April 8, 1998; 62 
FR 47969, September 12, 1997. These rulemakings contain expedited 
procedures and definitions of an ``eligible'' type of institution which 
generally parallel proposed Sec. 303.2(r). One comment received on 
proposed part 347 noted that although a bank must have a satisfactory 
or better CRA rating in order to meet that part's definition of 
eligibility, ``special purpose'' banks which are exempt from CRA are 
not assigned CRA ratings. Under the FDIC's CRA regulations at 12 CFR 
part 345, special purpose banks are not subject to examination under 
the FDIC's CRA regulations (12 CFR 345.11(c)(3)). The FDIC does not 
intend to apply the CRA element of the definition of an eligible 
depository institution to a special purpose bank which is not subject 
to examination under the FDIC's CRA regulations. Language to this 
effect has been added to the definition of ``eligible depository 
institution'' in Sec. 303.2 of the final rule.
    In the final rule the FDIC includes the term ``organizer'' in the 
proposed definition of ``insider,'' in Sec. 303.2(u) to make clear that 
the FDIC considers organizers to be insiders, similar to incorporators. 
This change is consistent with other provisions of part 303.
    The FDIC adopts proposed Sec. 303.2 with the revisions to 
Sec. 303.2 (r) and (u) indicated above.
    General filing procedures. Proposed Sec. 303.3 set forth general 
procedures for submitting filings under part 303, including where forms 
may be obtained and to whom they should be sent. Procedures are also 
designated for filing when no form is prescribed. Specific filing 
requirements are set forth in the appropriate subparts of the rule.
    No comments were received on this section. The FDIC adopts this 
section as proposed with a minor stylistic change to make the meaning 
of the section more clear.
    Computation of time. Proposed Sec. 303.4 clarified that the FDIC 
uses a calendar day rule and begins computing the relevant period on 
the day after an event occurs (for example, the day after receipt of a 
filing or newspaper publication).
    No comments were received on this section. The FDIC adopts this 
section as proposed.
    Effect of CRA performance on filings. Proposed Sec. 303.5 stated 
that CRA performance will be considered in connection with applications 
to establish a domestic branch or relocate a domestic branch or main 
office, merger applications, and deposit insurance applications, and 
clarified that CRA applies to applications to relocate an insured 
branch of a foreign bank. Although this information is currently 
contained in 12 CFR Part 345 (Community Reinvestment Act), the FDIC 
believes that an explicit statement concerning the filings covered by 
CRA better serves the public and the banking industry than providing a 
cross-reference.
    The only specific comment received on proposed Sec. 303.5 found 
that the information contained in proposal was useful information worth 
highlighting in subpart A. The FDIC adopts this section as proposed.
    Investigations and examinations. Proposed Sec. 303.6 made clear 
that certain FDIC officials have general delegated authority to examine 
or investigate and evaluate facts related to any filing under chapter 
12. This provides needed flexibility to evaluate factual and legal 
issues that arise during the course of a filing.
    No comments were received on this section. The FDIC adopts this 
section as proposed.
    Public notice requirements. Proposed Sec. 303.7 set forth the 
general requirements for providing notice of a filing to the public. 
The proposal required an applicant to provide prior notice of, and the 
opportunity to comment on, a filing to establish a domestic branch, 
relocate a domestic branch or the main office, relocate an insured 
branch of a foreign bank, engage in a merger transaction or other 
business combination, initiate a change of control transaction, or 
request deposit insurance. Where applicable, specific publication 
requirements appear in the appropriate paragraphs of part 303.
    No comments were received on proposed paragraphs (a), (b), (d) or 
(e). The FDIC adopts these paragraphs as proposed with minor stylistic 
changes to make the meaning of the paragraphs clearer. In particular, 
Sec. 303.7(b) has been refined in the final rule to make clear that 
where the notice of filing has been published prior to submission of 
the filing to the FDIC, the applicant should include confirmation of 
such publication with the filing. This will

[[Page 44689]]

further ensure that possible delays due to defective notices are 
avoided.
    Proposed Sec. 303.7(c) provided applicants with the choice of 
giving public notice by using a sample notice or drafting a notice that 
incorporates certain specified information and is tailored to the needs 
of the institution. This choice was designed to reduce burden on the 
banking industry by providing more flexibility in the required form of 
notice while, at the same time, requiring all applicants to provide the 
public with the same basic information.
    Two comments were received on this paragraph, both of which were 
generally favorable. Both commenters supported the flexibility that the 
FDIC proposed to offer to banks to meet their notification 
requirements. One of the commenters urged the FDIC to monitor the 
notices being used to ensure that all parties operate on the same basis 
and so there is no confusion about the content of the notice. The FDIC 
seeks to ensure that applicants comply consistently with public notice 
requirements by requiring each applicant to submit a copy of the public 
notice for content verification.
    The FDIC has made minor modifications to Sec. 303.7(c). The 
language of the final rule clarifies that applications to relocate a 
main office are included within the notice requirement. The language 
has been further modified to make clear that the public notice must 
state that photocopies of nonconfidential portions of an application 
will be provided by the appropriate regional office upon request. This 
requirement is included in current Sec. 303.6(f)(4).
    The FDIC adopts proposed Sec. 303.7(c) with the revisions discussed 
above.
    The final rule includes a provision at Sec. 303.7(f) that was not 
included in the proposal. Section 303.7(f) provides that where public 
notice is required, the FDIC may determine on a case by case basis that 
unusual circumstances surrounding a particular filing warrant 
modification of publication requirements. This new provision was added 
in response to a comment on subpart D, pertaining to merger 
transactions. The comment suggested that the FDIC require notices 
regarding merger transactions to be published in languages other than 
English in communities with significant non-English speaking 
populations.
    The FDIC appreciates the concern reflected in this comment. Rather 
than limit applicability to situations involving merger applications 
and non-English publication, however, the FDIC has instead added a more 
broadly-focused provision. Under the new Sec. 307.7(f) the FDIC may 
determine on a case-by-case basis that unusual circumstances 
surrounding a particular filing warrant modification of the publication 
requirements. It is intended that this provision will be applied 
sparingly and with the purpose of making publication more meaningful, 
not as a means of altering the publication requirements to suit the 
convenience of the parties or as a means of curing defective 
publications.
    Public Access to Filings. Proposed Sec. 303.8 set forth the 
procedures by which the FDIC makes the non-confidential portions of 
filings that are subject to a public notice requirement available to 
the public. Under the proposed rule, the FDIC makes such portions 
available for inspection upon request, not more than one business day 
after the regional office receives such request.
    A number of the commenters made specific suggestions as to how the 
FDIC might make applications and filings more accessible to the public. 
These suggestions included making a list of pending applications 
available on the FDIC's World Wide Web page; providing copies of 
filings within three days of receiving a request for filings; and 
mailing notices of all pending applications to all individuals and 
groups who request to be included on a mailing list.
    The FDIC has adopted various of the commenters' suggestions for 
expediting the public's receipt of information related to the filing of 
applications. The FDIC currently has a World Wide Web site with 
significant information of interest to the public. The FDIC will 
include at its World Wide Web site a page that will provide the public 
with prompt notice of all applications filed for deposit facilities 
that are subject to public comment. This page will be available when 
the final rule becomes effective and may be found at www.fdic.gov. In 
addition, the FDIC is committed to mailing the public portions of an 
application file to a requester within three business days of the 
appropriate regional office's receipt of the request to view the file. 
In some instances this may result in a filing becoming public prior to 
the publication of notice required by Sec. 303.7.
    The FDIC also will continue existing practices designed to provide 
information to the public on applications that are subject to the CRA. 
The FDIC will continue to provide updated lists of pending applications 
on a regular basis to all individuals or groups who have submitted a 
request to the appropriate regional director (DOS) to be included on 
this mailing list. In addition, it will continue to be the policy of 
the FDIC to provide the non-confidential portions of application files 
for public inspection at the appropriate regional office. The final 
rule adds language to clarify this latter policy. The FDIC believes 
that these practices will facilitate the public's ability to provide 
meaningful comments.
    In addition, the final rule adds a reference to part 309 of the 
FDIC rules and regulations. This regulation sets forth the FDIC's 
procedures for processing requests for information pursuant to the 
Freedom of Information Act (FOIA) (5 U.S.C. 552). Part 309 of the FDIC 
rules and regulations was recently revised to reflect changes to the 
FOIA as a result of the Electronic Freedom of Information Act 
Amendments of 1996 (63 FR 29, January 2, 1998).
    The FDIC believes that these changes to its procedures and 
continued commitment to existing practices will greatly facilitate the 
public's access to filings made to the FDIC and the public's ability to 
consider and comment upon such filings.
    Public comments. Currently, interested parties may comment on a 
pending filing until the date of final disposition. Proposed 
Sec. 303.9(a) provided that comments would be accepted only during a 
defined comment period in order to add certainty to the filing process 
for both the public and the applicant. The FDIC believes that closing 
the comment period on a date certain eliminates the risk of final 
action being delayed due to a late comment or of final action being 
taken while a comment is being transmitted to the FDIC.
    Currently, the only basis for extension of the comment period is 
for ``good cause.'' In order to provide the public with adequate time 
to submit meaningful comments, proposed Sec. 303.9(b)(2) granted the 
appropriate regional director (DOS) three bases upon which to extend or 
reopen the public comment period: (1) if the applicant failed to file 
all required information on a timely basis to permit review by the 
public or made a request for confidential treatment not granted by the 
FDIC that delayed the public availability of that information; (2) if 
any person requesting an extension of time satisfactorily demonstrated 
to the FDIC that additional time was necessary to develop factual 
information that might materially affect the application; or (3) for 
good cause.
    Further, proposed Sec. 303.9(b)(4) clarified that the FDIC will 
provide copies of all comments to the applicant

[[Page 44690]]

and that the applicant will be given an opportunity to respond.
    Several of the commenters fully supported the proposed defined 
comment period because it will reduce the current level of uncertainty 
that applicants face in making applications to the FDIC. Two of these 
commenters suggested that the defined comment period in the proposal 
would create a desirable shift of focus from enforcing CRA through the 
applications process to enforcing CRA through the examination process. 
One of these commenters believed that the ``good cause'' basis for an 
extension of the comment period is unnecessary because the other 
conditions for an extension are sufficiently comprehensive. Another 
commenter recommended that the FDIC take all possible regulatory action 
necessary to ensure that public notice is made so as to ensure that 
public commenters cannot seek delay based upon allegations of 
inadequate notice.
    Other commenters were strongly opposed to the proposed defined 
periods of time for comment. These commenters stated that the current 
flexibility in comment periods has been important in allowing the 
public to comment on applications covered by CRA. These commenters were 
concerned that the streamlined process will not provide enough time and 
opportunity to discover the filing of an application, conduct the 
necessary analysis and research and to write and submit any comments to 
the FDIC. They also question whether the FDIC's current decision making 
process has been delayed because of open public comment periods. Some 
of these commenters focused on the role that the applications process 
plays in enforcing CRA and were concerned that the proposal would 
weaken an enforcement tool that has been important to community groups.
    The commenters were also divided on their beliefs as to whether the 
actual periods of time permitted for public comment in the specific 
subparts were adequate. The commenters who supported the proposed 
revision generally believed that the comment periods provided for in 
the various subparts were sufficient. The commenters who opposed 
proposed Sec. 303.9 generally believed that the specific time periods 
were too short.
    The FDIC believes that proposed Sec. 303.9 strikes an appropriate 
balance between providing more certainty and expediency in the 
applications process and giving the public an opportunity to comment on 
an institution's CRA performance. The public comment period prompted by 
an application is not intended to be the exclusive opportunity for the 
public to inform the FDIC of concerns. Comments may be submitted to the 
FDIC at any time if an individual or a group has a concern about an 
institution's CRA program. It is not necessary to wait for an 
application to be filed. All CRA comments will be considered by DCA. By 
closing the comment period, the FDIC will eliminate delaying final 
action because of late comments. In addition, the DOS regional director 
or deputy director may extend or reopen the comment period as discussed 
above. The FDIC believes that this flexibility will enable it to 
consider all relevant information as part of the decision making 
process and to complete that process in a timely manner.
    As discussed previously, the FDIC has adopted certain suggestions 
of commenters to make filings and applications more accessible to the 
public in a more expeditious manner. Listing applications on the FDIC's 
World Wide Web site, providing access to public files within one day of 
receipt of a request, and mailing copies of public files within three 
days of receiving a request are all designed to make it easier for the 
public to provide timely comments. The FDIC believes these measures 
will help offset any adverse effect of defined comment periods.
    The FDIC adopts this section as proposed with a minor stylistic 
change to make the intent clear.
    Hearings and other meetings. Proposed Sec. 303.10 simplified the 
current rules concerning hearing procedures contained in Sec. 303.6 
(h), (i), and (j) and updated those provisions to reflect current FDIC 
practices. Proposed Sec. 303.10 (c) and (d) provided that the 
appropriate regional director (DOS) may grant or deny a request for a 
hearing and that the regional director's denial of such a request is a 
final agency determination that is not appealable to the FDIC Board of 
Directors.
    One commenter endorsed the proposal to allow community groups to 
request public hearings on pending applications because they afford 
opportunities for public housing residents, persons with limited 
literacy skills, and other citizens unlikely to submit written comments 
to offer their views. This and another commenter suggested that FDIC 
adopt a mandatory hearing procedure like that of the Office of Thrift 
Supervision (OTS).
    A third commenter appreciated the publication of procedures in 
proposed Sec. 303.10 as a source of clarity for community groups and 
other commenters. This commenter recognized that informal meeting 
procedures might prove helpful in providing additional avenues for 
commenters to pursue and hoped that the informal meetings would not 
preclude the use of hearings. This commenter sought assurance that 
hearings will serve the purpose of providing additional opportunity for 
commenters to develop the record and insure that such venue is readily 
accessible. This commenter opposed the preclusion of appeals of 
decisions denying hearing requests, believing that the Board of 
Directors is better suited to weigh competing issues, consider overall 
public interest, and ensure that the standards for judging hearing 
requests are consistently and fairly applied.
    The FDIC believes that proposed Sec. 303.10 represents an equitable 
and balanced approach because it continues to provide a basis for an 
individual to request a hearing, but provides more clarity with respect 
to the circumstances under which the FDIC will grant such a request. 
Delegation of authority to the regional director (DOS) places the 
authority to make decisions closer to the specific situation. The 
regional director is the most senior-level regional official and will 
have direct knowledge of the record of the institution or institutions 
and communities involved. The FDIC believes the regional director (DOS) 
is thus well suited to decide whether additional submissions would 
benefit the decision making process. The OTS hearing procedure 
emphasizes informal meetings as prerequisites to formal hearings. If 
the issues are not resolved at such meetings OTS will conduct formal 
meetings. The FDIC's procedure also provides for informal meetings. The 
FDIC generally will grant a request for a hearing only if the FDIC 
determines that written submissions would be insufficient or that a 
hearing otherwise would be in the public interest.
    Proposed Sec. 303.10 has been revised to specifically include 
hearings and other proceedings in connection with nullification, 
revocation, amendment, withdrawal, and suspension of decisions on 
filings discussed below and in Sec. 303.11(g). Additionally, the final 
rule makes clear that Legal Division consultation is required prior to 
taking action on a hearing request pursuant to Sec. 303.10(c) or 
denying a hearing request pursuant to Sec. 303.10(d). In addition, 
Sec. 303.10(e)(2) has been modified slightly to clarify that the 
presiding officer in a hearing under this section shall be the regional 
director (DOS or DCA) or his or her designee or such other person as 
may be named by the FDIC Board of Directors or the

[[Page 44691]]

Director (DOS or DCA). This restates the FDIC's current practice as set 
forth in current part 303.
    The FDIC adopts Sec. 303.10 as proposed with the revisions 
discussed above and other minor stylistic changes to make the intent 
clear.
    Decisions on filings. Proposed Sec. 303.11 contained general 
provisions governing the process of deciding upon filings made under 
part 303, including the general procedures related to the decision 
making process; the authority of the FDIC Board of Directors to modify 
any of the procedures contained in part 303; and new provisions 
concerning multiple transactions, abandonment of filings, and 
nullification of decisions.
    No comments were received on proposed Sec. 303.11 (a), (b), (d), 
(e), (g). The FDIC adopts these paragraphs as proposed.
    Proposed Sec. 303.11(c) set forth the general provisions pertaining 
to expedited processing. Under the proposal, expedited processing is 
automatically given to institutions meeting the definition of an 
``eligible depository institution'' (with a few exceptions where other 
conditions apply) unless the appropriate regional director or deputy 
regional director (DOS) removes the filing from expedited processing. 
Therefore, an applicant need not request expedited processing or even 
identify itself as an eligible institution. A filing may be removed 
from expedited processing pursuant to proposed Sec. 303.11(c)(2) if: 
(1) for filings subject to public notice, an adverse comment is 
received that warrants additional investigation or review; (2) for 
filings subject to evaluation of CRA performance, a CRA protest is 
received that warrants additional investigation or review, or the 
appropriate regional director (DCA) determines that the filing presents 
a significant CRA or compliance concern; (3) for any filing, the 
appropriate regional director (DOS) determines that the filing presents 
a significant supervisory concern, or raises a significant legal or 
policy issue; or (4) for any filing, the appropriate regional director 
(DOS) determines that other good cause exists for removal. Under the 
proposal, if a filing is removed from expedited processing, the 
applicant will be promptly informed in writing of the reason. With the 
exception of filings made under subpart J (International Banking), 
proposed Sec. 303.11(c)(1) provided that for filings where the 
appropriate regional director has not been delegated approval 
authority, the filing will generally be removed from expedited 
processing.
    As discussed above, the general concept of expedited processing 
generated numerous comments both in support of the proposal and opposed 
to it. The final rule is designed to balance the concerns of removing 
undue delays from the application process with the need to assess 
legitimate CRA concerns fairly.
    One commenter recommended that the mandatory removal from expedited 
processing of any application that is subject to a substantial CRA 
protest or otherwise meets the standards of Sec. 303.11(c)(2). This 
commenter also believed that the FDIC's clarification of ``significant 
CRA protest'' in Sec. 303.11(c)(3) of the proposed rule established a 
dual standard for distinguishing between areas in which the institution 
seeks to expand and areas where it currently has a presence but is not 
expanding. This commenter believed that if an institution's CRA 
performance is less than satisfactory in any geographic area, that fact 
alone should be grounds for its application to be removed from 
expedited processing, not whether the application is for expansion in 
that area or some other area.
    It is the policy and practice of the FDIC to investigate all CRA 
protests to the extent considered necessary. As a practical matter this 
will require the majority of protested applications to be removed from 
expedited processing. It may be possible to resolve some protests 
during the expedited processing period. This is especially true of 
applications for deposit insurance which have an expedited processing 
period of sixty days. The FDIC provided guidance on what will 
constitute a ``significant CRA concern'' under Sec. 303.11(c)(2) by way 
of example. In that paragraph the FDIC recognized that an applicant's 
overall CRA rating could be satisfactory, but the applicant could also 
have a less than satisfactory rating or performance in the particular 
geographic area to be affected by the filing. In such a circumstance 
the FDIC might require additional time to fully and fairly evaluate the 
filing and, if necessary, would remove the filing from expedited 
processing. The FDIC believes that the proposal provided the 
flexibility to fully evaluate local CRA concerns without undermining 
the intent of expedited processing.
    Two commenters recommended the proposed rule be revised to include 
a requirement for an abbreviated CRA examination in the case of a CRA 
protest.
    The FDIC believes that the proposed regulation and FDIC practice 
provides the FDIC with the flexibility to conduct a targeted CRA 
examination if such is necessary or appropriate under the 
circumstances. DCA's standard review of an applicant's record will 
include a review of current and previous CRA examination reports, the 
applicant's correspondence file, any complaints filed against the 
applicant, and any other pertinent information available. In addition, 
Sec. 303.6 allows the Board of Directors, the Director, Deputy 
Director, associate directors, appropriate regional directors and 
deputy regional directors (DOS and DCA) to examine or investigate and 
evaluate facts related to any filings under this chapter to the extent 
necessary to reach an informed decision.
    The same two commenters that suggested an abbreviated CRA 
examination also requested that the FDIC provide a detailed written 
statement of the basis for acting on protested applications.
    The FDIC included in the proposed rule several opportunities for 
the applicant and the public to obtain written information regarding 
disposition of a filing. Proposed Sec. 303.11(a) provided that the FDIC 
will notify both the applicant and any person who makes a written 
request of the final disposition of a filing. When the FDIC denies a 
filing, proposed Sec. 303.11(a) provides that the FDIC will immediately 
notify the applicant in writing of the reasons for the denial. This 
written notification is placed in the public file and remains available 
at the appropriate regional office for 180 days after the final 
decision. For any filing covered by the hearing procedures of 
Sec. 303.10, Sec. 303.10(k) requires the FDIC to notify the applicant 
and all participants of the final disposition of a filing and provide a 
statement of the reasons for the final disposition. By adopting these 
provisions in the final rule, the FDIC believes it has appropriately 
balanced the interests of those seeking information on filing 
disposition with those who seek a streamlined process. Additionally, it 
has been the FDIC's recent practice and will continue to be the 
agency's practice to prepare an Order and Statement in conjunction with 
the approval or denial of any application subject to an unresolved CRA 
protest. Orders and Statements are available to the public as part of 
the public file of an application and are available in the FDIC's 
public reading room.
    The FDIC adopts Sec. 303.11(c) as proposed with minor technical 
changes to Sec. 303.11(c)(1) and (3) to clarify the intended meaning of 
those paragraphs.
    Appeals and requests for reconsideration. Proposed Sec. 303.11(f) 
contained the FDIC's procedures governing petitions for reconsideration 
of a denied filing. The proposal clarified

[[Page 44692]]

that these procedures cover only requests for reconsideration of 
filings that do not otherwise have appeal procedures provided by other 
regulation or written guidance, and that decisions to deny a hearing 
request are nonappealable. No comments were received on proposed 
Sec. 303.11(f).
    The proposal modified the FDIC's appeals process. Under the 
proposal, a regional director or deputy regional director (DOS or DCA) 
could approve, but not deny, a petition for reconsideration. However, 
the Director or Deputy Director (DOS or DCA) could approve or deny a 
petition. If the petition were granted, the filing would be 
reconsidered by the Board of Directors if the filing was originally 
denied by the Board of Directors or denied by the Director, Deputy 
Director, or an associate director (DOS or DCA). The Director or Deputy 
Director (DOS or DCA) could reconsider the filing if the filing was 
originally denied by a regional director or deputy regional director. 
All decisions on requests for reconsideration and all reconsideration 
of denied filings require consultation with or the concurrence of the 
Legal Division. Proposed Sec. 303.11(f) also clarified that a decision 
on a petition for reconsideration by the Director or Deputy Director 
(DOS or DCA) is a final agency decision and is not appealable to the 
Board of Directors.
    The final rule changes the proposal regarding the FDIC officials 
who will act upon requests for reconsideration that are granted. 
Section 303.11(f)(5)(i) of the proposed rule provided that where 
reconsideration was granted for a filing within the scope of 
Sec. 303.11(f) that was originally denied by the Director, Deputy 
Director or associate director (DOS or DCA), the appeal of the denial 
would be decided by the Board of Directors. Section 303.11(f)(5)(ii) of 
the final rule provides that such appeals will be decided by the FDIC's 
Supervisory Appeals Review Committee (SARC). The SARC is an existing 
committee established by the Board of Directors with delegated 
authority to consider appeals of material supervisory determinations 
such as examination ratings, material disputed asset classifications, 
determinations regarding violations of laws and regulations, as set 
forth in the Federal Register on March 25, 1995, 60 FR 15923. These 
existing functions of the SARC continue unchanged by the revision to 
Sec. 303.11(f).
    The FDIC believes that the SARC is an appropriate body to 
reconsider the original denial of a filing made by the Director, Deputy 
Director or associate director (DOS or DCA). The SARC includes the 
FDIC's most senior managers with expertise in the areas necessary to a 
comprehensive understanding of the issues presented by the 
reconsideration of denied filings. The SARC is comprised of the 
following FDIC officials: Vice Chairperson of the Board of Directors, 
the General Counsel, the Director of DOS, the Director of DCA, the 
Director of the Division of Insurance, and the Ombudsman.
    The proposed rule did not contain time frames within which the FDIC 
should act on requests for reconsideration. Although no comments were 
received that specifically raised this issue, the final rule includes 
such time frames to assist applicants. Newly added Sec. 303.11(f)(6) 
provides that the appropriate regional director (DOS or DCA) will 
notify an applicant of the FDIC's decision to grant or deny a request 
for reconsideration within 15 days of receipt of the request for 
reconsideration. If the FDIC grants a request for reconsideration, it 
will notify the applicant of its final decision within 60 days of the 
receipt of the request for reconsideration.
    The FDIC adopts Sec. 303.11(f) with revisions discussed above and 
certain minor stylistic changes to the language to make the intent 
clear.
    Nullification, withdrawal, revocation, amendment, and suspensions 
of decisions on filings. The FDIC received no comments on proposed 
Sec. 303.11(g). The final rule has been modified to clarify the FDIC's 
authority and procedures regarding nullification of decisions on 
filings and related actions. These changes are a logical extension from 
the proposed rule. The final rule clarifies the scope of the FDIC's 
nullification authority to include the authority to withdraw, revoke, 
amend, and suspend decisions on filings (collectively 
``nullification'').
    As proposed, Sec. 303.11(g) would have authorized the FDIC to 
nullify a decision on a filing whenever: (a) the FDIC became aware of 
any material misrepresentation or omission by an applicant after the 
FDIC rendered a decision on a filing, (b) an applicant failed to inform 
the FDIC of a material change in circumstances which arose after the 
filing had been submitted to the FDIC and before the FDIC's decision on 
it, or (c) a decision on a filing was contrary to law, regulation, or 
FDIC policy, or was granted due to clerical or administrative error, or 
to a material mistake of law or fact.
    The final rule refines the substantive criteria necessary for the 
FDIC to take one of these actions and states in more detail the 
procedures to be followed. The substantive grounds have been refined by 
eliminating matters contrary to ``FDIC policy'' and ``material mistakes 
of law or fact'' from the final rule. The FDIC has determined that a 
nullification should continue to extend to decisions on filings that 
are contrary to law or regulation and that the latter is inclusive of 
``material mistakes of law and fact.'' The FDIC has also clarified one 
of the grounds for action contained in Sec. 303.11(g). The proposed 
rule would have given the FDIC authority to issue a nullification on a 
filing if the applicant failed to inform the FDIC of a material change 
in circumstance which arose after the filing was submitted to the FDIC 
and before the FDIC's decision on it. Under the final rule, the FDIC 
may issue a nullification on a filing if at anytime the FDIC becomes 
aware of any material misrepresentation or omission relating to the 
filing, or of material change in circumstance that occurred prior to 
the consummation of the transaction or commencement of the activity 
authorized by the decision on the filing, or if the decision on the 
filing is contrary to law or regulation or was granted due to clerical 
or administrative error. The grounds for nullification are contained in 
revised Sec. 303.11(g)(1).
    The FDIC has added procedures for use in nullification actions in 
Sec. 303.11(g)(2) and (3) to insure that the rights of the applicant 
are protected in that the applicant will receive notice of the FDIC's 
intent to nullify a decision on a filing and will have an opportunity 
to respond to the notice. The final rule also details the manner in 
which the FDIC would provide written notification of the proposed 
action and the reason therefor to the applicant. Final 
Sec. 303.11(g)(2) also provides that the FDIC may in certain cases 
issue temporary orders without issuing a prior notice of intent to an 
applicant. In such cases, the applicant is still provided an 
opportunity to respond after issuance of the order.
    Final Sec. 303.11(g)(3) has been redesignated ``Response to notice 
of intent or temporary order.'' This section provides that an applicant 
may file a written response to a notice of intent within 15 days of 
service of the notice. A written response should include: (a) an 
explanation as to why the proposed action is not warranted and (b) any 
other relevant information, mitigating circumstances, documentation, or 
other evidence. As a general rule, it is expected that these matters 
will be resolved on written submissions. An applicant may request a 
hearing with oral arguments and testimony under Sec. 303.10, although 
such hearings will not usually be granted unless resolution on the 
basis of written submissions is inadequate. Final Sec. 303.11(g)(3) 
also

[[Page 44693]]

provides that an applicant's failure to file a written response within 
the 15-day period constitutes a waiver of the opportunity to respond 
and consent to the nullification, whether or not a temporary order had 
been issued.
    Final Sec. 303.11(g) did not discuss whether authority was to be 
delegated in connection with the exercise of the authority to nullify 
decisions on filings. In final Sec. 303.11(g)(5), the FDIC Board of 
Directors retains the authority to issue a notice of intent to nullify 
if the decision on the filing was originally made by the Board. For 
decisions on filings under this Sec. 303.11(g) that were not originally 
acted on by the Board, authority is delegated to the Director and 
Deputy Director (DOS and DCA) and, where confirmed in writing by the 
appropriate Director, to an associate director, to issue notices of 
intent and temporary and final orders, after consultation with the 
Legal Division. The appropriate Director may also designate regional 
directors and deputy regional directors to issue notices of intent and 
final orders. Delegated authority is to be exercised by the official 
who acted on the original filing or by an official or equivalent or 
higher authority.
    General delegations of authority. Proposed Sec. 303.12 consolidated 
the general principles governing delegations of authority from the 
Board of Directors to FDIC officials. Specific delegations of authority 
are contained in appropriate subparts.
    No comments were received on this section. Changes were made to 
proposed Sec. 303.12(a), (c), (e) to limit the application of 
Sec. 303.12 to part 303 rather than to the entire chapter as proposed. 
Section 303.12(e) of the proposal has been further modified slightly in 
the final rule to make clear that actions taken by FDIC officials may 
be relied upon by the public as actions authorized by the FDIC. The 
FDIC adopts the remainder of the section as proposed.
    Delegations of authority to DOS and DCA officials. Proposed 
Sec. 303.13 contained delegations of authority to DOS and DCA officials 
to enable them to carry out the FDIC's applications function in the 
following areas: CRA protests, adequacy of filings, and the National 
Historic Preservation Act of 1966, (16 U.S.C. 470 et seq.) (NHPA).
    Where a CRA protest is filed and remains unresolved, proposed 
Sec. 303.13(a) delegated authority to the regional director or deputy 
regional director (DCA) to concur that approval of any filing subject 
to CRA is consistent with the purposes of CRA. Previously, receipt of 
any CRA protest caused a filing to be forwarded to DCA in Washington 
for review. For purposes of determining when to commence processing of 
a filing, proposed Sec. 303.13(b) delegated authority to DOS officials 
to determine whether a filing is substantially complete. This provision 
also clarified that the standard to initiate the processing period is 
the receipt of a substantially complete filing.
    Several commenters opposed the delegation of authority contained in 
proposed Sec. 303.13(a) to make decisions and to act on CRA protested 
applications. These commenters objected to the removal of such 
authority from the presidentially appointed and accountable Board of 
Directors who they believed are in a better position to weigh the 
issues involved. These commenters were concerned that the CRA might not 
be applied consistently by various FDIC offices and that the increasing 
consolidation of the banking industry accompanied by interstate 
expansion would result in decisions being made by regional directors 
without complete understanding of a particular institution and its CRA 
record.
    The FDIC is committed to careful and conscientious fulfillment of 
its CRA obligations. The FDIC believes there are adequate safeguards 
and checks in place to ensure that it is deliberate and fair in its 
actions involving consideration of CRA performance in the application 
process and to ensure consistency among regional offices. Internal 
procedures require regional offices to notify DCA in Washington of the 
receipt of a protest within specific time frames. In addition, as 
discussed below in the appropriate paragraphs, the FDIC has revised the 
delegation of authority where a CRA protest is unresolved. Proposed 
Secs. 303.26, 303.46 and 303.184 provided that where a CRA protest was 
unresolved at the regional level, the Director or Deputy Director (DOS) 
could approve the protested filing. The final rule makes clear that the 
Director or Deputy Director (DOS) may approve such a filing only with 
the concurrence of the Director or Deputy Director (DCA). This 
clarification will ensure that those FDIC officials with relevant 
expertise will act together to approve any application under this part 
that is subject to an unresolved CRA protest. Moreover, under 
Sec. 303.12(b)(1), the Board of Directors has not delegated the 
authority to act upon filings involving significant policy concerns, 
unique legal issues or other areas meriting special attention. Any 
filings involving these concerns would have to be decided by the FDIC 
Board of Directors.
    Proposed Sec. 303.13(c) contained a delegation of authority 
permitting DOS officials to enter into certain memoranda of agreement 
to facilitate the FDIC's ability to comply with the National Historic 
Preservation Act. No comments were received on this paragraph.
    The final rule adds Sec. 303.13(d) to delegate the authority 
necessary to modify publication requirements as set forth in 
Sec. 303.7(f).
    The FDIC adopts Sec. 303.13 as proposed with the addition of 
Sec. 303.13(d).

B. Subpart B--Deposit Insurance

    Subpart B of the proposal reorganized and clarified the filing and 
processing procedures for an applicant to follow in applying for 
deposit insurance for a proposed or existing noninsured depository 
institution, for an interim depository institution (when required), and 
for continuation of deposit insurance for a state bank upon withdrawing 
from membership in the Federal Reserve System. Proposed subpart B 
updated the regulation to reflect current statutory requirements and 
current FDIC policy for processing such applications. Finally, subpart 
B of the proposal set forth the delegations of authority and criteria 
under which DOS may approve such applications. The final rule should be 
read in conjunction with the FDIC's revised statement of policy on 
Applications for Deposit Insurance found elsewhere in today's Federal 
Register.
    Four commenters submitted comments in response to subpart B of the 
proposed rule. The FDIC has carefully considered these comments. The 
comments are summarized below in the following discussion of 
substantive changes to the regulatory text.
    Filing procedures. Proposed Sec. 303.21 set forth general 
procedures for filing applications for deposit insurance. No comments 
were received on this section. The FDIC adopts this section as proposed 
with minor changes to Sec. 303.21(b) to make clear that deposit 
insurance applications for interim institutions are subject to the 
provisions of subpart B and Sec. 303.62(b)(2), and to refine the 
intended definition of ``interim institution.'' This change is 
described more fully below and at Sec. 303.24.
    Processing. Proposed Sec. 303.22(a) provided for the expedited 
processing of applications for deposit insurance for proposed 
depository institutions which will be subsidiaries of an ``eligible 
depository institution'' or an ``eligible holding company.'' Proposed 
Sec. 303.22(b) provided for standard processing for those applications 
not

[[Page 44694]]

processed pursuant to expedited processing. Under expedited processing, 
applications would be processed within 60 days of receipt of a 
substantially complete application or 5 days after the expiration of 
the comment period, whichever is later. Heretofore, the time period for 
processing deposit insurance applications has generally been within 120 
days. The proposal provided that final action may be withheld until the 
FDIC has assurance that permission to reorganize the proposed 
depository institution will be granted by the chartering authority. An 
eligible depository institution is defined in Sec. 303.2(r) of the 
proposal. An eligible holding company is defined in Sec. 303.22(a) of 
the proposal as a bank or thrift holding company which has consolidated 
assets of $150 million or more; has an assigned composite rating of 2 
or better; and has at least 75 percent of its consolidated depository 
institution assets in eligible depository institutions. The proposal 
further provided that if the FDIC did not act within the expedited 
processing period, such inaction would not constitute an automatic or 
default approval.
    Three commenters questioned the definition of an ``eligible holding 
company.'' One commenter suggested that only the composite rating be 
considered. Another commenter suggested that the size criteria be 
lowered to $100 million. The FDIC intends to achieve the expedited 
processing time frame for acting on applications for deposit insurance 
by eligible holding companies by performing a more limited 
investigation of the application than for those subject to standard 
processing. In order to provide such treatment, the FDIC must be 
confident that the sponsoring organization has sufficient financial and 
management resources to justify streamlined processing. The composite 
rating and size criteria as proposed are meant to be indicators of such 
strength. Therefore, the final rule does not change this aspect of the 
proposal. In addition, it should be noted that some applications that 
appear to meet the expedited criteria as a matter of first impression 
may be removed from expedited processing if sufficient management and 
capital resources are not present to give the FDIC sufficient comfort 
in utilizing expedited procedures. Likewise, the FDIC has the option of 
processing an application within the expedited time frame, even if the 
sponsor does not technically meet the eligibility definition. The FDIC 
intends to process all applications as expeditiously as prudence and 
its resources permit.
    One commenter observed that it would be possible for an eligible 
holding company to receive expedited treatment even if some of its 
subsidiary institutions have less than satisfactory ratings. This is 
correct; however, if the condition of any of the subsidiary banks 
raises a safety or soundness, compliance or CRA concern, the regional 
director has the option of removing the application from expedited 
processing in accordance with the provisions of Sec. 303.11(c)(2).
    One commenter pointed out that a company which does not already 
control an insured depository institution cannot receive expedited 
treatment. The FDIC does not believe it appropriate to grant expedited 
treatment to applicants which do not have an established record of 
successfully managing an insured depository institution.
    One commenter suggested an expedited processing time of 120 days, 
which has been the FDIC's internal time line for all deposit insurance 
applications. The FDIC believes it is practical to process an 
application from an eligible depository institution or eligible holding 
company in 60 days. However, applications for deposit insurance are not 
treated as notices, so they are not deemed to be approved by the 
passage of time. As set forth in Sec. 303.11(c)(2) the FDIC can remove 
an application from expedited processing for a variety of reasons, 
including good cause. Removal of an application from expedited 
processing enables the FDIC to take additional time to consider a 
particular application that might present unique issues.
    The FDIC adopts this section as proposed with a technical change to 
conform to the longer comment period described below and at 
Sec. 303.23.
    Public notice and comment period. Proposed Sec. 303.23(a) provided 
that notice shall be published as close as practicable to the filing 
date but not more than five days before the filing date. This provided 
assurance that the public portion of the application file will be 
available for inspection during the comment period.
    Under the proposal Sec. 303.23(a) would have required interested 
parties to file comments with the appropriate regional director (DOS) 
on or before the 15th day following the date of publication. Two of the 
commenters believed that the proposed 15-day comment period was too 
short. In response to this concern, the proposed comment period under 
Sec. 303.23(a) has been increased to 30 days in the final rule. 
Interested parties are required to file comments with the regional 
director on or before the 30th day following the date of publication. 
Also, the appropriate regional director (DOS) may extend or reopen the 
comment period for good cause.
    The FDIC adopts this section with the longer public comment period 
discussed above.
    Application for deposit insurance for an interim depository 
institution. Proposed Sec. 303.24 defined an interim depository 
institution as an institution formed or organized solely to facilitate 
a merger transaction that would be reviewed by one of the four federal 
banking agencies and that would not open for business. The proposal 
described the requirements for a filing for deposit insurance for an 
interim depository institution and indicated the intent of the FDIC to 
take final action on such an application within 21 days after receipt 
of a substantially complete application unless the applicant was 
advised to the contrary.
    No comments were received on this section.
    Sections 303.21(b) and 303.24 have been revised in the final rule 
to cross-reference appropriate provisions of subpart D (Merger 
Transactions) of this part, Sec. 303.60 et. seq. An interim institution 
is defined in Sec. 303.21(b) of the final rule as a state or federally 
chartered depository institution that does not operate independently 
but exists solely as a vehicle to accomplish a merger transaction. A 
separate application for deposit insurance for an interim institution 
is not required in connection with merger transactions that require 
FDIC approval under subpart D. However, subject to the provisions of 
Sec. 303.62(b)(2), a separate deposit insurance application is required 
for a state chartered interim institution if the related merger 
transaction is subject to approval by a federal banking agency other 
than the FDIC. Federally chartered interim depository institutions are 
deemed to be insured upon the issuance of a charter by the appropriate 
federal banking agency and an application for deposit insurance with 
the FDIC is not required. The FDIC believes that the changes to these 
two sections will ensure consistency among subparts B and D.
    The filing required by Sec. 303.24(b) of the final rule consists of 
a brief letter application and a copy of the related merger 
transaction. It is anticipated that the FDIC will consult with the 
federal banking agency reviewing the merger application and that final 
action on the deposit insurance application will be taken within 21 
days after receipt of a substantially complete application. If

[[Page 44695]]

additional review by the FDIC is warranted, the applicant will be so 
advised in writing.
    Continuation of deposit insurance upon withdrawing from membership 
in the Federal Reserve System. Proposed Sec. 303.25 set forth the 
application procedure for the continuation of a state bank's deposit 
insurance upon its withdrawal from membership in the Federal Reserve 
System. No comments were received on this section. The FDIC adopts this 
section as proposed with minor technical revisions to clarify that the 
correspondence referred to in Sec. 303.25(a)(1), (2) is with the 
appropriate Federal Reserve Bank.
    Delegation of authority. Proposed Sec. 303.26 sets forth the 
delegations of authority relevant to applications for deposit 
insurance. The specific criteria that must be met before delegated 
authority can be exercised, such as initial capitalization, 
reasonableness of legal fees and other expenses, projected 
profitability, investment in fixed assets and financial arrangements 
involving insiders, including stock financing arrangements, were 
updated to reflect current policy, and are discussed in the revised 
statement of policy on Applications for Deposit Insurance published 
elsewhere in today's Federal Register. The revised statement of policy 
is cross-referenced in the final rule to avoid duplication.
    Proposed Sec. 303.26(a)(1) delegated authority to the Director and 
the Deputy Director (DOS), and where confirmed in writing, to an 
associate director, and the appropriate regional director and deputy 
regional director (DOS) to approve applications for deposit insurance 
for proposed depository institutions subject to specified criteria. The 
criteria set forth in paragraph (v) provided that an application could 
be approved by the regional director or deputy regional director (DOS) 
only where no CRA protest, as defined in Sec. 303.2(l), had been filed 
which remained unresolved, or where such protest remained unresolved, 
the appropriate DCA official concurred that approval would be 
consistent with purposes of the CRA, and the applicant agreed in 
writing to any conditions imposed regarding the CRA. Under the 
proposal, where a protested application remained unresolved the 
Director, Deputy Director or associate director (DOS) could approve the 
application without DCA concurrence. While no commenters specifically 
addressed this provision, several commenters raised general concerns 
regarding the FDIC's delegation of authority to act upon CRA protested 
applications. As discussed above, the FDIC believes that it is 
desirable to vest authority to act on protested applications in 
officials most likely to be personally familiar with the institution or 
institutions and communities involved. Section 303.26(a)(1) has been 
revised in the final rule to restrict the authority of the Director, 
Deputy Director and associate director (DOS) to act upon CRA protested 
applications by requiring them to obtain DCA concurrence before 
approving such applications. The FDIC believes that this revision will 
ensure that those FDIC officials with relevant expertise will act 
together to approve any application under this section that is subject 
to an unresolved CRA protest.
    The FDIC adopts this section with the revisions discussed above.
    Proposed Sec. 303.27 set forth authority retained by the Board of 
Directors. No comments were received on this section. The FDIC adopts 
this section as proposed.

C. Subpart C--Establishment and Relocation of Domestic Branches and 
Offices

    The proposal significantly revised the portion of part 303 that 
implements section 18(d) of the FDI Act (12 U.S.C. 1828(d)) which 
requires insured state nonmember banks to obtain the prior written 
consent of the FDIC in order to establish a domestic branch, relocate 
the main office, or relocate a branch. The major changes in the 
proposal provided for expedited processing for eligible depository 
institutions and new definitions for ``messenger service,'' ``mobile,'' 
``temporary,'' and ``seasonal'' branches. The proposal excluded remote 
service units including automated teller machines and automated loan 
machines from the definition of a branch. Requirements related to 
interstate branching were also addressed in the proposal. Because of 
the comprehensive treatment of branches, the proposal also recommended 
rescinding the Statements of Policy regarding Applications to Relocate 
a Main Office or Branch and Applications to Establish a Domestic 
Branch. Both statements were considered obsolete and unnecessary 
considering the revisions to subpart C and are rescinded elsewhere in 
today's Federal Register.
    The FDIC received three comments specifically on this subpart and 
numerous comments addressing expedited processing, the public comment 
period and the delegations of authority regarding CRA protested 
applications. The FDIC carefully considered all the comments, and the 
final rule reflects changes made in response to those comments as well 
as technical changes to the proposal.
    Definitions. Proposed Sec. 303.41(a) clarified that remote service 
units, including automated loan machines, are not branches. These 
exclusions are a result of statutory changes contained in section 2204 
of EGRPRA (12 U.S.C. 36). Two commenters supported this change in the 
definition.
    With regard to the definition of ``branch relocation,'' two 
commenters suggested that the FDIC explicitly make reference to the 
Policy Statement Concerning Branch Closing Notices and Policies (2 FDIC 
Law, Regulations and Related Acts 5391 (August 10,1993)) within the 
definition of ``branch relocation'' in order to ensure that the new 
definition is read as incorporating all of the guidance in the policy 
statement. The FDIC agrees that it would be useful to make reference to 
the policy statement and has provided the reference in the definition 
of a branch relocation.
    Filing procedures. The proposed regulation at Sec. 303.42(b)(2) 
provided filing procedures for messenger services and mobile branches. 
Specifically, the FDIC proposed that the geographic location for a 
mobile branch be designated as to which community or communities are to 
be served. The FDIC sought comment on whether such a designation is 
appropriate but received no specific response. The FDIC is, however, 
making a clarification in the final regulation to require that filings 
specify the community or communities in which the vehicle will operate 
and the manner in which it will be used.
    One commenter recommended that applications for mobile branches be 
subject to abbreviated FDIC review and public notice procedures because 
of their unique characteristics and the substantial public convenience 
offered by these facilities. The FDIC has carefully considered the 
comment but believes that with the adoption of expedited processing for 
eligible institutions that a special provision for a more limited 
review is unnecessary.
    In addition, proposed Sec. 303.42(b) has been modified to include 
references to two FDIC statements of policy, one of which gives 
guidance on the National Environmental Policy Act of 1969 (42 U.S.C 
4321 et seq.) (NEPA) (2 FDIC Law, Regulations and Related Acts 5185, 
March 31, 1980), and the other provides guidance on the NHPA (2 FDIC 
Law, Regulations and Related Acts 5175 (March 31, 1980). The language 
in Sec. 303.42(b)(5) has been modified to simply require a statement as 
to whether or not the particular site for a branch or branch relocation 
is included, or is eligible for inclusion, in the National Register of 
Historic Places, including

[[Page 44696]]

documentation of consultation with the State Historic Preservation 
Officer, as appropriate. The proposed regulation required a statement 
as to whether or not the particular site is included in or is eligible 
for inclusion in the National Register as well as a statement that 
clearance has been or will be obtained from the State Historic 
Preservation Officer. This change has been made in anticipation of a 
programmatic agreement with the Advisory Council on Historic 
Preservation and subsequent change in the FDIC's Statement of Policy on 
NHPA to reflect exclusions of certain categories of properties from the 
NHPA.
    With regard to the establishment of certain interstate de novo 
branches, the proposal at Sec. 303.42(b)(8) required the applicant to 
provide a statement that the applicant has requested that the host 
state provide to the appropriate regional director (DOS) written 
confirmation that the applicant has complied with the state's filing 
requirements and that the applicant has also submitted to the host 
state bank supervisor a copy of the filing with the FDIC to establish 
and operate a de novo branch. This requirement has been deleted in the 
final regulation and the FDIC will make direct requests to the state 
supervisor in those limited cases where such confirmation is required. 
As a result of this deletion, the remainder of the section has been 
renumbered.
    Processing. The proposal at Sec. 303.43(a), provided expedited 
processing for applications for the establishment and relocation of 
domestic branches and offices for eligible depository institutions. The 
expedited processing procedures were contained in Sec. 303.11(c), and 
provided that an application submitted by an eligible depository 
institution as defined in Sec. 303.2(r) will be acknowledged in writing 
by the FDIC and receive expedited processing unless the FDIC removes 
the application from expedited processing for any of the reasons set 
forth in Sec. 303.11(c)(2). Section 303.43(a) provided that the FDIC 
may remove an application from expedited processing at any time before 
the approval date and will promptly notify the applicant in writing of 
the reason for such action. Absent such removal, an application 
processed under expedited processing will be deemed approved on the 
latest of the following: (1) the 21st day after receipt of a 
substantially complete application by the FDIC, (2) the 5th day after 
expiration of the comment period described in Sec. 303.44, or (3) in 
the case of an application to establish and operate a de novo branch in 
a state that is not the applicant's home state and in which the 
applicant does not maintain a branch, the 5th day after the FDIC 
receives from the host state confirmation that the applicant has both 
complied with the filing requirements of the host state and submitted a 
copy to the host state bank supervisor of the application filed with 
the FDIC. One commenter objected to the expedited processing 
provisions, arguing that they treat such filings as notices and would 
subvert the spirit of the CRA. The FDIC believes such concerns are 
unwarranted since the FDIC intends to carefully review all applications 
for CRA and other safety and soundness and compliance concerns 
regardless of the expedited processing time frames. The FDIC has also 
provided for provisions for removal from expedited processing in 
certain circumstances as enumerated in Sec. 303.11(c)(2).
    Public notice requirements. The public notice requirements of the 
proposal required that to relocate a main office the applicant publish 
notice in the community in which the main office is currently located 
and in the community to which the main office proposes to relocate, and 
that such notice be published at least once each week on the same day 
for two consecutive weeks. The proposal provided that for the 
relocation of branches, a notice shall be published once in a newspaper 
in the community in which the branch is located. One commenter objected 
to this provision and recommended that two newspaper publications be 
required to conform with the requirement for main office relocation. 
The FDIC believes that since a branch relocation can only occur in the 
same immediate neighborhood, that only one publication in that 
community is necessary. Furthermore, a single publication is consistent 
with the requirements of the other federal banking agencies.
    In order to eliminate the uncertainty regarding the close of the 
comment period, proposed Sec. 303.44 provided that comments must be 
received by the appropriate Regional Director (DOS) within 15 days 
after the date of the last newspaper publication and proposed 
Sec. 303.9 provided for extension or reopening of the comment period in 
certain situations. The FDIC received numerous comments on the length 
of the comment period. Several comments supported the comment period, 
however, a number of commenters objected to the 15-day comment period. 
Several commenters suggested that a public comment period of 30 days 
after the last publication while one commenter suggested the FDIC adopt 
a processing time frame of 45 days as provided in part 5 of the Office 
of the Comptroller of the Currency's regulations. One commenter 
suggested that the comment period should not commence until the FDIC 
has received a complete application. One commenter thought that the 
application and notice provisions were generally reasonable, but 
suggested that the application review deadline be changed to 15 days 
after receipt of a substantially complete application or five days 
after the public comment period expires, whichever is later. The 
commenter argued that branch applications and relocations are 
relatively simple activities and should, therefore, be processed 
quickly. On balance, the FDIC believes a 15-day comment period provides 
adequate time for the public to comment on the establishment or 
relocation of a branch. The regulation provides for two publications 
and a 21-day comment period for a main office relocation. The FDIC also 
commits to place all applications subject to the CRA on its World Wide 
Web site within three days of receipt in order to provide prompt 
notification of all filings. The FDIC has also given its regional 
directors wide discretion to extend the comment periods in order to 
provide the public with an adequate amount of time to submit a 
meaningful analysis. With regard to the processing or review deadline 
being changed to 15 days after receipt of a substantially complete 
application, the FDIC believes the 21 day processing period is 
responsive to the industry and that it is not feasible to commit to a 
shorter time frame. For these reasons, the FDIC is adopting the 
timeframes as proposed.
    Special provisions. Section 303.45 of the proposed regulation added 
several new provisions regarding procedures for opening temporary 
branches in emergency or disaster situations, re-designating a main 
office, and providing for the expiration of approved applications.
    The proposed regulation at Sec. 303.45(a) clarified procedures for 
establishing temporary branches in emergency or disaster situations. 
The proposal provided that in the case of an emergency or disaster at a 
main office or branch which requires that an office be immediately 
relocated to a temporary location, the applicant notify the appropriate 
regional director (DOS) within 3 days of such temporary location. In 
such limited cases, the FDIC will accept initial notification by 
whatever means appropriate. The FDIC is making this limited exception 
to allow for the public's need to have uninterrupted access to banking 
services. However, the final regulation

[[Page 44697]]

does require that, within 10 days of a such a temporary relocation, the 
bank submit a written application to the appropriate regional director 
(DOS). The FDIC received one comment specifically supporting the 
inclusion of such temporary facilities since it will make it easier for 
institutions to relocate a branch or main office in the event of an 
emergency.
    Proposed Sec. 303.45(b) regarding relocation of a main office and 
simultaneous redesignation of an existing office as the main office has 
been modified to make clear that in such circumstances only a single 
application is required.
    Proposed Sec. 303.45(c) provided that approval of an application 
expires if a branch has not commenced business or if a relocation has 
not been completed within 18 months of approval. One commenter 
supported the expiration of the approval but suggested an extension 
should be possible where extenuating circumstances warrant. The FDIC 
has provided for such extension of time in subpart M of the final 
regulation.
    Delegation of Authority. Proposed Sec. 303.46 delegated authority 
to the Director and Deputy Director, and where confirmed in writing, to 
an associate director, and the appropriate regional director and deputy 
regional director (DOS) to approve applications listed in this subpart 
subject to specific criteria. The criteria set forth in paragraph 
(c)(5) provided that an application could be approved by the regional 
director or deputy regional director (DOS) only where no CRA protest as 
defined in Sec. 303.2(l) had been filed which remained unresolved, or 
where such protest remained unresolved, the appropriate DCA official 
concurred that approval would be consistent with the purposes of the 
CRA and the applicant agreed in writing to any conditions imposed 
regarding the CRA. Under the proposal, where a protested application 
remained unresolved the Director, Deputy Director or associate director 
(DOS) could approve the application without DCA concurrence. While no 
commenters specifically addressed this provision, several commenters 
raised general concerns regarding the FDIC's delegation of authority to 
act upon CRA protested applications. As discussed above, the FDIC 
believes that it is desirable to vest authority to act on protested 
applications in officials most likely to be personally familiar with 
the institution or institutions and communities involved. Section 
303.46(c)(5) has been revised in the final rule to restrict the 
authority of the Director, Deputy Director and associate director (DOS) 
to act upon CRA protested applications by requiring them to obtain DCA 
concurrence before approving such an application. The FDIC believes 
that this revision will ensure that those FDIC officials with relevant 
expertise will act together to approve any application under this 
subpart that is subject to an unresolved CRA protest.
    Modification has been made to Sec. 303.46(c)(7) to reflect the 
deletion of proposed Sec. 303.42(b)(8) which had required applicants to 
request and provide a statement from the host state which provided 
certain confirmations. As noted above, the FDIC will make such 
inquiries.
    After consideration of the comments, the FDIC adopts subpart C with 
the above-noted modifications.

D. Subpart D--Merger Transactions

    Proposed subpart D consolidated and reorganized the various 
provisions of part 303 governing transactions subject to FDIC approval 
under section 18(c) of the FDI Act (12 U.S.C. 1828(c)) (Bank Merger 
Act). The primary changes reflected in the proposal were the addition 
of an expedited processing procedure, the addition of various 
definitions applicable to merger transactions, and the addition of 
references to other statutory or regulatory provisions often applicable 
to merger transactions.
    The FDIC received three comments specifically addressing proposed 
subpart D and numerous comments addressing expedited processing and the 
delegations of authority regarding CRA protested applications. The FDIC 
has carefully considered these comments. The comments are summarized 
below in the following discussion of the regulatory text.
    First, however, the FDIC notes that the title of this subpart has 
been changed from ``Mergers'' to ``Merger Transactions.'' The use of 
the term ``merger transaction'' is meant to be inclusive of all types 
of transactions (including mergers, consolidations, and transfers of 
deposit liabilities) covered by the Bank Merger Act. When the term 
``merger'' is used in the regulation, it is used to reference only a 
true merger.
    Scope. Proposed Sec. 303.60 set forth the scope of the subpart. One 
commenter suggested that a cross reference to the FDIC's Statement of 
Policy on Bank Merger Transactions be added to the proposal. Section 
303.60 of the final rule includes such a reference to the Statement of 
Policy which is also published in today's issue of the Federal 
Register. The FDIC adopts this section with the suggested reference.
    Definitions. Proposed Sec. 303.61 added definitions regarding 
merger transactions. No comments were received regarding the 
definitions. The FDIC adopts this section as proposed, with minor, 
nonsubstantive editorial changes.
    Transactions requiring prior approval. Proposed Sec. 303.62 
detailed the types of transactions requiring the prior written approval 
of the FDIC under subpart D. No comments were received regarding the 
transactions covered. The FDIC adopts this section as proposed with 
minor editorial changes.
    Filing procedures. Proposed Sec. 303.63 provided guidance regarding 
the filing procedures for applications required under the subpart. No 
comments were received on the filing procedures. The FDIC adopts this 
section as proposed, with minor, nonsubstantive editorial changes.
    Processing. Proposed Sec. 303.64 included the addition of an 
expedited processing procedure. This procedure would be available when 
all parties to a merger transaction are eligible depository 
institutions (as defined in Sec. 303.2(r)), and the resulting 
institution would be well-capitalized immediately after the merger 
transaction.
    One commenter suggested that the expedited processing period of 45 
days be reduced to 30 days for smaller, less complex transactions where 
the total assets of the resultant institution would be less than $500 
million. Another commenter recommended that the expedited processing 
period be increased to 60 days. The final rule retains the 45 day 
processing time line. The FDIC believes that this provides sufficient 
time to act on applications that do not raise unique issues or are not 
subject to CRA protests. Protested applications or applications which 
raise unique issues generally would be removed from expedited 
processing. While it might be possible to resolve all relevant safety 
and soundness issues arising in the context of smaller merger 
transactions in less than 45 days, the statutory requirement of a 30 
day publication period and the requirement to consult with the Attorney 
General and other bank regulatory agencies regarding the competitive 
factors does not make it feasible to establish a shorter time frame for 
action.
    One commenter generally supported the expedited processing proposal 
but suggested that the eligibility criteria be expanded to include 
otherwise eligible proposals where an ineligible target institution has 
core deposits equal to 10 percent or less of the acquiror's core 
deposits. In response to this comment, a provision has been added in 
the final

[[Page 44698]]

rule that permits expedited processing for transactions involving an 
eligible acquiror and an ineligible seller if the amount of total 
assets to be transferred to the acquiror is no more than 10 percent of 
the acquiror's total assets. The FDIC believes that, absent other 
issues, such a transaction would be less likely than larger 
acquisitions to raise safety and soundness concerns.
    The FDIC adopts this section with the changes noted above, along 
with limited minor changes.
    Public notice requirements. Section 303.65 of the proposal set 
forth the requirements for providing public notice of merger 
transactions, the required content of such notices, and a predictable 
period of 35 days during which the public may submit comments on 
proposed non-emergency merger transactions. In addition, the proposal 
permitted the initial public notice of a proposed transaction to be 
published up to 5 days before the merger application is filed with the 
FDIC. Under the existing regulations, the notice could not be published 
until the application had been filed with the FDIC.
    One commenter opposed the proposal to permit merger applicants to 
publish notice of a proposed transaction before a completed application 
has been filed with the FDIC. Another commenter generally supported the 
proposal but objected to the 35 day comment period. One commenter also 
suggested a shorter comment period for smaller and less complex 
transactions, such as those resulting in an institution with less than 
$500 million in combined assets. In contrast, another commenter urged a 
longer comment period than that proposed. This commenter suggested that 
the public comment period should extend through the fifth day prior to 
FDIC action on the application (specifically, 5 days before the end of 
the 60-day minimum processing period urged by the commenter).
    The final rule continues to provide for a fixed comment period. The 
FDIC believes this will provide prospective commenters the assurance 
that they will have a definite number of days for submitting comments 
after publication of the last notice of a proposed transaction. The 
final regulation revises the length of the public comment period to a 
30-day public comment period rather than the 35-day period proposed. 
Upon reflection, the FDIC does not believe it is necessary to provide 
for a longer comment period than required by the Bank Merger Act. The 
final rule moves the last publication date for public notice of the 
transaction from the 30th day after initial publication to the 25th 
day. This ensures that prospective commenters will typically have 5 
days after the last publication to express their views on a proposed 
merger transaction. The FDIC notes that the final rule provides 
flexibility for the FDIC to extend or reopen a comment period for 
reasons specified in subpart A of the final rule.
    Regarding the suggestion that the comment period be extended to 5 
days before the end of the processing period, the FDIC notes that the 
expedited processing period in Sec. 303.64(a) is a maximum period, not 
a minimum. Thus, simple transactions requiring only the most cursory 
review, for example, might be approved sooner than 45 days after the 
date of the application. Because the processing time required for any 
given application cannot be predicted in advance, the closing date for 
comments on the application cannot both be predictable and end a 
certain number of days before the FDIC makes a decision on the 
application.
    Proposed Sec. 303.65(a) provided generally that an applicant for a 
merger transaction must publish notice of the proposed transaction on 
at least three occasions at approximately two-week intervals. No 
comments were received on this provision. The final rule revises this 
requirement to provide that such notice must be published on at least 
three occasions at approximately equal intervals. The FDIC makes this 
change to conform with changing the date of the last publication to the 
25th day after the initial publication, as discussed above.
    Proposed Sec. 303.65(b)(1) set forth an exception to the 
publication requirements where the FDIC determines that an emergency 
requires expeditious action. This exception tracks a statutory 
exception. Under this provision of the proposal, notice shall be 
published twice, with the second of the two notices to be published on 
the 10th day after the first publication. The final rule requires the 
second notice to be published on the 7th day after the first 
publication. Based upon the statutory 10-day processing period, this 
change allows the public 3 days to comment after the second 
publication.
    One commenter suggested that the FDIC require notices regarding 
merger transactions to be published in languages other than English in 
communities with significant non-English speaking populations. Rather 
than limit applicability to situations involving merger applications 
and non-English publication, however, the FDIC has instead added a more 
broadly-focused provision in subpart A. Specifically, under the new 
Sec. 303.7(f) the FDIC may determine on a case-by-case basis that 
unusual circumstances surrounding a particular filing warrant 
modification of the publication requirements. It is intended that this 
provision will be applied sparingly and with the purpose of making 
publication more meaningful, not as a means of altering the publication 
requirements to suit the convenience of the parties or as a means of 
curing defective publications.
    The FDIC adopts Sec. 303.65 with the modifications discussed above 
and minor, non-substantive, editorial changes.
    Delegations of authority. Proposed Sec. 303.66 set forth the 
delegations of authority to designated FDIC officials to approve under 
the Bank Merger Act any application filed under this subpart for 
approval of a merger transaction for which the specified criteria are 
satisfied. The specific criteria that must be met before delegated 
authority can be exercised, such as capital requirements, competitive 
effects and geographic markets were updated to reflect current FDIC 
policy.
    Proposed Sec. 303.66(b) delegated authority to the Director and 
Deputy Director, and where confirmed in writing, to an associate 
director, and the appropriate regional director and deputy regional 
director (DOS) to approve merger applications, subject to specific 
criteria. The criteria set forth in Sec. 303.66(b)(5) provided that an 
application could be approved by the regional director or deputy 
regional director (DOS) only where no CRA protest as defined in 
Sec. 303.2(l) had been filed which remained unresolved, or where such 
protest remained unresolved, the appropriate DCA official concurred 
that approval would be consistent with the purposes of the CRA, and the 
applicant agreed in writing to any conditions imposed regarding the 
CRA. Under the proposal, where a CRA protest remained unresolved the 
Director, Deputy Director or associate director (DOS) could approve the 
application without DCA concurrence. While no commenters specifically 
addressed this provision, several commenters raised general concerns 
regarding the FDIC's delegation of authority to act upon CRA protested 
applications. As discussed above, the FDIC believes that it is 
desirable to vest authority to act on protested applications in 
officials most likely to be personally familiar with the institution or 
institutions and communities involved. Sections 303.66(c) and (d) have 
been revised in the final rule to restrict the authority of the 
Director, Deputy Director and associate director (DOS) to act upon CRA 
protested applications by requiring

[[Page 44699]]

them to obtain DCA concurrence before approving such an application. 
The FDIC believes that this revision will ensure that those FDIC 
officials with relevant expertise will act together in deciding whether 
to approve a merger application that is subject to an unresolved CRA 
protest.
    Regarding competitive effects which are considered under proposed 
Secs. 303.66(f) and (g), one commenter urged that the regulation 
provide guidance as to the composition of relevant geographic markets 
to be used in analyzing competitive effects. The Statement of Policy on 
Bank Merger Transactions (published elsewhere in today's Federal 
Register), to which a cross reference has been added in new 
Sec. 303.60, includes a discussion on relevant geographic markets. 
Relevant geographic markets are best defined on a case-by-case basis, 
considering such factors as the location of the offices of the 
particular merging parties. Beyond the factors referred to in the 
Statement of Policy, the FDIC does not believe that any more specific 
factors can be identified that could be applied for all merger 
transactions, successfully, accurately, and without undue burden. This 
same commenter expressed concern that the benefits of expedited 
processing might be undermined if the FDIC waited for the Attorney 
General's competitive-factors reports before acting on a merger 
application. In response, we note that the Bank Merger Act allows the 
Attorney General 30 calendar days to provide a competitive factors 
report. The report is commonly provided within or near this period 
unless competition issues are raised that the Department of Justice 
believes merit more extensive examination. If there are such issues, it 
is likely that the application would be removed from expedited 
processing.
    One commenter further suggested that language be added to the final 
rule that would preclude FDIC consideration of any factor unless that 
factor is specifically referred to in the regulation. The FDIC believes 
such a provision would be ill advised and not in the public interest. 
General categories of considerations specified in the Bank Merger Act 
and other relevant statutes are identified in the Statement of Policy 
on Bank Merger Transactions (published elsewhere in today's Federal 
Register). The necessity of expressly enumerating each and every factor 
to be considered within these categories would result in a regulation 
of unwieldy length.
    Proposed Sec. 303.66(f) provided that if the Attorney General does 
not provide a competitive factors report and certain delegation 
criterion are satisfied, the appropriate regional director (DOS) may 
request a written opinion from the FDIC's General Counsel or designee 
as to whether the proposed merger might have a significantly adverse 
effect on competition. Since the request for a written opinion was 
permissive, the language has been deleted from the final rule. The FDIC 
notes that nothing would prohibit a regional director from requesting 
such an opinion.
    The FDIC adopts this section with the revisions discussed above.
    Authority retained by the FDIC Board of Directors. Proposed 
Sec. 303.27 set forth authority retained by the Board of Directors. No 
comments were received on this section. The FDIC adopts this section as 
proposed.

E. Subpart E--Change in Bank Control

    The proposal substantially reorganized, clarified, and simplified 
the FDIC's regulation implementing the Change in Bank Control Act of 
1978. The changes, developed in consultation with the other federal 
banking agencies, harmonize the scope and procedural requirements of 
the FDIC's regulation with those of the other federal banking agencies 
and reduce unnecessary burden. In addition, a common form which may be 
used to satisfy the notice requirements of the Change in Control Act 
has been adopted by the four federal banking agencies and is available 
from any FDIC regional office.
    The proposal defined the previously undefined term ``acting in 
concert'' to clarify the scope of the regulation. It also incorporated 
the current FDIC position that the acquisition of a loan in default 
that is secured by voting shares of an insured state nonmember bank is 
presumed to be an acquisition of the underlying shares. Further, the 
proposal lengthened the period of time for notifying the FDIC from 30 
to 90 days for shares acquired in satisfaction of a debt previously 
contracted in good faith or through testate or intestate succession or 
a bona fide gift. In the case of shares acquired in satisfaction of a 
debt previously contracted, the proposal added language that reflects 
FDIC practice of requiring the acquiror of a defaulted loan secured by 
a controlling amount of a state nonmember bank's voting securities to 
file a notice before the loan is acquired.
    The proposal also reduced regulatory burden on persons whose 
ownership percentage increases as the result of a redemption of voting 
shares by the issuing bank or the action of a third party not within 
the acquiring person's control. In these situations, the proposal 
permits the person affected by the bank or third party action to file a 
notice within 90 calendar days after receiving notice of the 
transaction. Currently, these persons must file notice under the Change 
in Bank Control Act prior to the action that increases the person's 
percentage ownership, and, because these persons cannot control the 
third party action that causes the increased percentage ownership, they 
are often put in violation of the Change in Bank Control Act and the 
FDIC's Rules and Regulations.
    The proposal provided more flexible timing for newspaper 
announcements of filings under the Change in Bank Control Act by 
permitting notificants to publish the announcement as close as 
practicable to filing the notice of change in control. The proposal 
removed the requirement that the notificant have confirmation that the 
FDIC has accepted the notice before publishing the announcement.
    The proposal deleted the provision governing notices filed in 
contemplation of a public tender offer which permits an acquiror to 
delay publication of the newspaper announcement. None of the other 
federal banking agencies has such a provision.
    The FDIC received two comments regarding the proposal. One 
commenter supported the proposed changes to the regulation and the 
other did not object to the changes proposed. The FDIC adopts this 
section as proposed.

F. Subpart F--Change of Director or Senior Executive Officer

    The proposed rule implemented the amendments to section 32 of the 
FDI Act and set forth the circumstances under which an insured state 
nonmember bank must give the FDIC prior notice of a change in any 
member of its board of directors or any senior executive officer and 
the procedures for filing such notice, as well as applicable 
delegations of authority. The proposed rule also strived to harmonize 
the procedural requirements of the FDIC's regulation with those of the 
other federal banking agencies and to reduce any unnecessary regulatory 
burden. In addition, a common application form providing the notice 
requirements of section 32 has been adopted by the federal banking 
agencies and is available from any FDIC regional office.
    Section 2208 of EGRPRA (12 U.S.C. 1843) amended section 32 by 
eliminating the prior notice requirement for institutions and holding 
companies that are chartered for less than two years or that have 
undergone a change in control within the preceding two years. However, 
institutions and holding companies that are not in compliance with 
minimum capital requirements or

[[Page 44700]]

are otherwise in ``troubled condition'' remain subject to the prior 
notice requirement. In addition, EGRPRA provided that prior notice will 
be required if the agency determines, in connection with its review of 
a capital restoration plan required under section 38 of the FDI Act 
(governing prompt corrective action) or otherwise, that such prior 
notice is appropriate. Also, the EGRPRA amendments provided the 
agencies with more latitude to determine the prior notice period and 
allowed the agencies up to 90 days to issue a notice of disapproval. 
Although the EGRPRA amendments provided the agencies with authority to 
increase the prior notice period to 90 days, the proposed subpart F 
retained the 30-day prior notice currently required but allowed the 
agency to extend the time to act on a notice by up to an additional 60 
days. The FDIC specifically sought public comment on the 30-day time 
frame.
    Two comments were received on the proposal. One commenter generally 
supported the changes in the proposal. Another commenter suggested that 
any extension of the 30 day processing period be limited to an 
additional 30 days rather than 60 days.
    The final rule retains the FDIC's ability to extend the 30 day 
notice for up to an additional 60 days. The FDIC expects to act on the 
vast majority of these cases within 30 days. It is anticipated that 
this additional 60-day period would be used infrequently. In all such 
cases, the notificant will be advised in writing prior to expiration of 
the 30-day prior notice period of the reason the FDIC could not take 
action and of the projected additional time needed.
    The final rule adopts subpart F as proposed, with minor technical 
changes.

G. Subpart G--Activities and Investments of Insured State Banks

    The part 303 proposal reserved subpart G for filing procedures 
related to activities and equity investments of insured state banks 
which are currently contained in part 362 (12 CFR 362). Part 362 
implements section 24 of the FDI Act (12 U.S.C. 1831a), which was 
created by the Federal Deposit Insurance Corporation Improvement Act of 
1991 (Pub. L. 102-242, 105 Stat. 2236), and governs the circumstances 
in which insured state banks may engage in activities which are not 
permissible for national banks.
    The FDIC has an outstanding notice of proposed rulemaking to make 
comprehensive revisions to part 362. 62 FR 47969, September 12, 1997. 
In connection with these revisions, the FDIC proposes to eliminate 
certain application procedures which are outdated, and also to 
authorize certain activities to be approved by the FDIC on an expedited 
basis. At the time the FDIC issued its part 303 proposal, the FDIC 
could not determine whether its 362 proposal or its part 303 proposal 
would be finalized first. In order to deal with this problem, the 
application procedures which implement the proposed revisions to part 
362 concerning state bank activities were issued in subpart E of the 
part 362 proposal. The part 303 proposal advised members of the public 
taking an interest in the FDIC's application procedures for the 
activities of insured state banks under part 362 to review the part 362 
proposal for the specifics of such application procedures. Both 
proposals also advised the public that it is the FDIC's intent to place 
the part 362 application procedures relating to state bank activities 
in subpart G of part 303 at such time as both rules are final.
    One commenter responding to the part 303 proposal addressed certain 
substantive aspects of the part 362 proposal. The FDIC will take this 
comment into consideration when the FDIC finalizes part 362.
    The final rule for part 303 will continue to reserve subpart G. 
When the FDIC issues the final rule for part 362, the final version of 
the application procedures proposed in subpart E of the part 362 
proposal will be issued as final rule amendments to subpart G of part 
303. In the interim, insured state banks operating under the current 
version of part 362 will continue to look to the current version of 
part 362 itself for application procedures until the revisions to part 
362 become effective.

H. Subpart H--Filings by Savings Associations

    Subpart H of the proposal was reserved for filing procedures 
related to activities of insured savings associations and subsidiaries 
of insured savings associations that were, at the time of the proposal, 
contained in Sec. 303.13 of part 303 (12 CFR 303.13). Section 303.13 
implemented sections 28 and 18(m) of the FDI Act (12 U.S.C. 1831e and 
12 U.S.C. 1828(m)) which were both enacted as part of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (Pub. L. 
101-73, 103 Stat. 484). Provisions of Sec. 303.13 generally governed 
the circumstances in which a state savings association could engage in 
activities which are not permissible for a federal savings association, 
and also required all insured savings associations to notify the FDIC 
prior to establishing or acquiring a subsidiary or engaging in any new 
activities through a subsidiary.
    As part of the FDIC's currently outstanding notice of proposed 
rulemaking to revise part 362, the FDIC proposed to address the 
substantive issues covered by Sec. 303.13 as subparts C and D of the 
revised part 362. 62 FR 47969, September 12, 1997. The part 362 
proposal harmonizes, to the extent possible given the differences in 
the underlying statutes, the treatment of activities of insured state 
banks and the activities of insured state savings associations. In 
addition, the proposal retains the statutory notice procedure for all 
savings associations establishing or acquiring subsidiaries or engaging 
in any new activities through a subsidiary. In connection with these 
revisions, the FDIC proposed to eliminate certain one-time application 
procedures that are outdated, and also to authorize certain activities 
to be approved by the FDIC on an expedited basis. As noted above, at 
the time that the FDIC issued its part 303 and part 362 proposals the 
FDIC could not determine whether its part 362 proposal or its part 303 
proposal would be finalized first. To compensate for this timing issue, 
the application and notice procedures that implement the proposed 
revisions to part 362 concerning savings associations were issued in 
subpart F of the 362 proposal. The preamble to proposed part 303 
advised readers to review the part 362 proposal for the specifics of 
such application and notice procedures. Both proposals also advised the 
public that it is the FDIC's intent to ultimately place the part 362 
application and notice procedures relating to savings associations in 
subpart H of part 303 at such time as both rules are final.
    Since part 303 is now being finalized and part 362 will be 
finalized at a later date, former Sec. 303.13 is being redesignated, 
without substantive change, as subpart H of part 303. Savings 
associations that were operating under former Sec. 303.13 will now look 
to subpart H. At such time as part 362 is finalized, however, these 
interim procedures will be replaced with the application procedures 
adopted with part 362.
    No comments were received regarding the reservation of subpart H. 
Comments were received, however, on the proposed part 362, and those 
comments are being considered in the course of the part 362 rulemaking.
    The procedures being adopted at this time preserve without 
substantive change the former Sec. 303.13, and redesignates it as 
subpart H, Sec. 303.140 through Sec. 303.148. The subpart makes

[[Page 44701]]

several technical and format changes and deletes obsolete references. 
First, it adds a Scope section describing the contents of subpart H. 
Second, the final rule inserts subheadings in the text in order to 
conform the format with the rest of the final part 303. Third, the 
final rule removes obsolete references to filing deadlines that expired 
years ago. Fourth, it makes certain technical changes throughout to 
conform the terminology used in subpart H with that used in part 303. 
For example, ``appropriate regional director (DOS)'' has been 
substituted for ``(DOS) regional director for the region in which the 
state savings association's principal office is located.''
    The FDIC adopts this section with the above-referenced 
modifications.

I. Subpart I--Mutual-to-Stock Conversions

    Proposed Subpart I contained the procedures for filing and 
processing the prior notice required of state-chartered mutual savings 
banks that propose to convert to stock form. The proposed regulatory 
text was almost identical to that contained in Sec. 303.15; however a 
delegation of authority was added to allow the Director and Deputy 
Director (DOS) to issue a notice of intent not to object to a proposed 
conversion transaction that is determined not to pose a risk to the 
institution's safety or soundness, violate any law or regulation, 
present a breach of fiduciary duty, and or raise any unique legal or 
policy issues. The proposal provided that the substantive regulation 
regarding mutual-to-stock conversions remain in Sec. 333.4 of this 
chapter (12 CFR Part 333).
    The FDIC received three comments on proposed subpart I, which are 
summarized below in the following discussion of substantive changes to 
the regulatory text.
    Filing procedures. As proposed, Sec. 303.161 only stated that a 
notice shall provide a description of the proposed conversion and 
include all materials that have been filed with any state or federal 
banking regulator and any state or federal securities regulator. Copies 
of all agreements entered into as part of the conversion process were 
also required. An insured mutual savings bank chartered by a state that 
does not require the filing of a conversion application was merely 
required to notify the FDIC of the proposed conversion and provide any 
materials requested by the FDIC. No further guidance was given to 
institutions on what the notice should contain. One commenter believed 
that FDIC's request of ``any'' materials from a state-chartered mutual 
savings bank not required to file a state application is overly broad 
and does not provide sufficient guidance. The commenter recommended 
that the FDIC specify the types of materials the FDIC may request in 
that situation. The FDIC believes the suggestion is well founded and, 
upon reflection, believes that it is appropriate to specify the 
required content of a notice whether or not a filing is being made with 
the chartering authority. As a result, Sec. 303.161 has been expanded 
to give more guidance with regard to the content of the filing.
    New Sec. 303.161(c), ``Content of notice,'' provides a 
comprehensive listing of the materials to be included in a complete 
notice. The required contents include the plan of conversion, certified 
board resolutions relating to the plan, a business plan, a description 
of employee benefit plans, a proxy statement and offering circular, a 
copy of the charter and bylaws, etc. The listing in no way expands on 
the materials currently required and imposes no new requirements. It is 
believed that this comprehensive listing of contents will better enable 
applicants to file a substantially complete notice and make it less 
likely that FDIC will find it necessary to request additional 
information prior to acceptance of an application for processing. The 
informational requirements in Sec. 333.4 of this chapter relating to 
appraisal reports and business plans are incorporated into the listing.
    To further clarify requirements, reference is made to the 
possibility that related applications for deposit insurance and mergers 
transactions may be required, depending upon how the transaction is 
structured. Other editorial changes were made to clarify intent, but in 
no way alter the substance of the requirements.
    The FDIC adopts this section with the increased guidance as 
discussed above.
    Waiver from compliance. The proposed regulation did not contain 
procedures for requesting a waiver from compliance with the substantive 
requirements regarding conversions contained in Sec. 333.4 of this part 
since such provisions were contained in Sec. 333.4 of this chapter. The 
FDIC has decided to move these provisions relating to the procedural 
requirements for requesting a waiver from compliance of the 
requirements of Sec. 333.4 of this chapter and subpart I of this part 
to the revised Sec. 303.162 so that all notice and waiver provisions 
for mutual to stock conversions are contained in one subpart. No 
substantive changes were made to the waiver procedures in the transfer 
from Sec. 333.4 to Sec. 303.162.
    Processing. Proposed Sec. 303.163 lists the factors to be 
considered by the FDIC in evaluating the notice filed by an institution 
seeking to convert from mutual to stock form.
    With regard to processing procedures, two commenters believed that 
the proposed 60-day notice processing period, as well as the 60-day 
extension, should be shortened. One commenter suggested that the notice 
period begin immediately upon filing of the notice.
    The FDIC believes the existing 60-day notice period is appropriate. 
For notices that involve significant legal or policy issues, a shorter 
processing period is not practical. Likewise, the 60-day extension 
period is viewed as appropriate; however, the FDIC anticipates that any 
extension of the notice period will be only as long as necessary to 
accomplish a complete review. The FDIC believes that conversion 
transactions not involving significant legal or policy issues generally 
can be reviewed by DOS within the initial 60-day period. Regarding 
commencement of the 60-day notice period, the FDIC believes it is only 
practical to begin the period when substantially all of the material 
required to make a decision is readily available for review. The final 
rule is modified to clarify that a notice will be accepted when it is 
deemed ``substantially complete.''
    One commenter suggested that the FDIC staff issue only one set of 
written comments that would include comments from all FDIC staff 
members reviewing the notice rather than forwarding comments from the 
various reviewers as separate communications. The FDIC believes that 
combining all the comments from the various offices within the FDIC 
would neither expedite processing nor facilitate prompt resolution of 
issues, but instead would slow the entire review process. Since a 
notice may raise a number of different types of regulatory issues, FDIC 
staff with varying areas of expertise are routinely called upon to 
evaluate certain aspects of a notice. The current system allows the 
notificant to receive comments on an on-going basis and thus begin to 
cure any defects in the notice without undue delay.
    The FDIC has replaced the term ``notice of intent not to object'' 
with the term ``letter of non-objection'' to better describe the final 
nature of the action.
    The FDIC adopts this section with the changes noted above and other 
editorial changes to clarify intent.
    Delegation of authority. Section Sec. 303.164 of the proposed rule 
provided for delegation of authority to the Director (DOS) and the 
Deputy Director

[[Page 44702]]

to issue non-objection letters when the proposed conversion is 
determined not to pose a risk to the converting institution's safety 
and soundness, violate any law or regulation, present a breach of 
fiduciary duty, or raise any unique legal or policy issues. Two 
commenters viewed the proposed delegation of authority as favorable and 
agreed that the proposed delegation of authority would reduce notice 
processing times. One of these commenters, however, recommended that 
the FDIC provide guidelines in a statement of policy or financial 
institution letter specifying what constitutes a ``routine 
transaction'' eligible for non-objection under delegated authority. At 
this time, the FDIC believes providing specific statements of policy or 
financial institution letters on what constitutes a ``routine 
transaction'' is not necessary; however, the Board may in the future 
consider the issuance of a statement of policy addressing issues 
relating to the mutual-to-stock conversion process.
    A third commenter objected to any delegation of authority to issue 
a letter of non-objection. The Board has acted on numerous conversion 
notices over the last four years and has provided staff with 
considerable guidance regarding the kinds of transaction that are not 
objectionable. Cases which raise unique legal or policy issues or 
otherwise do not meet the criteria outlined in the regulation will 
continue to be reviewed by the Board.
    After careful consideration of the comments, the FDIC is adopting 
the delegation of authority as proposed.

J. Subpart J--International Banking

    Subpart J centralizes application requirements relating to the 
foreign activities of insured state nonmember banks and the U.S. 
activities of insured branches of foreign banks.
Proposed Interim Application Procedures
    The part 303 proposal contained four interim application 
procedures.2 At the time the FDIC issued the part 303 
proposal, the FDIC had an outstanding notice of proposed rulemaking to 
revise the substantive rules underlying the interim procedures. 62 FR 
37748, July 15, 1997 (part 347 proposal). The FDIC could not at that 
time determine whether the part 303 proposal would be finalized before 
the part 347 proposal, and the interim procedures would have been 
necessary in that event. Subpart D of the part 347 proposal contained 
the permanent versions of the four application procedures, designed to 
work with the substantive revisions made to the FDIC's international 
banking operations under the part 347 proposal. However, on April 8, 
1998 the FDIC published the final rule for part 347, thus eliminating 
the need for the interim procedures. 63 FR 17056, April 8, 1998. The 
FDIC received no public comments on the interim procedures.
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    \2\ These were procedures for: (1) establishing, moving, or 
closing a foreign branch of a state nonmember bank, Sec. 303.182; 
(2) investment by state nonmember banks in foreign organizations, 
Sec. 303.183; (3) exemptions from the insurance requirement for a 
state branch of a foreign bank, Sec. 303.186; and (4) approval for 
an insured state branch of a foreign bank to conduct activities not 
permissible for federal branches, Sec. 303.187.
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Transfer of Application Procedures from Part 347
    The final rule for part 303 transfers the four application 
procedures contained in subpart D of part 347 to subpart J of part 303. 
Section 347.402 of this chapter, on establishing, moving or closing a 
foreign branch of a state nonmember bank under Sec. 347.103 of this 
chapter, has been transferred to Sec. 303.182. Section 347.403 of this 
chapter, on investment by insured state nonmember banks in foreign 
organizations under Sec. 347.108 of this chapter, has been transferred 
to Sec. 303.183. Section 347.404 of this chapter, on exemptions from 
the insurance requirement for a state branch of a foreign bank under 
Sec. 347.306 of this chapter, has been transferred to Sec. 303.186. 
Section 347.405, on approval for an insured state branch of a foreign 
bank to conduct activities not permissible for federal branches under 
Sec. 347.213 of this chapter, has been transferred to Sec. 303.187. The 
FDIC has made certain technical changes to the language of the 
procedures to integrate them with the rest of part 303, but these 
changes in language have not changed the substance of the procedures.
    In Sec. 303.183, setting out application procedures for investment 
by insured state nonmember banks in foreign organizations under 
Sec. 347.108 of this chapter, the FDIC has added one requirement. If an 
insured state nonmember bank owns 50 percent or more of the voting 
equity interests of a foreign organization or otherwise controls the 
organization, and the insured state nonmember bank divests itself of 
such ownership, the insured state nonmember bank is required to notify 
the FDIC by letter within 30 days. This requirement has been added to 
parallel the requirement for notice upon closure of a foreign branch 
under Sec. 303.182(d).
    In connection with the part 347 rulemaking, the FDIC received 
public comments on the four application procedures contained in subpart 
D of part 347. The preamble to the final rule for part 347 contains a 
discussion of the FDIC's consideration of the comments and a 
description of the application processes. 63 FR 17056 April 8, 1998.
Noninterim Application Procedures
    Proposed part 303 also contained two application procedures which 
are not of an interim nature: the procedure for moving an insured 
branch of a foreign bank, and the procedure for merger transactions 
involving an insured branch of a foreign bank. The definition of an 
``eligible insured branch'' at Sec. 303.181(c)(2) has been modified to 
make it consistent with Sec. 303.2(r)(2), clarifying that the CRA 
rating requirement does not apply to institutions which are not subject 
to CRA examinations.
Moving an Insured Branch of a Foreign Bank
    Proposed Sec. 303.184 addressed applications by any insured branch 
of a foreign bank which wishes to move from one location to another 
under section 18(d)(1) of the FDI Act (12 U.S.C. 1828(d)). The FDIC 
proposed that Sec. 303.184 parallel proposed subpart C, since the 
FDIC's consent to these applications is legally subject to the same 
statutory considerations as applications to establish or relocate a 
domestic branch or to relocate the main office of an insured state 
nonmember bank. This included expedited processing for an eligible 
insured branch, and a definition of ``eligible insured branch'' which 
paralleled the general Sec. 303.2(r) definition of ``eligible 
depository institution,'' with appropriate changes to take into account 
the different supervisory rating system and capital requirements 
applicable to insured branches.
    The FDIC received no comments on proposed Sec. 303.184.
    The FDIC has made two changes to Sec. 303.184 in the final rule. 
The language in Sec. 303.184(a)(2)(iv) has been modified to simply 
require a statement as to whether or not a particular site for a branch 
is included in or eligible for inclusion in the National Register of 
Historic Places, including documentation of consultation with the State 
Historic Preservation Officer as appropriate. Proposed Sec. 303.184(d) 
delegated authority to the Director and Deputy Director, and where 
confirmed in writing, to an associate director, and the appropriate 
regional director and deputy regional director (DOS) to approve 
applications to move an insured branch of a foreign bank, subject to 
specific criteria. The criteria set forth

[[Page 44703]]

in paragraph 303.184(d)(1)(v) provided that an application could be 
approved by the regional director or deputy regional director (DOS) 
only where no CRA protest as defined in Sec. 303.2(l) had been filed 
which remained unresolved, or where such protest remained unresolved, 
the appropriate DCA official concurred that approval would be 
consistent with the purposes of the CRA, and the applicant agreed in 
writing to any conditions imposed regarding the CRA. Under the 
proposal, where a protested application remained unresolved the 
Director, Deputy Director or associate director (DOS) could approve the 
application without DCA concurrence. While no commenters specifically 
addressed this provision, several commenters raised general concerns 
regarding the FDIC's delegation of authority to act upon CRA protested 
applications. As discussed above, the FDIC believes that it is 
desirable to vest authority to act on protested applications in 
officials most likely to be personally familiar with the communities 
involved. Section 303.184(d) has been revised in the final rule to 
restrict the authority of the Director, Deputy Director and associate 
director (DOS) to act upon CRA protested applications by requiring them 
to obtain DCA concurrence before approving such an applications. The 
FDIC believes that this revision will ensure that those FDIC officials 
with relevant expertise will act together to approve any application 
under this section that is subject to an unresolved CRA protest.
Merger Transactions Involving an Insured Branch of a Foreign Bank
    An insured branch of a foreign bank meets the definition of an 
insured depository institution under section 3 of the FDI Act (12 
U.S.C. 1813) and is therefore subject to the Bank Merger Act. The FDIC 
proposed Sec. 303.185, in order to give insured branches conducting 
merger transactions which are subject to FDIC approval the benefit of 
the same streamlined application processing proposed for domestic 
institutions in subpart D of part 303. Proposed Sec. 303.185 clarified 
that an eligible insured branch as defined in subpart J generally is 
eligible for the expedited processing available to an eligible 
depository institution in subpart D. Similarly, Sec. 303.185 clarifies 
that a transaction in which an insured branch is merged with other 
branches, agencies, or subsidiaries located in the United States of the 
same foreign bank parent is eligible for disposition under the enhanced 
delegations applicable to corporate reorganizations.3
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    \3\ If the foreign bank parent itself is not primarily engaged 
in business in the United States, and is involved in some merger 
transaction or other combination outside the United States which 
does not result in any corresponding merger transaction in the 
United States with respect to an insured branch, section 18(c)(11) 
of the FDI Act (12 U.S.C. 1828(c)) provides that no approval is 
required, since no party to the transaction is primarily engaged in 
business in the United States.
---------------------------------------------------------------------------

    Proposed Sec. 303.185 also incorporated a point explained in 
Advisory Opinion FDIC-96-12 (May 13, 1996) concerning the treatment of 
an insured branch under section 44 of the FDI Act (12 U.S.C. 1831u) as 
added by section 102 of the Interstate Act. Section 44 permits the 
responsible federal regulator to approve an interstate merger 
transaction involving the acquisition of a branch of an insured bank 
without the acquisition of the entire bank, but approval is possible 
only if the state in which the branch is located expressly permits out-
of-state banks to acquire a branch of the bank without acquiring an 
entire bank. In contrast, section 44 permits the responsible federal 
regulator to approve an interstate merger transaction involving the 
acquisition of an entire bank if the state in which the bank is located 
has not adopted legislation to opt out of interstate merger 
transactions. Proposed Sec. 303.185 treated interstate merger 
transactions involving an insured branch under the latter approach. 
Express state authority permitting out-of-state banks to acquire a 
branch of the bank without acquiring the entire bank is required only 
if a foreign bank has more than one insured branch in the affected 
state and proposes to sell fewer than all of them to the same acquiror. 
If such state authority does not exist, the FDIC requires the foreign 
bank to sell all of its insured branches in that state to the same 
affiliated or unaffiliated acquiror.
    The FDIC received no comments on proposed Sec. 303.185.
    In the final rule, the FDIC has made no changes to the above-
described portions of Sec. 303.185 governing merger transactions 
involving insured branches of foreign banks. However, the FDIC has 
added another subsection to the final version of Sec. 303.185. Section 
303.185(b) of the final rule addresses certain transactions in which a 
U.S. insured depository institution acquires deposits from a foreign 
organization at a location in a foreign country, as described below. 
The Bank Merger Act (12 U.S.C. 1828(c)) requires these transactions to 
be reviewed and approved by the FDIC prior to consummation. Although 
these transactions are likely to be rare, the FDIC has added section 
303.185(b) to the final rule, highlighting the existence of the 
statutory approval requirement in the interest of providing helpful 
guidance to the industry. These transactions are subject to Bank Merger 
Act approval in accordance with the procedures contained in subpart D 
of part 303.
    With one exception discussed in the following paragraphs, nothing 
in the statutory language or legislative history of the Bank Merger Act 
indicates that Congress intended the statute to apply to a U.S. insured 
depository institution's acquisitions in foreign countries. The 
competitive factors to be analyzed under the Act are by their terms 
concerned solely with effects in the U.S. While the financial and 
management factors could be germane, most foreign acquisitions are 
already subject to approval by federal bank regulators, since section 
25 of the Federal Reserve Act (12 U.S.C. 601) or section 18(l) of the 
FDI Act requires banking agency approval before an insured bank may 
acquire stock (or other evidences of ownership) of foreign banks or 
organizations. While certain acquisitions structured as mergers or 
purchase and assumption transactions do not involve stock acquisition 
subject to approval under these statutes, the insured bank frequently 
will establish a foreign branch office in the foreign country as part 
of the transaction, requiring federal banking agency approval under 
section 25 of the Federal Reserve Act or section 18(d)(2) of the FDI 
Act.
    Section 18(c)(1)(B) of the Bank Merger Act requires FDIC approval 
whenever an insured depository institution assumes liability to pay any 
deposits or similar liabilities of any noninsured bank or institution. 
Section 18(c)(1)(B), in referring to an assumption of liability to pay 
deposits, expressly includes a parenthetical reference to liabilities 
which are ordinarily excluded from the statutory definition of a 
``deposit'' in section 3(l) of the FDI Act under the proviso in section 
3(l)(5) (12 U.S.C. 1813(l)(5)). This reference was added to the Bank 
Merger Act in 1978, by the Financial Institutions Regulatory and 
Interest Rate Control Act, Pub. L. 95-630 (FIRIRCA). The legislative 
history of FIRIRCA states that the reference was added to make it clear 
that the FDIC's approval is necessary in connection with an insured 
bank's assumption of the deposit liabilities of a foreign noninsured 
bank. S. Rep. No. 95-323, 95th Cong., 1st Sess. (1977) at 29; H.R. Rep. 
No. 95-1383, 95th Cong., 1st Sess. (1977) at 45.
    Section 3(l) defines the term ``deposit'' for purposes of the FDI 
Act. At the time of the FIRIRCA amendment,

[[Page 44704]]

the section 3(l)(5) proviso stated that the definition of a deposit, or 
an insured deposit, did not include any obligation of a bank which was 
payable only at a bank office located in a foreign country. See 12 
U.S.C.A. 1813(l)(5) (West 1980). Under the language of the proviso, 
there was the potential for the liabilities of the FDIC's insurance 
fund to be increased when a U.S. insured bank acquired deposit 
liabilities from a foreign bank in a foreign country, such as by 
assuming the deposits of a branch of a foreign bank in another country 
in connection with acquiring the branch in that country. After the 
deposits had been assumed by the U.S. insured bank, the depositors 
might be heard to argue their deposits were payable at the insured 
bank's home office in the U.S., since it would be unlikely that their 
deposit agreements with the foreign bank, which had no U.S. offices, 
had contained provisions prohibiting payment in the U.S. Absent the 
parenthetical added to section 18(c)(1)(B) by FIRIRCA, these assumption 
transactions were arguably not subject to review by the FDIC, since the 
liabilities being assumed, in the hands of the foreign bank, did not 
meet the deposit definition. The FDIC took the position that section 
18(c)(1)(B) would apply, since the deposits might be within the section 
3(l) definition upon consummation of the assumption, and Congress, in 
an abundance of caution, added the parenthetical to clarify the issue. 
By extension, a merger or consolidation resulting in a U.S. insured 
bank's acquisition of deposit liabilities also required approval under 
section 18(c)(1)(A).4 From approximately 1978 to 1994, the 
FDIC gave Bank Merger Act approval to several insured bank acquisitions 
abroad.
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    \4\ This was because the parenthetical in section 18(c)(1)(B) 
established that the term ``noninsured bank or institution'' in 
section 18(c)(1)(B) included foreign organizations, and section 
18(c)(1)(A) also covers mergers or consolidations with any 
``noninsured bank or institution.''
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    Subsequent additions to section 3(l)(5) have reduced the potential 
for a foreign acquisition to directly increase the liability of the 
deposit insurance funds. In 1994, section 326 of CDRIA amended section 
3(l)(5), eliminating the proviso and adding a new statutory test. Any 
obligation which is carried on the books of an institution's office in 
a foreign country is excluded from the definition of deposit unless, 
among other things, the contract evidencing the obligation provides by 
express terms, and not by implication, that the deposit is payable at 
an office in the U.S. See 12 U.S.C. 1813(l)(5)(A) (West Supp. 1998). 
The addition of this express contractual element means that depositors 
holding foreign bank deposits abroad, whose deposits are assumed by a 
U.S. insured depository institution abroad, cannot argue that the 
assumption, standing alone, qualifies their claims for treatment as 
``deposits'' under the FDI Act. The U.S. insured depository institution 
would have to enter into a new contract with the depositor containing 
such a term. If a particular transaction involved a U.S. institution's 
assumption of foreign bank deposit contracts which contained such a 
term prior to the assumption, the deposits might satisfy the section 
3(l) definition. But, given industry practices, this scenario is not 
likely to arise, and even if it did, the issue would be clearly 
apparent to the U.S. institution.
    Although CDRIA eliminated the section 3(l)(5) proviso to which the 
parenthetical in section 18(c)(1)(B) refers, and CDRIA's additions to 
the deposit definition in section 3(l)(5) have narrowed the category of 
acquisitions presenting the risk which the section 18(c)(1)(B) 
parenthetical was designed to address, the parenthetical in section 
18(c)(1)(B) still requires a Bank Merger Act application for any 
assumption of foreign deposits from a noninsured foreign institution 
which directly increases the potential insured deposit liabilities of 
the deposit insurance funds. A merger or consolidation with a 
noninsured foreign institution having the same effect also requires 
FDIC approval under section 18(c)(1)(A), since section 18(c)(1)(A) uses 
the same ``noninsured bank or institution'' language found in section 
18(c)(1)(B). In order to highlight this statutory requirement for the 
benefit of the industry, the FDIC has added Sec. 347.185(b). This 
section states that the FDIC's Bank Merger Act approval is required for 
any merger transaction in which an insured depository institution 
becomes directly liable for obligations which will, after the merger 
transaction, be treated as deposits under section 3(l)(5)(A)(i)-(ii) of 
the FDI Act (12 U.S.C. 1813(l)(5)(A)(i)-(ii)), as a result of a merger 
or consolidation with a foreign organization or an assumption of 
liabilities of a foreign organization. As noted above, such merger 
applications are to be submitted and processed under the procedures 
contained in subpart D of part 303.

K. Subpart K--Prompt Corrective Action

    Section 38 of the FDI Act (12 U.S.C. 1831o), which governs prompt 
corrective action, restricts or prohibits certain activities based on 
an institution's capital category, and requires an insured institution 
to submit a capital restoration plan when it becomes undercapitalized. 
Subpart K as proposed set forth procedures for making applications 
under section 38.
    The FDIC did not receive any comments specifically on subpart K. 
The FDIC is adopting the subpart as proposed, with the exception of one 
nonsubstantive change.
    This change is to Sec. 303.207(b)(6), which requires critically 
undercapitalized institutions to obtain the FDIC's approval before 
paying excessive compensation or bonuses. The proposed regulatory 
language mistakenly cross referenced part 359 of the FDIC's rules as 
guidance for evaluating what compensation might be excessive, whereas 
it is part 364 of the FDIC's rules that governs excessive compensation. 
The final rule correctly cites part 364. The remainder of the paragraph 
has been removed, because appropriate guidance is now contained in part 
364. See 57 FR 44866, 44883, September 29, 1992.

L. Subpart L--Section 19 of the FDI Act (Consent to Service of Persons 
Convicted of Certain Criminal Offenses)

    Section 19 of the FDI Act (12 U.S.C. 1829) prohibits any person 
convicted of any crime involving dishonesty, breach of trust, or money 
laundering, or who has agreed to enter into a pretrial diversion or 
similar program in connection with a prosecution for any such offense, 
from (i) continuing as or becoming an institution-affiliated party, 
(ii) owning or controlling directly or indirectly an insured depository 
institution, or (iii) otherwise participating in the conduct of the 
affairs of FDIC-insured depository institutions, without the FDIC's 
prior written consent.
    Proposed subpart L did not substantially amend current section 19 
application procedures, but brought together all information on section 
19 which was previously contained in various sections of old part 303. 
Section 303.222 of the proposal clarified the FDIC's position that the 
prior consent of the FDIC is required before a person approved under 
section 19 to participate in the affairs of a particular institution 
may participate in the affairs of another insured institution.
    As stated in the proposal, on July 24, 1997, the FDIC Board of 
Directors published for comment a proposed Statement of Policy on 
Section 19 which contains interpretations of the statutory language (62 
FR 39840). Section L should be read in conjunction with the proposed 
policy statement for a more complete understanding of the FDIC's

[[Page 44705]]

position on section 19. When the final Statement of Policy is adopted, 
the FDIC may find it necessary to revise subpart L accordingly.
    The FDIC received no comments on the proposed subpart L and is 
adopting the subpart as proposed.

M. Subpart M--Other Filings

    As proposed, subpart M contained the procedural requirements and 
delegations of authority for miscellaneous filings which did not 
warrant treatment as separate subparts. Under the proposal, all 
information relating to a particular filing is brought together in a 
self-contained section under a standardized format. The proposal also 
provided for new expedited review procedures for certain applications.
    Proposed part 303 contemplated that the filing procedures for 
requesting an exemption from the statutory bar on management interlocks 
pursuant to the Depository Institutions Management Interlocks Act (12 
U.S.C. 3207) and the FDI Act (12 U.S.C. 1823(k)) would continue to be 
contained in part 348 of this chapter (12 CFR part 348). After further 
consideration, and in the interest of placing all of the application 
procedures in part 303 to the greatest extent possible, the FDIC has 
decided to move the procedural requirements and delegation of authority 
for filings for management official interlocks from part 348 to part 
303. Such filing requirements are now found in new Sec. 303.250 and the 
remainder of the subpart has been renumbered in light of this 
additional provision. The inclusion of these filing procedures is 
considered a technical change by the FDIC. No substantive changes have 
been made to these procedures.
    The FDIC and other federal banking agencies are engaged in a 
rulemaking to amend their respective management official interlocks 
regulations to conform to recent statutory changes, modernize and 
clarify rules, and reduce unnecessary regulatory burden where feasible. 
Once this rulemaking is completed, the applications procedures and 
delegations of authority for management official interlocks will be 
revised to bring them into conformity with the amended interlocks 
regulations. This will be done subsequent to this part 303 rulemaking 
by means of a final rule without notice and comment since such changes 
are purely technical in nature.
    Reduce or retire capital stock or capital debt instruments. Section 
303.241 reorganized and clarified procedures for applications to reduce 
or retire capital stock, notes or debentures pursuant to section 
18(i)(1) of the FDI Act (12 U.S.C. 1828(i)(1)). The FDIC received one 
comment specifically with regard to the expedited review procedures for 
these types of applications. The commenter supported the eligibility of 
these types of applications for expedited procedures. The FDIC is 
adopting this section as proposed.
    Exercise of trust powers. The FDIC proposed to amend part 303 to 
create a new section relating to trust applications that brings 
together all the trust application procedures as well as the related 
delegations of authority into one centralized location. The FDIC 
received one comment regarding this section which supported the 
eligibility of trust applications for expedited procedures. The FDIC is 
adopting this section as proposed.
    Brokered deposit waivers. The proposal reorganized the regulations 
regarding applications to accept brokered deposits by adequately 
capitalized insured depository institutions. In the proposal, the 
application procedures were placed in Sec. 303.243 and the substantive 
rules regarding the acceptance of brokered deposits remained in 
Sec. 337.6. The proposal retained expedited processing for brokered 
deposit waivers yet modified it to parallel the requirements for an 
``eligible depository institution'' in Sec. 303.2(r), with the 
exception of the well-capitalized criteria. The FDIC received no 
specific comments on this section and is adopting the section as 
proposed.
    Golden parachutes and severance plan payments. The proposal revised 
the regulatory provisions regarding applications to make excess 
nondiscriminatory severance plan payments and golden parachute payments 
by insured depository institutions or depository institution holding 
companies. The FDIC's regulations with respect to such payments are 
codified at part 359. The FDIC received no specific comment on the 
proposed changes and is adopting the section as proposed, with minor 
technical changes.
    Waiver of liability for commonly controlled depository 
institutions. Proposed Sec. 303.245 provided application procedures for 
an insured depository institution to request a waiver of liability 
pursuant to section 5(e) of the FDI Act (12 U.S.C. 1815(e)). These 
procedures were part of the FDIC's Statement of Policy Regarding 
Liability of Commonly Controlled Depository Institutions, which 
provided guidance to the industry as to the manner in which the FDIC 
will administer the provisions of section 5(e) of the FDI Act. The FDIC 
received no specific comments on this section and is adopting the 
section as proposed.
    The statement of policy is being revised elsewhere in today's 
Federal Register to remove these procedures for requesting a 
conditional waiver of the cross-guaranty liability from the statement 
of policy and to indicate that they may be found in Sec. 303.245.
    Insurance fund conversions. The proposal revised regulations 
regarding filings for insurance fund conversions at Sec. 303.246 to 
reformat the filing requirements and delete references to and 
procedures regarding insurance fund conversions qualifying as 
exceptions to the insurance fund conversion moratorium imposed in 
section 5(d) of the FDI Act (12 U.S.C. 1815(d)(2)(A)(ii)). The FDIC 
received no specific comments on this section and is adopting the 
section as proposed.
    Conversion with diminution of capital. Section 303.247 of the 
proposal reorganized and clarified filing procedures pursuant to 
section 18(i)(2) of the FDI Act (12 U.S.C. 1828(i)(2)) to convert from 
an insured federal depository institution to a state nonmember bank 
where the capital stock or surplus of the resulting bank will be less 
than the capital stock or surplus, respectively, of the converting 
institution at the time of the shareholder's meeting approving such 
conversion. The FDIC received no specific comments on the section and 
is adopting the section as proposed.
    Continue or resume status as an insured institution following 
termination under section 8 of the FDI Act. Proposed Sec. 303.248 
pertains to applications by depository institutions for permission to 
continue or resume their insured status after termination of insurance 
under section 8 of the FDI Act (12 U.S.C. 1818). This section covers 
institutions whose deposit insurance continues in effect for any 
purpose or for any length of time under the terms of FDIC orders 
terminating deposit insurance. However, it does not cover any operating 
non-insured depository institutions which were previously insured by 
the FDIC or any non-insured, non-operating depository institutions 
whose charters have not been surrendered or revoked. Institutions not 
covered by this section are required to file de novo applications for 
FDIC insurance. The FDIC received no specific comments on this section 
and is adopting the section as proposed.
    Truth in Lending Act--Relief from reimbursement. Proposed 
Sec. 303.249 established procedures for an initial request for relief 
from reimbursement

[[Page 44706]]

pursuant to the Truth in Lending Act (15 U.S.C. 1601 et seq.) and 
Regulation Z (12 CFR part 226) (Truth in Lending). The proposal set 
forth new procedures specifically for Truth in Lending cases and 
provided that applicants may file initial requests for relief within 60 
days after receipt of the compliance report of examination containing 
the request to conduct a file search and make restitution to affected 
customers. The proposal provided that requests for reconsideration 
would be handled under the FDIC's general petition for reconsideration 
provision located at proposed Sec. 303.11(f). Specifically, the 
proposal provided that if reconsideration of an initial denial of a 
request for relief was granted, the merits of the request for relief 
would have been reconsidered by the Board of Directors if the request 
for relief was originally denied by the Director, Deputy Director or 
associate director (DCA). Additionally, if the request for relief was 
originally denied by a regional director or deputy regional director, 
the merits of the request for relief would have been reconsidered by 
the Director or Deputy Director (DCA).
    No comments were received regarding this section.
    To assist applicants, Sec. 303.249(d) of the final rule provides 
that the FDIC will notify the applicant in writing of its determination 
on the initial request for relief within 60 days of the FDIC's receipt 
of such request. The FDIC adopts this section as proposed with this 
modification.
    Modifications of conditions. The proposal reorganized and clarified 
the procedures for requests to modify a previously issued FDIC approval 
of a filing. A new criteria for exercise of delegated authority by DOS 
officials was added requiring Legal Division consultation to modify 
conditions if Legal Division consultation was required in connection 
with the original filing. In the final regulation, the section has been 
redesignated as Sec. 303.251 as a result of an addition to the subpart 
and the necessity to renumber certain sections. The FDIC is adopting 
this section as proposed, with the section number modification.
    Extensions of time. Proposed Sec. 303.251 reorganized and clarified 
the procedures for requests seeking an extension of time to fulfill a 
condition required in an approval issued by the FDIC, or to consummate 
a transaction which was the subject of an approval by the FDIC.
    The FDIC is making two changes to this section in the final 
regulation. First, the FDIC is revising the proposal to make clear that 
multiple extensions of time will be allowed. The FDIC does not believe 
it is necessary to specify the exact number of extensions rather, the 
final regulation provides that an extension of time may not exceed one 
year; however, more than one extension may be granted regarding a 
particular filing. Second the FDIC has changed the section designation 
to Sec. 303.252 as a result of an addition to the subpart resulting in 
the necessity to renumber certain sections. The FDIC is adopting this 
section with the above-stated modifications.

N. Subpart N--Enforcement Delegations

    Proposed subpart N contained several changes to the FDIC's 
enforcement delegations of authority, which are discussed in detail in 
the proposal (62 FR 52827, October 7, 1997). No comments were received 
on the proposed subpart, therefore the FDIC adopts the subpart as 
proposed, with certain minor technical revisions to conform the 
language delegating authority with the delegations of authority in 
other subparts of this part 303, and the following clarifications.
    Civil money penalties. Proposed Sec. 303.269 provided delegation of 
authority, with one exception, to the Director and Deputy Director 
(DOS) and the Director and Deputy Director (DCA) to issue final orders 
to pay civil money penalties, whether or not a notice of charges has 
been issued in a case. The one exception was to delegate to the General 
Counsel the authority to levy and enforce civil money penalties for the 
late, inaccurate, false or misleading filing of Reports of Condition 
and Income, Home Mortgage Disclosure Act Reports, CRA reports (see 12 
CFR 345.42), and all other required reports. This exception has been 
deleted in the final regulation as the Board believes that such 
delegation to the General Counsel is not consistent with the other 
delegations and that the decision to issue such orders should be vested 
in the Directors and Deputy Director (DOS or DCA) with the concurrence 
of the General Counsel.
    Acceptance of written agreements. Proposed Sec. 303.274 continued 
in effect FDIC delegations of authority to accept written agreements in 
lieu of orders to terminate deposit insurance and to issue cease-and-
desist orders under sections 8(a) and (b) of the FDI Act (12 U.S.C. 
1818(a) and (b)). Proposed Sec. 303.274(c) added a new provision giving 
authority to the Director and Deputy Director (DOS and DCA) and, where 
confirmed in writing by the appropriate Director, to an associate 
director, or to the appropriate regional director or deputy regional 
director to enter into written agreements with insured institutions and 
institution-affiliated parties that contain conditions precedent to 
FDIC's nonobjection to a filing. A clarification has been added to the 
final regulation providing that an insured institution will not be 
disqualified from being treated as ``well-capitalized'' for prompt 
corrective action purposes because of having entered into a written 
agreement with the FDIC or its primary federal regulator in conjunction 
with a filing unless the written agreement expressly states to the 
contrary.
    Modification and termination of section 8(e) prohibition orders. 
Proposed, Sec. 303.275(e) authorized modification or termination of 
orders issued under section 8(e) of the Act (12 U.S.C. 1818(e)) if a 
respondent established any one of the three factors listed in 
Sec. 303.275(e). The use of the word ``or'' rather than ``and'' in 
paragraph (2) was a clerical error and has been corrected in the final 
regulation.

V. Other Regulatory Changes

A. Part 333--Extension of Corporate Powers

    The FDIC is making technical revisions to Sec. 333.4 which governs 
the substantive requirements for conversions of insured mutual state 
savings banks to the stock form of ownership. Paragraph (b) of 
Sec. 333.4 sets forth the procedural requirements for requesting any 
waiver from compliance with the requirement of Sec. 333.4 due to 
conflicts with state law. Paragraph (b) is deleted from Sec. 333.4 and 
moved to Sec. 303.162 with two changes. The first change allows an 
institution to file a written request for waiver of compliance with 
Sec. 333.4 or subpart I of 12 CFR part 303. The second change provides 
two circumstances for which a waiver may be sought: when compliance 
would be in conflict with state law or for any other good cause shown. 
Paragraphs (c)(4)(i) and (ii) are also deleted from Sec. 333.4 because 
they are now included in Sec. 303.161, which sets forth the filing 
procedures and the specific contents of the notice of intent to convert 
to stock form. Paragraph (c)(4)(i) required the submission of a full 
appraisal report on the value of the converting bank and the pricing of 
the stock to be sold in the conversion. This requirement is now located 
at Sec. 303.161(c)(6). The requirements in Sec. 333.4(c)(4)(i) fully 
describing the manner in which an appraisal must be prepared have been 
deleted as unnecessary because of the banking industry's knowledge of 
acceptable valuation practices. In addition, the Office of Thrift

[[Page 44707]]

Supervision's regulations governing mutual to stock conversions set 
forth in detail the requirements for an acceptable appraisal at 12 CFR 
Sec. 563b.7(f), and may be used as guidance in this area. Paragraph 
(c)(4)(ii) required the submission of a business plan and is now 
located at Sec. 303.161.(3).

B. Part 337--Unsafe and Unsound Banking Practices

    As part of the FDIC's effort to review and streamline its 
regulations pursuant to Riegle Community Development and Regulatory 
Improvement Act of 1994 (see Pub. L. 103-325, 108 Stat. 2160, section 
337) (CDRIA), the FDIC proposed centralizing virtually all filing 
procedures in part 303 of this chapter, including filing procedures for 
brokered deposit waivers. 62 FR 52810, October 7, 1997. Specifically, 
the proposal moved the procedures for an adequately capitalized insured 
depository institution to obtain a waiver of the restrictions on 
accepting or renewing brokered deposits from Sec. 337.6 (12 CFR part 
337) to Sec. 303.243 (12 CFR part 303). At the same time, technical 
amendments were proposed to part 337 to reflect these changes and to 
reflect certain changes in the statutory definition of ``deposit 
broker'' as a result of the CDRIA. Under the proposal, the amended 
statutory language was incorporated in the FDIC's regulatory definition 
of ``deposit broker'' at Sec. 337.6(a)(5)(iii). The FDIC received no 
comments on these changes and is, therefore, adopting part 337 as 
proposed.

C. Part 341--Registration of Transfer Agents

    The FDIC proposed to place in a new Sec. 341.7 certain delegations 
of authority to the DOS regarding the registration of transfer agents 
subject to section 17A(c)(1) of the Securities Exchange Act of 1934 (15 
U.S.C. 78q-1(c)(1)) (Exchange Act). 62 FR 52867, October 9, 1997. In 
its proposed Sec. 341.7, authority is delegated to DOS to act on 
disclosure matters regarding Sections 17 and 17A of the Exchange Act. 
However, the FDIC proposed that the Board of Directors retain its 
authority to act on disclosure matters when such matters involve 
exemptions from registration requirements pursuant to section 17A(c)(1) 
of the Exchange Act. No comments were received on proposed Sec. 341.7, 
and the FDIC adopts this section as proposed.

D. Part 346--Foreign Banks

    The FDIC proposed to relocate, from Sec. 303.8(f) of the current 
rule to Sec. 346.19, a delegation of authority for DOS to accept the 
pledge agreements by which insured branches of foreign banks pledge 
assets for the benefit of the FDIC. The FDIC received no public 
comments on the proposal. On April 8, 1998, the FDIC published a final 
rule consolidating three parts of the FDIC's rules on international 
operations, including part 346, into a single part 347. 63 FR 17056, 
April 8, 1998. Section 347.210 of the new rule contains the delegation 
in question, so the proposal to relocate Sec. 303.8(f) is no longer 
necessary.

E. Part 347--International Banking

    As discussed in connection with subpart J, the FDIC is transferring 
four application procedures presently contained in part 347 to subpart 
J of part 303. The amendments in this rulemaking delete the interim 
application procedures from part 347.

F. Part 348--Management Official Interlocks

    The FDIC proposed to place certain delegations of authority to DOS 
related to management official interlocks in 12 CFR part 348, as a 
result of the changes to be made in 12 CFR part 303. 62 FR 52867, 
October 7, 1997. The FDIC received no public comment on the proposal. 
The FDIC has determined, however, to place the proposed delegations in 
subpart M of part 303, rather than part 348, as part of new filing 
procedures for requesting an exemption from the statutory bar on 
management interlocks. The delegation of authority is now contained in 
Sec. 303.250(f).

G. Part 359--Golden Parachute and Indemnification Payments

    Part 359 contains the rules regarding the making of excess 
nondiscriminatory severance plan payments and golden parachute payments 
by insured depository institutions or depository institution holding 
companies. The proposal contemplated amending 12 CFR part 359 by moving 
information regarding filing instructions from Sec. 359.6 to 
Sec. 303.244 and providing appropriate cross references. In addition, 
the proposal provided a listing of application contents. These elements 
were expanded in the proposal to assist an applicant in preparing a 
complete filing. No comments were received on these technical 
amendments and the FDIC adopts this section as proposed.

VI. Regulatory Text Deleted From Part 303

    As a result of the comprehensive revision of part 303, a number of 
provisions currently found in part 303 are not being included in the 
final part 303 because these matters are covered elsewhere or are no 
longer needed. Those items are summarized below:
    Section 303.2(c)--Special procedures for remote service facilities. 
Notice procedures for remote service facilities, along with related 
delegations of authority and the definition of ``remote service 
facility'' have been deleted because EGRPRA excludes such facilities 
from the definition of a branch.
    Section 303.11(c)--Request for review. This section merely stated 
that an aggrieved party may request the Board of Directors to review 
any action taken under authority delegated under the former 
Secs. 303.7, 303.8, and 303.9. Numerous avenues now exist for appeal, 
such as those found under new Sec. 303.11(f) (Appeals and requests for 
reconsideration) and part 308 (Uniform Rules of Practice and 
Procedure). Broad authority to challenge delegations of authority is 
unnecessary and is not in keeping with the Board's recent resolution on 
delegations of authority which has been codified in part in Sec. 303.12 
(General rules governing delegations of authority).
    Section 303.12--OMB control number assigned pursuant to the 
Paperwork Reduction Act. This section is deleted in its entirety 
because this same material also appears in Sec. 304.7, Display of 
control numbers, of this chapter.
    Several delegations of authority are also being eliminated:
    Section 303.8(b)--Disclosure laws and regulations. The delegations 
related to part 335 (Securities of nonmember insured banks) are now 
contained in part 335 of this chapter. The delegations to administer 
part 341 (Registration of Securities Transfer Agents) are moved to part 
341 of this chapter.
    Section 303.8(c)--Security devices and procedures and bank service 
arrangements. This delegation was to administer the provisions of part 
326 (Minimum Security Devices and Procedures). There are no longer any 
application procedures related to part 326, so therefore no delegations 
of authority are required.
    Section 303.8(d)--In emergencies. This was a delegation to staff to 
manage the FDIC's affairs in the event an enemy attack renders the 
Board of Directors unable to perform its normal management functions. 
The Board has determined that no such delegation is necessary and has 
deleted the provision.
    Section 303.8(h)--Application or notices for membership or 
resumption of business. This delegation permitted DOS officials to 
provide comments to other federal regulators on applications

[[Page 44708]]

or notices for membership in the Federal Reserve System, or for 
conversion of a state bank to a national bank. This delegation is being 
deleted as unnecessary.
    Section 303.8(i)--Depository Institutions Disaster Relief Act of 
1992 (DIDRA). The provisions of DIDRA that were the subject of these 
delegations have expired and thus the delegations are removed.

VII. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (44 U.S.C. 3501 et 
seq.) the FDIC may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid Office of Management and Budget (``OMB'') control 
number.
    Collections approved as part of the Part 303 proposed rule. The 
proposed rule invited public comment on two collections of information 
contained that were submitted to the Office of Management and Budget 
(OMB) for review. The first collection is located in Subpart C 
(Establishment and Relocation of Domestic Branches and Offices) of the 
regulation which sets forth the application requirements and procedures 
for insured state nonmember banks to establish a branch, relocate a 
main office, and relocate a branch subject to the approval by the FDIC. 
The information collected is used by the FDIC to evaluate the factors 
required by statute and to determine whether to grant consent. No 
public comment was received about this collection. OMB approved this 
collection under control number 3064-0070 through November 30, 2000. 
The second collection is located in Subpart M (Other filings), Section 
303.242 (Exercise of trust powers) which sets forth the application 
procedures relating to the FDIC's approval to exercise trust powers. 
Each application submitted by a bank is evaluated by the FDIC to verify 
the qualifications of bank management to administer a trust department 
to ensure that the bank's financial condition will not be jeopardized 
as a result of trust operations. No public comment was received about 
this collection. OMB approved this collection under control number 
3064-0025 through November 30, 2000.
    Other Collections of Information. The final part 303 also addresses 
other collections of information for which public comment and OMB 
approval were sought separate from the part 303 notice of proposed 
rulemaking discussed above. Nothing in the final part 303 is intended 
to change any of these collections. Specifically, Subpart B (Deposit 
Insurance) addresses a collection approved by OMB under control number 
3064-0001 which expires on July 31, 2000. Subpart D (Merger 
Transactions) addresses a collection approved by OMB under control 
number 3064-0015 which expires on September 30, 1998. The merger 
application collection was the subject of an interagency solicitation 
of public comment concerning the PRA aspects of a single, interagency 
form for affiliated and nonaffiliated merger transactions. 63 Fed. Reg. 
3182 (Jan. 21, 1998) and was submitted to OMB for review and further 
public comment. Subpart E (Change in Bank Control) addresses a 
collection approved by OMB under control number 3064-0019 which expires 
on January 31, 2000. Subpart F (Change of Director or Senior Executive 
Officer) addresses a collection approved by OMB under control number 
3064-0097 which expires on January 31, 2000. Subpart G (Activities and 
Investments of Insured State Banks), addresses a collection approved by 
OMB under control number 3064-0111, and Subpart H (Filings by Savings 
Associations), addresses a collection approved under control number 
3064-0104, both of which expire on November 30, 2000.
    Subpart I (Mutual-to-Stock Conversions) addresses a collection 
approved by OMB under control number 3064-0117 which expires on July 
31, 2000. Subpart J (International Banking) addresses two collections 
approved by OMB under control numbers 3064-0114 and 3064-0125, both of 
which expire on July 31, 2000. Subpart K (Prompt Corrective Action) 
addresses a collection approved by OMB under control number 3064-0115 
which expires on July 31, 1999. Subpart L (Section 19 of the FDIC Act--
Consent to service of persons convicted of certain criminal offenses) 
addresses a collection approved by OMB under control number 3064-0018 
which expires on July 31, 2000. Subpart M (Other Filings) Sec. 303.241 
(Reduce or retire capital stock or capital debt instruments) addresses 
a collection approved by OMB under control number 3064-0079 which 
expires on November 30, 2000. Subpart M (Other Filings) Sec. 303.243 
(Brokered deposits) addresses a collection approved by OMB under 
control number 3064-0099 which expires on August 31, 1998.
    Modification of collection: Title of the collection: The rule will 
modify an information collection previously approved by OMB titled 
``Foreign Branching and Investment by Insured State Nonmember Banks'' 
under control number 3064-0125.
    Summary of the collection: The collection consists of applications 
for establishing or closing a foreign branch, acquiring stock of a 
foreign organization and records and reports which a state nonmember 
bank must maintain after it has established a foreign branch or 
organization.
    Need and use of the information: The FDIC needs the additional 
information required by this change, to better assess the condition, 
management, and risk to the fund posed by institutions involved in 
operating foreign organizations, and also for use in connection with 
authorizing other institutions to conduct such operations under section 
18(l) of the FDI Act (12 U.S.C. 1828(l)).
    Changes to the collection: The rule will modify the collection by 
adding, at Sec. 303.183(d), a requirement that, if an insured state 
nonmember bank holding 50 percent or more of the voting equity 
interests of a foreign organization or otherwise controlling the 
foreign organization divests itself of such ownership or control, the 
insured state nonmember bank shall file a notice, in the form of a 
letter, including the name, location, and date of divestiture of the 
foreign organization, with the appropriate DOS regional director no 
later than 30 days after the divestiture.
    Respondents: State nonmember banks.
    Estimated annual burden: 
    Frequency of response: Occasional.
    Number of responses: 2.
    Average number of hours to prepare a response: 1.
    Total annual burden: 2.
    With respect to this modification of a collection, comment is 
solicited on:
    (i) Whether the collection of information is necessary for the 
proper performance of the functions of the agency, including whether 
the information will have practical utility;
    (ii) The accuracy of the agency's estimate of the burden of the 
collection of information, including the validity of the methodology 
and assumptions used;
    (iii) The quality, utility, and clarity of the information to be 
collected; and
    (iv) Ways to minimize the burden of the collection of information 
on those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    The collection of information contained at Sec. 303.183(d) of the 
final rule and described above has been submitted to OMB for review. 
Comments on the collection of information should be sent to the desk

[[Page 44709]]

officer for the FDIC: Alexander T. Hunt, Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 3208, Washington, DC 20503. Copies of comments 
should also be sent to: Steven F. Hanft, FDIC Clearance Officer, Office 
of the Executive Secretary, Federal Deposit Insurance Corporation, 550 
17th Street, NW, Washington, DC 20429, (202) 898-3907. Comments may be 
hand-delivered to the guard station at the rear of the 17th Street 
building (located on F Street) on business days between 7:00 a.m. and 
5:00 p.m. [Fax number (202) 898-3838; Internet address: 
[email protected]]. OMB will make a decision concerning the change in 
the information collection between 30 and 60 days after the publication 
of this document in the Federal Register. Therefore, a comment to OMB 
is best assured of having its full effect if OMB receives it within 30 
days of this publication. Unless the FDIC publishes a notice to the 
contrary, the public may assume that the change in the collection was 
approved within 60 days of this publication.
    Ongoing review. Public comment and OMB review of all collections 
contained in part 303 will occur as part of the regular cycle of review 
under the PRA. Nonetheless, the FDIC welcomes comment about the PRA 
aspects of this regulation. Comment specifically about PRA related 
issues should identify the Paperwork Reduction Act and any particular 
subpart and/or collection for which consideration is desired. Such 
comments should be sent to Steven F. Hanft (FDIC) at the above address.

VIII. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1966 
(SBREFA) (Title II, Pub. L. 104-11) provides generally for agencies to 
report rules to Congress for review. The reporting requirement is 
triggered when a federal agency issues a final rule. Accordingly, the 
FDIC will file the appropriate reports with Congress as required by 
SBREFA.
    The Office of Management and Budget has determined that this final 
revision of part 303 does not constitute a ``major rule'' as defined by 
SBREFA.

IX. Regulatory Flexibility Act

    Pursuant to Section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. 601-612) (RFA) it is hereby certified that this final rule will 
not have a significant adverse economic impact on a substantial number 
of small entities. Accordingly, a final regulatory flexibility analysis 
is not required. This regulation will reduce the regulatory burden on 
the financial institutions to which this rule applies, regardless of 
size, by consolidating, simplifying and clarifying existing regulatory 
requirements. This regulation will not increase the burden on such 
institutions.
    The FDIC prepared and published an initial regulatory flexibility 
analysis (IRFA) pursuant to Section 603 of the RFA as part of the 
proposed rulemaking. In that analysis the FDIC estimated the number of 
small entities to be affected by the proposal and stated its belief 
that any economic impact on such small entities would be beneficial 
because the rule serves to reduce regulatory burden. The proposal 
specifically sought comment on that belief. No comments received 
addressed the initial regulatory analysis. As discussed in the 
``Supplementary Information'' section to this rule, many of the 
commenters supported the provisions of this rule which streamline the 
application process and make it less burdensome for the regulated 
financial institutions. The FDIC has carefully considered all comments 
received and adopts the final rule without amendments that would change 
the belief stated in the IRFA.

X. Derivation Table

------------------------------------------------------------------------
       Revised provision          Original provision        Comments    
------------------------------------------------------------------------
303.0.........................  .....................  Added.           
303.1.........................  303.0(a).............  Revised.         
303.2.........................  303.0(b).............  No change.       
(a)...........................  303.0(b)(13).........  No change.       
(b)...........................  303.0(b)(29).........  No change.       
(c)...........................  303.0(b)(30).........  Revised.         
(d)...........................  303.0(b)(25).........  No change.       
(e)...........................  .....................  Added.           
(f)...........................  .....................  Added.           
(g)...........................  303.0(b)(12).........  Revised.         
(h)...........................  303.0(b)(6)..........  No change.       
(I)...........................  303.0(b)(26).........  No change.       
(j)...........................  .....................  Added.           
(k)...........................  303.0(b)(1)..........  No change.       
(l)...........................  303.0(b)(30).........  Revised.         
(m)...........................  .....................  Added.           
(n)...........................  303.0(b)(8)..........  Revised.         
(o)...........................  303.0(b)(3)..........  No change.       
(p)...........................  303.0(b)(2)..........  No change.       
(q)...........................  303.0(b)(4),(5)......  No change.       
(r)...........................  .....................  Added.           
(s)...........................  .....................  Added.           
(t)...........................  .....................  Added.           
(u)...........................  .....................  Added.           
(v)...........................  303.0(b)(14).........  No change.       
(w)...........................  .....................  Added.           
(x)...........................  .....................  Added.           
(y)...........................  .....................  Added.           
(z)...........................  303.0(b)(24).........  No change.       
(aa)..........................  303.0(b)(17).........  No change.       
(bb)..........................  303.0(b)(15).........  No change.       
(cc)..........................  303.0(b)(11).........  No change.       
(dd)..........................  303.0(b)(7),(9)......  Revised.         

[[Page 44710]]

                                                                        
(ee)(1).......................  303.0(b)(16).........  No change.       
(2)...........................  303.0(b)(18).........  No change.       
(3)...........................  303.0(b)(19).........  No change.       
(4)...........................  303.0(b)(20).........  No change.       
(5)...........................  303.0(b)(21).........  No change.       
(6)...........................  303.0(b)(22).........  No change.       
(ff)..........................  303.0(b)(31).........  No change.       
(gg)..........................  303.0(b)(27).........  Revised.         
(hh)..........................  303.0(b)(28).........  Revised.         
303.3.........................  303.0(a).............  Revised.         
303.4.........................  303.6(1).............  Added.           
303.5.........................  .....................  Added.           
303.6.........................  303.6(b).............  Revised.         
303.7(a)......................  303.6(a),(b).........  Revised.         
(b)...........................  303.6(f)(1)(iii).....  Revised.         
(c),(d),(e),(f)...............  .....................  Added.           
303.8(a)......................  303.6(g)(1),(2)......  Revised.         
(b)...........................  303.6(g)(3)..........  Revised.         
303.9(a)......................  303.6(f)(3)..........  Revised.         
303.9(b)(1)...................  .....................  Added.           
(2)...........................  303.6(f)(4)..........  Revised.         
(3)...........................  303.6(f)(5)..........  No change.       
(4)...........................  .....................  Added.           
303.10(a).....................  .....................  Added.           
(b),(c).......................  303.6(h).............  Revised.         
(d)...........................  .....................  Added.           
(e)...........................  303.6(i).............  Revised.         
(f)...........................  303.6(i)(2)..........  Revised.         
(g)...........................  303.6(j)(5)..........  Revised.         
(h)...........................  303.6(j)(1-4)........  Revised.         
(i)...........................  303.6(j)(6)..........  Revised.         
(j)...........................  303.6(h)(3)..........  Revised.         
(k)...........................  303.6(k).............  Revised.         
(l)...........................  303.6(l).............  Revised.         
(m)...........................  303.6(m).............  Revised.         
303.11(a).....................  303.6(d).............  Revised.         
(b)...........................  .....................  Added.           
(c)...........................  .....................  Added.           
(d)...........................  .....................  Added.           
(e)...........................  .....................  Added.           
(f)...........................  303.6(e).............  Revised.         
(g)...........................  .....................  Added.           
303.12(a).....................  303.11(a)............  Revised.         
(b)...........................  .....................  Added.           
(c),(d).......................  303.10(a)............  Revised.         
(e),(f).......................  303.11(a)(1).........  Revised.         
303.13........................  303.8(g).............  No change.       
303.13(a).....................  .....................  Added.           
303.13(b).....................  .....................  Added.           
303.13(c).....................  303.8(g)(1)..........  No change.       
303.14(d).....................  .....................  Added.           
303.20........................  303.1................  Revised.         
303.21........................  303.1................  Revised.         
303.22........................  .....................  Added.           
303.23(a).....................  303.6(f)(1)..........  Revised.         
(b)...........................  303.6(f)(1)(ii)......  No change.       
303.24........................  .....................  Added.           
303.25........................  .....................  Added.           
303.26(a)(1)..................  303.7(d)(1)..........  Revised.         
303.26(a)(2)..................  303.7(f)(1)(vi)......  Revised.         
303.26(b).....................  303.7(d)(2)..........  Revised.         
(c)...........................  303.7(d)(3)..........  Revised.         
(d)...........................  303.7(b)(4)..........  Revised.         
303.27........................  303.10(b)(2).........  Revised.         
303.40(a).....................  303.2................  Revised.         
(b),(c),(d)...................  .....................  Added.           
303.41(a).....................  303.2(a)(footnote 2).  Revised.         
(b)...........................  303.2(a).............  No change.       
(c),(d),(e)...................  .....................  Added.           
303.42(a),(b),(c),(d).........  303.2(a).............  Revised.         
303.43(a),(b).................  .....................  Added.           
303.44(a).....................  303.6(f)(1)..........  Revised.         
(b)...........................  303.69(f)(3),(4).....  Revised.         
(c)...........................  303.6(f)(2)..........  Revised.         

[[Page 44711]]

                                                                        
303.45(a),(b),(c).............  .....................  Added.           
303.46(a),(b),(c).............  303.7(a).............  Revised.         
303.60........................  .....................  Added.           
303.61(a).....................  303.3(a),(b).........  Revised.         
(b)...........................  303.7(f)(1)(v).......  Revised.         
(c)...........................  303.7(f)(1)(v).......  Revised.         
(d)...........................  303.3(d).............  Revised.         
(e)...........................  .....................  Added.           
303.62(a).....................  303.3................  Revised.         
(b)...........................  .....................  Added.           
303.63(a).....................  303.3(a),(e).........  Revised.         
(b)...........................  303.3(a).............  Revised.         
(c)...........................  .....................  Added.           
(d)...........................  303.3(d).............  Revised.         
303.64........................  .....................  Added.           
303.65........................  303.6(f)(1),(3)......  Revised.         
303.66(a)(1)..................  303.7(b),(f).........  Revised.         
(2),(3).......................  .....................  Added.           
(b)...........................  303.7(b).............  Revised.         
(c)...........................  303.7(b)(2),(5)......  Revised.         
(d)...........................  303.7(f)(1)(v),(vi)..  Revised.         
(e)...........................  303.10(b)(1)(i),(iii)  Revised.         
                                 ,(iv).                                 
(f)...........................  303.7(b)(3)..........  Revised.         
(g)...........................  303.8(e).............  Revised.         
303.67........................  303.10(b)(1).........  Revised.         
303.80........................  .....................  Added.           
303.81(a).....................  303.4(a).............  Revised.         
(b)...........................  .....................  Added.           
(c)...........................  303.4(a) (footnote 3)  No change.       
(d)...........................  303.4(a) (footnote 4)  No change.       
303.82(a).....................  .....................  Added.           
(b)...........................  303.4(a).............  Revised.         
(c)...........................  .....................  Added.           
(d), (e)......................  303.4(a).............  Revised.         
303.83(a)(1) thru (b)(1)......  303.4(c).............  Revised.         
(b)(2), (3)...................  .....................  Added.           
303.84(a).....................  303.4(b)(1)..........  Revised.         
(b)...........................  303.4(b)(5)..........  No change.       
303.85........................  .....................  Added.           
303.86(a)(1), (2).............  303.4(b)(2)(i).......  Revised.         
(a)(3)........................  .....................  Added.           
(a)(4), (5)...................  303.4(b)(3)(ii)......  Revised.         
(a)(6)........................  303.4(b)(6)..........  Revised.         
303.87........................  303.7(c).............  Revised.         
303.100.......................  .....................  Added.           
303.101(a)....................  .....................  Added.           
(b)...........................  303.14(a)(3).........  Revised.         
(c)...........................  303.14(a)(4).........  Revised.         
303.102(a), (b)...............  303.14(b)............  Revised.         
(c), (d)......................  303.14(c)(2).........  Revised.         
303.103(a)....................  303.14(c)(1).........  Revised.         
(b)...........................  303.14(c)(4).........  Revised.         
(c)...........................  303.14(d)............  Revised.         
303.104.......................  303.14(e)............  Revised.         
303.140.......................  .....................  Added            
303.141.......................  303.13(a)............  No change.       
303.142.......................  303.13(b)............  No change.       
303.143.......................  303.13(c)............  No change.       
303.144.......................  303.13(d)............  No change.       
303.145.......................  303.13(e)............  No change.       
303.146.......................  303.13(f)............  No change.       
303.147.......................  303.13(g)............  No change.       
303.148.......................  303.13(h)............  No change.       
303.160.......................  .....................  Added.           
303.161(a), (b)...............  303.15(a)............  Revised.         
303.161(c)....................  303.15(b)............  Revised.         
303.161(d)....................  303.15(c)............  No change.       
303.161(e)....................  303.15(d)............  No change.       
303.161(f)....................  .....................  Added.           
303.162.......................  .....................  Added.           
303.163(a)....................  303.15(c)(1).........  No change.       
303.163(b)....................  303.15(c)(2).........  No change.       
303.163(c)....................  303.15(e)............  No change.       
303.163(d)....................  303.15(e)............  No change.       

[[Page 44712]]

                                                                        
303.163(e)....................  303.15(f)............  No change.       
303.163(f)....................  303.15(g)............  No change.       
303.164.......................  .....................  Added.           
303.180.......................  .....................  Added.           
303.181.......................  .....................  Added.           
303.182(a)....................  .....................  Added.           
303.182(b)....................  303.2(a).............  Revised.         
303.182(c)....................  .....................  Added.           
303.182(d)....................  347.3(a).............  Revised.         
303.182(e)....................  303.7(a).............  Revised.         
303.183(a), (b), (c), (d).....  303.5(d).............  Revised.         
303.183(e)....................  303.7(f)(2)(ii)......  Revised.         
303.184.......................  303.2, 303.6, 303.7..  Revised.         
303.185.......................  .....................  Added.           
303.186.......................  346.6(b).............  Revised.         
303.187.......................  346.101..............  Revised.         
303.200.......................  .....................  Added.           
303.201.......................  303.5(e).............  No change.       
303.202.......................  303.5(e).............  No change.       
303.203.......................  303.5(e)(1)..........  No change.       
303.204.......................  303.5(e)(2)..........  No change.       
303.205.......................  303.5(e)(3)..........  No change.       
303.206.......................  303.5(e)(4)..........  No change.       
303.207.......................  303.5(e)(5)..........  Revised.         
303.208.......................  303.7(f)(1)(ix)......  No change.       
303.220.......................  .....................  Added.           
303.221.......................  .....................  Added.           
303.222.......................  .....................  Added.           
303.223.......................  .....................  Added.           
303.224(a),(b),(c),(d)........  303.7(e).............  Revised.         
(e)...........................  303.10(b)(3).........  No change.       
303.240.......................  .....................  Added.           
303.241(a)....................  .....................  Added.           
(b),(c),(d)...................  303.5(b).............  Revised.         
(e),(f),(g)...................  .....................  Added.           
(h)...........................  303.7(f)(1)(iii).....  No change.       
303.242(a)....................  .....................  Added.           
(b),(c),(d)...................  303.5(b).............  Revised.         
(e),(f).......................  .....................  Added.           
(g),(h).......................  303.7(a)(2)..........  No change.       
303.243(a),(b),(c)............  337.6(d),(e).........  No change.       
(d),(e),(f)...................  .....................  Added.           
(g)...........................  337.6(c),(e).........  No change.       
(h)...........................  337.6(e),              Revised.         
                                 303.7(f)(1)(viii).                     
303.244(a),(b),(c),(d),(e)....  359..................  Revised.         
(f)...........................  303.7(g).............  No change.       
303.245.......................  .....................  Added.           
303.246(a),(b),(c),(d)........  303.5(a).............  Revised.         
(e)...........................  .....................  Added.           
(f)...........................  303.7(f)(4)..........  Revised.         
303.247.......................  303.3(c).............  Revised.         
303.248.......................  303.5(c).............  Revised.         
303.249.......................  .....................  Added.           
303.250.......................  .....................  Added.           
303.250(a),(b),(c),(d),(e)....  .....................  Added.           
(h)...........................  303.7(f)(1)(vii),      Revised.         
                                 303.7(f)(2)(i).                        
303.251(a),(b),(c),(d),(e)....  .....................  Added.           
(f)...........................  303.7(f)(14)(iv).....  Revised.         
303.252(a),(b),(c),(d),(e)....  .....................  Added.           
(f)...........................  303.8(a).............  No change.       
303.260.......................  .....................  Added.           
303.261.......................  303.9(a).............  Revised.         
303.262.......................  .....................  Added.           
303.263.......................  303.9(b).............  Revised.         
303.264.......................  303.9(c).............  Revised.         
303.265.......................  303.9(d).............  Revised.         
303.266.......................  303.9(e).............  Revised.         
303.267.......................  303.9(f).............  Revised.         
303.268.......................  .....................  Added.           
303.269.......................  303.9(g).............  Revised.         
303.270.......................  .....................  Added.           
303.271.......................  303.9(h).............  Revised.         
303.272.......................  303.9(i).............  Revised.         
303.273.......................  303.9(k).............  Revised.         

[[Page 44713]]

                                                                        
303.274.......................  303.9(l).............  Revised.         
303.275.......................  303.9(m).............  Revised.         
303.276.......................  303.9(n).............  Revised.         
303.277.......................  303.9(o).............  Revised.         
03.278........................  303.10(c)............  Revised.         
------------------------------------------------------------------------

List of Subjects

12 CFR Part 303

    Administrative practice and procedure, Authority delegations 
(Government agencies), Bank deposit insurance, Banks, banking, Bank 
merger, Branching, Foreign branches, Foreign investments, Golden 
parachute payments, Insured branches, Interstate branching, Reporting 
and recordkeeping requirements, Savings associations.

12 CFR Part 333

    Banks, banking, Corporate powers.

12 CFR Part 337

    Banks, banking, Reporting and recordkeeping requirements, Savings 
associations, Securities.

12 CFR Part 341

    Banks, banking, Reporting and recordkeeping requirements, 
Securities.

12 CFR Part 347

    Authority delegations (Governmental agencies), Bank deposit 
insurance, Banks, banking, Credit, Foreign banking, Foreign 
investments, Insured branches, Investments, Reporting and recordkeeping 
requirements, United States investments abroad.

12 CFR Part 359

    Bank deposit insurance, Banks, banking, Golden parachute payments, 
Indemnity payments.

    For the reasons set forth in the preamble and under the authority 
of 12 U.S.C. 1819(a)(Tenth), the FDIC Board of Directors hereby amends 
12 CFR chapter III as follows:
    1. Part 303 is revised to read as follows:

PART 303--FILING PROCEDURES AND DELEGATIONS OF AUTHORITY

Sec.
303.0  Scope.

Subpart A--Rules of General Applicability

Sec.
303.1  Scope.
303.2  Definitions.
303.3  General filing procedures.
303.4  Computation of time.
303.5  Effect of Community Reinvestment Act performance on filings.
303.6  Investigations and examinations.
303.7  Public notice requirements.
303.8  Public access to filing.
303.9  Comments.
303.10  Hearings and other meetings.
303.11  Decisions.
303.12  General rules governing delegations of authority.
303.13  Delegations of authority to officials in the Division of 
Supervision and the Division of Compliance and Consumer Affairs.

Subpart B--Deposit Insurance

303.20  Scope.
303.21  Filing procedures.
303.22  Processing.
303.23  Public notice requirements.
303.24  Application for deposit insurance for an interim 
institution.
303.25  Continuation of deposit insurance upon withdrawing from 
membership in the Federal Reserve System.
303.26  Delegation of authority.
303.27 Authority retained by the FDIC Board of Directors.

Subpart C--Establishment and Relocation of Domestic Branches and 
Offices

303.40  Scope.
303.41  Definitions.
303.42  Filing procedures.
303.43  Processing.
303.44  Public notice requirements.
303.45  Special provisions.
303.46  Delegation of authority.

Subpart D--Merger Transactions

303.60  Scope.
303.61  Definitions.
303.62  Transactions requiring prior approval.
303.63  Filing procedures.
303.64  Processing.
303.65  Public notice requirements.
303.66  Delegation of authority.
303.67  Authority retained by the FDIC Board of Directors

Subpart E--Change in Bank Control

303.80  Scope.
303.81  Definitions.
303.82  Transactions requiring prior notice.
303.83  Transactions not requiring prior notice.
303.84  Filing procedures.
303.85  Processing.
303.86  Public notice requirements.
303.87  Delegation of authority.

Subpart F-- Change of Director or Senior Executive Officer

303.100  Scope.
303.101  Definitions.
303.102  Filing procedures and waiver of prior notice.
303.103  Processing.
303.104  Delegation of authority.

Subpart G--Activities and Investments of Insured State Banks [Reserved]

Subpart H--Filings by Savings Associations

303.140  Scope.
303.141  Definitions.
303.142  Engaging other than as an agent on behalf of customers in 
activities not permissible for federal savings associations.
303.143  Engaging other than as agent on behalf of customers in 
activities authorized for federal savings associations but to an 
extent not so authorized.
303.144  Equity investments.
303.145  Corporate debt securities not of investment grade.
303.146  Notice of acquisition or establishment of a subsidiary or 
the conduct of new activities through a subsidiary.
303.147  Notice by federal savings associations conducting 
grandfathered activities.
303.148  Delegation of authority.

Subpart I--Mutual-to-Stock Conversions

303.160  Scope.
303.161  Filing procedures.
303.162  Waiver from compliance.
303.163  Processing.
303.164  Delegation of authority.

Subpart J--International Banking

303.180  Scope.
303.181  Definitions.
303.182  Establishing, moving or closing a foreign branch of a state 
nonmember bank; Sec. 347.103.
303.183  Investment by insured state nonmember banks in foreign 
organizations; Sec. 347.108.
303.184  Moving an insured branch of a foreign bank.
303.185  Mergers transactions involving foreign banks or foreign 
organizations.
303.186  Exemptions from insurance requirement for a state branch of 
a foreign bank; Sec. 347.206.
303.187  Approval for an insured state branch of a foreign bank to 
conduct activities not permissible for federal branches; 
Sec. 347.213 .

Subpart K--Prompt Corrective Action

303.200  Scope.
303.201  Filing procedures.
303.202  Processing.
303.203  Applications for capital distribution.
303.204  Applications for acquisitions, branching, and new lines of 
business.
303.205  Applications for bonuses and increased compensation for 
senior executive officers.

[[Page 44714]]

303.206  Application for payment of principal or interest on 
subordinated debt.
303.207  Restricted activities for critically undercapitalized 
institutions.
303.208  Delegation of authority.

Subpart L--Section 19 of the FDI Act (Consent to Service of Persons 
Convicted of Certain Criminal Offenses)

303.220  Scope.
303.221  Filing procedures.
303.222  Service at another insured depository institution.
303.223  Applicant's right to hearing following denial.
303.224  Delegation of authority.

Subpart M--Other Filings

303.240  General.
303.241  Reduce or retire capital stock or capital debt instruments.
303.242  Exercise of trust powers.
303.243  Brokered deposit waivers.
303.244  Golden parachute and severance plan payments.
303.245  Waiver of liability for commonly controlled depository 
institutions.
303.246  Insurance fund conversions.
303.247  Conversion with diminution of capital.
303.248  Continue or resume status as an insured institution 
following termination under section 8 of the FDI Act.
303.249  Truth in Lending Act--relief from reimbursement.
303.250  Management official interlocks.
303.251  Modification of conditions.
303.252  Extension of time.

Subpart N--Enforcement Delegations

303.260  Scope.
303.261  Issuance of notification to primary regulator under section 
8(a) of the FDI Act (12 U.S.C. 1818(a)).
303.262  Issuance of notice of intention to terminate insured status 
under section 8(a) of the FDI Act (12 U.S.C. 1818(a)).
303.263  Cease-and-desist actions under section 8(b) of the FDI Act 
(12 U.S.C. 1818(b)).
303.264  Temporary cease-and-desist orders under section 8(c) of the 
FDI Act (12 U.S.C. 1818(c)).
303.265  Removal and prohibition actions under section 8(e) of the 
FDI Act (12 U.S.C. 1818(e)).
303.266  Suspension and removal action under section 8(g) of the FDI 
Act (12 U.S.C. 1818(g)).
303.267  Termination of insured status under section 8(p) of the FDI 
Act (12 U.S.C. 1818(p)).
303.268  Termination of insured status under section 8(q) of the FDI 
Act (12 U.S.C. 1818(q)).
303.269  Civil money penalties.
303.270  Notices of assessment under section 5(e) of the FDI Act (12 
U.S.C. 1815(e)).
303.271  Prompt corrective action directives and capital plans under 
section 38 of the FDI Act (12 U.S.C. 1831o) and part 325 of this 
chapter.
303.272  Investigations under section 10(c) of the FDI Act (12 
U.S.C. 1820(c)).
303.273  Unilateral settlement offers.
303.274  Acceptance of written agreements.
303.275  Modifications and terminations of enforcement actions and 
orders.
303.276  Enforcement of outstanding enforcement orders.
303.277  Compliance plans under section 39 of the FDI Act (12 U.S.C. 
1831p-1) (standards for safety and soundness) and part 308 of this 
chapter.
303.278  Enforcement matters where authority is not delegated.

    Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817, 1818, 1819, 
(Seventh and Tenth), 1820, 1823, 1828, 1831e, 1831p-1, 1835a, 3104, 
3105, 3108; 3207; 15 U.S.C. 1601-1607.


Sec. 303.0  Scope.

    (a) This part describes the procedures to be followed by both the 
FDIC and applicants with respect to applications, requests, or notices 
(filings) required to be filed by statute or regulation. Additional 
details concerning processing are explained in related FDIC statements 
of policy. This part also sets forth delegations of authority from the 
FDIC's Board of Directors to the Directors of the Division of 
Supervision (DOS), the Division of Compliance and Consumer Affairs 
(DCA), the General Counsel of the Legal Division, the Executive 
Secretary, and, in some cases, their designees to act on certain 
filings and enforcement matters.
    (b) Additional application procedures may be found in the following 
FDIC regulations:
    (1) 12 CFR part 327--Assessments (Request for review of assessment 
risk classification);
    (2) 12 CFR part 328--Advertisement of Membership (Application for 
temporary waiver of advertising requirements);
    (3) 12 CFR part 345--Community Reinvestment (CRA strategic plans 
and requests for designation as a wholesale or limited purpose 
institution);

Subpart A--Rules of General Applicability


Sec. 303.1  Scope.

    This subpart A prescribes the general procedures for submitting 
filings to the FDIC which are required by statute or regulation. This 
subpart also prescribes the procedures to be followed by the FDIC, 
applicants and interested parties during the process of considering a 
filing, including public notice and comment. This subpart explains the 
availability of expedited processing for eligible depository 
institutions (defined in Sec. 303.2(r)). Certain terms used throughout 
this part are also defined in this subpart. Finally, this subpart sets 
forth general principles governing delegations of authority by the 
FDIC's Board of Directors.


Sec. 303.2  Definitions.

    For purposes of this part:
    (a) Act or FDI Act means the Federal Deposit Insurance Act (12 
U.S.C. 1811 et seq.).
    (b) Adjusted part 325 total assets means adjusted 12 CFR part 325 
total assets as calculated and reflected in the FDIC's Report of 
Examination.
    (c) Adverse comment means any objection, protest, or other adverse 
written statement submitted by an interested party relative to a 
filing. The term adverse comment shall not include any comment 
concerning the Community Reinvestment Act (CRA), fair lending, consumer 
protection, or civil rights that the appropriate regional director or 
deputy regional director (DCA) determines to be frivolous (for example, 
raising issues between the commenter and the applicant that have been 
resolved). The term adverse comment also shall not include any other 
comment that the appropriate regional director or deputy regional 
director (DOS) determines to be frivolous (for example, a non-
substantive comment submitted primarily as a means of delaying action 
on the filing).
    (d) Amended order to pay means an order to forfeit and pay civil 
money penalties, the amount of which has been changed from that 
assessed in the original notice of assessment of civil money penalties.
    (e) Applicant means a person or entity that submits a filing to the 
FDIC.
    (f) Application means a submission requesting FDIC approval to 
engage in various corporate activities and transactions.
    (g) Appropriate FDIC region, appropriate FDIC regional office, 
appropriate regional director, appropriate deputy regional director, 
appropriate regional counsel mean, respectively, the FDIC region, and 
the FDIC regional office, regional director, deputy regional director, 
and regional counsel, which the FDIC designates as follows:
    (1) When an institution or proposed institution that is the subject 
of a filing or administrative action is not and will not be part of a 
group of related institutions, the appropriate region for the 
institution and any individual associated with the institution is the 
FDIC region in which the institution or proposed institution is or will 
be located; or
    (2) When an institution or proposed institution that is the subject 
of a filing or administrative action is or will be part of a group of 
related institutions, the appropriate region for the institution and 
any individual associated with the

[[Page 44715]]

institution is the FDIC region in which the group's major policy and 
decision makers are located, or any other region the FDIC designates on 
a case-by-case basis.
    (h) Associate director means any associate director of the Division 
of Supervision (DOS) or the Division of Compliance and Consumer Affairs 
(DCA) or, in the event such titles become obsolete, any official of 
equivalent authority within the respective divisions.
    (i) Book capital means total equity capital which is comprised of 
perpetual preferred stock, common stock, surplus, undivided profits and 
capital reserves, as those items are defined in the instructions of the 
Federal Financial Institutions Examination Council (FFIEC) for the 
preparation of Consolidated Reports of Condition and Income for insured 
banks.
    (j) Comment means any written statement of fact or opinion 
submitted by an interested party relative to a filing.
    (k) Corporation or FDIC means the Federal Deposit Insurance 
Corporation.
    (l) CRA protest means any adverse comment from the public related 
to a pending filing which raises a negative issue relative to the 
Community Reinvestment Act (CRA) (12 U.S.C. 2901 et seq.), whether or 
not it is labeled a protest and whether or not a hearing is requested.
    (m) Deputy Director means the Deputy Director of the Division of 
Supervision (DOS) or the Deputy Director of the Division of Compliance 
and Consumer Affairs (DCA) or, in the event such titles become 
obsolete, any official of equivalent or higher authority within the 
respective divisions.
    (n) Deputy regional director means any deputy regional director of 
the Division of Supervision (DOS) or the Division of Compliance and 
Consumer Affairs (DCA) or, in the event such titles become obsolete, 
any official of equivalent authority within the same FDIC region of DOS 
or DCA.
    (o) DCA means the Division of Compliance and Consumer Affairs or, 
in the event the Division of Compliance and Consumer Affairs is 
reorganized, such successor division.
    (p) DOS means the Division of Supervision or, in the event the 
Division of Supervision is reorganized, such successor division.
    (q) Director means the Director of the Division of Supervision 
(DOS) or the Director of the Division of Compliance and Consumer 
Affairs (DCA) or, in the event such titles become obsolete, any 
official of equivalent or higher authority within the respective 
divisions.
    (r) Eligible depository institution means a depository institution 
that meets the following criteria:
    (1) Received an FDIC-assigned composite rating of 1 or 2 under the 
Uniform Financial Institutions Rating System (UFIRS) as a result of its 
most recent federal or state examination;
    (2) Received a satisfactory or better Community Reinvestment Act 
(CRA) rating from its primary federal regulator at its most recent 
examination, if the depository institution is subject to examination 
under part 345 of this chapter;
    (3) Received a compliance rating of 1 or 2 from its primary federal 
regulator at its most recent examination;
    (4) Is well-capitalized as defined in the appropriate capital 
regulation and guidance of the institution's primary federal regulator; 
and
    (5) Is not subject to a cease and desist order, consent order, 
prompt corrective action directive, written agreement, memorandum of 
understanding, or other administrative agreement with its primary 
federal regulator or chartering authority.
    (s) Filing means an application, notice or request submitted to the 
FDIC under this part.
    (t) General Counsel means the head of the Legal Division of the 
FDIC or any official within the Legal Division exercising equivalent 
authority for purposes of this part.
    (u) Insider means a person who is or is proposed to be a director, 
officer, organizer, or incorporator of an applicant; a shareholder who 
directly or indirectly controls 10 percent or more of any class of the 
applicant's outstanding voting stock; or the associates or interests of 
any such person.
    (v) Institution-affiliated party shall have the same meaning as 
provided in section 3(u) of the Act (12 U.S.C. 1813(u)).
    (w) NEPA means the National Environmental Policy Act of 1969 (42 
U.S.C. 4321 et seq.).
    (x) NHPA means the National Historic Preservation Act of 1966 (16 
U.S.C. 470 et seq.).
    (y) Notice means a submission notifying the FDIC that a depository 
institution intends to engage in or has commenced certain corporate 
activities or transactions.
    (z) Notice of assessment of civil money penalties means a notice of 
assessment of civil money penalties, findings of fact and conclusions 
of law, and order to pay issued pursuant to sections 7(a)(1), 7(j)(15), 
8(i) or 18(h) of the Act (12 U.S.C. 1817(a)(1), 1817(j)(15), 1818(i), 
or 1828(h)), section 106(b) of the Bank Holding Company Act (12 U.S.C. 
1972), section 910(d) of the International Lending Supervision Act of 
1983 (12 U.S.C. 3909), or any other provision of law providing for the 
assessment of civil money penalties by the FDIC.
    (aa) Notice of charges means a notice of charges and of hearing 
setting forth the allegations of unsafe or unsound practices or 
violations and fixing the time and place of the hearing issued under 
section 8(b) of the Act (12 U.S.C. 1818(b)).
    (bb) Notice to primary regulator means the notice described in 
section 8(a)(2)(A) of the Act concerning termination of deposit 
insurance (12 U.S.C. 1818(a)(2)(A)).
    (cc) Regional counsel means a regional counsel of the Legal 
Division or, in the event the title becomes obsolete, any official of 
equivalent authority within the Legal Division. The authority delegated 
to a regional counsel may be exercised, when confirmed in writing by 
the regional counsel, by a deputy regional counsel, or any official of 
equivalent or higher authority in the Supervision and Legislation 
Branch of the Legal Division.
    (dd) Regional director means any regional director in the Division 
of Supervision (DOS) or the Division of Compliance and Consumer Affairs 
(DCA), or in the event such titles become obsolete, any official of 
equivalent authority within the respective divisions.
    (ee) Section 8 orders:
    (1) Section 8(a) order means an order terminating the insured 
status of a depository institution under section 8(a) of the Act (12 
U.S.C. 1818(a)).
    (2) Section 8(b) order, cease-and-desist order means a final order 
to cease and desist issued under section 8(b) of the Act (12 U.S.C. 
1818(b)).
    (3) Section 8(c) order, temporary cease-and-desist order means a 
temporary order to cease and desist issued under section 8(c) of the 
Act (12 U.S.C. 1818(c)).
    (4) Section 8(e) order means a final order of removal or 
prohibition issued under section 8(e) of the Act (12 U.S.C. 1818(e)).
    (5) Section 8(e)(3) order, temporary order of suspension means a 
temporary order of suspension or prohibition issued under section 
8(e)(3) of the Act (12 U.S.C. 1818(e)(3)).
    (6) Section 8(g) order means an order of suspension or order of 
prohibition issued under section 8(g) of the Act (12 U.S.C. 1818(g)).
    (ff) Standard conditions means the conditions that any FDIC 
official acting under delegated authority may impose as a routine 
matter when approving a

[[Page 44716]]

filing, whether or not the applicant has agreed to their inclusion. The 
following conditions, or variations thereof, are standard conditions:
    (1) That the applicant has obtained all necessary and final 
approvals from the appropriate federal or state authority or other 
appropriate authority;
    (2) That if the transaction does not take effect within a specified 
time period, or unless, in the meantime, a request for an extension of 
time has been approved, the consent granted shall expire at the end of 
the specified time period;
    (3) That until the conditional commitment of the FDIC becomes 
effective, the FDIC retains the right to alter, suspend or withdraw its 
commitment should any interim development be deemed to warrant such 
action; and
    (4) In the case of a merger transaction (as defined in 
Sec. 303.61(a)), including a corporate reorganization, that the 
proposed transaction not be consummated before the 30th calendar day 
(or shorter time period as may be prescribed by the FDIC with the 
concurrence of the Attorney General) after the date of the order 
approving the merger transaction.
    (gg) Tier 1 capital shall have the same meaning as provided in 
Sec. 325.2(t) of this chapter.
    (hh) Total assets shall have the same meaning as provided in 
Sec. 325.2(v) of this chapter.


Sec. 303.3  General filing procedures.

    Unless stated otherwise, filings should be submitted to the 
appropriate regional director (DOS). Forms and instructions for 
submitting filings may be obtained from any FDIC regional office (DOS). 
If no form is prescribed, the filing should be in writing; be signed by 
the applicant or a duly authorized agent; and contain a concise 
statement of the action requested. For specific filing and content 
requirements, consult the appropriate subparts of this part. The FDIC 
may require the applicant to submit additional information.


Sec. 303.4  Computation of time.

    For purposes of this part, the FDIC begins computing the relevant 
period on the day after an event occurs (e.g., the day after a 
substantially complete filing is received by the FDIC or the day after 
publication begins) through the last day of the relevant period. When 
the last day is a Saturday, Sunday or federal holiday, the period runs 
until the end of the next business day.


Sec. 303.5  Effect of Community Reinvestment Act performance on 
filings.

    Among other factors, the FDIC takes into account the record of 
performance under the Community Reinvestment Act (CRA) of each 
applicant in considering a filing for approval of:
    (a) The establishment of a domestic branch;
    (b) The relocation of the bank's main office or a domestic branch;
    (c) The relocation of an insured branch of a foreign bank;
    (d) A transaction subject to the Bank Merger Act; and
    (e) Deposit insurance.


Sec. 303.6  Investigations and examinations.

    The Board of Directors, Directors of (DOS) or (DCA), the associate 
directors, or the appropriate regional director or appropriate deputy 
regional director (DOS) or (DCA) acting under delegated authority may 
examine or investigate and evaluate facts related to any filing under 
this chapter to the extent necessary to reach an informed decision and 
take any action necessary or appropriate under the circumstances.


Sec. 303.7  Public notice requirements.

    (a) General. The public must be provided with prior notice of a 
filing to establish a domestic branch, relocate a domestic branch or 
the main office, relocate an insured branch of a foreign bank, engage 
in a merger transaction, initiate a change of control transaction, or 
request deposit insurance. The public has the right to comment on, or 
to protest, these types of proposed transactions during the relevant 
comment period. In order to fully apprise the public of this right, an 
applicant shall publish a public notice of its filing in a newspaper of 
general circulation. For specific publication requirements, consult 
subparts B (Deposit Insurance), C (Branches and Relocations), D (Merger 
Transactions), E (Change in Bank Control), and J (International 
Banking) of this part.
    (b) Confirmation of publication. The applicant shall mail or 
otherwise deliver a copy of the newspaper notice to the appropriate 
regional director (DOS) as part of its filing, or, if a copy is not 
available at the time of filing, promptly after publication.
    (c) Content of notice. (1) The public notice referred to in 
paragraph (a) of this section shall consist of the following:
    (i) Name and address of the applicant(s). In the case of an 
application for deposit insurance for a de novo bank, include the names 
of all organizers or incorporators. In the case of an application to 
establish a branch, include the location of the proposed branch or, in 
the case of an application to relocate a branch or main office, include 
the current and proposed address of the office. In the case of a merger 
application, include the names of all parties to the transaction. In 
the case of a notice of acquisition of control, include the name(s) of 
the acquiring parties. In the case of an application to relocate an 
insured branch of a foreign bank, include the current and proposed 
address of the branch;
    (ii) Type of filing being made;
    (iii) Name of the depository institution(s) that is the subject 
matter of the filing;
    (iv) That the public may submit comments to the appropriate FDIC 
regional director (DOS);
    (v) The address of the appropriate FDIC regional office (DOS) where 
comments may be sent (the same location that where the filing will be 
made);
    (vi) The closing date of the public comment period as specified in 
the appropriate subpart of this part; and
    (vii) That the nonconfidential portions of the application are on 
file in the regional office and are available for public inspection 
during regular business hours; photocopies of the nonconfidential 
portion of the application file will be made available upon request.
    (2) The requirements of paragraphs (c)(1)(iv) through (vii) of this 
section may be satisfied through use of the following notice:

    Any person wishing to comment on this application may file his 
or her comments in writing with the regional director (DOS) of the 
Federal Deposit Insurance Corporation at its regional office [insert 
address of regional office] not later than [insert closing date of 
the public comment period specified in the appropriate subpart of 
part 303]. The non-confidential portions of the application are on 
file in the regional office and are available for public inspection 
during regular business hours. Photocopies of the nonconfidential 
portion of the application file will be made available upon request.

    (d) Multiple transactions. The FDIC may consider more than one 
transaction, or a series of transactions, to be a single filing for 
purposes of the publication requirements of this section. When 
publishing a single public notice for multiple transactions, the 
applicant shall explain in the public notice how the transactions are 
related. The closing date of the comment period shall be the closing 
date of the longest public comment period that applies to any of the 
related transactions.
    (e) Joint public notices. For a transaction subject to public 
notice requirements by the FDIC and another

[[Page 44717]]

federal or state banking authority, the FDIC will accept publication of 
a single joint notice containing all the information required by both 
the FDIC and the other federal agency or state banking authority, 
provided that the notice states that comments must be submitted to the 
FDIC and, if applicable, the other federal or state banking authority.
    (f) Where public notice is required, the FDIC may determine on a 
case-by-case basis that unusual circumstances surrounding a particular 
filing warrant modification of the publication requirements.


Sec. 303.8  Public access to filing.

    (a) General. For filings subject to a public notice requirement, 
any person may inspect or request a copy of the non-confidential 
portions of a filing (the public file) until 180 days following final 
disposition of a filing. Following the 180-day period, non-confidential 
portions of an application file will be made available in accordance 
with paragraph (c) of this section. The public file generally consists 
of portions of the filing, supporting data, supplementary information, 
and comments submitted by interested persons (if any) to the extent 
that the documents have not been afforded confidential treatment. To 
view or request photocopies of the public file, an oral or written 
request should be submitted to the appropriate regional director (DOS). 
The public file will be produced for review not more than one business 
day after receipt by the regional office of the request (either written 
or oral) to see the file. The FDIC may impose a fee for photocopying in 
accordance with Sec. 309.5(c) of this chapter at the rates the FDIC 
publishes annually in the Federal Register.
    (b) Confidential treatment. (1) The applicant may request that 
specific information be treated as confidential. The following 
information generally is considered confidential:
    (i) Personal information, the release of which would constitute a 
clearly unwarranted invasion of privacy;
    (ii) Commercial or financial information, the disclosure of which 
could result in substantial competitive harm to the submitter; and
    (iii) Information, the disclosure of which could seriously affect 
the financial condition of any depository institution.
    (2) If an applicant requests confidential treatment for information 
that the FDIC does not consider to be confidential, the FDIC may 
include that information in the public file after notifying the 
applicant. On its own initiative, the FDIC may determine that certain 
information should be treated as confidential and withhold that 
information from the public file.
    (c) FOIA requests. A written request for information withheld from 
the public file, or copies of the public file following closure of the 
file 180 days after final disposition, should be submitted pursuant to 
the Freedom of Information Act (5 U.S.C. 552) and part 309 of this 
chapter to the FDIC, Office of the Executive Secretary, 550 17th 
Street, N.W., Washington, D.C. 20429.


Sec. 303.9  Comments.

    (a) Submission of comments. For filings subject to a public notice 
requirement, any person may submit comments to the appropriate FDIC 
regional director (DOS) during the comment period.
    (b) Comment period--(1) General. Consult appropriate subparts of 
this part for the comment period applicable to a particular filing.
    (2) Extension. The appropriate regional director or deputy regional 
director (DOS) may extend or reopen the comment period if:
    (i) The applicant fails to file all required information on a 
timely basis to permit review by the public or makes a request for 
confidential treatment not granted by the FDIC that delays the public 
availability of that information;
    (ii) Any person requesting an extension of time satisfactorily 
demonstrates to the FDIC that additional time is necessary to develop 
factual information that the FDIC determines may materially affect the 
application; or
    (iii) The appropriate regional director or deputy regional director 
(DOS) determines that other good cause exists.
    (3) Solicitation of comments. Whenever appropriate, the appropriate 
regional director (DOS) may solicit comments from any person or 
institution which might have an interest in or be affected by the 
pending filing.
    (4) Applicant response. The FDIC will provide copies of all 
comments received to the applicant and may give the applicant an 
opportunity to respond.


Sec. 303.10  Hearings and other meetings.

    (a) Matters covered. This section covers hearings and other 
proceedings in connection with filings and determinations for or by:
    (1) Deposit insurance by a proposed new depository institution or 
operating non-insured institution;
    (2) An insured state nonmember bank to establish a domestic branch 
or to relocate a main office or domestic branch;
    (3) Relocation of an insured branch of a foreign bank;
    (4)(i) Merger transaction which requires the FDIC's prior approval 
under the Bank Merger Act (12 U.S.C. 1828(c));
    (ii) Except as otherwise expressly provided, the provisions of this 
section shall not be applicable to any proposed merger transaction 
which the FDIC Board of Directors determines must be acted upon 
immediately to prevent the probable failure of one of the institutions 
involved, or must be handled with expeditious action due to an existing 
emergency condition, as permitted by the Bank Merger Act (12 U.S.C. 
1828(c)(6));
    (5) Nullification of a decision on a filing; and
    (6) Any other purpose or matter which the FDIC Board of Directors 
in its sole discretion deems appropriate.
    (b) Hearing requests. (1) Any person may submit a written request 
for a hearing on a filing:
    (i) To the appropriate regional director (DOS) before the end of 
the comment period; or
    (ii) To the appropriate regional director (DOS or DCA), pursuant to 
a notice to nullify a decision on a filing issued pursuant to 
Sec. 303.11(g)(2)(i) or (ii).
    (2) The request must describe the nature of the issues or facts to 
be presented and the reasons why written submissions would be 
insufficient to make an adequate presentation of those issues or facts 
to the FDIC. A person requesting a hearing shall simultaneously submit 
a copy of the request to the applicant.
    (c) Action on a hearing request. The appropriate regional director 
(DOS or DCA), after consultation with the Legal Division, may grant or 
deny a request for a hearing and may limit the issues that he or she 
deems relevant or material. The FDIC generally grants a hearing request 
only if it determines that written submissions would be insufficient or 
that a hearing otherwise would be in the public interest.
    (d) Denial of a hearing request. If the appropriate regional 
director (DOS or DCA), after consultation with the Legal Division, 
denies a hearing request, he or she shall notify the person requesting 
the hearing of the reason for the denial. A decision to deny a hearing 
request shall be a final agency determination and is not appealable.
    (e) FDIC procedures prior to the hearing--(1) Notice of hearing. 
The FDIC shall issue a notice of hearing if it grants a request for a 
hearing or orders a hearing because it is in the public interest. The 
notice of hearing shall state the subject and date of the filing, the 
time and place of the hearing, and the issues to be addressed. The FDIC 
shall

[[Page 44718]]

send a copy of the notice of hearing to the applicant, to the person 
requesting the hearing, and to anyone else requesting a copy.
    (2) Presiding officer. The presiding officer shall be the Regional 
Director (DOS or DCA) or his or her designee or such other person as 
may be named by the Board or the Director (DOS or DCA). The presiding 
officer is responsible for conducting the hearing and determining all 
procedural questions not governed by this section.
    (f) Participation in the hearing. Any person who wishes to appear 
(participant) shall notify the appropriate regional director (DOS or 
DCA) of his or her intent to participate in the hearing no later than 
10 days from the date that the FDIC issues the Notice of Hearing. At 
least 5 days before the hearing, each participant shall submit to the 
appropriate regional director (DOS or DCA), as well as to the applicant 
and any other person as required by the FDIC, the names of witnesses, a 
statement describing the proposed testimony of each witness, and one 
copy of each exhibit the participant intends to present.
    (g) Transcripts. The FDIC shall arrange for a hearing transcript. 
The person requesting the hearing and the applicant each shall bear the 
cost of one copy of the transcript for his or her use unless such cost 
is waived by the presiding officer and incurred by the FDIC.
    (h) Conduct of the hearing.--(1) Presentations. Subject to the 
rulings of the presiding officer, the applicant and participants may 
make opening and closing statements and present and examine witnesses, 
material, and data.
    (2) Information submitted. Any person presenting material shall 
furnish one copy to the FDIC, one copy to the applicant, and one copy 
to each participant.
    (3) Laws not applicable to hearings. The Administrative Procedure 
Act (5 U.S.C. 551 et seq.), the Federal Rules of Evidence (28 U.S.C. 
Appendix), the Federal Rules of Civil Procedure (28 U.S.C. Rule 1 et 
seq.), and the FDIC's Rules of Practice and Procedure (12 CFR part 308) 
do not govern hearings under this section.
    (i) Closing the hearing record. At the applicant's or any 
participant's request, or at the FDIC's discretion, the FDIC may keep 
the hearing record open for up to 10 days following the FDIC's receipt 
of the transcript. The FDIC shall resume processing the filing after 
the record closes.
    (j) Disposition and notice thereof. The presiding officer shall 
make a recommendation to the FDIC within 20 days following the date the 
hearing and record on the proceeding are closed. The FDIC shall notify 
the applicant and all participants of the final disposition of a filing 
and shall provide a statement of the reasons for the final disposition.
    (k) Computation of time. In computing periods of time under this 
section, the provisions of Sec. 308.12 of the FDIC's Rules of Practice 
and Procedure (12 CFR 308.12) shall apply.
    (l) Informal proceedings. The FDIC may arrange for an informal 
proceeding with an applicant and other interested parties in connection 
with a filing, either upon receipt of a written request for such a 
meeting made during the comment period, or upon the FDIC's own 
initiative. No later than 10 days prior to an informal proceeding, the 
appropriate regional director (DOS or DCA) shall notify the applicant 
and each person who requested a hearing or oral presentation of the 
date, time, and place of the proceeding. The proceeding may assume any 
form, including a meeting with FDIC representatives at which 
participants will be asked to present their views orally. The 
appropriate regional director (DOS or DCA) may hold separate meetings 
with each of the participants.
    (m) Authority retained by FDIC Board of Directors to modify 
procedures. The FDIC Board of Directors may delegate authority by 
resolution on a case-by-case basis to the presiding officer to adopt 
different procedures in individual matters and on such terms and 
conditions as the Board of Directors determines in its discretion. Such 
resolution shall be made available for public inspection and copying in 
the Office of the Executive Secretary under the Freedom of Information 
Act (5 U.S.C. 552(a)(2)).


Sec. 303.11  Decisions.

    (a) General procedures. The FDIC may approve, conditionally 
approve, deny, or not object to a filing after appropriate review and 
consideration of the record. The FDIC will promptly notify the 
applicant and any person who makes a written request of the final 
disposition of a filing. If the FDIC denies a filing, the FDIC will 
immediately notify the applicant in writing of the reasons for the 
denial.
    (b) Authority retained by FDIC Board of Directors to modify 
procedures. In acting on any filing under this part, the FDIC Board of 
Directors may by resolution adopt procedures which differ from those 
contained in this part when it deems it necessary or in the public 
interest to do so. The resolution shall be made available for public 
inspection and copying in the Office of the Executive Secretary under 
the Freedom of Information Act (5 U.S.C. 552(a)(2)).
    (c) Expedited processing. (1) A filing submitted by an eligible 
depository institution as defined in Sec. 303.2(r) will receive 
expedited processing as specified in the appropriate subparts of this 
part unless the appropriate regional director or deputy regional 
director (DOS) determines to remove the filing from expedited 
processing for any of the reasons set forth in paragraph (c)(2) of this 
section. Except for filings made pursuant to subpart J of this part 
(International Banking), expedited processing will not be available for 
any filing that the appropriate regional director (DOS) does not have 
delegated authority to approve.
    (2) Removal of filing from expedited processing. The appropriate 
regional director or deputy regional director (DOS) may remove a filing 
from expedited processing at any time prior to final disposition if:
    (i) For filings subject to public notice under Sec. 303.7, an 
adverse comment is received that warrants additional investigation or 
review;
    (ii) For filings subject to evaluation of CRA performance under 
Sec. 303.5, a CRA protest is received that warrants additional 
investigation or review, or the appropriate regional director (DCA) 
determines that the filing presents a significant CRA or compliance 
concern;
    (iii) For any filing, the appropriate regional director (DOS) 
determines that the filing presents a significant supervisory concern, 
or raises a significant legal or policy issue; or
    (iv) For any filing, the appropriate regional director (DOS) 
determines that other good cause exists for removal.
    (3) For purposes of this section, a significant CRA concern 
includes, but is not limited to, a determination by the appropriate 
regional director (DCA) that, although a depository institution may 
have an institution-wide rating of satisfactory or better, a depository 
institution's CRA rating is less than satisfactory in a state or multi-
state metropolitan statistical area, or a depository institution's CRA 
performance is less than satisfactory in a metropolitan statistical 
area as defined in 12 CFR 345.12 (MSA) or in the non-MSA portion of a 
state in which it seeks to expand through approval of an application 
for a deposit facility as defined in 12 U.S.C. 2902(3).
    (4) If the FDIC determines that it is necessary to remove a filing 
from expedited processing pursuant to paragraph (c)(2) of this section, 
the FDIC promptly will provide the applicant with a written 
explanation.

[[Page 44719]]

    (d) Multiple transactions. If the FDIC is considering related 
transactions, some or all of which have been granted expedited 
processing, then the longest processing time for any of the related 
transactions shall govern for purposes of approval.
    (e) Abandonment of filing. A filing must contain all information 
set forth in the applicable subpart of this part. To the extent 
necessary to evaluate a filing, the FDIC may require an applicant to 
provide additional information. If information requested by the FDIC is 
not provided within the time period specified by the agency, the FDIC 
may deem the filing abandoned and shall provide written notification to 
the applicant and any interested parties that submitted comments to the 
FDIC that the file has been closed.
    (f) Appeals and requests for reconsideration.--(1) General. Appeal 
procedures for a denial of a change in bank control (subpart E of this 
part), change in senior executive officer or board of directors 
(subpart F of this part) or denial of an application pursuant to 
section 19 of the FDI Act (subpart L of this part) are contained in 12 
CFR part 308, subparts D, L, and M, respectively. For all other filings 
covered by this chapter for which appeal procedures are not provided by 
regulation or other written guidance, the procedures specified in 
paragraphs (f) (2) through (5) of this section shall apply. A decision 
to deny a request for a hearing is a final agency determination and is 
not appealable.
    (2) Filing procedures. Within 15 days of receipt of notice from the 
FDIC that its filing has been denied, any applicant may file a request 
for reconsideration with the appropriate regional director (DOS), if 
the filing initially was submitted to DOS, or the appropriate regional 
director (DCA), if the filing initially was submitted to DCA.
    (3) Content of filing. A request for reconsideration must contain 
the following information:
    (i) A resolution of the board of directors of the applicant 
authorizing filing of the request if the applicant is a corporation, or 
a letter signed by the individual(s) filing the request if the 
applicant is not a corporation;
    (ii) Relevant, substantive information that for good cause was not 
previously set forth in the filing; and
    (iii) Specific reasons why the FDIC should reconsider its prior 
decision.
    (4) Delegation of authority for requests for reconsideration. (i) 
Authority is delegated to the Director and Deputy Director (DOS) and 
(DCA), as appropriate and, where confirmed in writing by the 
appropriate Director, to an associate director and the appropriate 
regional director and deputy regional director, to grant a request for 
reconsideration, after consultation with the Legal Division.
    (ii) Authority is delegated to the Director and Deputy Director 
(DOS) and (DCA), as appropriate and, where confirmed in writing, to an 
associate director, to deny a request for reconsideration, after 
consultation with the Legal Division. Such a denial is a final agency 
decision and is not appealable.
    (5) Reconsideration of the filing. If a request for reconsideration 
is granted pursuant to this paragraph (f), the filing will be 
reconsidered as follows:
    (i) The Board of Directors will reconsider any such filing if the 
filing was originally denied by the Board of Directors.
    (ii) Authority is delegated to the FDIC's Supervisory Appeals 
Review Committee to reconsider any such filing if the filing was 
originally denied by the Director or Deputy Director or an associate 
director (DOS) or (DCA), and to make the final agency decision on such 
filing, after consultation with the Legal Division.
    (iii) Authority is delegated to the Director or Deputy Director 
(DOS) or (DCA), as appropriate, to reconsider any such filing that was 
originally denied by a regional director or deputy regional director, 
and to make the final agency decision on such filing, after 
consultation with the Legal Division.
    (iv) Notwithstanding paragraphs (f)(5)(ii) and (iii) of this 
section, no reconsideration of a filing that originally required Legal 
Division concurrence may be acted upon without Legal Division 
concurrence.
    (6) Processing. The appropriate regional director (DOS or DCA) will 
notify the applicant whether reconsideration will be granted or denied 
within 15 days of receipt of a request for reconsideration. If a 
request for reconsideration is granted pursuant to this paragraph (f), 
the FDIC will notify the applicant of the final agency decision on such 
filing within 60 days of its receipt of the request for 
reconsideration.
    (g) Nullification, withdrawal, revocation, amendment, and 
suspension of decisions on filings.--(1) Grounds for action. (i) Except 
as otherwise provided by law or regulation, the FDIC may nullify, 
withdraw, revoke, amend or suspend a decision on a filing if it becomes 
aware at anytime:
    (A) Of any material misrepresentation or omission related to the 
filing or of any material change in circumstance that occurred prior to 
the consummation of the transaction or commencement of the activity 
authorized by the decision on the filing; or
    (B) That the decision on the filing is contrary to law or 
regulation or was granted due to clerical or administrative error.
    (ii) Any person responsible for a material misrepresentation or 
omission in a filing or supporting materials may be subject to an 
enforcement action and other penalties, including criminal penalties 
provided in Title 18 of the United States Code.
    (2) Notice of intent and temporary order. (i) Except as provided in 
paragraph (g)(2)(ii) of this section, before taking action under this 
paragraph (g), the FDIC shall issue and serve on an applicant written 
notice of its intent to take such action. A notice of intent to act on 
a filing shall include:
    (A) The reasons for the proposed action; and
    (B) The date by which the applicant may file a written response 
with the FDIC.
    (ii) The FDIC may issue a temporary order on a decision on a filing 
without providing an applicant a prior notice of intent if the FDIC 
determines that:
    (A) It is necessary to reevaluate the impact of a change in 
circumstance prior to the consummation of the transaction or 
commencement of the activity authorized by the decision on the filing; 
or
    (B) The activity authorized by the filing may pose a threat to the 
interests of the depository institution's depositors or may threaten to 
impair public confidence in the depository institution.
    (iii) A temporary order shall provide the applicant with an 
opportunity to make a written response in accordance with paragraph 
(g)(3) of this section.
    (3) Response to notice of intent or temporary order. An applicant 
may file a written response to a notice of intent or a temporary order 
within 15 days from the date of service of the notice or temporary 
order. The written response should include:
    (i) An explanation of why the proposed action or temporary order is 
not warranted; and
    (ii) Any other relevant information, mitigating circumstance, 
documentation, or other evidence in support of the applicant's 
position. An applicant may also request a hearing under Sec. 303.10. 
Failure by an applicant to file a written response with the FDIC to a 
notice of intent or a temporary order within the specified time period, 
shall constitute a waiver of the opportunity to respond and shall 
constitute consent to a final order under this paragraph (g).

[[Page 44720]]

    (4) Effective date. All orders issued pursuant to this section 
shall become effective immediately upon issuance unless otherwise 
stated therein.
    (5) Retained and delegated authority. The FDIC Board of Directors 
retains authority to issue notices of intent and temporary and final 
orders under this paragraph (g), as to any decision on a filing 
originally acted on by the Board. For decisions on filings under this 
paragraph (g) that were not originally acted on by the Board, authority 
is delegated to the Director and Deputy Director (DOS and DCA) and, 
where confirmed in writing by the appropriate Director, to an associate 
director or the appropriate regional director or deputy regional 
director, to issue notices of intent and final orders, after 
consultation with the Legal Division. Authority is delegated to the 
Director and Deputy Director (DOS and DCA) and, where confirmed in 
writing by the appropriate Director, to an associate director, to issue 
temporary orders under this paragraph (g), after consultation with the 
Legal Division. This delegated authority may be exercised only by the 
official who acted on the original filing or an official of equivalent 
or higher authority.


Sec. 303.12  General rules governing delegations of authority.

    (a) Scope. This section contains general rules governing the FDIC 
Board of Director's delegations of authority under this part. These 
principles are procedural in nature only and are not substantive 
standards. All delegations of authority, confirmations, limitations, 
revisions, and rescissions under this part must be in writing and 
maintained with the Office of the Executive Secretary.
    (b) Authority not delegated. Except as otherwise expressly 
provided, the FDIC Board of Directors does not delegate its authority.
    (1) The FDIC Board of Directors retains and does not delegate the 
authority to act on agreements with foreign regulatory or supervisory 
authorities, matters that would establish or change existing 
Corporation policy, matters that might attract unusual attention or 
publicity, or involve an issue of first impression notwithstanding any 
existing delegation of authority.
    (2) The FDIC Board of Directors retains the authority to act on any 
filing or enforcement matter upon which any member of the Board of 
Directors wishes to act, even if the authority to act on such filing or 
enforcement matter has been delegated.
    (c) Exercise of delegated authority not mandated. Any FDIC official 
with delegated authority under this part may elect not to exercise that 
authority.
    (d) Action by FDIC officials. In matters where the FDIC Board of 
Directors has neither specifically delegated nor retained authority, 
FDIC officials may take action with respect to matters which generally 
involve conditions or circumstances requiring prompt action to protect 
the interests of the FDIC and to achieve flexibility in and expedite 
its operations and the exercise of FDIC functions under this part.
    (e) Construction. The delegations of authority contained in this 
part are to be broadly construed in favor of the existence of authority 
in FDIC officials who act under delegated authority. Any exercise of 
authority under this part by an FDIC official is conclusive evidence of 
that official's authority.
    (f) Written confirmations, limitations, revisions or rescissions. 
Where the FDIC Board of Directors has delegated authority to the 
Director (DOS), Director (DCA) or the General Counsel, or their 
respective designees, each shall have the right to confirm, limit, 
revise, or rescind any delegation of authority issued or approved by 
them, respectively, to any subordinate official(s).


Sec. 303.13  Delegations of authority to officials in the Division of 
Supervision and the Division of Compliance and Consumer Affairs.

    (a) CRA protests. Where a CRA protest is filed and remains 
unresolved, authority is delegated to the Director and Deputy Director 
(DCA) and, where confirmed in writing by the Director, to an associate 
director or the appropriate regional director or deputy regional 
director to concur that approval of any filing subject to CRA is 
consistent with the purposes of CRA.
    (b) Adequacy of filings. Authority is delegated to the Director and 
Deputy Director (DOS) and, where confirmed in writing by the Director, 
to an associate director and the appropriate regional director and 
deputy regional director, to determine whether a filing is 
substantially complete for purposes of commencing processing.
    (c) National Historic Preservation Act. Authority is delegated to 
the Director and Deputy Director (DOS) and, where confirmed in writing 
by the Director, to an associate director and the appropriate regional 
director and deputy regional director, to enter into memoranda of 
agreement pursuant to regulations of the Advisory Council on Historic 
Preservation which implement the National Historic Preservation Act of 
1966 (16 U.S.C. 470).
    (d) Modification of publication requirements. Authority is 
delegated to the Director and Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director and the 
appropriate regional director and deputy regional director, to modify 
the publication requirements for a particular filing where the unusual 
circumstances surrounding the filing warrant such modification.

Subpart B--Deposit Insurance


Sec. 303.20  Scope.

    This subpart sets forth the procedures for applying for deposit 
insurance for a proposed depository institution or an operating 
noninsured depository institution under section 5 of the FDI Act (12 
U.S.C. 1815). It also sets forth the procedures for requesting 
continuation of deposit insurance for a state-chartered bank 
withdrawing from membership in the Federal Reserve System and for 
interim institutions chartered to facilitate a merger transaction. 
Related delegations of authority are also set forth.


Sec. 303.21  Filing procedures.

    (a) Applications for deposit insurance shall be filed with the 
appropriate regional director (DOS). The relevant application forms and 
instructions for applying for deposit insurance for an existing or 
proposed depository institution may be obtained from any FDIC regional 
office (DOS).
    (b) An application for deposit insurance for an interim depository 
institution shall be filed and processed in accordance with the 
procedures set forth in Sec. 303.24, subject to the provisions of 
Sec. 303.62(b)(2) regarding deposit insurance for interim institutions. 
An interim institution is defined as a state- or federally-chartered 
depository institution that does not operate independently but exists 
solely as a vehicle to accomplish a merger transaction.
    (c) A request for continuation of deposit insurance upon 
withdrawing from membership in the Federal Reserve System shall be in 
letter form and shall provide the information prescribed in 
Sec. 303.25.


Sec. 303.22  Processing.

    (a) Expedited processing for proposed institutions. (1) An 
application for deposit insurance for a proposed institution which will 
be a subsidiary of an eligible depository institution as defined in 
Sec. 303.2(r) or an eligible holding company will be acknowledged

[[Page 44721]]

in writing by the FDIC and will receive expedited processing unless the 
applicant is notified in writing to the contrary and provided with the 
basis for that decision. An eligible holding company is defined as a 
bank or thrift holding company that has consolidated assets of $150 
million or more, has an assigned composite rating of 2 or better, and 
has at least 75 percent of its consolidated depository institution 
assets comprised of eligible depository institutions. The FDIC may 
remove an application from expedited processing for any of the reasons 
set forth in Sec. 303.11(c)(2).
    (2) Under expedited processing, the FDIC will take action on an 
application within 60 days of receipt of a substantially complete 
application or 5 days after the expiration of the comment period 
described in Sec. 303.23, whichever is later. Final action may be 
withheld until the FDIC has assurance that permission to organize the 
proposed institution will be granted by the chartering authority. 
Notwithstanding paragraph (a)(1) of this section, if the FDIC does not 
act within the expedited processing period, it does not constitute an 
automatic or default approval.
    (b) Standard processing. For those applications that are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action when the 
decision is rendered.


Sec. 303.23  Public notice requirements.

    (a) De novo institutions and operating noninsured institutions. The 
applicant shall publish a notice as prescribed in Sec. 303.7 in a 
newspaper of general circulation in the community in which the main 
office of the depository institution is or will be located. Notice 
shall be published as close as practicable to, but no sooner than five 
days before, the date the application is mailed or delivered to the 
appropriate regional director (DOS). Comments by interested parties 
must be received by the appropriate regional director (DOS) within 30 
days following the date of publication, unless the comment period has 
been extended or reopened in accordance with Sec. 303.9(b)(2).
    (b) Exceptions to public notice requirements. No publication shall 
be required in connection with the granting of insurance to a new 
depository institution established pursuant to the resolution of a 
depository institution in default, or to an interim depository 
institution formed solely to facilitate a merger transaction, or for a 
request for continuation of federal deposit insurance by a state-
chartered bank withdrawing from membership in the Federal Reserve 
System.


Sec. 303.24  Application for deposit insurance for an interim 
institution.

    (a) Application required. Subject to Sec. 303.62(b)(2), a deposit 
insurance application is required for a state-chartered interim 
institution if the related merger transaction is subject to approval by 
a federal banking agency other than the FDIC. A separate application 
for deposit insurance for an interim institution is not required in 
connection with any merger requiring FDIC approval pursuant to subpart 
D of this part.
    (b) Content of separate application. A letter application for 
deposit insurance for an interim institution, accompanied by a copy of 
the related merger application, shall be filed with the appropriate 
regional director (DOS). The letter application shall briefly describe 
the transaction and contain a statement that deposit insurance is being 
requested for an interim institution that does not operate 
independently but exists solely as a vehicle to accomplish a merger 
transaction which will be reviewed by a federal banking agency other 
than the FDIC.
    (c) Processing. An application for deposit insurance for an interim 
depository institution will be acknowledged in writing by the FDIC. 
Final action will be taken within 21 days after receipt of a 
substantially complete application, unless the applicant is notified in 
writing that additional review is warranted. If the FDIC does not act 
within the expedited processing period, it does not constitute an 
automatic or default approval.


Sec. 303.25  Continuation of deposit insurance upon withdrawing from 
membership in the Federal Reserve System.

    (a) Content of application. To continue its insured status upon 
withdrawal from membership in the Federal Reserve System, a state-
chartered bank shall submit a letter application to the appropriate 
regional director (DOS). A complete application shall consist of the 
following information:
    (1) A copy of the letter, and any attachments thereto, sent to the 
appropriate Federal Reserve Bank setting forth the bank's intention to 
terminate its membership;
    (2) A copy of the letter from the Federal Reserve Bank 
acknowledging the bank's notice to terminate membership;
    (3) A statement regarding any anticipated changes in the bank's 
general business plan during the next 12-month period; and
    (4)(i) A statement by the bank's management that there are no 
outstanding or proposed corrective programs or supervisory agreements 
with the Federal Reserve System.
    (ii) If such programs or agreements exist, a statement by the 
applicant that its Board of Directors is willing to enter into similar 
programs or agreements with the FDIC which would become effective upon 
withdrawal from the Federal Reserve System.
    (b) Processing. An application for deposit insurance under this 
section will be acknowledged in writing by the FDIC. The appropriate 
regional director (DOS) shall notify the applicant, within 15 days of 
receipt of a substantially complete application, either that federal 
deposit insurance will continue upon termination of membership in the 
Federal Reserve System or that additional review is warranted and the 
applicant will be notified, in writing, of the FDIC's final decision 
regarding continuation of deposit insurance. If the FDIC does not act 
within the expedited processing period, it does not constitute an 
automatic or default approval.


Sec. 303.26  Delegation of authority.

    (a) Proposed depository institutions. (1) Authority is delegated to 
the Director and the Deputy Director (DOS) and, where confirmed in 
writing by the Director, to an associate director and the appropriate 
regional director and deputy regional director, to approve applications 
for deposit insurance for proposed depository institutions. For the 
delegate to exercise this authority, the criteria in paragraphs 
(a)(1)(i) through (a)(1)(v) of this section must be satisfied and the 
applicant shall have agreed in writing to comply with any conditions 
imposed by the delegate, other than those listed in paragraph (d) of 
this section which may be imposed without the applicant's consent:
    (i) The factors set forth in section 6 of the Act (12 U.S.C. 1816) 
have been considered and favorably resolved;
    (ii) No unresolved management interlocks, as prohibited by the 
Depository Institution Management Interlocks Act (12 U.S.C. 3201 et 
seq.), part 348 of this chapter or any other applicable implementing 
regulation, exist;
    (iii) The application is in conformity with the standards and 
guidelines for the granting of deposit insurance established in the 
FDIC statement of policy ``Applications for Deposit Insurance'' (2 FDIC 
Law, Regulations and Related Acts (FDIC) 5349; see Sec. 309.4(a) and 
(b) of this chapter for availability);

[[Page 44722]]

    (iv) Compliance with the CRA, the NEPA, the NHPA and any applicable 
related regulations, including 12 CFR part 345, has been considered and 
favorably resolved; and
    (v) No CRA protest as defined in Sec. 303.2(l) has been filed which 
remains unresolved or, where such a protest has been filed and remains 
unresolved, the Director (DCA), Deputy Director (DCA), an associate 
director (DCA) or the appropriate regional director (DCA) or deputy 
regional director (DCA) concurs that approval is consistent with the 
purposes of the CRA and the applicant agrees in writing to any 
conditions imposed regarding the CRA.
    (2) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director and the appropriate regional director and deputy regional 
director, to approve applications for deposit insurance filed by or on 
behalf of proposed interim depository institutions formed or organized 
solely for the purpose of facilitating a merger transaction which will 
be reviewed by a responsible agency as defined in section 18(c)(2) of 
the FDI Act. For the delegate to exercise this authority, the criteria 
in paragraphs (a)(1)(i) through (a)(1)(v) of this section must be 
satisfied and the applicant must agree in writing to comply with any 
conditions imposed by the delegate, other than those listed in 
paragraph (d) of this section which may be imposed without the 
applicant's consent.
    (b) Operating noninsured depository institutions. Authority is 
delegated to the Director and the Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director and the 
appropriate regional director and deputy regional director, to approve 
applications for deposit insurance by operating noninsured depository 
institutions. For the delegate to exercise this authority, the 
following criteria must be satisfied and the applicant must have agreed 
in writing to comply with any condition imposed by the delegate, other 
than those listed in paragraph (d) of this section which may be imposed 
without the applicant's consent:
    (1) The applicant is determined to be eligible for federal deposit 
insurance for the class of institution to which the applicant belongs 
in the state (as defined in section 3(a) of the Act (12 U.S.C. 1813(a)) 
in which the applicant is located;
    (2) The factors set forth in section 6 of the Act (12 U.S.C. 1816) 
have been considered and favorably resolved;
    (3) No unresolved management interlocks, as prohibited by the 
Depository Institution Management Interlocks Act (12 U.S.C. 3201 et 
seq.), part 348 of this chapter or any other applicable implementing 
regulation, exist;
    (4) The application is in conformity with the standards and 
guidelines for the granting of deposit insurance to operating 
noninsured depository institutions established in the FDIC statement of 
policy ``Applications for Deposit Insurance'' (2 FDIC Law, Regulations 
and Related Acts (FDIC) 5349);
    (5) Compliance with the CRA, the NEPA, the NHPA, and any applicable 
related regulations, including 12 CFR part 345, has been considered and 
favorably resolved; and
    (6) No CRA protest as defined in Sec. 303.2(l) has been filed which 
remains unresolved or, where such a protest has been filed and remains 
unresolved, the Director (DCA), Deputy Director (DCA), an associate 
director (DCA) or the appropriate regional director (DCA) or deputy 
regional director (DCA) concurs that approval is consistent with the 
purposes of the CRA and the applicant agrees in writing to any 
conditions imposed regarding the CRA.
    (c) Continuation of deposit insurance upon withdrawing from 
membership in the Federal Reserve System. Authority is delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to an associate director and the appropriate regional 
director and deputy regional director to approve continuation of 
federal deposit insurance where the applicant has agreed in writing to 
comply with any conditions imposed by the delegate, other than the 
standard conditions defined in Sec. 303.2(ff) which may be imposed 
without the applicant's written consent.
    (d) Conditions that may be imposed under delegated authority. 
Following are conditions which may be imposed by a delegate in 
approving applications for deposit insurance without affecting the 
authority granted under paragraphs (a) and (b) of this section:
    (1) The applicant will provide a specific amount of initial paid-in 
capital;
    (2) With respect to a proposed depository institution that has 
applied for deposit insurance pursuant to this subpart, the Tier 1 
capital to assets leverage ratio (as defined in the appropriate capital 
regulation and guidance of the institution's primary federal regulator) 
will be maintained at not less than eight percent throughout the first 
three years of operation and that an adequate allowance for loan and 
lease losses will be provided;
    (3) Any changes in proposed management or proposed ownership to the 
extent of 10 percent or more of stock, including new acquisitions of or 
subscriptions to 10 percent or more of stock shall be approved by the 
FDIC prior to the opening of the depository institution for business;
    (4) The applicant will adopt an accrual accounting system for 
maintaining the books of the depository institution;
    (5) Where applicable, deposit insurance will not become effective 
until the applicant has been granted a charter as a depository 
institution, has authority to conduct a depository institution 
business, and its establishment and operation as a depository 
institution have been fully approved by the appropriate state and/or 
federal supervisory authority;
    (6) Where deposit insurance is granted to an interim institution 
formed or organized solely to facilitate a related transaction, deposit 
insurance will only become effective in conjunction with consummation 
of the related transaction;
    (7) Where applicable, a registered or proposed bank holding 
company, or a registered or proposed thrift holding company, has 
obtained approval of the Board of Governors of the Federal Reserve 
System or the Office of Thrift Supervision to acquire voting stock 
control of the proposed depository institution prior to its opening for 
business;
    (8) Where applicable, the applicant has submitted any proposed 
contracts, leases, or agreements relating to construction or rental of 
permanent quarters to the appropriate regional director for review and 
comment;
    (9) Where applicable, full disclosure has been made to all proposed 
directors and stockholders of the facts concerning the interest of any 
insider in any transactions being effected or then contemplated, 
including the identity of the parties to the transaction and the terms 
and costs involved. An insider is one who is or is proposed to be a 
director, officer, or incorporator of an applicant; a shareholder who 
directly or indirectly controls 10 or more percent of any class of the 
applicant's outstanding voting stock; or the associates or interests of 
any such person;
    (10) The person(s) selected to serve as the principal operating 
officer(s) shall be acceptable to the appropriate regional director 
(DOS);
    (11) The applicant will have adequate fidelity coverage;
    (12) The depository institution will obtain an audit of its 
financial statements by an independent public

[[Page 44723]]

accountant annually for at least the first three years after deposit 
insurance is effective, furnish a copy of any reports by the 
independent auditor (including any management letters) to the 
appropriate FDIC regional office within 15 days after their receipt by 
the depository institution and notify the appropriate FDIC regional 
office within 15 days when a change in its independent auditor occurs; 
and
    (13) Any standard condition defined in Sec. 303.2(ff).


Sec. 303.27  Authority retained by the FDIC Board of Directors.

    Without limiting the Board of Director's authority, the Board of 
Directors retains authority to deny applications for deposit insurance 
and approve applications for deposit insurance where the applicant does 
not agree in writing to comply with any condition imposed by the FDIC, 
other than the standard conditions listed in Secs. 303.2(ff) and 
303.26(d), which may be imposed without the applicant's written 
consent.

Subpart C--Establishment and Relocation of Domestic Branches and 
Offices


Sec. 303.40  Scope.

    (a) General. This subpart sets forth the application requirements, 
procedures and the delegations of authority for insured state nonmember 
banks to establish a branch, relocate a branch or main office, and 
retain existing branches after the interstate relocation of the main 
office subject to the approval by the FDIC pursuant to sections 13(f), 
13(k), 18(d) and 44 of the FDI Act.
    (b) Merger transaction. Applications for approval of the 
acquisition and establishment of branches in connection with a merger 
transaction under section 18(c) of the FDI Act (12 U.S.C. 1828(c)), are 
processed in accordance with subpart D (Merger Transactions) of this 
part.
    (c) Insured branches of foreign banks and foreign branches of 
domestic banks. Applications regarding insured branches of foreign 
banks and foreign branches of domestic banks are processed in 
accordance with subpart J (International Banking) of this part.
    (d) Interstate acquisition of individual branch. Applications 
requesting approval of the interstate acquisition of an individual 
branch or branches located in a state other than the applicant's home 
state without the acquisition of the whole bank are treated as 
interstate bank merger transactions under section 44 of the FDI Act (12 
U.S.C. 1831a(u)), and are processed in accordance with subpart D 
(Merger Transactions) of this part.


Sec. 303.41  Definitions.

    For purposes of this subpart:
    (a) Branch includes any branch bank, branch office, additional 
office, or any branch place of business located in any State of the 
United States or in any territory of the United States, Puerto Rico, 
Guam, American Samoa, the Trust Territory of the Pacific Islands, the 
Virgin Islands, and the Northern Mariana Islands at which deposits are 
received or checks paid or money lent. A branch does not include an 
automated teller machine, an automated loan machine, or a remote 
service unit. The term branch also includes the following:
    (1) A messenger service that is operated by a bank or its affiliate 
that picks up and delivers items relating to transactions in which 
deposits are received or checks paid or money lent. A messenger service 
established and operated by a non-affiliated third party generally does 
not constitute a branch for purposes of this subpart. Banks contracting 
with third parties to provide messenger services should consult with 
the appropriate regional director (DOS) to determine if the messenger 
service constitutes a branch.
    (2) A mobile branch, other than a messenger service, that does not 
have a single, permanent site and uses a vehicle that travels to 
various locations to enable the public to conduct banking business. A 
mobile branch may serve defined locations on a regular schedule or may 
serve a defined area at varying times and locations.
    (3) A temporary branch that operates for a limited period of time 
not to exceed one year as a public service, such as during an emergency 
or disaster situation.
    (4) A seasonal branch that operates at various periodically 
recurring intervals, such as during state and local fairs, college 
registration periods, and other similar occasions.
    (b) Branch relocation means a move within the same immediate 
neighborhood of the existing branch that does not substantially affect 
the nature of the business of the branch or the customers of the 
branch. Moving a branch to a location outside its immediate 
neighborhood is considered the closing of an existing branch and the 
establishment of a new branch. Closing of a branch is covered in the 
FDIC Statement of Policy Concerning Branch Closing Notices and Policies 
(2 FDIC Law, Regulations, Related Acts 5391; see Sec. 309.4 (a) and (b) 
of this chapter for availability).
    (c) De novo branch means a branch of a bank which is established by 
the bank as a branch and does not become a branch of such bank as a 
result of:
    (1) The acquisition by the bank of an insured depository 
institution or a branch of an insured depository institution; or
    (2) The conversion, merger, or consolidation of any such 
institution or branch.
    (d) Home state means the state by which the bank is chartered.
    (e) Host state means a state, other than the home state of the 
bank, in which the bank maintains, or seeks to establish and maintain, 
a branch.


Sec. 303.42  Filing procedures.

    (a) General. An applicant shall submit an application to the 
appropriate regional director (DOS) on the date the notice required by 
Sec. 303.44 is published, or within 5 days after the date of the last 
required publication.
    (b) Content of filing. A complete letter application shall include 
the following information:
    (1) A statement of intent to establish a branch, or to relocate the 
main office or a branch;
    (2) The exact location of the proposed site including the street 
address. With regard to messenger services, specify the geographic area 
in which the services will be available. With regard to a mobile branch 
specify the community or communities in which the vehicle will operate 
and the manner in which it will be used;
    (3) Details concerning any involvement in the proposal by an 
insider of the bank as defined in Sec. 303.2(u), including any 
financial arrangements relating to fees, the acquisition of property, 
leasing of property, and construction contracts;
    (4) A statement on the impact of the proposal on the human 
environment, including, information on compliance with local zoning 
laws and regulations and the effect on traffic patterns for purposes of 
complying with the applicable provisions of the NEPA and the FDIC 
Statement of Policy on NEPA (2 FDIC Law, Regulations, Related Acts 
5185; see Sec. 309.4 (a) and (b) of this chapter for availability);
    (5) A statement as to whether or not the site is eligible for 
inclusion in the National Register of Historic Places for purposes of 
complying with applicable provisions of the NHPA and the FDIC Statement 
of Policy on NHPA (2 FDIC Law, Regulations, Related Acts 5175; see 
Sec. 309.4 (a) and (b) of this chapter for availability) including 
documentation of consultation with the State Historic Preservation 
Officer, as appropriate;

[[Page 44724]]

    (6) Comments on any changes in services to be offered, the 
community to be served, or any other effect the proposal may have on 
the applicant's compliance with the CRA;
    (7) A copy of each newspaper publication required by Sec. 303.44, 
the name and address of the newspaper, and date of the publication;
    (8) When an application is submitted to relocate the main office of 
the applicant from one state to another, a statement of the applicant's 
intent regarding retention of branches in the state where the main 
office exists prior to relocation.
    (c) Undercapitalized institutions. Applications to establish a 
branch by applicants subject to section 38 of the FDI Act (12 U.S.C. 
1831o) also should provide the information required by Sec. 303.204. 
Applications pursuant to sections 38 and 18(d) of the FDI Act (12 
U.S.C. 1831o and 1828(d)) may be filed concurrently or as a single 
application.
    (d) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.


Sec. 303.43  Processing.

    (a) Expedited processing for eligible depository institutions. An 
application filed under this subpart by an eligible depository 
institution as defined in Sec. 303.2(r) will be acknowledged in writing 
by the FDIC and will receive expedited processing, unless the applicant 
is notified in writing to the contrary and provided with the basis for 
that decision. The FDIC may remove an application from expedited 
processing for any of the reasons set forth in Sec. 303.11(c)(2). 
Absent such removal, an application processed under expedited 
processing will be deemed approved on the latest of the following:
    (1) The 21st day after receipt by the FDIC of a substantially 
complete filing;
    (2) The 5th day after expiration of the comment period described in 
Sec. 303.44; or
    (3) In the case of an application to establish and operate a de 
novo branch in a state that is not the applicant's home state and in 
which the applicant does not maintain a branch, the 5th day after the 
FDIC receives confirmation from the host state that the applicant has 
both complied with the filing requirements of the host state and 
submitted a copy of the application with the FDIC to the host state 
bank supervisor.
    (b) Standard processing. For those applications which are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action when the 
decision is rendered.


Sec. 303.44  Public notice requirements.

    (a) Newspaper publications. For applications to establish or 
relocate a branch, a notice as described in Sec. 303.7(b) shall be 
published once in a newspaper of general circulation. For applications 
to relocate a main office, notice shall be published at least once each 
week on the same day for two consecutive weeks. The required 
publication shall be made in the following communities:
    (1) To establish a branch. In the community in which the main 
office is located and in the communities to be served by the branch 
(including messenger services and mobile branches).
    (2) To relocate a main office. In the community in which the main 
office is currently located and in the community to which it is 
proposed the main office will relocate.
    (3) To relocate a branch. In the community in which the branch is 
located.
    (b) Public comments. Comments by interested parties must be 
received by the appropriate regional director (DOS) within 15 days 
after the date of the last newspaper publication required by paragraph 
(a) of this section, unless the comment period has been extended or 
reopened in accordance with Sec. 303.9(b)(2).
    (c) Lobby notices. In the case of applications to relocate a main 
office or a branch, a copy of the required newspaper publication shall 
be posted in the public lobby of the office to be relocated for at 
least 15 days beginning on the date of the last published notice 
required by paragraph (a) of this section.


Sec. 303.45  Special provisions.

    (a) Emergency or disaster events. (1) In the case of an emergency 
or disaster at a main office or a branch which requires that an office 
be immediately relocated to a temporary location, applicants shall 
notify the appropriate regional director (DOS) within 3 days of such 
temporary relocation.
    (2) Within 10 days of the temporary relocation resulting from an 
emergency or disaster, the bank shall submit a written application to 
the appropriate regional director (DOS), that identifies the nature of 
the emergency or disaster, specifies the location of the temporary 
branch, and provides an estimate of the duration the bank plans to 
operate the temporary branch.
    (3) As part of the review process, the appropriate regional 
director (DOS) will determine on a case by case basis whether 
additional information is necessary and may waive public notice 
requirements.
    (b) Redesignation of main office and existing branch. In cases 
where an applicant desires to redesignate its main office as a branch 
and redesignate an existing branch as the main office, a single 
application shall be submitted. The appropriate regional director (DOS) 
may waive the public notice requirements in instances where an 
application presents no significant or novel policy, supervisory, CRA, 
compliance or legal concerns. A waiver will be granted only to a 
redesignation within the applicant's home state.
    (c) Expiration of approval. Approval of an application expires if 
within 18 months after the approval date a branch has not commenced 
business or a relocation has not been completed.


Sec. 303.46  Delegation of authority.

    (a) Approval of applications. (1) Where the applicant agrees in 
writing to comply with any conditions imposed by the delegate, other 
than the standard conditions defined in Sec. 303.2(ff) which may be 
imposed without the applicant's written consent, authority is delegated 
to the Director and Deputy Director (DOS) and, where confirmed in 
writing by the Director, to an associate director and the appropriate 
regional director and deputy regional director, to approve the 
following applications:
    (i) Establish a branch;
    (ii) Establish and operate a de novo branch in a state that is not 
the applicant's home state and in which the applicant does not maintain 
a branch;
    (iii) Relocate a main office (including an application to relocate 
a main office to another state and retain existing branches); and
    (iv) Relocate a branch.
    (2) For the delegate to exercise this authority, the criteria in 
paragraphs (c)(1) through (c)(7) of this section must be satisfied.
    (3) Where the applicant does not agree in writing to comply with 
any condition imposed by the delegate, authority is delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to an associate director to approve the applications 
listed in paragraph (a)(1) of this section.
    (b) Denial of applications. (1) Authority is delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to an associate director and the appropriate regional 
director and deputy regional director, to deny an application to 
establish a temporary branch.

[[Page 44725]]

    (2) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director to deny an application for consent to:
    (i) Establish a branch;
    (ii) Establish and operate a de novo branch in a state that is not 
the applicant's home state and in which the applicant does not maintain 
a branch;
    (iii) Relocate a main office (including an application to relocate 
a main office to another state and retain existing branches); and
    (iv) Relocate a branch.
    (c) Criteria for delegated authority. The following criteria must 
be satisfied before the authority delegated in paragraph (a) of this 
section may be exercised:
    (1) The factors set forth in section 6 of the FDI Act (12 U.S.C. 
1816) have been considered and favorably resolved except that this 
criterion does not apply to applications to establish messenger 
services and temporary branches;
    (2) The applicant meets the capital requirements set forth in 12 
CFR part 325 and the FDIC ``Statement of Policy on Capital Adequacy'' 
(12 CFR part 325, appendix B) or agrees in writing to increase capital 
so as to be in compliance with the requirements of 12 CFR part 325 
before or at the consummation of the transaction which is the subject 
of the filing, except that this criterion does not apply to 
applications to establish messenger services and temporary branches, or 
to relocate branches or main offices;
    (3) Any financial arrangements which have been made in connection 
with the proposed branch or relocation and which involve the 
applicant's insiders are fair and reasonable in comparison to similar 
arrangements that could have been made with independent third parties;
    (4) Compliance with the CRA, the NEPA, the NHPA, and any applicable 
related regulations, including 12 CFR part 345, has been considered and 
favorably resolved;
    (5) No CRA protest as defined in Sec. 303.2(l) has been filed which 
remains unresolved or, where such a protest has been filed and remains 
unresolved, the Director (DCA), Deputy Director (DCA), an associate 
director (DCA) or the appropriate regional director or deputy regional 
director (DCA) concurs that approval is consistent with the purposes of 
the CRA and the applicant agrees in writing to any conditions imposed 
regarding the CRA;
    (6) An applicant with one or more existing branches in a state 
other than the applicant's home state has not failed the credit needs 
test in a host state under section 109 of the Riegle-Neal Interstate 
Banking and Branching Efficiency Act of 1994 (12 U.S.C. 1835a);
    (7) Additionally, for applications submitted to establish and 
operate a de novo branch in a state that is not the applicant's home 
state and in which the applicant does not maintain a branch:
    (i) Confirmation by the appropriate regional director (DOS) that 
the applicant has complied with that state's filing requirements and 
that the applicant also has submitted to the host state bank supervisor 
a copy of its FDIC filing to establish and operate a de novo branch;
    (ii) Determination by the FDIC that the applicant is adequately 
capitalized as of the date of the filing and will continue to be 
adequately capitalized and adequately managed upon consummation of the 
transaction;
    (iii) Confirmation that the host state has in effect a law that 
meets the requirements of section 18(d)(4)(A) of the FDI Act (12 U.S.C. 
1828(d)(4)(A)); and
    (iv) Compliance with section 44(b)(3) of the FDI Act (12 U.S.C. 
1831u(b)(3)); and
    (8) Additionally, for applications submitted to relocate a main 
office from one state to another where the applicant seeks to retain 
branches in the state where the applicant's main office exists prior to 
an interstate relocation of the main office, confirmation that the 
filing meets the requirements of section 18(d)(3)(B) of the FDI Act (12 
U.S.C. 1828(d)(3)(B)).

Subpart D--Merger Transactions


Sec. 303.60  Scope.

    This subpart sets forth the application requirements, procedures, 
and delegations of authority for transactions subject to FDIC approval 
under the Bank Merger Act, section 18(c) of the FDI Act (12 U.S.C. 
1828(c)). Additional guidance is contained in the FDIC ``Statement of 
Policy on Bank Merger Transactions'' (2 FDIC Law, Regulations, Related 
Acts (FDIC) 5145; see Sec. 309.4 (a) and (b) of this chapter for 
availability).


Sec. 303.61  Definitions.

    For purposes of this subpart:
    (a) Merger transaction includes any transaction:
    (1) In which an insured depository institution merges or 
consolidates with any other insured depository institution or, either 
directly or indirectly, acquires the assets of, or assumes liability to 
pay any deposits made in, any other insured depository institution; or
    (2) In which an insured depository institution merges or 
consolidates with any noninsured bank or institution or assumes 
liability to pay any deposits made in, or similar liabilities of, any 
noninsured bank or institution, or in which an insured depository 
institution transfers assets to any noninsured bank or institution in 
consideration of the assumption of any portion of the deposits made in 
the insured depository institution.
    (b) Corporate reorganization means a merger transaction between 
commonly-owned institutions, between an insured depository institution 
and its subsidiary, or between an insured depository institution and 
its holding company, provided that the merger transaction would have no 
effect on competition or otherwise have significance under the 
statutory standards set forth in section 18(c) of the FDI Act (12 
U.S.C. 1828(c)). For purposes of this paragraph, institutions are 
commonly-owned if more than 50 percent of the voting stock of each of 
the institutions is owned by the same company, individual, or group of 
closely-related individuals acting in concert.
    (c) Interim merger transaction means a merger transaction (other 
than a purchase and assumption transaction) between an operating 
depository institution and a newly-formed depository institution or 
corporation that will not operate independently and that exists solely 
for the purpose of facilitating a corporate reorganization.
    (d) Optional conversion (Oakar transaction) means a merger 
transaction in which an insured depository institution assumes deposit 
liabilities insured by the deposit insurance fund (either the Bank 
Insurance Fund (BIF) or the Savings Association Insurance Fund (SAIF)) 
of which that assuming institution is not a member, and elects not to 
convert the insurance covering the assumed deposits. Such transactions 
are covered by section 5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)).
    (e) Resulting institution refers to the acquiring, assuming or 
resulting institution in a merger transaction.


Sec. 303.62  Transactions requiring prior approval.

    (a) Merger transactions. The following merger transactions require 
the prior written approval of the FDIC under this subpart:
    (1) Any merger transaction, including any corporate reorganization, 
interim merger transaction, or optional conversion, in which the 
resulting institution is to be an insured state nonmember bank; and
    (2) Any merger transaction, including any corporate reorganization 
or interim

[[Page 44726]]

merger transaction, that involves an uninsured bank or institution.
    (b) Related provisions. Transactions covered by this subpart also 
may be subject to other provisions or application requirements, 
including the following:
    (1) Interstate merger transactions. Merger transactions between 
insured banks that are chartered in different states are subject to the 
provisions of section 44 of the FDI Act (12 U.S.C. 1831u). In the case 
of a merger transaction that consists of the acquisition by an out of 
state bank of a branch without acquisition of the bank, the branch is 
treated for section 44 purposes as a bank whose home state is the state 
in which the branch is located.
    (2) Deposit insurance. An application for deposit insurance will be 
required in connection with a merger transaction between a state-
chartered interim institution and an insured depository institution if 
the related merger application is being acted upon by a federal banking 
agency other than the FDIC. If the FDIC is the federal banking agency 
responsible for acting on the related merger application, a separate 
application for deposit insurance is not necessary. Procedures for 
applying for deposit insurance are set forth in subpart B of this part. 
An application for deposit insurance will not be required in connection 
with a merger transaction (other than a purchase and assumption 
transaction) of a federally-chartered interim institution and an 
insured institution, even if the resulting institution is to operate 
under the charter of the federal interim institution.
    (3) Deposit insurance fund conversions. Procedures for conversion 
transactions involving the transfer of deposits from BIF to SAIF or 
from SAIF to BIF are set forth in subpart M of this part at 
Sec. 303.246.
    (4) Branch closings. Branch closings in connection with a merger 
transaction are subject to the notice requirements of section 42 of the 
FDI Act (12 U.S.C. 1831r-1), including requirements for notice to 
customers. These requirements are addressed in the ``Interagency Policy 
Statement Concerning Branch Closings Notices and Policies'' (2 FDIC 
Law, Regulations, Related Acts (FDIC) 5391).
    (5) Undercapitalized institutions. Applications for a merger 
transaction by applicants subject to section 38 of the FDI Act (12 
U.S.C. 1831o) should also provide the information required by 
Sec. 303.204. Applications pursuant to sections 38 and 18(c) of the FDI 
Act (12 U.S.C, 1831o and 1828(c)) may be filed concurrently or as a 
single application.
    (6) Certification of assumption of deposit liability. An insured 
depository institution assuming deposit liabilities of another insured 
institution must provide certification of assumption of deposit 
liability to the FDIC in accordance with 12 CFR part 307.


Sec. 303.63  Filing procedures.

    (a) General. Applications required under this subpart shall be 
filed with the appropriate regional director (DOS). The appropriate 
forms and instructions may be obtained upon request from any DOS 
regional office.
    (b) Merger transactions. Applications for approval of merger 
transactions shall be accompanied by copies of all agreements or 
proposed agreements relating to the merger transaction and any other 
information requested by the FDIC.
    (c) Interim merger transactions. Applications for approval of 
interim merger transactions and any related deposit insurance 
applications shall be made by filing the forms and other documents 
required by paragraphs (a) and (b) of this section and such other 
information as may be required by the FDIC for consideration of the 
request for deposit insurance.
    (d) Optional conversions. If the proposed merger transaction is an 
optional conversion, the merger application shall include a statement 
that the proposed merger transaction is a transaction covered by 
section 5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)).


Sec. 303.64  Processing.

    (a) Expedited processing for eligible depository institutions.--(1) 
General. An application filed under this subpart by an eligible 
depository institution as defined in Sec. 303.2(r) and which meets the 
additional criteria in paragraph (a)(4) of this section will be 
acknowledged by the FDIC in writing and will receive expedited 
processing, unless the applicant is notified in writing to the contrary 
and provided with the basis for that decision. The FDIC may remove an 
application from expedited processing for any of the reasons set forth 
in Sec. 303.11(c)(2).
    (2) Under expedited processing, the FDIC will take action on an 
application by the date that is the latest of:
    (i) 45 days after the date of the FDIC's receipt of a substantially 
complete merger application; or
    (ii) 10 days after the date of the last notice publication required 
under Sec. 303.65; or
    (iii) 5 days after receipt of the Attorney General's report on the 
competitive factors involved in the proposed transaction; or
    (iv) For an interstate merger transaction subject to the provisions 
of section 44 of the FDI Act (12 U.S.C. 1831u), 5 days after the FDIC 
receives confirmation from the host state (as defined in 
Sec. 303.41(e)) that the applicant has both complied with the filing 
requirements of the host state and submitted a copy of the FDIC merger 
application to the host state's bank supervisor.
    (3) Notwithstanding paragraph (a)(1) of this section, if the FDIC 
does not act within the expedited processing period, it does not 
constitute an automatic or default approval.
    (4) Criteria. The FDIC will process an application using expedited 
procedures if:
    (i) Immediately following the merger transaction, the resulting 
institution will be ``well-capitalized'' pursuant to subpart B of part 
325 of this chapter; and
    (ii)(A) All parties to the merger transaction are eligible 
depository institutions as defined in Sec. 303.2(r); or
    (B) The acquiring party is an eligible depository institution as 
defined in Sec. 303.2(r) and the amount of the total assets to be 
transferred does not exceed an amount equal to 10 percent of the 
acquiring institution's total assets as reported in its report of 
condition for the quarter immediately preceding the filing of the 
merger application.
    (b) Standard processing. For those applications not processed 
pursuant to the expedited procedures, the FDIC will provide the 
applicant with written notification of the final action taken by the 
FDIC on the application when the decision is rendered.


Sec. 303.65  Public notice requirements.

    (a) General. Except as provided in paragraph (b) of this section, 
an applicant for approval of a merger transaction must publish notice 
of the proposed transaction on at least three occasions at 
approximately equal intervals in a newspaper of general circulation in 
the community or communities where the main offices of the merging 
institutions are located or, if there is no such newspaper in the 
community, then in the newspaper of general circulation published 
nearest thereto.
    (1) First publication. The first publication of the notice should 
be as close as practicable to the date on which the application is 
filed with the FDIC, but no more than 5 days prior to the filing date.
    (2) Last publication. The last publication of the notice shall be 
on the 25th day after the first publication or, if the newspaper does 
not publish on the 25th day, on the newspaper's

[[Page 44727]]

publication date that is closest to the 25th day.
    (b) Exceptions.--(1) Emergency requiring expeditious action. If the 
FDIC determines that an emergency exists requiring expeditious action, 
notice shall be published twice. The first notice shall be published as 
soon as possible after the FDIC notifies the applicant of such 
determination. The second notice shall be published on the 7th day 
after the first publication or, if the newspaper does not publish on 
the 7th day, on the newspaper's publication date that is closest to the 
7th day.
    (2) Probable failure. If the FDIC determines that it must act 
immediately to prevent the probable failure of one of the institutions 
involved in a proposed merger transaction, publication is not required.
    (c) Content of notice.--(1) General. The notice shall conform to 
the public notice requirements set forth in Sec. 303.7.
    (2) Branches. If it is contemplated that the resulting institution 
will operate offices of the other institution(s) as branches, the 
following statement shall be included in the notice required in 
Sec. 303.7(b):

    It is contemplated that all offices of the above-named 
institutions will continue to be operated (with the exception of 
[insert identity and location of each office that will not be 
operated]).

    (3) Emergency requiring expeditious action. If the FDIC determines 
that an emergency exists requiring expeditious action, the notice shall 
specify as the closing date of the public comment period the date that 
is the 10th day after the date of the first publication.
    (d) Public comments. Comments must be received by the appropriate 
regional director (DOS) within 30 days after the first publication of 
the notice, unless the comment period has been extended or reopened in 
accordance with Sec. 303.9(b)(2). If the FDIC has determined that an 
emergency exists requiring expeditious action, comments must be 
received by the appropriate regional director within 10 days after the 
first publication.


Sec. 303.66  Delegation of authority.

    (a) General.--(1) Bank Merger Act approval. Subject to paragraphs 
(a)(3) and (e) of this section, authority is delegated in paragraphs 
(b), (c), and (d) of this section to the designated FDIC officials to 
approve under the Bank Merger Act, 18(c) of the FDI Act (12 U.S.C. 
1828(c)), applications filed under this subpart.
    (2) Interstate merger approval. With respect to an interstate 
merger transaction covered by section 44 of the FDI Act (12 U.S.C. 
1831u), in addition to the authority delegated to any official in 
paragraph (b), (c), or (d) of this section to approve the merger 
transaction under the Bank Merger Act, authority is also delegated to 
such official to approve the merger transaction under section 44. This 
delegation is subject to paragraph (a)(3) of this section and to the 
condition that the merger transaction is eligible for FDIC approval 
under section 44.
    (3) Combined approvals. The delegations in paragraphs (a)(2), (b), 
(c), and (d) of this section do not apply to an interstate bank merger 
transaction covered both by section 44 and by the Bank Merger Act 
unless the merger transaction is being approved pursuant to delegated 
authority under both section 44 and the Bank Merger Act.
    (b) Basic delegation. Authority is delegated to the Director and 
Deputy Director (DOS) and, where confirmed in writing by the Director, 
to an associate director, and the appropriate regional director and 
deputy regional director to approve applications under the Bank Merger 
Act. For the delegate to exercise this authority, the following 
criteria must be satisfied:
    (1) The resulting institution would meet all applicable capital 
requirements upon consummation of the transaction (or, where the 
resulting entity is an insured branch of a foreign bank, would be in 
compliance with 12 CFR 347.211 upon consummation of the transaction); 
and
    (2) The factors set forth in section 18(c)(5) of the Act (12 U.S.C. 
1828(c)(5)) have been considered and favorably resolved; and
    (3)(i) The merging institutions do not operate in the same relevant 
geographic market(s); or
    (ii) In each relevant geographic market in which more than one of 
the merging institutions operate, the resulting institution upon 
consummation of the merger transaction would hold no more than 15 
percent of the total deposits held by banks and/or other depository 
institutions (as appropriate) in the market; or
    (iii) In each relevant geographic market in which more than one of 
the merging institutions operate, the resulting institution upon 
consummation of the merger transaction would hold no more than 25 
percent of the total deposits held by banks and/or other depository 
institutions (as appropriate) in the market, and the Attorney General 
has notified the FDIC in writing that the proposed merger transaction 
would not have a significantly adverse effect on competition; and
    (4) Compliance with the CRA and any applicable related regulations, 
including 12 CFR part 345, has been considered and favorably resolved; 
and
    (5) No CRA protest as defined in Sec. 303.2(l) has been filed which 
remains unresolved or, where such a protest has been filed and remains 
unresolved, the Director (DCA), Deputy Director (DCA), associate 
director (DCA), the appropriate regional director (DCA), or deputy 
regional director (DCA) concurs that approval is consistent with the 
purposes of the CRA, and the applicant agrees in writing to any 
conditions imposed regarding the CRA; and
    (6) The applicant agrees in writing to comply with any conditions 
imposed by the delegate, other than the standard conditions defined in 
Sec. 303.2(ff), which may be imposed without the applicant's written 
consent.
    (c) Additional delegations. In addition to the delegations 
otherwise provided for in this section, and subject to the criteria set 
forth in paragraphs (b)(1), (2), (4), (5), and (6) of this section, 
authority is delegated to the Director and to the Deputy Director (DOS) 
and, where confirmed in writing by the Director, to an associate 
director, to approve an application for a merger transaction upon the 
consummation of which the resulting institution would hold not more 
than 35 percent of the total deposits held by banks and/or other 
depository institutions (as appropriate) in any relevant geographic 
market in which more than one of the merging institutions operate, and 
the Attorney General has notified the FDIC in writing that the merger 
transaction would not have a significantly adverse effect on 
competition.
    (d) Corporate reorganizations; interim merger transactions. In 
addition to the delegations otherwise provided for in this section, 
authority is delegated to the Director and to the Deputy Director (DOS) 
and, where confirmed in writing by the Director, to an associate 
director and the appropriate regional director and deputy regional 
director, to approve:
    (1) An application for a corporate reorganization or an interim 
merger transaction that satisfies the criteria set forth in paragraphs 
(b)(5) and (6) of this section; and
    (2) Any related application for deposit insurance.
    (e) Limitations. The delegations in paragraphs (b) through (d) of 
this section do not apply if:
    (1) The Attorney General has determined that the merger transaction 
would have a significantly adverse effect on competition; or

[[Page 44728]]

    (2) The FDIC has made a determination pursuant to section 18 (c)(6) 
of the FDI Act (12 U.S.C. 1828(c)(6)) that an emergency exists 
requiring expeditious action or that the transaction must be 
consummated immediately in order to avoid a probable failure.
    (f) Review of competitive factors reports. In deciding whether to 
approve a merger transaction under the authority delegated by this 
section, the delegate shall review any reports provided by the Attorney 
General, the Comptroller of the Currency, the Board of Governors of the 
Federal Reserve System, or the Director of the Office of Thrift 
Supervision in response to a request by the FDIC for reports on the 
competitive factors involved in the proposed merger transaction.
    (g) Competitive factor reports provided by the FDIC. Authority is 
delegated to the Director and the Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director and the 
appropriate regional director and deputy regional director, to furnish 
requested reports to the Board of Governors of the Federal Reserve 
System, the Comptroller of the Currency, or the Director of the Office 
of Thrift Supervision on the competitive factors involved in any merger 
transaction subject to approval by one of those agencies, if the 
delegate determines that the proposed merger transaction would not have 
a substantially adverse effect on competition.


Sec. 303.67  Authority retained by the FDIC Board of Directors.

    Without limiting the authority of the Board of Directors, the Board 
of Directors retains authority to act on applications covered by this 
subpart if the criteria or other conditions for delegation are not 
satisfied. This includes the retention of authority to deny 
applications for merger transactions. It further includes retention of 
authority to approve applications for merger transactions where:
    (a) The limitations specified in Sec. 303.66(e) preclude action 
under delegated authority;
    (b) The applicant does not agree in writing to comply with any 
conditions imposed by the delegate, other than the standard conditions 
defined in Sec. 303.2(ff), which may be imposed without the applicant's 
written consent; or
    (c) The resulting institution, upon consummation of a merger 
transaction other than a corporate reorganization, would have more than 
35 percent of the total deposits held by banks and/or other depository 
institutions (as appropriate) in any relevant geographic market in 
which more than one of the merging institutions operate.

Subpart E--Change in Bank Control


Sec. 303.80  Scope.

    This subpart sets forth the procedures for submitting a notice to 
acquire control of an insured state nonmember bank pursuant to the 
Change in Bank Control Act of 1978, section 7(j) of the FDI Act (12 
U.S.C. 1817(j)), and delegations of authority regarding such filings.


Sec. 303.81  Definitions.

    For purposes of this subpart:
    (a) Acquisition means a purchase, assignment, transfer, pledge or 
other disposition of voting shares, or an increase in percentage 
ownership of an insured state nonmember bank resulting from a 
redemption of voting shares.
    (b) Acting in concert means knowing participation in a joint 
activity or parallel action towards a common goal of acquiring control 
of an insured state nonmember bank, whether or not pursuant to an 
express agreement.
    (c) Control means the power, directly or indirectly, to direct the 
management or policies of an insured bank or to vote 25 percent or more 
of any class of voting shares of an insured bank.
    (d) Person means an individual, corporation, partnership, trust, 
association, joint venture, pool, syndicate, sole proprietorship, 
unincorporated organization, and any other form of entity; and a voting 
trust, voting agreement, and any group of persons acting in concert.


Sec. 303.82  Transactions requiring prior notice.

    (a) Prior notice requirement. Any person acting directly or 
indirectly, or through or in concert with one or more persons, shall 
give the FDIC 60 days prior written notice, as specified in 
Sec. 303.84, before acquiring control of an insured state nonmember 
bank, unless the acquisition is exempt under Sec. 303.83.
    (b) Acquisitions requiring prior notice.--(1) Acquisition of 
control. The acquisition of control, unless exempted, requires prior 
notice to the FDIC.
    (2) Rebuttable presumption of control. The FDIC presumes that an 
acquisition of voting shares of an insured state nonmember bank 
constitutes the acquisition of the power to direct the management or 
policies of an insured bank requiring prior notice to the FDIC, if, 
immediately after the transaction, the acquiring person (or persons 
acting in concert) will own, control, or hold with power to vote 10 
percent or more of any class of voting shares of the institution, and 
if:
    (i) The institution has registered shares under section 12 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78l); or
    (ii) No other person will own, control or hold the power to vote a 
greater percentage of that class of voting shares immediately after the 
transaction. If two or more persons, not acting in concert, each 
propose to acquire simultaneously equal percentages of 10 percent or 
more of a class of voting shares of an insured state nonmember bank, 
each such person shall file prior notice with the FDIC.
    (c) Acquisitions of loans in default. The FDIC presumes an 
acquisition of a loan in default that is secured by voting shares of an 
insured state nonmember bank to be an acquisition of the underlying 
shares for purposes of this section.
    (d) Other transactions. Transactions other than those set forth in 
paragraph (b)(2) of this section resulting in a person's control of 
less than 25 percent of a class of voting shares of an insured state 
nonmember bank are not deemed by the FDIC to constitute control for 
purposes of the Change in Bank Control Act.
    (e) Rebuttal of presumptions. Prior notice to the FDIC is not 
required for any acquisition of voting shares under the presumption of 
control set forth in this section, if the FDIC finds that the 
acquisition will not result in control. The FDIC will afford any person 
seeking to rebut a presumption in this section an opportunity to 
present views in writing or, if appropriate, orally before its 
designated representatives at an informal meeting.


Sec. 303.83  Transactions not requiring prior notice.

    (a) Exempt transactions. The following transactions do not require 
notice to the FDIC under this subpart:
    (1) The acquisition of additional voting shares of an insured state 
nonmember bank by a person who:
    (i) Held the power to vote 25 percent or more of any class of 
voting shares of that institution continuously since March 9, 1979, or 
since that institution commenced business, whichever is later; or
    (ii) Is presumed, under Sec. 303.82(b)(2), to have controlled the 
institution continuously since March 9, 1979, if the aggregate amount 
of voting shares held does not exceed 25 percent or more of any class 
of voting shares of the institution or, in other cases, where the FDIC 
determines that the person has

[[Page 44729]]

controlled the bank continuously since March 9, 1979;
    (2) The acquisition of additional shares of a class of voting 
shares of an insured state nonmember bank by any person (or persons 
acting in concert) who has lawfully acquired and maintained control of 
the institution (for purposes of Sec. 303.82) after complying with the 
procedures of the Change in Bank Control Act to acquire voting shares 
of the institution under this subpart;
    (3) Acquisitions of voting shares subject to approval under section 
3 of the Bank Holding Company Act (12 U.S.C. 1842(a)), section 18(c) of 
the FDI Act (12 U.S.C. 1828(c)), or section 10 of the Home Owners' Loan 
Act (12 U.S.C. 1467a);
    (4) Transactions exempt under the Bank Holding Company Act: 
foreclosures by institutional lenders, fiduciary acquisitions by banks, 
and increases of majority holdings by bank holding companies described 
in sections 2(a)(5), 3(a)(A), or 3(a)(B) respectively of the Bank 
Holding Company Act (12 U.S.C. 1841(a)(5), 1842(a)(A), and 1842(a)(B));
    (5) A customary one-time proxy solicitation;
    (6) The receipt of voting shares of an insured state nonmember bank 
through a pro rata stock dividend; and
    (7) The acquisition of voting shares in a foreign bank, which has 
an insured branch or branches in the United States. (This exemption 
does not extend to the reports and information required under 
paragraphs 9, 10, and 12 of the Change in Bank Control Act of 1978 (12 
U.S.C. 1817(j) (9), (10), and (12)).
    (b) Prior notice exemption. (1) The following acquisitions of 
voting shares of an insured state nonmember bank, which otherwise would 
require prior notice under this subpart, are not subject to the prior 
notice requirements if the acquiring person notifies the appropriate 
regional director (DOS) within 90 calendar days after the acquisition 
and provides any relevant information requested by the regional 
director (DOS):
    (i) The acquisition of voting shares through inheritance;
    (ii) The acquisition of voting shares as a bona fide gift; or
    (iii) The acquisition of voting shares in satisfaction of a debt 
previously contracted in good faith, except that the acquiror of a 
defaulted loan secured by a controlling amount of a state nonmember 
bank's voting securities shall file a notice before the loan is 
acquired.
    (2) The following acquisitions of voting shares of an insured state 
nonmember bank, which otherwise would require prior notice under this 
subpart, are not subject to the prior notice requirements if the 
acquiring person notifies the appropriate regional director (DOS) 
within 90 calendar days after receiving notice of the acquisition and 
provides any relevant information requested by the regional director 
(DOS):
    (i) A percentage increase in ownership of voting shares resulting 
from a redemption of voting shares by the issuing bank; or
    (ii) The sale of shares by any shareholder that is not within the 
control of a person resulting in that person becoming the largest 
shareholder.
    (3) Nothing in paragraph (b)(1) of this section limits the 
authority of the FDIC to disapprove a notice pursuant to 
Sec. 303.85(c).


Sec. 303.84  Filing procedures.

    (a) Filing notice. (1) A notice required under this subpart shall 
be filed with the appropriate regional director (DOS) and shall contain 
all the information required by paragraph 6 of the Change in Bank 
Control Act, section 7 (j) of the FDI Act, (12 U.S.C. 1817(j)(6)), or 
prescribed in the designated interagency form which may be obtained 
from any FDIC regional office.
    (2) The FDIC may waive any of the informational requirements of the 
notice if the FDIC determines that it is in the public interest.
    (3) A notificant shall notify the appropriate regional director 
(DOS) immediately of any material changes in a notice submitted to the 
regional director (DOS), including changes in financial or other 
conditions.
    (4) When the acquiring person is an individual, or group of 
individuals acting in concert, the requirement to provide personal 
financial data may be satisfied by a current statement of assets and 
liabilities and an income summary, as required in the designated 
interagency form, together with a statement of any material changes 
since the date of the statement or summary. The appropriate regional 
director (DOS) may require additional information if appropriate.
    (b) Other laws. Nothing in this subpart shall affect any obligation 
which the acquiring person(s) may have to comply with the federal 
securities laws or other laws.


Sec. 303.85  Processing.

    (a) Acceptance of notice. The 60-day notice period specified in 
Sec. 303.82 shall commence on the date of receipt of a substantially 
complete notice. The regional director (DOS) shall notify the person or 
persons submitting a notice under this subpart in writing of the date 
the notice is accepted for processing. The FDIC may request additional 
information at any time.
    (b) Time period for FDIC action; consummation of acquisition. (1) 
The notificant(s) may consummate the proposed acquisition 60 days after 
submission to the regional director (DOS) of a substantially complete 
notice under paragraph (a) of this section, unless within that period 
the FDIC disapproves the proposed acquisition or extends the 60-day 
period.
    (2) The notificant(s) may consummate the proposed transaction 
before the expiration of the 60-day period if the FDIC notifies the 
notificant(s) in writing of its intention not to disapprove the 
acquisition.
    (c) Disapproval of acquisition of control. Subpart D of 12 CFR part 
308 sets forth the rules of practice and procedure for a notice of 
disapproval.


Sec. 303.86  Public notice requirements.

    (a) Publication--(1) Newspaper announcement. Any person(s) filing a 
notice under this subpart shall publish an announcement soliciting 
public comment on the proposed acquisition. The announcement shall be 
published in a newspaper of general circulation in the community in 
which the home office of the state nonmember bank to be acquired is 
located. The announcement shall be published as close as is practicable 
to the date the notice is filed with the appropriate regional director 
(DOS), but in no event more than 10 calendar days before or after the 
filing date.
    (2) Contents of newspaper announcement. The newspaper announcement 
shall conform to the public notice requirements set forth in 
Sec. 303.7.
    (b) Delay of publication. The FDIC may permit delay in the 
publication required by this section if the FDIC determines, for good 
cause, that it is in the public interest to grant such a delay. 
Requests for delay of publication may be submitted to the appropriate 
regional director (DOS).
    (c) Shortening or waiving notice. The FDIC may shorten the public 
comment period to a period of not less than 10 days, or waive the 
public comment or newspaper publication requirements of this paragraph, 
or act on a notice before the expiration of a public comment period, if 
it determines in writing either that an emergency exists or that 
disclosure of the notice, solicitation of public comment, or delay 
until expiration of the public comment period

[[Page 44730]]

would seriously threaten the safety or soundness of the bank to be 
acquired.
    (d) Consideration of public comments. In acting upon a notice filed 
under this subpart, the FDIC shall consider all public comments 
received in writing within 20 days following the required newspaper 
publication or, if the FDIC has shortened the public comment period 
pursuant to paragraph (c) of this section, within such shorter period.
    (e) Publication if filing is subsequent to acquisition of control. 
(1) Whenever a notice of a proposed acquisition of control is not filed 
in accordance with the Change in Bank Control Act and these 
regulations, the acquiring person(s) shall, within 10 days of being so 
directed by the FDIC, publish an announcement of the acquisition of 
control in a newspaper of general circulation in the community in which 
the home office of the state nonmember bank to be acquired is located.
    (2) The newspaper announcement shall contain the name(s) of the 
acquiror(s), the name of the depository institution involved, and the 
date of the acquisition of the stock. The announcement shall also 
contain a statement indicating that the FDIC is currently reviewing the 
acquisition of control. The announcement also shall state that any 
person wishing to comment on the change in control may do so by 
submitting written comments to the appropriate regional director (DOS) 
of the FDIC (give address of regional office) within 20 days following 
the required newspaper publication.


Sec. 303.87  Delegation of authority.

    (a) Authority is delegated to the Director and the Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director and the appropriate regional director and deputy regional 
director, to issue a written notice of the FDIC's intent not to 
disapprove an acquisition of control of an insured state nonmember 
bank.
    (b) The authority delegated by paragraph (a) of this section shall 
include the power to:
    (1) Act in situations where information is submitted on 
acquisitions arising out of events beyond the person's control, as set 
forth in Sec. 303.83(b);
    (2) Extend notice periods;
    (3) Determine whether a notice should be filed under section 7(j) 
of the Act (12 U.S.C. 1817(j)) by a person acquiring less than 25 
percent of any class of voting shares of an insured state nonmember 
bank; and
    (4) Delay or waive publication, waive or shorten the public comment 
period, or act on a proposed acquisition of control prior to the 
expiration of the public comment period, as provided in 
Secs. 303.86(a)(3) and (4).
    (c) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director, to disapprove an acquisition of control of an insured state 
nonmember bank.

Subpart F--Change of Director or Senior Executive Officer


Sec. 303.100  Scope.

    This subpart sets forth the circumstances under which an insured 
state nonmember bank must notify the FDIC of a change in any member of 
its board of directors or any senior executive officer and the 
procedures for filing such notice, as well as applicable delegations of 
authority. This subpart implements section 32 of the FDI Act (12 U.S.C. 
1831i).


Sec. 303.101  Definitions.

    For purposes of this subpart:
    (a) Director means a person who serves on the board of directors or 
board of trustees of an insured state nonmember bank, except that this 
term does not include an advisory director who:
    (1) Is not elected by the shareholders;
    (2) Is not authorized to vote on any matters before the board of 
directors or board of trustees or any committee thereof;
    (3) Solely provides general policy advice to the board of directors 
or board of trustees and any committee thereof; and
    (4) Has not been identified by the FDIC as a person who performs 
the functions of a director for purposes of this subpart.
    (b) Senior executive officer means a person who holds the title of 
president, chief executive officer, chief operating officer, chief 
managing official (in an insured state branch of a foreign bank), chief 
financial officer, chief lending officer, or chief investment officer, 
or, without regard to title, salary, or compensation, performs the 
function of one or more of these positions. Senior executive officer 
also includes any other person identified by the FDIC, whether or not 
hired as an employee, with significant influence over, or who 
participates in, major policymaking decisions of the insured state 
nonmember bank.
    (c) Troubled condition means any insured state nonmember bank that:
    (1) Has a composite rating, as determined in its most recent report 
of examination of 4 or 5 under the Uniform Financial Institutions 
Rating System (UFIRS), or in the case of an insured state branch of a 
foreign bank, an equivalent rating; or
    (2) Is subject to a proceeding initiated by the FDIC for 
termination or suspension of deposit insurance; or
    (3) Is subject to a cease-and-desist order or written agreement 
issued by either the FDIC or the appropriate state banking authority 
that requires action to improve the financial condition of the bank or 
is subject to a proceeding initiated by the FDIC or state authority 
which contemplates the issuance of an order that requires action to 
improve the financial condition of the bank, unless otherwise informed 
in writing by the FDIC; or
    (4) Is informed in writing by the FDIC that it is in troubled 
condition for purposes of the requirements of this subpart on the basis 
of the bank's most recent report of condition or report of examination, 
or other information available to the FDIC.


Sec. 303.102  Filing procedures and waiver of prior notice.

    (a) Insured state nonmember banks. An insured state nonmember bank 
shall give the FDIC written notice, as specified in paragraph (c)(1) of 
this section, at least 30 days prior to adding or replacing any member 
of its board of directors, employing any person as a senior executive 
officer of the bank, or changing the responsibilities of any senior 
executive officer so that the person would assume a different senior 
executive officer position, if:
    (1) The bank is not in compliance with all minimum capital 
requirements applicable to the bank as determined on the basis of the 
bank's most recent report of condition or report of examination;
    (2) The bank is in troubled condition; or
    (3) The FDIC determines, in connection with its review of a capital 
restoration plan required under section 38(e)(2) of the FDI Act (12 
U.S.C. 1831o(e)(2)) or otherwise, that such notice is appropriate.
    (b) Insured branches of foreign banks. In the case of the addition 
of a member of the board of directors or a change in senior executive 
officer in a foreign bank having an insured state branch, the notice 
requirement shall not apply to such additions and changes in the 
foreign bank parent, but only to changes in senior executive officers 
in the state branch.
    (c) Waiver of prior notice--(1) Waiver requests. The FDIC may 
permit an individual, upon petition by the bank to the appropriate 
regional director (DOS), to serve as a senior executive officer or

[[Page 44731]]

director before filing the notice required under this subpart if the 
FDIC finds that:
    (i) Delay would threaten the safety or soundness of the bank;
    (ii) Delay would not be in the public interest; or
    (iii) Other extraordinary circumstances exist that justify waiver 
of prior notice.
    (2) Automatic waiver. In the case of the election of a new director 
not proposed by management at a meeting of the shareholders of an 
insured state nonmember bank, the prior 30-day notice is automatically 
waived and the individual immediately may begin serving, provided that 
a complete notice is filed with the appropriate regional director (DOS) 
within two business days after the individual's election.
    (3) Effect on disapproval authority. A waiver shall not affect the 
authority of the FDIC to disapprove a notice within 30 days after a 
waiver is granted under paragraph (c)(1) of this section or the 
election of an individual who has filed a notice and is serving 
pursuant to an automatic waiver under paragraph (c)(2) of this section.
    (d)(1) Content of filing. The notice required by paragraph (a) of 
this section shall be filed with the appropriate regional director 
(DOS) and shall contain information pertaining to the competence, 
experience, character, or integrity of the individual with respect to 
whom the notice is submitted, as prescribed in the designated 
interagency form which is available from any FDIC regional office. The 
regional director or his or her designee may require additional 
information.
    (2) Modification. The FDIC may modify or accept other information 
in place of the requirements of paragraph (d)(1) of this section for a 
notice filed under this subpart.


Sec. 303.103  Processing.

    (a) Processing. The 30-day notice period specified in 
Sec. 303.102(a) shall begin on the date substantially all information 
required to be submitted by the notificant pursuant to 
Sec. 303.102(c)(1) is received by the appropriate regional director 
(DOS). The regional director shall notify the bank submitting the 
notice of the date on which the notice is accepted for processing and 
of the date on which the 30-day notice period will expire. If 
processing cannot be completed within 30 days, the notificant will be 
advised in writing, prior to expiration of the 30-day period, of the 
reason for the delay in processing and of the additional time period, 
not to exceed 60 days, in which processing will be completed.
    (b) Commencement of service--(1) At expiration of period. A 
proposed director or senior executive officer may begin service after 
the end of the 30-day period or any other additional period as provided 
under paragraph (a) of this section, unless the FDIC disapproves the 
notice before the end of the period.
    (2) Prior to expiration of period. A proposed director or senior 
executive officer may begin service before the end of the 30-day period 
or any additional time period as provided under paragraph (a) of this 
section, if the FDIC notifies the bank and the individual in writing of 
the FDIC's intention not to disapprove the notice.
    (c) Notice of disapproval. The FDIC may disapprove a notice filed 
under Sec. 303.102 if the FDIC finds that the competence, experience, 
character, or integrity of the individual with respect to whom the 
notice is submitted indicates that it would not be in the best 
interests of the depositors of the bank or in the best interests of the 
public to permit the individual to be employed by, or associated with, 
the bank. Subpart L of 12 CFR part 308 sets forth the rules of practice 
and procedure for a notice of disapproval.


Sec. 303.104  Delegation of authority.

    The following authority is delegated to the Director and Deputy 
Director (DOS) and, where confirmed in writing by the Director, to an 
associate director and the appropriate regional director or deputy 
regional director to:
    (a) Designate an insured state nonmember bank as being in troubled 
condition;
    (b) Grant waivers of the prior notice requirement;
    (c) Extend the 30-day processing period for an additional period of 
up to 60 days in the event of extenuating circumstances; and
    (d) Issue notices of disapproval or notices of intent not to 
disapprove under this subpart.

Subpart G--Activities and Investments of Insured State Banks 
[Reserved]

Subpart H--Filings by Savings Associations


Sec. 303.140  Scope.

    This subpart sets forth the notice and application procedures 
necessary for a savings association to engage in certain activities, or 
to acquire or retain certain investments, in a type or to an extent, 
not authorized for federal savings associations, prohibits federal and 
state savings associations from acquiring or retaining certain 
corporate debt securities, sets forth the notice procedures for a 
savings association to establish or acquire a subsidiary or conduct any 
new activity through a subsidiary, sets forth the notice requirements 
for a federal savings association conducting grandfathered activities, 
and finally sets forth the delegations of authority with respect to 
such activities and investments.


Sec. 303.141  Definitions.

    For the purposes of this subpart, the following definitions apply:
    (a) As used in Secs. 303.142 and 303.143, the term activity 
includes acquiring or retaining any investment other than an equity 
investment.
    (b) Control means the power to vote, directly or indirectly, 25 per 
cent or more of any class of the voting stock of a company, the ability 
to control in any manner the election of a majority of a company's 
directors or trustees, or the ability to exercise a controlling 
influence over the management and policies of a company.
    (c) Corporate debt securities not of investment grade refers to any 
corporate debt security that when acquired was not rated among the four 
highest rating categories by at least one nationally recognized 
statistical rating organization. The term shall not include any 
obligation issued or guaranteed by a corporation that may be held by a 
federal savings association without limitation as to percentage of 
assets under subparagraphs (D), (E), or (F) of section 5(c)(1) of the 
Home Owners' Loan Act (12 U.S.C. 1464(c)(1)).
    (d) Equity investment means any equity security as defined in this 
section; any partnership interest; any equity interest in real estate 
as defined in this section; and any transaction which in substance 
falls into any of these categories, even though it may be structured as 
some other form of business transaction.
    (e) Equity interest in real estate means any form of direct or 
indirect ownership of any interest in real property (whether in the 
form of an equity interest, partnership, joint venture or other form) 
which is accounted for as an investment in real estate or real estate 
joint ventures under generally accepted accounting principles or is 
otherwise determined to be an investment in a real estate venture under 
Federal Financial Institutions Examination Council instructions for the 
preparation of reports of condition. The term equity interest in real 
estate shall not include:
    (1) An interest in real property that is primarily used or intended 
to be used for future expansion by a savings association, its 
subsidiaries, or its

[[Page 44732]]

affiliates as offices or related facilities for the conduct of its 
business;
    (2) An interest in real property that is acquired in satisfaction 
of a debt previously contracted in good faith, acquired by way of deed 
in lieu of foreclosure, or acquired in sales under judgments, decrees, 
or mortgages held by a savings association, provided that the property 
is not intended to be held for real estate investment purposes but is 
expected to be disposed of in a timely fashion as permitted by 
applicable law; and
    (3) Interests in real property that are primarily in the nature of 
charitable contributions to community development.
    (f) Equity security means any stock (other than adjustable rate 
preferred stock and money market (auction rate) preferred stock), 
certificate of interest or participation in any profit-sharing 
agreement, collateral-trust certificate, preorganization certificate or 
subscription, transferable share, investment contract, or voting-trust 
certificate; any security immediately convertible at the option of the 
holder without payment of substantial additional consideration into 
such a security; any security carrying any warrant or right to 
subscribe to or purchase any such security; and any certificate of 
interest or participation in, temporary or interim certificate for, or 
receipt for any of the foregoing. The term equity security does not 
include any of the foregoing if it is acquired through foreclosure or 
settlement in lieu of foreclosure.
    (g) Qualified affiliate means, in the case of a stock savings 
association, an affiliate other than a subsidiary or an insured 
depository institution; and, in the case of a mutual savings 
association, a subsidiary other than an insured depository institution, 
so long as all of the savings association's investments in, and 
extensions of credit to, the subsidiary are deducted from the savings 
association's capital.
    (h) The term service corporation means any corporation the capital 
stock of which is available for purchase only by savings associations.
    (i) A significant risk is understood to be present whenever there 
is a high probability that any insurance fund administered by the FDIC 
may suffer a loss.
    (j) Subsidiary means any corporation, partnership, business trust, 
association, joint venture, pool, syndicate or other similar business 
organization directly or indirectly controlled by a savings 
association. For the purposes of Sec. 303.146, the term does not 
include an insured depository institution as that term is defined in 
section 3(c)(2) of the FDI Act (12 U.S.C. 1813(c)(2)).


Sec. 303.142  Engaging other than as agent on behalf of customers in 
activities not permissible for federal savings associations.

    (a) General. After January 1, 1990, no state savings association 
may directly engage, other than as agent on behalf of its customers, in 
an activity that is not expressly authorized for federal savings 
associations by the Home Owners' Loan Act (12 U.S.C. 1461 et seq.) or 
any other statute, regulations issued by the Office of Thrift 
Supervision (OTS) (12 CFR chapter V), official OTS Regulatory or Thrift 
Bulletins, or any order or interpretation issued in writing by OTS 
unless the state savings association obtains the approval of the FDIC.
    (b) Filing procedures--(1) Where to file. Any state savings 
association that wishes to obtain approval to initiate or continue such 
an activity, as well as any state savings association that wishes to 
make, or already has, nonresidential real property loans in an amount 
exceeding that described in section 5(c)(2)(B) of ``HOLA'' (12 U.S.C. 
1464(c)(2)(B)) must file a letter application with the appropriate 
regional director (DOS).
    (2) Content of filing. The letter application shall contain the 
following information:
    (i) A brief description of the activity and the manner in which it 
is (or will be) conducted;
    (ii) A copy, if available, of any feasibility study, management 
plan, financial projections, business plan, or similar document 
concerning the conduct of the activity;
    (iii) An estimate of the present or expected dollar volume of the 
activity;
    (iv) Resolutions by the board of directors (or the board of 
trustees in a mutual association) of the savings association 
authorizing the conduct of such activity and the filing of this 
submission;
    (v) A current statement of the association's assets, liabilities, 
and capital on both a consolidated and a non-consolidated basis, 
respectively;
    (vi) A discussion by management of its analysis regarding the 
impact of the proposed activity on the association's earnings, capital 
adequacy, and general condition;
    (vii) A statement by the savings association of whether or not it 
is in compliance with the fully phased-in capital standards prescribed 
under section 5(t) of HOLA (12 U.S.C. 1464(t)), including a calculation 
of the relevant capital ratio; and
    (viii) A statement of the authority the savings association is 
relying upon for the conduct of the activity in the amount set forth in 
the letter application.
    (3) Additional information. The appropriate regional director (DOS) 
may request that the state savings association provide such other 
information as the director deems appropriate.
    (4) Processing. Approval will not be granted if it is determined by 
the FDIC that engaging in the activity poses a significant risk to the 
affected deposit insurance fund. Furthermore, no savings association 
will be granted approval unless it is in compliance with the fully 
phased-in capital standards prescribed in section 5(t) of HOLA. 
Consequently, no application to engage in an activity after January 1, 
1990 should be filed if a state association is not in compliance with 
the fully phased-in capital requirements.
    (5) Assets held prior to August 9, 1989. This section shall not be 
read to require the divestiture by a state savings association of any 
asset (including a nonresidential real estate loan) it had on its books 
prior to August 9, 1989 despite the fact that such asset may be held in 
connection with the conduct of an activity for which the state savings 
association must obtain the FDIC's approval under this section. A 
notice describing the activities and those assets is nevertheless 
required by this section.


Sec. 303.143  Engaging other than as agent on behalf of customers in 
activities authorized for federal savings associations but to an extent 
not so authorized.

    (a) Filing procedures--(1) Where and when to file. Any state 
savings association that intends to directly engage, other than as 
agent on behalf of its customers, in an activity expressly authorized 
to all federal savings associations by statute or regulation adopted by 
OTS, or an official OTS Regulatory or Thrift Bulletin interpreting such 
statutes or regulations, in an amount in excess of that permitted for 
federal savings associations, must file a notice, return receipt 
requested, with the appropriate regional director (DOS) at least 60 
days prior to the initiation of the level of the activity described in 
the notice.
    (2) Content of filing. The notice must contain the same information 
required by Sec. 303.142(b)(2).
    (3) Additional information. The appropriate regional director (DOS) 
may request such other information as the appropriate regional director 
(DOS) deems appropriate.
    (b) Processing. A state savings association that files a 60-day 
notice may initiate the level of activity as described in its notice 60 
days after the

[[Page 44733]]

FDIC accepts the notice as complete, or 60 days after the FDIC accepts 
as complete the additional information, if any, that has been requested 
provided that the association is in compliance with the fully phased-in 
capital standards prescribed in section 5(t) of HOLA and provided that 
the FDIC does not, prior to that date, pose an objection to the 
association doing so. A state savings association may initiate the 
level of activity described in its notice prior to the expiration of 
the 60-day period if so notified. The continued conduct of the 
activities as described in the notice is conditioned upon the 
association's continued compliance with the fully phased-in capital 
standards and the FDIC's continued non-objection to those activities. 
The 60-day period may be extended upon notice to the state savings 
association if the notice as received is incomplete or the notice 
raises issues that require additional information or time for analysis. 
If the 60-day period is extended, the state savings association may 
begin the conduct of the activities only upon receipt of written 
notification to that effect. No state savings association will be 
permitted to initiate activities subject to this paragraph if it is 
determined that to do so would pose a significant risk to the affected 
deposit insurance fund.


Sec. 303.144  Equity investments

    (a) General. No state savings association may directly acquire or 
retain any equity investment after August 9, 1989 of a type or in an 
amount that is not expressly authorized for federal savings 
associations by HOLA, regulations issued by OTS, official OTS 
Regulatory or Thrift Bulletins, or any order or interpretation issued 
in writing by OTS.
    (b) Service corporations--(1) General. Paragraph (a) of this 
section notwithstanding, a state savings association may acquire or 
retain an equity investment in a service corporation, provided that the 
service corporation's activities are limited solely to those expressly 
authorized by HOLA or any other statute, regulations issued by OTS, 
official OTS Regulatory or Thrift Bulletins, or any order or 
interpretation issued in writing by OTS, for all service corporations 
owned by federal savings associations and provided that the investment 
in such service corporation does not exceed that permissible for a 
federal savings association pursuant to statute or regulation of OTS.
    (2) Filing procedure--(i) Where and when to file. If either of the 
two conditions specified in paragraph (b)(1) of this section does not 
exist, the state association must file a letter application under 
paragraph (b)(2)(ii) of this section with the appropriate regional 
director (DOS) requesting permission to acquire or retain the equity 
investment in the service corporation in question.
    (ii) Content and filing of application. The letter application 
required hereby shall contain the information required by 
Sec. 303.142(b)(2), as it relates both to the service corporation and 
to its parent state savings association. In addition, the application 
shall contain: A listing of the officers (contemplated officers) of the 
service corporation, a listing of any other shareholders of the service 
corporation (existing or prospective) and their respective holdings, 
and a listing of the locations (expected locations) of all of the 
offices of the service corporation.
    (iii) Additional information. The appropriate regional director 
(DOS) may request such other information as the appropriate regional 
director (DOS) deems appropriate.
    (3) Processing. Approval of the acquisition or retention of an 
equity investment in a service corporation in which a federal 
association could not invest will not be granted if the state 
association is not in compliance with the fully phased-in capital 
standards prescribed by section 5(t) of HOLA. Consequently, no 
application to acquire or retain an equity investment in such a service 
corporation should be filed if a state association is not in compliance 
with these capital requirements. In addition, approval of the retention 
or acquisition of such investments will not be granted if the 
acquisition or retention is determined to pose a significant risk to 
the affected deposit insurance fund. If an application to retain an 
investment is denied, the state association must file a divestiture 
plan with the appropriate regional director (DOS) requesting the FDIC's 
permission to accomplish divestiture in accordance with said plan.


Sec. 303.145  Corporate debt securities not of investment grade.

    Notwithstanding anything to the contrary in this subpart, no state 
or federal savings association may, directly or through a subsidiary 
(other than a subsidiary that is a qualified affiliate), acquire or 
retain after August 9, 1989 any corporate debt security that is not of 
investment grade.


Sec. 303.146  Notice of acquisition or establishment of a subsidiary or 
the conduct of new activities through a subsidiary.

    (a) General. No insured savings association may establish or 
acquire a subsidiary, or conduct any new activity through a subsidiary, 
without providing the appropriate regional director (DOS) prior notice 
of the association's intent to do so.
    (b) Filing procedure--(1) Where and when to file. Notice must be 
sent return receipt requested and be received by the appropriate 
regional director (DOS) at least 30 days prior to the establishment or 
acquisition of the subsidiary or the commencement of the new activity.
    (2) Content of filing. The notice shall contain the same 
information required to be in a letter application filed pursuant to 
Sec. 303.142(b)(2) plus the following:
    (i) A description of how the activities of the subsidiary will be 
funded;
    (ii) The amount of the insured savings association's investment in 
the subsidiary and the form of the investment;
    (iii) The percentage ownership the insured savings association will 
have in the subsidiary;
    (iv) A listing of the other owners of the subsidiary if any; and
    (v) In the case of the acquisition of an existing concern, the 
terms and conditions of the acquisition including an appraisal, 
assessment of value, or other substantiation of the purchase price and 
operating statements for the previous three years (if applicable). If 
the insured savings association's filing with the OTS under section 
18(m)(1) of the FDI Act contains all of the information required, that 
filing may be submitted to the FDIC in satisfaction of this provision.
    (3) Additional information. In any case, the appropriate regional 
director (DOS) may request such additional information as the 
appropriate regional director (DOS) deems appropriate. In all such 
cases, the 30-day period will not begin to run until the response to 
the request for additional information is complete.
    (c) Exception to filing requirement. Any Federal savings bank that 
was chartered prior to October 15, 1982 as a savings bank under state 
law, and any savings association that acquired its principal assets 
from such an institution, is not required to file prior notice in 
accordance with paragraph (a) of this section.
    (d) Notice regarding certain subsidiaries holding certain real 
property--(1) Where and when to file. Paragraph (a) of this section 
notwithstanding, an insured savings association may establish or 
acquire one or more subsidiaries whose sole purpose is to hold 
interests in real property acquired by the savings association that fit 
the description in Sec. 303.141(e)(2)

[[Page 44734]]

provided that the savings association files a written notice, return 
receipt requested, with the appropriate regional director (DOS) 
indicating that the association intends to establish or acquire one or 
more subsidiaries that will be engaged solely in the disposition of 
such property. Notice must be received by the appropriate regional 
director (DOS) at least 30 days prior to the establishment or 
acquisition of any such subsidiary.
    (2) Where and when to file, and content of filing regarding 
additional subsidiaries. An association that has filed a notice 
pursuant to this paragraph (d) may thereafter establish or acquire 
additional such subsidiaries provided that each time within 14 days 
after doing so the association notifies the appropriate regional 
director (DOS) in writing. The notice shall identify the savings 
association, give the date of the initial notice, identify the new 
subsidiary, and state the value of the property at the time it was 
transferred to the subsidiary.


Sec. 303.147  Notice by federal savings associations conducting 
grandfathered activities.

    Any federal savings association authorized by section 5(i)(4) of 
HOLA (12 U.S.C. 1464(i)(4)) to make any investment or engage in any 
activity not otherwise generally authorized to federal savings 
association by section 5 of HOLA must file a notice with the 
appropriate regional director (DOS) within 30 days after December 29, 
1989 or within 30 days after the date the federal savings association 
is first able to rely upon section 5(i)(4) of HOLA as a result of the 
acquisition of an association that is covered by such section. The 
notice shall briefly describe the activity or investment.


Sec. 303.148  Delegation of authority.

    Authority is delegated to the Director and Deputy Director (DOS), 
and where confirmed in writing by the Director, to an associate 
director and the appropriate regional director and deputy regional 
director (DOS), to act on applications and notices filed pursuant to 
this subpart, and to make any and all determinations called for in 
regard to the same.

Subpart I--Mutual-to-Stock Conversions


Sec. 303.160  Scope.

    This subpart sets forth the notice requirements, procedures, and 
delegations of authority for the conversion of an insured mutual state-
chartered savings bank to the stock form of ownership. The substantive 
requirements governing such conversions are contained in Sec. 333.4 of 
this chapter.


Sec. 303.161  Filing procedures.

    (a) Prior notice required. In addition to complying with the 
substantive requirements in Sec. 333.4 of this chapter, an insured 
state-chartered mutually owned savings bank that proposes to convert 
from mutual to stock form shall file with the FDIC a notice of intent 
to convert to stock form.
    (b) General. (1) A notice required under this subpart shall be 
filed in letter form with the appropriate regional director (DOS) at 
the same time as required conversion application materials are filed 
with the institution's state regulator.
    (2) An insured mutual savings bank chartered by a state that does 
not require the filing of a conversion application shall file a notice 
in letter form with the appropriate regional director (DOS) as soon as 
practicable after adoption of its plan of conversion.
    (c) Content of notice. The notice shall provide a description of 
the proposed conversion and include all materials that have been filed 
with any state or federal banking regulator and any state or federal 
securities regulator. At a minimum, the notice shall include, as 
applicable, copies of:
    (1) The plan of conversion, with specific information concerning 
the record date used for determining eligible depositors and the 
subscription offering priority established in connection with any 
proposed stock offering;
    (2) Certified board resolutions relating to the conversion;
    (3) A business plan, including a detailed discussion of how the 
capital acquired in the conversion will be used, expected earnings for 
at least a three-year period following the conversion, and a 
justification for any proposed stock repurchases;
    (4) The charter and bylaws of the converted institution;
    (5) The bylaws and operating plans of any other entities formed in 
connection with the conversion transaction, such as a holding company 
or charitable foundation;
    (6) A full appraisal report, prepared by an independent appraiser, 
of the value of the converting institution and the pricing of the stock 
to be sold in the conversion transaction;
    (7) Detailed descriptions of any proposed management or employee 
stock benefit plans or employment agreements and a discussion of the 
rationale for the level of benefits proposed, individually and by 
participant group;
    (8) Indemnification agreements;
    (9) A preliminary proxy statement and sample proxy;
    (10) Offering circular(s) and order form;
    (11) All contracts or agreements relating to solicitation, 
underwriting, market-making, or listing of conversion stock and any 
agreements among members of a group regarding the purchase of 
unsubscribed shares;
    (12) A tax opinion concerning the federal income tax consequences 
of the proposed conversion;
    (13) Consents from experts to use their opinions as part of the 
notice; and
    (14) An estimate of conversion-related expenses.
    (d) Additional information. The FDIC, in its discretion, may 
request any additional information it deems necessary to evaluate the 
proposed conversion. The institution proposing to convert from mutual 
to stock form shall promptly provide such information to the FDIC.
    (e) Acceptance of notice. The 60-day notice period specified in 
Sec. 303.163 shall commence on the date of receipt of a substantially 
complete notice. The appropriate regional director (DOS) shall notify 
the institution proposing to convert in writing of the date the notice 
is accepted.
    (f) Related applications. Related applications that require FDIC 
action may include:
    (1) Applications for deposit insurance, as required by subpart B of 
this part; and
    (2) Applications for consent to merge, as required by subpart D of 
this part.


Sec. 303.162  Waiver from compliance.

    (a) General. An institution proposing to convert from mutual to 
stock form may file with the appropriate regional director (DOS) a 
letter requesting waiver of compliance with this subpart or Sec. 333.4 
of this chapter:
    (1) When compliance with any provision of this section or 
Sec. 333.4 of this chapter would be inconsistent or in conflict with 
applicable state law; or
    (2) For any other good cause shown.
    (b) Content of filing. In making a request for waiver under 
paragraph (a) of this section, the institution shall demonstrate that 
the requested waiver, if granted, would not result in any effects that 
would be detrimental to the safety and soundness of the institution, 
entail a breach of fiduciary duty on part of the institution's 
management or otherwise be detrimental or inequitable to the 
institution, its depositors, any other insured depository 
institution(s),

[[Page 44735]]

the federal deposit insurance funds, or to the public interest.


Sec. 303.163  Processing.

    (a) General considerations. The FDIC shall review the notice and 
other materials submitted by the institution proposing to convert from 
mutual to stock form, specifically considering the following factors:
    (1) The proposed use of the proceeds from the sale of stock, as set 
forth in the business plan;
    (2) The adequacy of the disclosure materials;
    (3) The participation of depositors in approving the transaction;
    (4) The form of the proxy statement required for the vote of the 
depositors/members on the conversion;
    (5) Any proposed increased compensation and other remuneration 
(including stock grants, stock option rights and other similar 
benefits) to be granted to officers and directors/trustees of the bank 
in connection with the conversion;
    (6) The adequacy and independence of the appraisal of the value of 
the mutual savings bank for purposes of determining the price of the 
shares of stock to be sold;
    (7) The process by which the bank's trustees approved the 
appraisal, the pricing of the stock, and the proposed compensation 
arrangements for insiders;
    (8) The nature and apportionment of stock subscription rights; and
    (9) The bank's plans to fulfill its commitment to serving the 
convenience and needs of its community.
    (b) Additional considerations. (1) In reviewing the notice and 
other materials submitted under this subpart, the FDIC will take into 
account the extent to which the proposed conversion transaction 
conforms with the various provisions of the mutual-to-stock conversion 
regulations of the Office of Thrift Supervision (OTS) (12 CFR part 
563b), as currently in effect at the time the notice is submitted. Any 
non-conformity with those provisions will be closely reviewed.
    (2) Conformity with the OTS requirements will not be sufficient for 
FDIC regulatory purposes if the FDIC determines that the proposed 
conversion transaction would pose a risk to the bank's safety or 
soundness, violate any law or regulation, or present a breach of 
fiduciary duty.
    (c) Notice period. (1) The period in which the FDIC may object to 
the proposed conversion transaction shall be the later of:
    (i) 60 days after receipt of a substantially complete notice of 
proposed conversion; or
    (ii) 20 days after the last applicable state or other federal 
regulator has approved the proposed conversion.
    (2) The FDIC may, in its discretion, extend the initial 60-day 
period for up to an additional 60 days by providing written notice to 
the institution.
    (d) Letter of non-objection. If the FDIC determines, in its 
discretion, that the proposed conversion transaction would not pose a 
risk to the institution's safety or soundness, violate any law or 
regulation, or present a breach of fiduciary duty, then the FDIC shall 
issue to the institution proposing to convert a letter of non-objection 
to the proposed conversion.
    (e) Letter of objection. If the FDIC determines, in its discretion, 
that the proposed conversion transaction poses a risk to the 
institution's safety or soundness, violates any law or regulation, or 
presents a breach of fiduciary duty, then the FDIC shall issue a letter 
to the institution stating its objection(s) to the proposed conversion 
and advising the institution not to consummate the proposed conversion 
until such letter is rescinded. A copy of the letter of objection shall 
be furnished to the institution's primary state regulator and any other 
state or federal banking regulator and state or federal securities 
regulator involved in the conversion.
    (f) Consummation of the conversion. (1) An institution may 
consummate the proposed conversion upon either:
    (i) The receipt of a letter of non-objection; or
    (ii) The expiration of the notice period.
    (2) If a letter of objection is issued, then the institution shall 
not consummate the proposed conversion until the FDIC rescinds such 
letter.


Sec. 303.164  Delegation of authority.

    (a) Authority is delegated to the Director and Deputy Director 
(DOS) to issue a letter of non-objection to an institution proposing to 
convert when the proposed conversion transaction is determined not to 
pose a risk to the institution's safety or soundness, violate any law 
or regulation, present a breach of fiduciary duty, and not to raise any 
unique legal or policy issues. Such authority will be exercised in 
accordance with the time periods contained in Sec. 303.163, unless the 
institution proposing to convert agrees to a longer time period.
    (b) Authority to approve or deny a waiver under Sec. 303.162 is 
retained by the Board of Directors.
    (c) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director and the appropriate regional director and deputy regional 
director to accept notices of intent to convert to stock form and to 
extend the initial 60-day period within which FDIC may object by an 
additional 60 days.

Subpart J--International Banking


Sec. 303.180  Scope.

    This subpart sets forth procedures for complying with application 
requirements relating to the foreign activities of insured state 
nonmember banks, U.S. activities of insured branches of foreign banks, 
and certain foreign mergers of insured depository institutions. Related 
delegations of authority are also set forth in the subpart.


Sec. 303.181  Definitions.

    For the purposes of this subpart, the following additional 
definitions apply:
    (a) Board of Governors means the Board of Governors of the Federal 
Reserve System.
    (b) Comptroller means the Office of the Comptroller of the 
Currency.
    (c) Eligible insured branch. An insured branch will be treated as 
an eligible depository institution within the meaning of Sec. 303.2(r) 
if the insured branch:
    (1) Received an FDIC-assigned composite ROCA rating of 1 or 2 as a 
result of its most recent federal or state examination, and the FDIC, 
Comptroller, or Board of Governors have not expressed concern about the 
condition or operations of the foreign banking organization or the 
support it offers the branch;
    (2) Received a satisfactory or better Community Reinvestment Act 
(CRA) rating from its primary federal regulator at its most recent 
examination, if the depository institution is subject to examination 
under part 345 of this chapter;
    (3) Received a compliance rating of 1 or 2 from its primary federal 
regulator at its most recent examination;
    (4) Is well-capitalized as defined in subpart B of part 325 of this 
chapter; and
    (5) Is not subject to a cease and desist order, consent order, 
prompt corrective action directive, written agreement, memorandum of 
understanding, or other administrative agreement with any U.S. bank 
regulatory authority.
    (d) Federal branch means a federal branch of a foreign bank as 
defined by Sec. 347.202 of this chapter.
    (e) Foreign bank means a foreign bank as defined by Sec. 347.202 of 
this chapter.
    (f) Foreign branch means a foreign branch of an insured state 
nonmember

[[Page 44736]]

bank as defined by Sec. 347.102 of this chapter.
    (g) Foreign organization means a foreign organization as defined by 
Sec. 347.102 of this chapter.
    (h) Insured branch means an insured branch of a foreign bank as 
defined by Sec. 347.202 of this chapter.
    (i) Noninsured branch means a noninsured branch of a foreign bank 
as defined by Sec. 347.202 of this chapter.
    (j) State branch means a state branch of a foreign bank as defined 
by Sec. 347.202 of this chapter.


Sec. 303.182  Establishing, moving or closing a foreign branch of a 
state nonmember bank; Sec. 347.103.

    (a) Notice procedures for general consent. Notice in the form of a 
letter from an eligible depository institution establishing or 
relocating a foreign branch pursuant to Sec. 347.103(b) of this chapter 
shall be provided to the appropriate regional director (DOS) no later 
than 30 days after taking such action, and include the location of the 
foreign branch, including a street address, and a statement that the 
foreign branch has not been located on a site on the World Heritage 
List or on the foreign country's equivalent of the National Register of 
Historic Places (National Register), in accordance with section 402 of 
the National Historic Preservation Act Amendments of 1980 (NHPA 
Amendments Act) (16 U.S.C. 470a-2). The regional director will provide 
written acknowledgment of receipt of the notice.
    (b) Filing procedures for other branch establishments. (1) Where to 
file. An applicant seeking to establish a foreign branch other than 
under Sec. 347.103(b) of this chapter shall submit an application to 
the appropriate regional director (DOS).
    (2) Content of filing. A complete letter application shall include 
the following information:
    (i) The exact location of the proposed foreign branch, including 
the street address, and a statement whether the foreign branch will be 
located on a site on the World Heritage List or on the foreign 
country's equivalent of the National Register, in accordance with 
section 402 of the NHPA Amendments Act;
    (ii) Details concerning any involvement in the proposal by an 
insider of the applicant, as defined in Sec. 303.2(u), including any 
financial arrangements relating to fees, the acquisition of property, 
leasing of property, and construction contracts;
    (iii) A brief description of the applicant's business plan with 
respect to the foreign branch; and
    (iv) A brief description of the activities of the branch, and to 
the extent any activities are not authorized by Sec. 347.103(a) of this 
chapter, the applicant's reasons why they should be approved.
    (3) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (c) Processing--(1) Expedited processing for eligible depository 
institutions. An application filed under Sec. 347.103(c) of this 
chapter by an eligible depository institution as defined in 
Sec. 303.2(r) seeking to establish a foreign branch by expedited 
processing will be acknowledged in writing by the FDIC and will receive 
expedited processing, unless the applicant is notified in writing to 
the contrary and provided with the basis for that decision. The FDIC 
may remove the application from expedited processing for any of the 
reasons set forth in Sec. 303.11(c)(2). Absent such removal, an 
application processed under expedited processing is deemed approved 45 
days after receipt of a substantially complete application by the FDIC, 
or on such earlier date authorized by the FDIC in writing.
    (2) Standard processing. For those applications which are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action when the 
decision is rendered.
    (d) Closing. Notices of branch closing under Sec. 347.103(f) of 
this chapter, in the form of a letter including the name, location, and 
date of closing of the closed branch, shall be filed with the 
appropriate regional director (DOS) no later than 30 days after the 
branch is closed.
    (e) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, if confirmed in writing by the Director, 
to an associate director and the appropriate regional director and 
deputy regional director to approve an application under paragraph (c) 
of this section if the following criteria are satisfied:
    (1) The requirements of section 402 the NHPA Amendments Act have 
been favorably resolved;
    (2) The applicant will only conduct activities authorized by 
Sec. 347.103(a) of this chapter; and
    (3) If the foreign branch will be located in a foreign country in 
which applicable law or practice would limit the FDIC's access to 
information for supervisory purposes, the delegate is satisfied that 
adequate arrangements have been made (through conditions imposed in 
connection with the approval and agreed to in writing by the applicant) 
to ensure that the FDIC will have necessary access to information for 
supervisory purposes.


Sec. 303.183  Investment by insured state nonmember banks in foreign 
organizations; Sec. 347.108.

    (a) Notice procedures for general consent. Notice in the form of a 
letter from an eligible depository institution making direct or 
indirect investments in a foreign organization pursuant to 
Sec. 347.108(a) of this chapter shall be provided to the appropriate 
regional director (DOS) no later than 30 days after taking such action. 
The appropriate regional director will provide written acknowledgment 
of receipt of the notice.
    (b) Filing procedures for other investments. (1) Where to file. An 
applicant seeking to make a foreign investment other than under 
Sec. 347.108(a) of this chapter shall submit an application to the 
appropriate regional director (DOS).
    (2) Content of filing. A complete application shall include the 
following information:
    (i) Basic information about the terms of the proposed transaction, 
the amount of the investment in the foreign organization and the 
proportion of its ownership to be acquired;
    (ii) Basic information about the foreign organization, its 
financial position and income, including any available balance sheet 
and income statement for the prior year, or financial projections for a 
new foreign organization;
    (iii) A listing of all shareholders known to hold ten percent or 
more of any class of the foreign organization's stock or other evidence 
of ownership, and the amount held by each;
    (iv) A brief description of the applicant's business plan with 
respect to the foreign organization;
    (v) A brief description of any business or activities which the 
foreign organization will conduct directly or indirectly in the United 
States, and to the extent such activities are not authorized by subpart 
A of part 347 of this chapter, the applicant's reasons why they should 
be approved;
    (vi) A brief description of the foreign organization's activities, 
and to the extent such activities are not authorized by subpart A of 
part 347 of this chapter, the applicant's reasons why they should be 
approved; and
    (vii) If the applicant seeks approval to engage in underwriting or 
dealing activities, a description of the applicant's plans and 
procedures to address all relevant risks.

[[Page 44737]]

    (3) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (c) Processing.--(1) Expedited processing for eligible depository 
institutions. An application filed under Sec. 347.108(b) of this 
chapter by an eligible depository institution as defined in 
Sec. 303.2(r) seeking to make direct or indirect investments in a 
foreign organization by expedited processing will be acknowledged in 
writing by the FDIC and will receive expedited processing, unless the 
applicant is notified in writing to the contrary and provided with the 
basis for that decision. The FDIC may remove the application from 
expedited processing for any of the reasons set forth in 
Sec. 303.11(c)(2). Absent such removal, an application processed under 
expedited processing is deemed approved 45 days after receipt of a 
complete application by the FDIC, or on such earlier date authorized by 
the FDIC in writing.
    (2) Standard processing. For those applications which are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action when the 
decision is rendered.
    (d) Divestiture. If an insured state nonmember bank holding 50 
percent or more of the voting equity interests of a foreign 
organization or otherwise controlling the foreign organization divests 
itself of such ownership or control, the insured state nonmember bank 
shall file a notice in the form of a letter, including the name, 
location, and date of divestiture of the foreign organization, with the 
appropriate regional director (DOS) no later than 30 days after the 
divestiture.
    (e) Delegations of authority. Authority is delegated to the 
Director and Deputy Director (DOS) and, if confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director to approve applications under 
paragraph (c) of this section so long as:
    (1) The investment complies with the amount limits in Sec. 347.104 
through Sec. 347.107 of this chapter and is in a foreign organization 
which only conducts such activities as authorized thereunder; and
    (2) For foreign investments resulting in the applicant holding 20 
percent or more of the voting equity interests of the foreign 
organization or controlling such organization, if the organization is 
located in a foreign country in which applicable law or practice would 
limit the FDIC's access to information for supervisory purposes, the 
delegate is satisfied that adequate arrangements have been made 
(through conditions imposed in connection with the approval and agreed 
to in writing by the applicant) to ensure that the FDIC will have 
necessary access to information for supervisory purposes.


Sec. 303.184  Moving an insured branch of a foreign bank.

    (a) Filing procedures.--(1) Where and when to file. An application 
by an insured branch of a foreign bank seeking the FDIC's consent to 
move from one location to another, as required by section 18(d)(1) of 
the FDI Act (12 U.S.C. 1828(d)(1)), shall be submitted in writing to 
the appropriate regional director (DOS) on the date the notice required 
by paragraph (c) of this section is published, or within 5 days after 
the date of the last required publication.
    (2) Content of filing. A complete letter application shall include 
the following information:
    (i) The exact location of the proposed site, including the street 
address;
    (ii) Details concerning any involvement in the proposal by an 
insider of the applicant, as defined in Sec. 303.2(u), including any 
financial arrangements relating to fees, the acquisition of property, 
leasing of property, and construction contracts;
    (iii) A statement of the impact of the proposal on the human 
environment, including information on compliance with local zoning laws 
and regulations and the effect on traffic patterns, for purposes of 
complying with the applicable provisions of the NEPA, and the FDIC 
``Statement Policy on NEPA'' (2 FDIC Law, Regulations, Related Acts 
5185; see Sec. 309.4 (a) and (b) of this chapter for availability);
    (iv) A statement as to whether or not the site is eligible for 
inclusion in the National Register of Historic Places for purposes of 
complying with the applicable provisions of the NHPA, and the FDIC 
``Statement on NHPA'' (2 FDIC Law, Regulations, Related Acts 5175; see 
Sec. 309.4 (a) and (b) of this chapter for availability), including 
documentation of consultation with the State Historic Preservation 
Officer, as appropriate;
    (v) Comments on any changes in services to be offered, the 
community to be served, or any other effect the proposal may have on 
the applicant's compliance with the CRA; and
    (vi) A copy of the newspaper publication required by paragraph (c) 
of this section, as well as the name and address of the newspaper and 
the date of the publication.
    (3) Comptroller's application. If the applicant is filing an 
application with the Comptroller which contains the information 
required by paragraph (a)(2) of this section, the applicant may submit 
a copy to the FDIC in lieu of a separate application.
    (4) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (b) Processing.--(1) Expedited processing for eligible insured 
branches. An application filed by an eligible insured branch as defined 
in Sec. 303.181(c) will be acknowledged in writing by the FDIC and will 
receive expedited processing, unless the applicant is notified to the 
contrary and provided with the basis for that decision. The FDIC may 
remove an application from expedited processing for any of the reasons 
set forth in Sec. 303.11(c)(2). Absent such removal, an application 
processed under expedited processing will be deemed approved on the 
latest of the following:
    (i) The 21st day after the FDIC's receipt of a substantially 
complete application; or
    (ii) The 5th day after expiration of the comment period described 
in paragraph (c) of this section.
    (2) Standard processing. For those applications that are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action as soon as 
the decision is rendered.
    (c) Publication requirement and comment period.--(1) Newspaper 
publications. The applicant shall publish a notice of its proposal to 
move from one location to another, as described in Sec. 303.7(b), in a 
newspaper of general circulation in the community in which the insured 
branch is located prior to its being moved and in the community to 
which it is to be moved. The notice shall include the insured branch's 
current and proposed addresses.
    (2) Public comments. All public comments must be received by the 
appropriate regional director (DOS) within 15 days after the date of 
the last newspaper publication required by paragraph (c)(1) of this 
section, unless the comment period has been extended or reopened in 
accordance with Sec. 303.9(b)(2).
    (3) Lobby notices. If the insured branch has a public lobby, a copy 
of the newspaper publication shall be posted in the public lobby for at 
least 15 days beginning on the date of the publication required by 
paragraph (c)(1) of this section.
    (d) Delegation of authority. (1) Authority is delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to

[[Page 44738]]

an associate director and the appropriate regional director and deputy 
regional director to approve an application under this section. For the 
delegate to exercise this authority, the criteria in paragraphs 
(d)(1)(i) through (d)(1)(vi) of this section must be satisfied:
    (i) The factors set forth in section 6 of the FDI Act (12 U.S.C. 
1816) have been considered and favorably resolved;
    (ii) The applicant is at least adequately capitalized as defined in 
subpart B of part 325 of this chapter;
    (iii) Any financial arrangements which have been made in connection 
with the proposed relocation and which involve the applicant's 
directors, officers, major shareholders, or their interests are fair 
and reasonable in comparison to similar arrangements that could have 
been made with independent third parties;
    (iv) Compliance with the CRA, the NEPA, the NHPA and any applicable 
related regulations, including 12 CFR part 345, has been considered and 
favorably resolved;
    (v) No CRA protest as defined in Sec. 303.2(l) has been filed which 
remains unresolved or, where such a protest has been filed and remains 
unresolved, the Director (DCA), Deputy Director (DCA), an associate 
director (DCA) or the appropriate regional director or deputy regional 
director (DCA) concurs that approval is consistent with the purposes of 
the CRA and the applicant agrees in writing to any conditions imposed 
regarding the CRA; and
    (vi) The applicant agrees in writing to comply with any conditions 
imposed by the delegate, other than the standard conditions defined in 
Sec. 303.2(ff) which may be imposed without the applicant's written 
consent.
    (2) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director, to approve applications under this section which meet all 
criteria in paragraph (d)(1) of this section except that the applicant 
does not agree in writing to comply with any condition imposed by the 
delegate, other than the standard conditions defined in Sec. 303.2(ff) 
which may be imposed without the applicant's written consent.
    (3) Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director, to deny applications under this section.


Sec. 303.185  Merger transactions involving foreign banks or foreign 
organizations.

    (a) Merger transactions involving an insured branch of a foreign 
bank. Merger transactions requiring the FDIC's prior approval as set 
forth in Sec. 303.62 include any merger transaction in which the 
resulting institution is an insured branch of a foreign bank which is 
not a federal branch, or any merger transaction which involves any 
insured branch and any uninsured institution. In such cases:
    (1) References to an eligible depository institution in subpart D 
of this part include an eligible insured branch as defined in 
Sec. 303.181;
    (2) The definition of a corporate reorganization in Sec. 303.61(b) 
includes a merger transaction between an insured branch and other 
branches, agencies, or subsidiaries in the United States of the same 
foreign bank; and
    (3) For the purposes of Sec. 303.62(b)(1) on interstate mergers, a 
merger transaction involving an insured branch is one involving the 
acquisition of a branch of an insured bank without the acquisition of 
the bank for purposes of section 44 of the FDI Act (12 U.S.C. 1831u) 
only when the merger transaction involves fewer than all the insured 
branches of the same foreign bank in the same state.
    (b) Certain merger transactions with foreign organizations outside 
any State. Merger transactions requiring the FDIC's prior approval as 
set forth in Sec. 303.62 include any merger transaction in which an 
insured depository institution becomes directly liable for obligations 
which will, after the merger transaction, be treated as deposits under 
section 3(l)(5)(A)(i)-(ii) of the FDI Act (12 U.S.C. 1813(l)(5)(A)(i)-
(ii)), as a result of a merger or consolidation with a foreign 
organization or an assumption of liabilities of a foreign organization.


Sec. 303.186  Exemptions from insurance requirement for a state branch 
of a foreign bank; Sec. 347.206.

    (a) Filing procedures.--(1) Where to file. An application by a 
state branch for consent to operate as a noninsured state branch, as 
permitted by Sec. 347.206(b) of this chapter, shall be submitted in 
writing to the appropriate regional director (DOS).
    (2) Content of filing. A complete letter application shall include 
the following information:
    (i) The kinds of deposit activities in which the state branch 
proposes to engage;
    (ii) The expected source of deposits;
    (iii) The manner in which deposits will be solicited;
    (iv) How the activity will maintain or improve the availability of 
credit to all sectors of the United States economy, including the 
international trade finance sector;
    (v) That the activity will not give the foreign bank an unfair 
competitive advantage over United States banking organizations; and
    (vi) A resolution by the applicant's board of directors, or 
evidence of approval by senior management if a resolution is not 
required pursuant to the applicant's organizational documents, 
authorizing the filing of the application.
    (2) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (b) Processing. The FDIC will provide the applicant with written 
notification of the final action taken.


Sec. 303.187  Approval for an insured state branch of a foreign bank to 
conduct activities not permissible for federal branches; Sec. 347.213.

    (a) Filing procedures.--(1) Where to file. An application by an 
insured state branch seeking approval to conduct activities not 
permissible for a federal branch, as required by Sec. 347.213(a) of 
this chapter, shall be submitted in writing to the appropriate regional 
director (DOS).
    (2) Content of filing. A complete letter application shall include 
the following information:
    (i) 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;
    (ii) 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 of the 
feasibility study, management plan, financial projections, business 
plan, or similar document concerning the conduct of the activity;
    (iii) A resolution by the applicant's board of directors, or 
evidence of approval by senior management if a resolution is not 
required pursuant to the applicant's organizational documents, 
authorizing the filing of the application;
    (iv) A statement by the applicant of whether it is in compliance 
with Secs. 347.210 and 347.211 of this chapter, Pledge of assets and 
Asset maintenance, respectively;
    (v) 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 each such 
application, including a copy of the Board of Governors' disposition of 
such application, if applicable; and

[[Page 44739]]

    (vi) A statement of why the activity will pose no significant risk 
to the Bank Insurance Fund.
    (3) Board of Governors application. If the application to the Board 
of Governors contains the information required by paragraph (a) of this 
section, the applicant may submit a copy to the FDIC in lieu of a 
separate letter application.
    (4) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (b) Divestiture or cessation.--(1) Where to file. Divestiture plans 
necessitated by a change in law or other authority, as required by 
Sec. 347.213(e) of this chapter, shall be submitted in writing to the 
appropriate regional director (DOS).
    (2) Content of filing. A complete letter application shall include 
the following information:
    (i) A detailed description of the manner in which the applicant 
proposes to divest itself of or cease the activity in question; and
    (ii) A projected timetable describing how long the divestiture or 
cessation is expected to take.
    (3) Additional information. The appropriate regional director (DOS) 
may request additional information to complete processing.
    (c) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve plans of divestiture 
and cessation submitted pursuant to paragraph (b) of this section.

Subpart K--Prompt Corrective Action


Sec. 303.200  Scope.

    (a) General. (1) This subpart covers applications filed pursuant to 
section 38 of the FDI Act (12 U.S.C. 1831o), which requires insured 
depository institutions that are not adequately capitalized to receive 
approval prior to engaging in certain activities. Section 38 restricts 
or prohibits certain activities and requires an insured depository 
institution to submit a capital restoration plan when it becomes 
undercapitalized. The restrictions and prohibitions become more severe 
as an institution's capital level declines.
    (2) Definitions of the capital categories referenced in this Prompt 
Corrective Action subpart may be found in subpart B of part 325 of this 
chapter, Sec. 325.103(b) for state nonmember banks and Sec. 325.103(c) 
for insured branches of foreign banks.
    (b) Institutions covered. Restrictions and prohibitions contained 
in subpart B of part 325 of this chapter apply primarily to insured 
state nonmember banks and insured branches of foreign banks, as well as 
to directors and senior executive officers of those institutions. 
Portions of subpart B of part 325 of this chapter also apply to all 
insured depository institutions that are deemed to be critically 
undercapitalized.


Sec. 303.201  Filing procedures.

    Applications shall be filed with the appropriate regional director 
(DOS). The application shall contain the information specified in each 
respective section of this subpart, and shall be in letter form as 
prescribed in Sec. 303.3. Additional information may be requested by 
the FDIC. Such letter shall be signed by the president, senior officer 
or a duly authorized agent of the insured depository institution and be 
accompanied by a certified copy of a resolution adopted by the 
institution's board of directors or trustees authorizing the 
application.


Sec. 303.202  Processing.

    The FDIC will provide the applicant with a subsequent written 
notification of the final action taken as soon as the decision is 
rendered.


Sec. 303.203  Applications for capital distributions.

    (a) Scope. An insured state nonmember bank and any insured branch 
of a foreign bank shall submit an application for capital distribution 
if, after having made a capital distribution, the institution would be 
undercapitalized, significantly undercapitalized, or critically 
undercapitalized.
    (b) Content of filing. An application to repurchase, redeem, retire 
or otherwise acquire shares or ownership interests of the insured 
depository institution shall describe the proposal, the shares or 
obligations which are the subject thereof, and the additional shares or 
obligations of the institution which will be issued in at least an 
amount equivalent to the distribution. The application also shall 
explain how the proposal will reduce the institution's financial 
obligations or otherwise improve its financial condition. If the 
proposed action also requires an application under section 18(i) of the 
FDI Act (12 U.S.C. 1828(i)) as implemented by Sec. 303.241 regarding 
prior consent to retire capital, such application should be filed 
concurrently with, or made a part of, the application filed pursuant to 
section 38 of the FDI Act (12 U.S.C. 1831o).


Sec. 303.204  Applications for acquisitions, branching, and new lines 
of business.

    (a) Scope. (1) Any insured state nonmember bank and any insured 
branch of a foreign bank which is undercapitalized or significantly 
undercapitalized, and any insured depository institution which is 
critically undercapitalized, shall submit an application to engage in 
acquisitions, branching or new lines of business.
    (2) A new line of business will include any new activity exercised 
which, although it may be permissible, has not been exercised by the 
institution.
    (b) Content of filing. Applications shall describe the proposal, 
state the date the institution's capital restoration plan was accepted 
by its primary federal regulator, describe the institution's status in 
implementing the plan, and explain how the proposed action is 
consistent with and will further the achievement of the plan or 
otherwise further the purposes of section 38 of the FDI Act. If the 
FDIC is not the applicant's primary federal regulator, the application 
also should state whether approval has been requested from the 
applicant's primary federal regulator, the date of such request and the 
disposition of the request, if any. If the proposed action also 
requires applications pursuant to section 18 (c) or (d) of the FDI Act 
(mergers and branches) (12 U.S.C. 1828 (c) or (d)), such applications 
should be filed concurrently with, or made a part of, the application 
filed pursuant to section 38 of the FDI Act (12 U.S.C. 1831o).


Sec. 303.205  Applications for bonuses and increased compensation for 
senior executive officers.

    (a) Scope. Any insured state nonmember bank or insured branch of a 
foreign bank that is significantly or critically undercapitalized, or 
any insured state nonmember bank or any insured branch of a foreign 
bank that is undercapitalized and which has failed to submit or 
implement in any material respect an acceptable capital restoration 
plan, shall submit an application to pay a bonus or increase 
compensation for any senior executive officer.
    (b) Content of filing. Applications shall list each proposed bonus 
or increase in compensation, and for the latter shall identify 
compensation for each of the twelve calendar months preceding the 
calendar month in which the institution became undercapitalized. 
Applications also shall state the date the institution's capital 
restoration plan was accepted by the FDIC, and describe any progress 
made in implementing the plan.

[[Page 44740]]

Sec. 303.206  Application for payment of principal or interest on 
subordinated debt.

    (a) Scope. Any critically undercapitalized insured depository 
institution shall submit an application to pay principal or interest on 
subordinated debt.
    (b) Content of filing. Applications shall describe the proposed 
payment and provide an explanation of action taken under section 
38(h)(3)(A)(ii) of the FDI Act (action other than receivership or 
conservatorship). The application also shall explain how such payments 
would further the purposes of section 38 of the FDI Act (12 U.S.C. 
1831o). Existing approvals pursuant to requests filed under section 
18(i)(1) of the FDI Act (12 U.S.C. 1828(i)(1)) (capital stock 
reductions or retirements) shall not be deemed to be the permission 
needed pursuant to section 38.


Sec. 303.207  Restricted activities for critically undercapitalized 
institutions.

    (a) Scope. Any critically undercapitalized insured depository 
institution shall submit an application to engage in certain restricted 
activities.
    (b) Content of filing. Applications to engage in any of the 
following activities, as set forth in sections 38(i)(2) (A) through (G) 
of the FDI Act, shall describe the proposed activity and explain how 
the activity would further the purposes of section 38 of the FDI Act 
(12 U.S.C. 1831o):
    (1) Enter into any material transaction other than in the usual 
course of business including any action with respect to which the 
institution is required to provide notice to the appropriate federal 
banking agency. Materiality will be determined on a case-by-case basis;
    (2) Extend credit for any highly leveraged transaction (as defined 
in part 325 of this chapter);
    (3) Amend the institution's charter or bylaws, except to the extent 
necessary to carry out any other requirement of any law, regulation, or 
order;
    (4) Make any material change in accounting methods;
    (5) Engage in any covered transaction (as defined in section 23A(b) 
of the Federal Reserve Act (12 U.S.C. 371c(b));
    (6) Pay excessive compensation or bonuses. Part 364 of this chapter 
provides guidance for determining excessive compensation; or
    (7) Pay interest on new or renewed liabilities at a rate that would 
increase the institution's weighted average cost of funds to a level 
significantly exceeding the prevailing rates of interest on insured 
deposits in the institution's normal market area. Section 337.6 of this 
chapter (Brokered deposits) provides guidance for defining the relevant 
terms of this provision; however this provision does not supersede the 
general prohibitions contained in Sec. 337.6 of this chapter.


Sec. 303.208  Delegation of authority.

    Authority is delegated to the Director and Deputy Director (DOS) 
and, where confirmed in writing by the Director, to an associate 
director and the appropriate regional director and deputy regional 
director, to approve or deny the following applications, requests or 
petitions submitted pursuant to this subpart:
    (a) Applications filed pursuant to section 38 of the FDI Act (12 
U.S.C. 1831o) (prompt corrective action), including applications to 
make a capital distribution;
    (b) Applications for acquisitions, branching, and new lines of 
business (except that the delegation is limited to the authority as 
delegated to approve or deny any concurrent application filed pursuant 
to section 18 (c) or (d) of the FDI Act (12 U.S.C. 1828 (c) or (d));
    (c) Applications to pay a bonus or increase compensation;
    (d) Applications for an exception to pay principal or interest on 
subordinated debt; and
    (e) Applications by critically undercapitalized insured depository 
institutions to engage in any restricted activity listed in this 
subpart.

Subpart L--Section 19 of the FDI Act (Consent to Service of Persons 
Convicted of Certain Criminal Offenses)


Sec. 303.220  Scope.

    This subpart covers applications under section 19 of the FDI Act 
(12 U.S.C. 1829). Pursuant to section 19, any person who has been 
convicted of any criminal offense involving dishonesty, breach of 
trust, or money laundering, or has agreed to enter into a pretrial 
diversion or similar program in connection with a prosecution for such 
offense, may not become, or continue as, an institution-affiliated 
party of an insured depository institution; own or control, directly or 
indirectly, any insured depository institution; or otherwise 
participate, directly or indirectly, in the conduct of the affairs of 
any insured depository institution without the prior written consent of 
the FDIC.


Sec. 303.221  Filing procedures.

    (a) Regional office. An application under section 19 shall be filed 
with the appropriate regional director (DOS).
    (b) Contents of filing. Application forms may be obtained from any 
FDIC regional office. The FDIC may require additional information 
beyond that sought in the form, as warranted, in individual cases.


Sec. 303.222  Service at another insured depository institution.

    In the case of a person who has already been approved by the FDIC 
under this subpart or section 19 of the FDI Act in connection with a 
particular insured depository institution, such person may not become 
an institution affiliated party, or own or control directly or 
indirectly another insured depository institution, or participate in 
the conduct of the affairs of another insured depository institution, 
without the prior written consent of the FDIC.


Sec. 303.223  Applicant's right to hearing following denial.

    An applicant may request a hearing following a denial of an 
application in accordance with the provisions of part 308 of this 
chapter.


Sec. 303.224  Delegation of authority.

    (a) Approvals. Authority is delegated to the Director and Deputy 
Director (DOS) and, where confirmed in writing by the Director, to an 
associate director or to the appropriate regional director and deputy 
regional director, to approve applications made by insured depository 
institutions pursuant to section 19 of the FDI Act, after consultation 
with the Legal Division; provided however, that authority may not be 
delegated to the regional director or deputy regional director where 
the applicant's primary supervisory authority interposes any objection 
to such application.
    (b) Denials. Authority is delegated to the Director and Deputy 
Director (DOS) and, where confirmed in writing by the Director, to an 
associate director, to deny applications made by insured depository 
institutions pursuant to section 19 of the FDI Act.
    (c) Concurrent legal certification. The authority to deny 
applications delegated under this section shall be exercised only upon 
the concurrent certification by the General Counsel and, where 
confirmed in writing by the General Counsel, his or her designee, that 
the action taken is not inconsistent with section 19 of the FDI Act.
    (d) Conditions on application approvals. Regional directors and 
deputy regional directors acting under delegated authority under this 
subpart may impose any of the following conditions on the approval of 
applications, as appropriate in individual cases:
    (1) A participant or institution-affiliated party of an institution 
shall be

[[Page 44741]]

bonded to the same extent as others in similar positions; and/or
    (2) When deemed necessary, the prior consent of the appropriate 
regional director (DOS) shall be required for any proposed significant 
changes in duties and/or responsibilities of the person who is the 
subject of the application.
    (e) Authority not delegated by FDIC Board of Directors. The FDIC 
Board of Directors has not delegated its authority to consider and act 
upon an application under section 19 of the FDI Act after a hearing 
held in accordance with the provisions of part 308 of this chapter.

Subpart M--Other Filings


Sec. 303.240  General.

    This subpart sets forth the filing procedures to be followed when 
seeking the FDIC's consent to engage in certain activities or 
accomplish other matters as specified in the individual sections 
contained herein. For those matters covered by this subpart that also 
have substantive FDIC regulations or related statements of policy, 
references to the relevant regulations or statements of policy are 
contained in the specific sections.


303.241  Reduce or retire capital stock or capital debt instruments.

    (a) Scope. This section contains the procedures to be followed by 
an insured state nonmember bank to seek the prior approval of the FDIC 
to reduce the amount or retire any part of its common or preferred 
stock, or to retire any part of its capital notes or debentures 
pursuant to section 18(i)(1) of the Act (12 U.S.C. 1828(i)(1)).
    (b) Filing procedures. Applicants shall submit a letter application 
to the appropriate regional director (DOS).
    (c) Content of filing. The application shall contain the following:
    (1) The type and amount of the proposed change to the capital 
structure and the reason for the change;
    (2) A schedule detailing the present and proposed capital 
structure;
    (3) The time period that the proposal will encompass;
    (4) If the proposal involves a series of transactions affecting 
Tier 1 capital components which will be consummated over a period of 
time which shall not exceed twelve months, the application shall 
certify that the insured depository institution will maintain itself as 
a well-capitalized institution as defined in part 325 of this chapter, 
both before and after each of the proposed transactions;
    (5) If the proposal involves the repurchase of capital instruments, 
the amount of the repurchase price and the basis for establishing the 
fair market value of the repurchase price;
    (6) A statement that the proposal will be available to all holders 
of a particular class of outstanding capital instruments on an equal 
basis, and if not, the details of any restrictions; and
    (7) The date that the applicant's board of directors approved the 
proposal.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the application.
    (e) Undercapitalized institutions. Procedures regarding 
applications by an undercapitalized insured depository institution to 
retire capital stock or capital debt instruments pursuant to section 38 
of the FDI Act (12 U.S.C. 1831o) are set forth in subpart K of this 
part (Prompt Corrective Action), Sec. 303.203. Applications pursuant to 
sections 38 and 18(i) may be filed concurrently, or as a single 
application.
    (f) Expedited processing for eligible depository institutions. An 
application filed under this section by an eligible depository 
institution as defined in Sec. 303.2(r) will be acknowledged in writing 
by the FDIC and will receive expedited processing, unless the applicant 
is notified in writing to the contrary and provided with the basis for 
that decision. The FDIC may remove an application from expedited 
processing for any of the reasons set forth in Sec. 303.11(c)(2). 
Absent such removal, an application processed under expedited 
processing will be deemed approved 20 days after the FDIC's receipt of 
a substantially complete application.
    (g) Standard processing. For those applications that are not 
processed pursuant to expedited procedures, the FDIC will provide the 
applicant with written notification of the final action as soon as the 
decision is rendered.
    (h) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve or deny an 
application pursuant to section 18(i)(1) of the FDI Act (12 U.S.C. 
1828(i)) to reduce the amount or retire any part of common or preferred 
capital stock, or to retire any part of capital notes or debentures.


Sec. 303.242  Exercise of trust powers.

    (a) Scope. This section contains the procedures to be followed by a 
state nonmember bank to seek the FDIC's prior consent to exercise trust 
powers. The FDIC's prior consent to exercise trust powers is not 
required in the following circumstances:
    (1) Where a state nonmember bank received authority to exercise 
trust powers from its chartering authority prior to December 1, 1950; 
or
    (2) Where an insured depository institution continues to conduct 
trust activities pursuant to authority granted by its chartering 
authority subsequent to a charter conversion or withdrawal from 
membership in the Federal Reserve System.
    (b) Filing procedures. Applicants shall submit to the appropriate 
regional director (DOS) a completed form, ``Application for Consent To 
Exercise Trust Powers.'' This form may be obtained from any FDIC 
regional office.
    (c) Content of filing. The filing shall consist of the completed 
trust application form.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Expedited processing for eligible depository institutions. An 
application filed under this section by an eligible depository 
institution as defined in Sec. 303.2(r) will be acknowledged in writing 
by the FDIC and will receive expedited processing, unless the applicant 
is notified in writing to the contrary and provided with the basis for 
that decision. The FDIC may remove an application from expedited 
processing for any of the reasons set forth in Sec. 303.11(c)(2). 
Absent such removal, an application processed under expedited 
procedures will be deemed approved 30 days after the FDIC's receipt of 
a substantially complete application.
    (f) Standard processing. For those applications that are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action when the 
decision is rendered.
    (g) Delegation of authority. (1) Where the criteria listed in 
paragraph (g)(2) of this section are satisfied and the applicant agrees 
in writing to comply with any conditions imposed by the approving FDIC 
official, other than the standard conditions defined in Sec. 303.2(ff), 
which may be imposed without the applicant's written consent, authority 
is delegated to the Director and Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director and the 
appropriate regional director and deputy regional director, to approve 
applications for the FDIC's consent to exercise trust powers.
    (2) The following criteria must be satisfied before the authority 
delegated in paragraph (g)(1) of this section may be exercised:

[[Page 44742]]

    (i) The factors set forth in section 6 of the FDI Act (12 U.S.C. 
1816) have been considered and favorably resolved;
    (ii) The proposed management of the trust business is determined to 
be capable of satisfactorily handling the anticipated business; and
    (iii) The applicant's board of directors formally has adopted the 
FDIC Statement of Principles of Trust Department Management available 
from any FDIC regional office.
    (h) Denials and certain conditional approvals. Authority is 
delegated to the Director and Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director to:
    (1) Deny applications for trust powers; and
    (2) Approve applications for trust powers where the criteria listed 
in paragraph (g)(2) of this section are satisfied but the applicant 
does not agree in writing to comply with any condition imposed by the 
delegate, other than the standard conditions defined in Sec. 303.2(ff) 
which may be imposed without the applicant's written consent.


Sec. 303.243  Brokered deposit waivers.

    (a) Scope. Pursuant to section 29 of the FDI Act (12 U.S.C. 1831f) 
and part 337 of this chapter, an adequately capitalized insured 
depository institution may not accept, renew or roll over any brokered 
deposits unless it has obtained a waiver from the FDIC. A well-
capitalized insured depository institution may accept brokered deposits 
without a waiver, and an undercapitalized insured depository 
institution may not accept, renew or roll over any brokered deposits 
under any circumstances. This section contains the procedures to be 
followed to file with the FDIC for a brokered deposit waiver. The FDIC 
will provide notice to the depository institution's appropriate federal 
banking agency and any state regulatory agency, as appropriate, that a 
request for a waiver has been filed and will consult with such agency 
or agencies, prior to taking action on the institution's request for a 
waiver. Prior notice and/or consultation shall not be required in any 
particular case if the FDIC determines that the circumstances require 
it to take action without giving such notice and opportunity for 
consultation.
    (b) Filing procedures. Applicants shall submit a letter application 
to the appropriate regional director (DOS).
    (c) Content of filing. The application shall contain the following:
    (1) The time period for which the waiver is requested;
    (2) A statement of the policy governing the use of brokered 
deposits in the institution's overall funding and liquidity management 
program;
    (3) The volume, rates and maturities of the brokered deposits held 
currently and anticipated during the waiver period sought, including 
any internal limits placed on the terms, solicitation and use of 
brokered deposits;
    (4) How brokered deposits are costed and compared to other funding 
alternatives and how they are used in the institution's lending and 
investment activities, including a detailed discussion of asset growth 
plans;
    (5) Procedures and practices used to solicit brokered deposits, 
including an identification of the principal sources of such deposits;
    (6) Management systems overseeing the solicitation, acceptance and 
use of brokered deposits;
    (7) A recent consolidated financial statement with balance sheet 
and income statements; and
    (8) The reasons the institution believes its acceptance, renewal or 
rollover of brokered deposits would pose no undue risk.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the application.
    (e) Expedited processing for eligible depository institutions. An 
application filed under this section by an eligible depository 
institution as defined in this Sec. 303.243(e) will be acknowledged in 
writing by the FDIC and will receive expedited processing, unless the 
applicant is notified in writing to the contrary and provided with the 
basis for that decision. For the purpose of this section, an applicant 
will be deemed an eligible depository institution if it satisfies all 
of the criteria contained in Sec. 303.2(r) except that the applicant 
may be adequately capitalized rather than well-capitalized. The FDIC 
may remove an application from expedited processing for any of the 
reasons set forth in Sec. 303.11(c)(2). Absent such removal, an 
application processed under expedited procedures will be deemed 
approved 21 days after the FDIC's receipt of a substantially complete 
application.
    (f) Standard processing. For those filings which are not processed 
pursuant to the expedited procedures, the FDIC will provide the 
applicant with written notification of the final action as soon as the 
decision is rendered.
    (g) Conditions for approval. A waiver issued pursuant to this 
section shall:
    (1) Be for a fixed period, generally no longer than two years, but 
may be extended upon refiling; and
    (2) May be revoked by the FDIC at any time by written notice to the 
institution.
    (h) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve or deny brokered 
deposit waiver applications. Based upon a preliminary review, any 
delegate may grant a temporary waiver for a short period in order to 
facilitate the orderly processing of a filing for a waiver.


Sec. 303.244  Golden parachute and severance plan payments.

    (a) Scope. Pursuant to section 18(k) of the FDI Act (12 U.S.C. 
1828(k)) and part 359 of this chapter, an insured depository 
institution or depository institution holding company may not make 
golden parachute payments or excess nondiscriminatory severance plan 
payments unless the depository institution or holding company obtains 
permission to make such payments in accordance with the rules contained 
in part 359 of this chapter. This section contains the procedures to 
file for the FDIC's consent when such consent is necessary under part 
359 of this chapter.
    (1) Golden parachute payments. A troubled insured depository 
institution or a troubled depository institution holding company is 
prohibited from making golden parachute payments (as defined in 
Sec. 359.1(f)(1) of this chapter) unless it obtains the consent of the 
appropriate federal banking agency and the written concurrence of the 
FDIC. Therefore, in the case of golden parachute payments, the 
procedures in this section apply to all troubled insured depository 
institutions and troubled depository institution holding companies.
    (2) Excess nondiscriminatory severance plan payments. In the case 
of excess nondiscriminatory severance plan payments as provided by 
Sec. 359.1(f)(2)(v) of this chapter, the FDIC's consent is necessary 
for state nonmember banks that meet the criteria set forth in 
Sec. 359.1(f)(1)(ii) of this chapter. In addition, the FDIC's consent 
is required for all insured depository institutions or depository 
institution holding companies that meet the same criteria and seek to 
make payments in excess of the 12-month amount specified in 
Sec. 359.1(f)(2)(v) of this chapter.
    (b) Filing procedures. Applicants shall submit a letter application 
to the

[[Page 44743]]

appropriate FDIC regional director (DOS).
    (c) Content of filing. The application shall contain the following:
    (1) The reasons why the applicant seeks to make the payment;
    (2) An identification of the institution-affiliated party who will 
receive the payment;
    (3) A copy of any contract or agreement regarding the subject 
matter of the filing;
    (4) The cost of the proposed payment and its impact on the 
institution's capital and earnings; and
    (5) The reasons why consent to the payment should be granted.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Processing. The FDIC will provide the applicant with a 
subsequent written notification of the final action taken as soon as 
the decision is rendered.
    (f) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve or to deny filings to 
make:
    (1) Excess nondiscriminatory severance plan payments as provided by 
12 CFR 359.1(f)(2)(v); and
    (2) Golden parachute payments permitted by 12 CFR 359.4.


Sec. 303.245  Waiver of liability for commonly controlled depository 
institutions.

    (a) Scope. Section 5(e) of the FDI Act (12 U.S.C. 1815(e)) creates 
liability for commonly controlled insured depository institutions for 
losses incurred or anticipated to be incurred by the FDIC in connection 
with the default of a commonly controlled insured depository 
institution or any assistance provided by the FDIC to any commonly 
controlled insured depository institution in danger of default. In 
addition to certain statutory exceptions and exclusions contained in 
sections 5(e)(6), (7) and (8), the FDI Act also permits the FDIC, in 
its discretion, to exempt any insured depository institution from this 
liability if it determines that such exemption is in the best interests 
of the Bank Insurance Fund (BIF) or the Savings Association Insurance 
Fund (SAIF). This section describes procedures to request a conditional 
waiver of liability pursuant to section 5 of the FDI Act (12 U.S.C. 
1815(e)(5)(A)).
    (b) Definition. Conditional waiver of liability means an exemption 
from liability pursuant to section 5(e) of the FDI Act (12 U.S.C. 
1815(e)) subject to terms and conditions.
    (c) Filing procedures. Applicants shall submit a letter application 
to the appropriate regional director (DOS).
    (d) Content of filing. The application shall contain the following 
information:
    (1) The basis for requesting a waiver;
    (2) The existence of any significant events (e.g., change in 
control, capital injection, etc.) that may have an impact upon the 
applicant and/or any potentially liable institution;
    (3) Current, and if applicable, pro forma financial information 
regarding the applicant and potentially liable institution(s); and
    (4) The benefits to the appropriate FDIC insurance fund resulting 
from the waiver and any related events.
    (e) Additional information. The FDIC may request additional 
information at any time during the processing of the filing.
    (f) Processing. The FDIC will provide the applicant with written 
notification of the final action as soon as the decision is rendered.
    (g) Failure to comply with terms of conditional waiver. In the 
event a conditional waiver of liability is issued, failure to comply 
with the terms specified therein may result in the termination of the 
conditional waiver of liability. The FDIC reserves the right to revoke 
the conditional waiver of liability after giving the applicant written 
notice of such revocation and a reasonable opportunity to be heard on 
the matter pursuant to Sec. 303.10.
    (h) Authority retained by FDIC Board of Directors. The FDIC Board 
of Directors retains the authority to act on any application for waiver 
of liability of commonly controlled depository institutions.


Sec. 303.246  Insurance fund conversions.

    (a) Scope. This section contains the procedures to be followed by 
an insured depository institution to seek the FDIC's prior approval to 
engage in an insurance fund conversion that involves the transfer of 
deposits between the SAIF and the BIF. Optional conversion 
transactions, commonly referred to as Oakar transactions, pursuant to 
section 5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)), which do not 
involve the transfer of deposits between the SAIF and the BIF, are 
governed by the procedures set forth in subpart D (Merger Transactions) 
of this part.
    (b) Filing procedures. Applicants shall submit a letter application 
to the appropriate FDIC regional director (DOS). The filing shall be 
signed by representatives of each institution participating in the 
transaction. Insurance fund conversions which are proposed in 
conjunction with a merger application filed by a state nonmember bank 
pursuant to section 18(c) of the FDI Act (12 U.S.C. 1828(c)) should be 
included with that filing.
    (c) Content of filing. The application shall include the following 
information:
    (1) A description of the transaction;
    (2) The amount of deposits involved in the conversion transaction;
    (3) A pro forma balance sheet and income statement for each 
institution upon consummation of the transaction; and
    (4) Certification by each party to the transaction that applicable 
entrance and exit fees will be paid pursuant to part 312 of this 
chapter.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Processing. The FDIC will provide the applicant with written 
notification of the final action as soon as the decision is rendered.
    (f) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve or deny filings for 
insurance fund conversions involving the transfers of deposits between 
the SAIF and the BIF.


Sec. 303.247  Conversion with diminution of capital.

    (a) Scope. This section contains the procedures to be followed by 
an insured federal depository institution seeking the prior written 
consent of the FDIC pursuant to section 18(i)(2) of the FDI Act (12 
U.S.C. 1828(i)(2)) to convert from an insured federal depository 
institution to an insured state nonmember bank (except a District bank) 
where the capital stock or surplus of the resulting bank will be less 
than the capital stock or surplus, respectively, of the converting 
institution at the time of the shareholders' meeting approving such 
conversion.
    (b) Filing procedures. Applicants shall submit a letter application 
to the appropriate regional director (DOS).
    (c) Content of filing. The application shall contain the following 
information:
    (1) A description of the proposed transaction;
    (2) A schedule detailing the present and proposed capital 
structure; and
    (3) A copy of any documents submitted to the state chartering 
authority with respect to the charter conversion.
    (d) Additional information. The FDIC may request additional 
information at any time during the processing.

[[Page 44744]]

    (e) Processing. The FDIC will provide the applicant with written 
notification of the final action when the decision is rendered.
    (f) Delegation of authority.--(1) Approvals. Authority is delegated 
to the Director and Deputy Director (DOS) and, where confirmed in 
writing by the Director, to an associate director and the appropriate 
regional director and deputy regional director, to approve applications 
to convert with diminution of capital.
    (2) Denials. Authority is delegated to the Director and Deputy 
Director (DOS) and, where confirmed in writing by the Director, to an 
associate director to deny applications to convert with diminution of 
capital.


Sec. 303.248  Continue or resume status as an insured institution 
following termination under section 8 of the FDI Act.

    (a) Scope. This section relates to an application by a depository 
institution whose insured status has been terminated under section 8 of 
the FDI Act (12 U.S.C. 1818) for permission to continue or resume its 
status as an insured depository institution. This section covers 
institutions whose deposit insurance continues in effect for any 
purpose or for any length of time under the terms of an FDIC order 
terminating deposit insurance, but does not cover operating non-insured 
depository institutions which were previously insured by the FDIC, or 
any non-insured, non-operating depository institution whose charter has 
not been surrendered or revoked.
    (b) Filing procedures. Applicants shall submit a letter application 
to the appropriate regional director (DOS).
    (c) Content of filing. The filing shall contain the following 
information:
    (1) A complete statement of the action requested, all relevant 
facts, and the reason for such requested action; and
    (2) A certified copy of the resolution of the depository 
institution's board of directors authorizing submission of the filing.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Processing. The FDIC will provide the applicant with written 
notification of the final action as soon as the decision is rendered.
    (f) Authority retained by FDIC Board of Directors. The FDIC Board 
of Directors retains the authority to act on any application to 
continue or resume status as an insured institution following 
termination under section 8 of the FDI Act (12 U.S.C. 1818).


Sec. 303.249  Truth in Lending Act--relief from reimbursement.

    (a) Scope. This section applies to requests for relief from 
reimbursement pursuant to the Truth in Lending Act (15 U.S.C. 1601 et 
seq.) and Regulation Z (12 CFR part 226). Related delegations of 
authority are also set forth.
    (b) Procedures to be followed in filing initial requests for 
relief. Requests for relief from reimbursement shall be filed with the 
appropriate regional director (DCA) within 60 days after receipt of the 
compliance report of examination containing the request to conduct a 
file search and make restitution to affected customers. The filing 
shall contain a complete and concise statement of the action requested, 
all relevant facts, the reasons and analysis relied upon as the basis 
for such requested action, and all supporting documentation.
    (c) Additional information. The FDIC may request additional 
information at any time during processing of any such requests.
    (d) Processing. The FDIC will acknowledge receipt of the request 
and provide the applicant with written notification of its 
determination within 60 days of its receipt of the request.
    (e) Delegation of authority.--(1) Denial of initial requests for 
relief. Authority is delegated to the Director and Deputy Director 
(DCA), and where confirmed in writing by the Director, to an associate 
director, or to the appropriate regional director or deputy regional 
director, to deny initial requests for relief from the requirement for 
reimbursement under section 608(a)(2) of the Truth in Lending 
Simplification and Reform Act (15 U.S.C. 1607(e)(2)); provided, 
however, that a regional director or deputy regional director is not 
authorized to deny any request where the estimated amount of 
reimbursement is greater than $25,000.
    (2) Approval of initial requests for relief. Authority is delegated 
to the Director and Deputy Director (DCA), and where confirmed in 
writing by the director, to an associate director, to approve requests 
for relief from the requirement for reimbursement under section 
608(a)(2) of the Truth in Lending Simplification and Reform Act (15 
U.S.C. 1607(a)(2)).
    (f) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, or, in cases where a regional director or deputy 
regional director denies requests for relief, by the appropriate 
regional counsel, that the action taken is not inconsistent with the 
Truth in Lending Simplification and Reform Act.
    (g) Procedures to be followed in filing requests for 
reconsideration. Within 15 days of receipt of written notice that its 
request for relief has been denied, the requestor may petition the 
appropriate regional director (DCA) for reconsideration of such request 
in accordance with the procedures set forth in Sec. 303.11(f).


Sec. 303.250  Management official interlocks.

    (a) Scope. This section contains the procedures to be followed by 
an insured state nonmember bank to seek the approval of FDIC to 
establish an interlock pursuant to the Depository Institutions 
Management Interlocks Act (12 U.S.C. 3207), section 13 of the FDI Act 
(12 U.S.C. 1823(k)) and part 348 of this chapter.
    (b) Filing procedures. Applicants shall submit a letter application 
to the appropriate regional director (DOS).
    (c) Content of filing. The application shall contain the following:
    (1) A description of the proposed interlock;
    (2) A statement of reason as to why the interlock will not result 
in a monopoly or a substantial lessening of competition; and
    (3) If the applicant is seeking an exemption set forth in 
Sec. 348.5 or Sec. 348.6 of this chapter, a description of the 
particular exemption which is being requested and a statement of 
reasons as to why the exemption is applicable.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Processing. The FDIC will provide the applicant with written 
notification of the final action when the decision is rendered.
    (f) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS), and where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director, deputy regional director, to approve or deny a request to 
establish a management official interlock pursuant to Sec. 348.5 or 
Sec. 348.6 of this chapter or section 205(8) of the Depository 
Institutions Management Interlocks Act (12 U.S.C. 3207, 12 U.S.C. 
1823(k)).


Sec. 303.251  Modification of conditions.

    (a) Scope. This section contains the procedures to be followed by 
an insured depository institution to seek the prior consent of the FDIC 
to modify the requirement of a prior approval of a filing issued by the 
FDIC.
    (b) Filing procedures. Applicants should submit a letter 
application to the

[[Page 44745]]

appropriate FDIC regional director (DOS).
    (c) Content of filing. The application should contain the following 
information:
    (1) A description of the original approved application;
    (2) A description of the modification requested; and
    (3) The reason for the request.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Processing. The FDIC will provide the applicant with a written 
notification of the final action as soon as the decision is rendered.
    (f) Delegation of authority. Authority is delegated to the Director 
and Deputy Director (DOS) and, where confirmed in writing by the 
Director, to an associate director and the appropriate regional 
director and deputy regional director, to approve or deny requests to 
modify the requirements of a prior approval of a filing issued by the 
FDIC subject to the following criteria;
    (1) The Legal Division is consulted to the same extent as was 
required for approval of the original filing; and
    (2) The approving delegate had the authority to approve the 
original filing.


Sec. 303.252  Extension of time.

    (a) Scope. This section contains the procedures to be followed by 
an insured depository institution to seek the prior consent of the FDIC 
for additional time to fulfill a condition required in an approval of a 
filing issued by the FDIC or to consummate a transaction which was the 
subject of an approval by the FDIC.
    (b) Filing procedures. Applicants shall submit a letter application 
to the appropriate regional director (DOS).
    (c) Content of filing. The application shall contain the following 
information:
    (1) A description of the original approved application;
    (2) Identification of the original time limitation;
    (3) The additional time period requested; and
    (4) The reason for the request.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Processing. The FDIC will provide the applicant with written 
notification of the final action as soon as the decision is rendered.
    (f) Delegation of authority. (1) Except as provided in paragraph 
(f)(2) of this section, authority is delegated to the Director and 
Deputy Director (DOS) and, where confirmed in writing by the Director, 
to an associate director and the appropriate regional director and 
deputy regional director, to approve or deny requests for extensions of 
time within which to perform acts or fulfill conditions required by a 
prior FDIC action on a filing of the insured depository institution.
    (2) Limits on exercise of delegated authority. (i) An extension of 
time may not exceed one year; however, more than one extension may be 
granted regarding a particular filing.
    (ii) Notwithstanding the delegations in paragraph (f)(1) of this 
section, no delegate shall have the authority to deny an extension of 
time request unless that delegate has the authority under this part to 
deny the original filing upon which the extension of time is 
predicated.

Subpart N--Enforcement Delegations


Sec. 303.260  Scope.

    This subpart contains delegations of authority relating to the 
initiation, prosecution, and settlement of administrative enforcement 
actions under the FDI Act and other laws and regulations enforced by 
the FDIC, including investigations and subpoenas.


Sec. 303.261  Issuance of notification to primary regulator under 
section 8(a) of the FDI Act (12 U.S.C. 1818(a)).

    (a) Book capital less than 2 percent. Authority is delegated to the 
Director and Deputy Director (DOS), and where confirmed in writing by 
the Director, to an associate director and to the appropriate regional 
director and deputy regional director, to issue notifications to 
primary regulator when the respondent depository institution's book 
capital is less than 2 percent of total assets; provided that authority 
may not be delegated to the regional director or deputy regional 
director whenever the respondent depository institution has issued any 
mandatory convertible debt or any form of Tier 2 capital (such as 
limited life preferred stock, subordinated notes and debentures).
    (b) Tier 1 capital less than 2 percent. Authority is delegated to 
the Director and Deputy Director (DOS) and, where confirmed in writing 
by the Director, to an associate director, to issue notifications to 
primary regulator when the respondent depository institution's adjusted 
Tier 1 capital is less than 2 percent of adjusted part 325 total assets 
as defined in Sec. 303.2(b).
    (c) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, or, in cases where a regional director or deputy 
regional director issues notifications to primary regulator, by the 
appropriate regional counsel, that the allegations contained in the 
findings of violations of law or regulation and/or unsafe or unsound 
practices and/or unsafe or unsound condition, if proven, constitute a 
basis for the issuance of a notification to primary regulator pursuant 
to section 8(a) of the FDI Act (12 U.S.C. 1818(a)).


Sec. 303.262  Issuance of notice of intention to terminate insured 
status under section 8(a) of the FDI Act (12 U.S.C. 1818(a)).

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS), and where confirmed in writing by the Director, to an 
associate director, to issue notices of intent to terminate insured 
status when the respondent depository institution has failed to correct 
any violations of law or regulation and/or unsafe or unsound practices 
and/or unsafe or unsound condition as specified in the relevant 
notification to primary regulator.
    (b) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the allegations contained in the findings in the 
notice of intention to terminate insured status of violations of law or 
regulation and/or unsafe or unsound practices and/or unsafe or unsound 
condition, if proven, constitute a basis for termination of the insured 
status of the respondent depository institution pursuant to section 
8(a) of the FDI Act (12 U.S.C. 1818(a)).


Sec. 303.263  Cease-and-desist actions under section 8(b) of the FDI 
Act (12 U.S.C. 1818(b)).

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS), to the Director and Deputy Director (DCA), and where 
confirmed in writing by the appropriate Director, to an associate 
director and to the appropriate regional director and deputy regional 
director to issue:
    (1) Notices of charges; and
    (2) Cease-and-desist orders (with or without a prior notice of 
charges) where the respondent depository institution or individual 
respondent consents to the issuance of the cease-and-desist order prior 
to the filing by an administrative law judge of proposed findings of 
fact, conclusions of law and recommended decision with the Executive 
Secretary of the FDIC.
    (b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA) 
may issue a joint notice of charges or

[[Page 44746]]

cease-and-desist order under this section, where such notice or order 
addresses both safety and soundness and consumer compliance matters. A 
joint notice or order will require the signatures of both Directors or 
their Deputy Directors or associate directors, appropriate regional 
directors or deputy regional directors.
    (c) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, or, in cases where a regional director or deputy 
regional director issues the notice of charges or the stipulated cease-
and-desist order, by the appropriate regional counsel, that the 
allegations contained in the notice of charges, if proven, constitute a 
basis for the issuance of a section 8(b) order, or that the stipulated 
cease-and-desist order is authorized under section 8(b) of the FDI Act, 
and, upon its effective date, shall be a cease-and-desist order which 
has become final for purposes of enforcement pursuant to the FDI Act.


Sec. 303.264  Temporary cease-and-desist orders under section 8(c) of 
the FDI Act (12 U.S.C. 1818(c)).

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS) and to the Director and Deputy Director (DCA), and where 
confirmed in writing by the appropriate Director, to an associate 
director, to issue temporary cease-and-desist orders.
    (b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA) 
may issue a joint temporary cease-and-desist order where such order 
addresses both safety and soundness and consumer compliance matters. A 
joint notice or order will require the signatures of both Directors or 
their Deputy Directors or associate directors.
    (c) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the action is not inconsistent with section 8(c) 
of the FDI Act (12 U.S.C. 1818(c)) and the temporary cease-and-desist 
order is enforceable in a United States District Court.


Sec. 303.265  Removal and prohibition actions under section 8(e) of the 
FDI Act (12 U.S.C. 1818(e)).

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS) or the Director and Deputy Director (DCA) and, where 
confirmed in writing by the appropriate Director, to an associate 
director, to issue:
    (1) Notices of intention to remove an institution-affiliated party 
from office or to prohibit an institution-affiliated party from further 
participation in the conduct of the affairs of an insured depository 
institution pursuant to sections 8(e) (1) and (2) of the FDI Act (12 
U.S.C. 1818(e) (1) and (2)), and temporary orders of suspension 
pursuant to section 8(e)(3) of the FDI Act (12 U.S.C. 1818(e)(3)); and
    (2) Orders of removal, suspension or prohibition from participation 
in the conduct of the affairs of an insured depository institution 
where the institution-affiliated party consents to the issuance of such 
orders prior to the filing by an administrative law judge of proposed 
findings of fact, conclusions of law and a recommended decision with 
the Executive Secretary of the FDIC.
    (b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA) 
may issue joint notices and orders pursuant to this section where such 
notice or order addresses both safety and soundness and consumer 
compliance matters. A joint notice or order will require the signatures 
of both directors or their deputy directors or associate directors.
    (c) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the allegations contained in the notice of 
intent, if proven, constitute a basis for the issuance of a notice of 
intent pursuant to section 8(e) of the FDI Act, or that the stipulated 
section 8(e) order is not inconsistent with section 8(e) of the FDI 
Act, and, upon issuance, shall be an order which has become final for 
purposes of enforcement pursuant to the FDI Act.


Sec. 303.266  Suspension and removal action under section 8(g) of the 
FDI Act (12 U.S.C. 1818(g)).

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS), to the Director and Deputy Director (DCA), and where 
confirmed in writing by the appropriate Director, to an associate 
director, to issue orders of suspension or prohibition to an 
institution-affiliated party who is charged in any information, 
indictment, or complaint, or who is convicted of or enters a pretrial 
diversion or similar program, as to any criminal offense cited in or 
covered by section 8(g) of the FDI Act, when such institution-
affiliated party consents to the suspension or prohibition.
    (b) Delegation of authority where suspension or prohibition 
mandated. Authority is delegated to the Director and Deputy Director 
(DOS), to the Director and Deputy Director (DCA), and where confirmed 
in writing by the appropriate Director, to an associate director, to 
issue orders of suspension and prohibition to any institution-
affiliated party who is charged in any information, indictment, or 
complaint, or who is convicted or enters a pretrial diversion or 
similar program, as to any criminal offense involving mandatory 
suspension or prohibition under sections 8(g)(1) (A)(ii) and (C)(ii) of 
the FDI Act (12 U.S.C. 1818(g)(1) (A)(ii) and (C)(ii)), whether or not 
such institution-affiliated party consents to the suspension or 
prohibition.
    (c) Joint DOS-DCA action. The Director (DOS) and the Director (DCA) 
may issue joint orders pursuant to this section where such order 
addresses both safety and soundness and consumer compliance matters. A 
joint order will require the signatures of both Directors or their 
Deputy Directors or associate directors.
    (d) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the action taken is not inconsistent with section 
8(g) of the FDI Act (12 U.S.C. 1818(g)) and the order is enforceable in 
a United States District Court pursuant to sections 8(i) and 8(j) of 
the FDI Act (12 U.S.C. 1818 (i) and (j)).


Sec. 303.267  Termination of insured status under section 8(p) of the 
FDI Act (12 U.S.C. 1818(p)).

    (a) General. Authority is delegated to the Executive Secretary to 
issue consent orders terminating the insured status of insured 
depository institutions that have ceased to engage in the business of 
receiving deposits other than trust funds pursuant to section 8(p) of 
the FDI Act (12 U.S.C. 1818(p)).
    (b) DOS and legal concurrence. The authority delegated under this 
section shall be exercised only upon the recommendation and concurrence 
of the Director or Deputy Director (DOS) and, when confirmed in writing 
by the Director, an associate director, and upon the certification of 
the General Counsel and, where confirmed in writing by the General 
Counsel, by his or her designee, that the action taken is not 
inconsistent with section 8(p) of the FDI Act (12 U.S.C. 1818(p)).

[[Page 44747]]

Sec. 303.268  Termination of insured status under section 8(q) of the 
FDI Act (12 U.S.C. 1818(q)).

    (a) General. Authority is delegated to the Executive Secretary to 
issue consent orders terminating the insured status of an insured 
depository institution where the liabilities of the insured institution 
for deposits shall have been assumed by another insured depository 
institution or depository institutions, whether by way of merger, 
consolidation, or other statutory assumption, or pursuant to contract, 
pursuant to section 8(q) of the FDI Act (12 U.S.C. 1818(q)).
    (b) DOS and legal concurrence. The authority delegated under this 
section shall be exercised only upon the recommendation and concurrence 
of the Director or Deputy Director (DOS) or, when confirmed in writing 
by the Director, an associate director, and upon the certification of 
the General Counsel or, where confirmed in writing by the General 
Counsel, by his or her designee, that the action taken is not 
inconsistent with section 8(q) of the FDI Act (12 U.S.C. 1818(q)).


Sec. 303.269  Civil money penalties.

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS), to the Director and Deputy Director (DCA), and where 
confirmed in writing by the appropriate Director, to an associate 
director, to issue:
    (1) Notice of assessment of civil money penalties; and
    (2) Final orders to pay (with or without a prior notice of 
assessment of civil money penalty) where the insured depository 
institution or institution-affiliated party consents to the issuance of 
the order to pay and waives, as applicable, receipt of a notice of 
assessment of civil money penalty and the right to an administrative 
hearing.
    (b) Legal concurrence. The authority delegated under paragraph (a) 
of this section shall be exercised only upon concurrent certification 
by the General Counsel or, where confirmed in writing by the General 
Counsel, by his or her designee, that the allegations contained in the 
notice of assessment, if proven, constitute a basis for assessment of 
civil money penalties, or that the stipulated final order to pay is 
authorized under the FDI Act, and upon its effective date, shall be an 
order to pay which has become final for purposes of enforcement 
pursuant to the FDI Act.
    (c) Joint DOS-DCA action. The Director (DOS) and the Director (DCA) 
may issue joint notices pursuant to paragraph (a) of this section where 
such notice addresses both safety and soundness and consumer compliance 
matters. A joint notice will require the signatures of both Directors 
or their Deputy Directors or associate directors.
    (d) Prosecution of civil money penalty actions and collection of 
civil money penalties. Authority is delegated to the General Counsel 
or, where confirmed in writing, to his or her designee, to prosecute 
administrative civil money penalty actions and to collect civil money 
penalties under this section.


Sec. 303.270  Notices of assessment under section 5(e) of the FDI Act 
(12 U.S.C. 1815(e)).

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS), and where confirmed in writing by the Director, to an 
associate director, to issue notices of assessment of liability to 
commonly controlled insured depository institutions for the estimated 
amount of loss to the deposit insurance funds.
    (b) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the action taken is not inconsistent with section 
5(e) of the FDI Act (12 U.S.C. 1815(e)).


Sec. 303.271  Prompt corrective action directives and capital plans 
under section 38 of the FDI Act (12 U.S.C. 1831o) and part 325 of this 
chapter.

    (a) General--notices, directives and orders. Authority is delegated 
to the Director and Deputy Director (DOS), and where confirmed in 
writing by the Director, to an associate director, and to the 
appropriate regional director and deputy regional director, to accept, 
reject, require new or revised capital restoration plans, or make any 
other determinations with respect to the implementation of capital 
restoration plans and, in accordance with subpart Q of part 308 of this 
chapter, to issue:
    (1) Notices of intent to issue capital directives;
    (2) Directives to insured state nonmember banks that fail to 
maintain capital in accordance with the requirements contained in part 
325 of this chapter;
    (3) Notices of intent to issue prompt corrective action directives, 
except directives issued pursuant to section 38(f)(2)(F)(ii) of the FDI 
Act (12 U.S.C. 1831(f)(2)(F)(ii));
    (4) Directives to insured depository institutions pursuant to 
section 38 of the FDI Act (12 U.S.C. 1831o), with or without the 
consent of the respondent bank to the issuance of the directive, except 
directives issued pursuant to section 38(f)(2)(F)(ii) of the FDI Act 
(12 U.S.C. 1831o(f)(2)(F)(ii));
    (5) Directives to insured depository institutions requiring 
immediate action or imposing proscriptions pursuant to section 38 of 
the FDI Act (12 U.S.C. 1831o) and part 325 of this chapter, and in 
accordance with the requirements contained in Sec. 308.201(a)(2) of 
this chapter;
    (6) Notices of intent to reclassify insured banks pursuant to 
Secs. 325.103(d) and 308.202 of this chapter;
    (7) Directives to reclassify insured banks pursuant to 
Secs. 325.103(d) and 308.202 of this chapter with the consent of the 
respondent bank to the issuance of the directive; and
    (8) Orders on request for informal hearings to reconsider 
reclassifications and designate the presiding officer at the hearing 
pursuant to Sec. 308.202 of this chapter.
    (b) Notices--dismissal of director and officer. Authority is 
delegated to the Director and Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director, to:
    (1) Issue notices of intent to issue a prompt corrective action 
directive ordering the dismissal from office of a director or senior 
executive officer pursuant to section 38(f)(2)(F)(ii) of the FDI Act 
(12 U.S.C. 1831o(f)(2)(F)(ii)) and in accordance with the requirements 
contained in Sec. 308.203 of this chapter;
    (2) Issue directives ordering the dismissal from office of a 
director or senior executive officer pursuant to section 
38(f)(2)(F)(ii) of the FDI Act (12 U.S.C. 1831o(f)(2)(F)(ii)); and
    (3) Issue orders of dismissal from office of a director or senior 
executive officer pursuant to section 38(f)(2)(F)(ii) of the FDI Act 
(12 U.S.C. 1831o(f)(2)(F)(ii)) where the individual consents to the 
issuance of such order prior to the filing of a recommendation by the 
presiding officer with the FDIC.
    (c) Reclassification of institution other than on basis of capital. 
Authority is delegated to the Director and Deputy Director (DOS), and 
where confirmed in writing by the Director, to an associate director, 
to:
    (1) Act on recommended decisions of presiding officers pursuant to 
a request for reconsideration of a reclassification in accordance with 
the requirements contained in Sec. 308.202 of this chapter; and
    (2) Act on requests for rescission of a reclassification.
    (d) Appeals of immediately effective PCA directives. Authority is 
delegated to the Director and Deputy Director (DOS), and where 
confirmed in writing by the Director, to an associate director, to act 
on appeals from immediately effective directives issued pursuant to 
section 38

[[Page 44748]]

of the FDI Act (12 U.S.C. 1831o) and Sec. 308.201 of this chapter.
    (e) Informal hearings. Authority is delegated to the Executive 
Secretary of the FDIC to issue orders for informal hearings and 
designate presiding officers on directives issued pursuant to section 
38(f)(2)(F)(ii) of the FDI Act (12 U.S.C. 1831o(f)(2)(F)(ii)).
    (f) Legal concurrence. The authority delegated under this section 
shall be exercised only upon the concurrent certification by the 
General Counsel or, where confirmed in writing by the General Counsel, 
by his or her designee, or, in cases where a regional director or 
deputy regional director issues a notice, directive, or order, by the 
appropriate regional counsel, that the action taken is not inconsistent 
with section 38 of the FDI Act (12 U.S.C. 1831o) and part 325 of this 
chapter.


Sec. 303.272  Investigations under section 10(c) of the FDI Act (12 
U.S.C. 1820(c)).

    (a) Authority of division directors. Authority is delegated to the 
Director and Deputy Director (DOS), to the Director and Deputy Director 
(DCA), to the Director and Deputy Director of the Division of 
Resolutions and Receiverships, and where confirmed in writing by the 
appropriate Director, to an associate director, and to the appropriate 
regional director and deputy regional director, to issue an order of 
investigation pursuant to section 10(c) of the FDI Act (12 U.S.C. 
1820(c)) and subpart K of part 308 of this chapter.
    (b) Authority of General Counsel. Authority is delegated to the 
General Counsel, and where confirmed in writing by the General Counsel, 
to his or her designee, to issue an order of investigation pursuant to 
sections 8 through 13 of the FDI Act (12 U.S.C. 1818-1823), as 
appropriate, and subpart K of part 308 of this chapter.
    (c) Concurrence in certain situations. In issuing an order of 
investigation that pertains to an open insured depository institution 
or an institution making application to become an insured depository 
institution, or a post-conservatorship or post-receivership order of 
investigation, the authority delegated under this section shall be 
exercised only upon the concurrent execution of the order of 
investigation by the Director or Deputy Director (DOS), or the Director 
or Deputy Director (DCA), or the Director or Deputy Director of the 
Division of Resolutions and Receiverships, their respective associate 
directors, and the General Counsel or his or her designee. In the case 
of a joint order of investigation, such authority shall be exercised 
only upon the concurrent execution of the order of investigation by 
both Directors or Deputy Directors, or their associate directors, and 
upon the certification and execution of the order by the General 
Counsel or his or her designee.


Sec. 303.273  Unilateral settlement offers.

    (a) General. Authority is delegated to the Director and Deputy 
Director (DOS), to the Director and Deputy Director (DCA), and where 
confirmed in writing by the appropriate Director, to an associate 
director, to accept, deny or enter into negotiations for or regarding 
settlement and settlement offers with insured depository institutions, 
or with an institution-affiliated party, pertaining to or arising in 
connection with a proceeding under part 308 of this chapter. In cases 
where a proceeding under part 308 of this chapter was issued jointly by 
DOS and DCA, both Directors or Deputy Directors, or their associate 
directors, must agree to accept, deny or enter into negotiations 
regarding settlement and settlement offers with insured depository 
institutions or with an institution-affiliated party.
    (b) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the action taken is not inconsistent with the FDI 
Act.


Sec. 303.274  Acceptance of written agreements.

    (a) Written agreements under section 8(a) of the FDI Act. Authority 
is delegated to the Director and Deputy Director (DOS), and where 
confirmed in writing by the Director, to an associate director, to 
accept or enter into any written agreements with insured depository 
institutions, or any institution-affiliated party pertaining to any 
matter which may be addressed by the FDIC pursuant to section 8(a) of 
the FDI Act (12 U.S.C. 1818(a)).
    (b) Written agreements in lieu of cease-and-desist orders. 
Authority is delegated to the Director and Deputy Director (DOS) and to 
the Director and Deputy Director (DCA), and where confirmed in writing 
by the appropriate Director, to an associate director, to accept or 
enter into any written agreements with insured depository institutions, 
or any institution-affiliated party pertaining to any safety and 
soundness or consumer compliance matter which may be addressed by the 
FDIC pursuant to section 8(b) of the FDI Act (12 U.S.C. 1818(b)) or any 
other provision of the FDI Act which addresses safety and soundness or 
consumer compliance matters. In cases which would address both safety 
and soundness and consumer compliance matters, the Directors, or their 
designees, may accept or enter into joint written agreements with 
insured depository institutions or any institution-affiliated party.
    (c) Written agreements as condition attendant to FDIC filings 
contained in this part. Authority is delegated to the Director and 
Deputy Director (DOS), and to the Director and Deputy Director (DCA), 
as appropriate, and, where confirmed in writing by the appropriate 
Director, to an associate director, and to the appropriate regional 
director and deputy regional director, to accept or enter into any 
written agreements with any insured depository institution, any 
institution-affiliated party or any other petitioner which contains 
conditions precedent to the FDIC's non-objection to a filing pursuant 
to this part. A written agreement under this paragraph (c) shall not 
affect an institution's rating for prompt corrective action purposes, 
unless the written agreement expressly provides to the contrary.
    (d) Legal concurrence. The authority delegated under this section 
shall be exercised only upon concurrent certification by the General 
Counsel or, where confirmed in writing by the General Counsel, by his 
or her designee, that the action taken is not inconsistent with the FDI 
Act.


Sec. 303.275  Modifications and terminations of enforcement actions and 
orders.

    (a) Termination of section 8(a) (12 U.S.C. 1818(a)) orders and 
agreements. Authority is delegated to the Director and Deputy Director 
(DOS) and, where confirmed in writing by the Director, to an associate 
director, and to the appropriate regional director and deputy regional 
director, to terminate outstanding section 8(a) orders and agreements 
and to terminate actions and agreements which are pending pursuant to 
section 8(a) of the FDI Act when the depository institution is closed 
by a federal or state authority or merges into another institution.
    (b) Termination of section 8(a) (12 U.S.C. 1818(a)) notification to 
primary regulator issued by Board of Directors. Authority is delegated 
to the Director and Deputy Director (DOS), and where confirmed in 
writing by the Director, to an associate director, and to the 
appropriate regional director and deputy regional director, to 
terminate notifications to primary regulator issued by the Board of 
Directors pursuant to section 8(a) of the FDI Act where the

[[Page 44749]]

respondent depository institution is in material compliance with such 
notification or for good cause shown.
    (c) Termination of section 8(a) (12 U.S.C. 1818(a)) notice of 
intent to terminate insured status. In cases where the Board of 
Directors has issued a notice of intent to terminate insured status 
pursuant to section 8(a) of the FDI Act, authority is delegated to the 
Director and Deputy Director (DOS) and, where confirmed in writing by 
the Director, to an associate director, and to the appropriate regional 
director and deputy regional director, to terminate the actions pending 
pursuant to such notice of intent to terminate insured status where the 
respondent depository institution is in material compliance with the 
applicable notification to primary regulator or for good cause shown.
    (d) Sections 8(b) and 8(c)(12 U.S.C. 1818(b) and (c)) actions and 
orders. (1) Authority is delegated to the Director and Deputy Director 
(DOS) and to the Director and Deputy Director (DCA), as appropriate 
and, where confirmed in writing by the appropriate Director, to an 
associate director, and to the appropriate regional director and deputy 
regional director, to terminate outstanding section 8(b) and section 
8(c) orders and agreements and to terminate actions and agreements 
which are pending pursuant to sections 8(b) and 8(c) of the FDI Act 
when the depository institution is closed by a federal or state 
authority or merges into another institution. In cases where a joint 
order was issued by DOS and DCA, both Directors, or their Deputy 
Directors or associate directors, or the appropriate regional directors 
or deputy regional directors, must execute the order of termination.
    (2) Authority is delegated to the Director and Deputy Director 
(DOS) and to the Director and Deputy Director (DCA), as appropriate, 
and where confirmed in writing by the appropriate Director, to an 
associate director, and to the appropriate regional director and deputy 
regional director, to terminate outstanding section 8(b) orders issued 
by the Board of Directors either where material compliance with the 
section 8(b) order has been achieved by the respondent depository 
institution or individual respondent or for good cause shown. In cases 
where an order issued by the Board of Directors addresses both safety 
and soundness and consumer compliance matters, both Directors or Deputy 
Director, or the designees of the Directors, must execute the order of 
termination.
    (e) Modification and termination of section 8(e) (12 U.S.C. 
1818(e)) orders and actions. Authority is delegated to the Director and 
Deputy Director (DOS) and the Director and Deputy Director (DCA), as 
appropriate, and where confirmed in writing by the appropriate 
Director, to an associate director, to modify or terminate outstanding 
section 8(e) orders and pending actions and to grant consent under 
section 8(e)(7)(B) of the Act (12 U.S.C. 1818(e)(7)(B)) for the 
modification or termination of an outstanding section 8(e) order issued 
by another Federal financial institution regulatory agency where:
    (1) The respondent has demonstrated his or her fitness to 
participate in any manner in the conduct of the affairs of an insured 
depository institution; and
    (2) The respondent has shown that his or her participation would 
not pose a risk to the institution's safety and soundness; and
    (3) The respondent has proven that his or her participation would 
not erode public confidence in the institution.
    (f) Modification and termination of section 8(g) (12 U.S.C. 
1818(g)) orders and actions. Pursuant to section 8(j) of the FDI Act 
(12 U.S.C. 1818(j)), authority is delegated to the Director and Deputy 
Director (DOS) and the Director and Deputy Director (DCA), as 
appropriate, and where confirmed in writing by the appropriate 
Director, to an associate director, to approve requests for 
modifications or terminations of section 8(g) orders issued by either 
the Board of Directors or under delegated authority.
    (g) Other matters not specifically addressed. For all outstanding 
or pending notices, actions, orders, directives and agreements not 
specifically addressed in this subpart, the delegations of authority 
contained in this subpart shall include the authority to modify or 
terminate any outstanding or pending notice, order, directive or 
agreement issued pursuant to delegated authority, as may be 
appropriate.
    (h) Termination of pending actions--general. Any pending 
enforcement action may be dismissed or terminated by the Director or 
Deputy Director of DOS or DCA, as appropriate, at any time prior to the 
commencement of a hearing on the merits by an administrative law judge. 
Once a hearing on the merits has been convened by an administrative law 
judge, a pending enforcement action may be dismissed or terminated by 
stipulation or consent of the affected parties no later than 14 days 
after the administrative law judge has closed the record of the 
hearing. Only the FDIC Board of Directors may terminate or dismiss an 
enforcement action more than 14 days after the record has been closed 
by an administrative law judge.
    (i) Legal concurrence. Any dismissals, modifications or 
terminations pursuant to this section shall be exercised only upon 
concurrent certification by the General Counsel or, where confirmed in 
writing by the General Counsel, by his or her designee, or, in cases 
where a regional director or deputy regional director acts under 
delegated authority, by the appropriate regional counsel, that the 
action taken is not inconsistent with the FDI Act.


Sec. 303.276  Enforcement of outstanding enforcement orders.

    After consultation with the Director (DOS) or the Director (DCA), 
or a Deputy Director or an associate director, or the appropriate 
regional director or deputy regional director, as may be appropriate, 
the General Counsel or designee is authorized to initiate and prosecute 
any action to enforce any effective and outstanding order or temporary 
order issued under 12 U.S.C. 1817, 1818, 1820, 1828, 1829, 1831l, 
1831o, 1972, or 3909, or any provision thereof, in the appropriate 
United States District Court.


Sec. 303.277  Compliance plans under section 39 of the FDI Act (12 
U.S.C. 1831p-1) (standards for safety and soundness) and part 308 of 
this chapter.

    (a) Compliance plans. Authority is delegated to the Director and 
Deputy Director (DOS), and where confirmed in writing by the Director, 
to an associate director, and to the appropriate regional director and 
deputy regional director, to accept, to reject, to require new or 
revised compliance plans, or to make any other determinations with 
respect to the implementation of compliance plans pursuant to subpart R 
of part 308 of this chapter.
    (b) Notices, orders, and other action. Authority is delegated to 
the Director and Deputy Director (DOS) and, where confirmed in writing 
by the Director, to an associate director, to:
    (1) Issue notices of intent to issue an order requiring the bank to 
correct a safety and soundness deficiency or to take or refrain from 
taking other actions pursuant to section 39 of the FDI Act (12 U.S.C. 
1831p-1) and in accordance with the requirements contained in 
Sec. 308.304(a)(1) of this chapter;
    (2) Issue an order requiring the bank immediately to correct a 
safety and soundness deficiency or to take or refrain from taking other 
actions pursuant to section 39 of the FDI Act (12 U.S.C. 1831p-1) and 
in accordance with the requirements contained in Sec. 308.304(a)(2) of 
this chapter; and
    (3) Act on requests for modification or rescission of an order.

[[Page 44750]]

    (c) Legal concurrence--compliance plans. The authority delegated 
under this section as to compliance plans shall be exercised only upon 
the concurrent certification by the General Counsel or, where confirmed 
in writing by the General Counsel, by his or her designee, or, in cases 
where a regional director or deputy regional director accepts, rejects 
or requires new or revised compliance plans or makes any other 
determinations with respect to compliance plans, by the appropriate 
regional counsel, that the action taken is not inconsistent with the 
FDI Act.
    (d) Legal concurrence--notices and orders. The authority delegated 
under this section as to notices and orders shall be exercised only 
upon the concurrent certification by the General Counsel or, where 
confirmed in writing by the General Counsel, by his or her designee 
that the allegations contained in the notice of intent, if proven, 
constitute a basis for the issuance of a final order pursuant to 
section 39 of the FDI Act or that the issuance of a final order is not 
inconsistent with section 39 of the FDI Act or that the stipulated 
section 39 order is not inconsistent with section 39 of the FDI Act and 
is an order which has become final for purposes of enforcement pursuant 
to the FDI Act.


Sec. 303.278  Enforcement matters where authority is not delegated.

    Without limiting the Board of Directors' authority, the Board of 
Directors has retained the authority to act upon the following 
enforcement matters:
    (a) Notifications to primary regulator under section 8(a) of the 
FDI Act (12 U.S.C. 1818(a)) when the respondent bank's book capital is 
at or above 2 percent of total assets and adjusted Tier 1 capital is at 
or above 2 percent of adjusted part 325 total assets as defined in 
Sec. 303.2(b);
    (b) Orders terminating insured status under section 8(a) of the FDI 
Act (12 U.S.C. 1818(a));
    (c) Cease-and-desist orders under section 8(b) of the FDI Act (12 
U.S.C. 1818(b)) when the respondent depository institution or 
individual does not consent to the issuance of such orders;
    (d) Temporary orders of suspension and prohibition under section 
8(e) of the FDI Act (12 U.S.C. 1818(e));
    (e) Orders of removal, suspension or prohibition from participation 
in the conduct of the affairs of an insured depository institution 
under section 8(e) of the FDI Act (12 U.S.C. 1818(e)) when the 
individual does not consent to the issuance of such orders;
    (f) Orders of suspension or prohibition to an indicted director, 
officer or person participating in the conduct of the affairs of an 
insured depository institution and orders of removal or prohibition to 
a convicted director, officer or person participating in the conduct of 
the affairs of an insured depository institution under section 8(g) of 
the FDI Act (12 U.S.C. 1818(g)) when such director, officer or person 
does not consent to the suspension or removal;
    (g) Final orders to pay civil money penalties where respondents do 
not consent to the assessment of civil money penalties and hearings 
have been held;
    (h) Denials of requests for modifications or terminations of orders 
issued pursuant to section 8(g) of the FDI Act;
    (i) Grants or denials of requests for reinstatement to office, 
whether or not an informal hearing has been requested, pursuant to 
Sec. 308.203 of this chapter; and
    (j) Grants or denials of requests for waivers of liability of 
commonly controlled insured depository institutions as to assessments 
under section 5(e) of the FDI Act (12 U.S.C. 1815(e)).

PART 333--EXTENSION OF CORPORATE POWERS

    2. The authority citation for part 333 continues to read as 
follows:

    Authority: 12 U.S.C. 1816, 1818, 1819 (``Seventh'', ``Eighth'' 
and ``Tenth''), 1828, 1828(m), 1831p-1(c).

    3. Section 333.4 is amended by adding the word ``and'' at the end 
of paragraph (d)(2), by removing the words ``; and'' at the end of 
paragraph (d)(3) and adding a period in their place, by revising the 
last sentence of paragraph (a), removing paragraphs (b) and (d)(4), and 
redesignating paragraphs (c), (d), (e) and (f) as paragraphs (b), (c), 
(d) and (e) respectively, to read as follows:


Sec. 333.4  Conversions from mutual to stock form.

    (a) * * * As provided in Sec. 303.162 of this chapter, the Board of 
Directors of the FDIC may grant a waiver in writing from any 
requirement of this section for good cause shown.
* * * * *

PART 337--UNSAFE AND UNSOUND BANKING PRACTICES

    4. The authority citation for part 337 is revised to read as 
follows:

    Authority: 12 U.S.C. 375a(4), 375b, 1816, 1818(a), 1818(b), 
1819, 1820(d)(10), 1821f, 1828(j)(2), 1831, 1831f-l.

    5. Section 337.6 is amended by revising paragraph (a)(5)(iii), 
adding a sentence at the end of paragraph (c), removing paragraphs (d), 
(e), and (f) and redesignating paragraphs (g) and (h) as paragraphs (d) 
and (e), respectively, to read as follows:


Sec. 337.6  Brokered deposits.

    (a) * * *
    (5) * * *
    (iii) Notwithstanding paragraph (a)(5)(ii) of this section, the 
term deposit broker includes any insured depository institution that is 
not well-capitalized, and any employee of any such insured depository 
institution, which engages, directly or indirectly, in the solicitation 
of deposits by offering rates of interest (with respect to such 
deposits) which are significantly higher than the prevailing rates of 
interest on deposits offered by other insured depository institutions 
in such depository institution's normal market area.
* * * * *
    (c) * * * For filing requirements, consult 12 CFR 303.243.
* * * * * *

PART 341--REGISTRATION OF SECURITIES TRANSFER AGENTS

    6. The authority citation for part 341 continues to read as 
follows:

    Authority: Secs. 2, 3, 17, 17A and 23(a), Securities Exchange 
Act of 1934, as amended (15 U.S.C. 78b, 78c, 78q, 78q-1 and 78w(a)).

    7. Section 341.7 is added to read as follows:


Sec. 341.7  Delegation of authority.

    (a) Except as provided in paragraph (b) of this section, authority 
is delegated to the Director and Deputy Director (DOS) and, where 
confirmed in writing by the Director, to an associate director and the 
appropriate regional director and deputy regional director, to act on 
disclosure matters under and pursuant to sections 17 and 17A of the 
Securities Exchange Act of 1934 (15 U.S.C. 78).
    (b) Authority to act on disclosure matters is retained by the Board 
of Directors when such matters involve exemption from registration 
requirements pursuant to section 17A(c)(1) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78q-1(c)(1)).

PART 347--INTERNATIONAL BANKING

    8. The authority to citation for part 347 continues to read as 
follows:

    Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820, 1828, 3103, 
3104, 3105, 3108; Title IX, Pub. L. 98-181, 97 Stat. 1153.

[[Page 44751]]

Subpart D [Removed]

    9. In part 347, subpart D is removed.

PART 359--GOLDEN PARACHUTE AND INDEMNIFICATION PAYMENTS

    10. The authority citation for part 359 continues to read as 
follows:

    Authority: 12 U.S.C. 1828(k).

    11. Section 359.6 is revised to read as follows:


Sec. 359.6  Filing instructions.

    Requests to make excess nondiscriminatory severance plan payments 
pursuant to Sec. 359.1(f)(2)(v) and golden parachute payments permitted 
by Sec. 359.4 shall be submitted in writing to the appropriate regional 
director (DOS). For filing requirements, consult 12 CFR 303.244. In the 
event that the consent of the institution's primary federal regulator 
is required in addition to that of the FDIC, the requesting party shall 
submit a copy of its letter to the FDIC to the institution's primary 
federal regulator. In the case of national banks, such written requests 
shall be submitted to the OCC. In the case of state member banks and 
bank holding companies, such written requests shall be submitted to the 
Federal Reserve district bank where the institution or holding company, 
respectively, is located. In the case of savings associations and 
savings association holding companies, such written requests shall be 
submitted to the OTS regional office where the institution or holding 
company, respectively, is located. In cases where only the prior 
consent of the institution's primary federal regulator is required and 
that agency is not the FDIC, a written request satisfying the 
requirements of this section shall be submitted to the primary federal 
regulator as described in this section.

    By order of the Board of Directors.

    Dated at Washington, D.C., this 7th day of July, 1998.

Federal Deposit Insurance Corporation.
James LaPierre,
Deputy Executive Secretary.
[FR Doc. 98-21487 Filed 8-19-98; 8:45 am]
BILLING CODE 6714-01-P