[Federal Register Volume 63, Number 211 (Monday, November 2, 1998)]
[Rules and Regulations]
[Pages 58620-58622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29097]


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FEDERAL RESERVE SYSTEM

12 CFR Parts 208, 211, 215, 225, 262, 263, and 265

[Regulations H, K, O, and Y; Docket No. R-1021]


Membership of State Banking Institutions in the Federal Reserve 
System; International Banking Operations; Loans to Executive Officers, 
Directors, and Principal Shareholders of Member Banks; Bank Holding 
Companies and Change in Bank Control; Rules of Practice for Hearings; 
and Rules Regarding Delegation of Authority

AGENCY: Board of Governors of the Federal Reserve System (Board).

ACTION: Final rule; technical amendments.

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SUMMARY: The Board published an amendment to Regulation H (Membership 
of State Banking Institutions in the Federal Reserve System) that 
appeared in the Federal Register on July 13, 1998. This document 
corrects cross references to Regulation H that appear in Regulations H, 
K, O, Y, the Rules of Practice for Hearings, and the Rules Regarding 
Delegation of Authority (Parts 208, 211, 215, 225, 262, 263, and 265).

EFFECTIVE DATE: November 2, 1998.

FOR FURTHER INFORMATION CONTACT: Jean Anderson, Staff Attorney, Legal 
Division (202/452-3707). For the hearing impaired only, 
Telecommunications Device for the Deaf (TDD), Diane Jenkins (202/452-
3544).

SUPPLEMENTARY INFORMATION:

Background

    The Board published amendments to Regulation H (12 CFR part 208) in 
the Federal Register on July 13, 1998 (63 FR 37629), in order to 
reorganize, clarify, and reduce the burden of compliance with Subpart A 
of Regulation H. This document corrects cross references to Regulation 
H that appear in Regulations H, K, O, Y, the Rules of Practice for 
Hearings and the Rules Regarding Delegation of Authority (parts 208, 
211, 215, 225, 262, 263, and 265).

List of Subjects

12 CFR Part 208

     Accounting, Agriculture, Banks, banking, Confidential business 
information, Crime, Currency, Federal Reserve System, Mortgages, 
Reporting and recordkeeping requirements, Securities.

12 CFR Part 211

    Exports, Federal Reserve System, Foreign banking, Holding 
companies, Investments, Reporting and recordkeeping requirements.

12 CFR Part 215

    Credit, Federal Reserve System, Penalties, Reporting and 
recordkeeping requirements.

12 CFR Part 225

    Administrative practice and procedure, Banks, banking, Federal 
Reserve System, Holding companies, Reporting and recordkeeping 
requirements, Securities.

12 CFR Part 262

    Administrative practice and procedure, Federal Reserve System.

12 CFR Part 263

    Administrative practice and procedure, Claims, Crime, Equal access 
to justice, Federal Reserve System, Lawyers, Penalties.

12 CFR Part 265

    Authority delegations (Government agencies), Banks, banking, 
Federal Reserve System.

    For the reasons set forth in the preamble, the Board is amending 
parts 208, 211, 215, 225, 262, 263, and 265 in chapter II of title 12 
of the Code of Federal Regulations as follows:

PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL 
RESERVE SYSTEM (REGULATION H)

    1.The authority citation for part 208 continues to read as follows:

    Authority: 12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321-338a, 
371d, 461, 481-486, 601, 611, 1814, 1816, 1818, 1823(j), 1828(o), 
1831o, 1831p-1, 1831r-1, 1835a, 1882, 2901-2907, 3105, 3310, 3331-
3351, and 3906-3909; 15 U.S.C. 78b, 78l(b), 78l(g), 78l(i), 78o-
4(c)(5), 78q, 78q-1, and 78w; 31 U.S.C. 5318; 42 U.S.C. 4012a, 
4104a, 4104b, 4106 and 4128.

    2. In Sec. 208.3, paragraph (c)(1)(ii) is amended by adding the 
acronym ``CAMELS,'' after the word ``received.''
    3. Section 208.3 is amended by revising the last sentence in 
paragraph (d)(1) to read as follows:


Sec. 208.3  Application and conditions for membership in the Federal 
Reserve System.

* * * * *
    (d) * * *
    (1) * * * (The Interagency Guidelines Establishing Standards for 
Safety and Soundness and Year 2000 Standards for Safety and Soundness 
prescribed pursuant to section 39 of the FDI Act (12

[[Page 58621]]

U.S.C. 1831p-1), as set forth in appendices D-1 and D-2 to this part, 
apply to all member banks.)
* * * * *


Sec. 208.6  [Amended]

    4. In Sec. 208.6, paragraph (c)(1)(ii) is amended by adding the 
acronym ``CAMELS,'' on the third line after the word ``received.''
    5. In Appendix A to part 208, the following amendments are made:
    a. Section III.B.5.b. is amended by removing the reference to ``(12 
CFR 208.30)'' and adding in its place ``(12 CFR 208.40).''
    b. Section III.B.5.d.(i) is amended by removing the reference to 
``(12 CFR 208.33(b))'' and adding in its place ``(12 CFR 
208.43(b)(1)).''
    c. Section III.B.5.d.(ii) is amended by removing the reference to 
``(12 CFR 208.33(c))'' and adding in its place ``(12 CFR 208.43(c)).''
    6. In Appendix B to part 208, the following amendments are made:
    a. Section II.d. is amended by removing the reference to ``(12 CFR 
208.30)'' and adding in its place ``(12 CFR 208.40).''
    b. Section II.f.(i) is amended by removing the reference to ``(12 
CFR 208.33(b))'' and adding in its place ``(12 CFR 208.43(b)(1)).''
    c. Section II.f.(ii) is amended by removing the reference to ``(12 
CFR 208.33(c))'' and adding in its place ``(12 CFR 208.43(c)).''
    7. In Appendix C to part 208, in the paragraph immediately 
following the heading, footnote 5 is redesignated as footnote 1 and the 
new footnote 1 is amended by removing the reference to ``12 CFR part 
208, subpart C'' and adding in its place ``12 CFR part 208, subpart 
E.''

PART 211--INTERNATIONAL BANKING OPERATIONS (REGULATION K)

    1. The authority citation for part 211 continues to read as 
follows:

    Authority: 12 U.S.C. 221 et seq., 1818, 1835a, 1841 et seq., 
3101 et seq., and 3901 et seq.


Sec. 211.2  [Amended]

    2. In Sec. 211.2, paragraph (u)(1) is amended by removing the 
reference to ``12 CFR 208.33(b)(1)'' and adding in its place ``12 CFR 
208.43(b)(1).''


Sec. 211.8  [Amended]

    3. In Sec. 211.8, the paragraph is amended by removing the 
reference to ``Sec. 208.20'' and adding in its place ``Sec. 208.62'' 
and by removing the reference to ``12 CFR 208.20'' and adding in its 
place ``12 CFR 208.62.''


211.22  [Amended]

    4. In Sec. 211.22, paragraph (d) is amended by removing the 
reference to ``Sec. 208.28'' and adding in its place ``Sec. 208.7'' and 
by removing the reference to ``(12 CFR 208.28)'' and adding in its 
place ``(12 CFR 208.7).''


Sec. 211.24  [Amended]

    5. In Sec. 211.24, paragraph (f) is amended by removing the 
reference to ``Sec. 208.20'' and adding in its place ``Sec. 208.62'' 
and by removing the reference to ``12 CFR 208.20'' and adding in its 
place ``12 CFR 208.62.''
    6. In Sec. 211.24, paragraph (h) is amended by removing the 
reference to ``12 CFR 208.25'' and by adding in its place ``12 CFR 
208.37.''

PART 215--LOANS TO EXECUTIVE OFFICERS, DIRECTORS, AND PRINCIPAL 
SHAREHOLDERS OF MEMBER BANKS (REGULATION O)

    1. The authority citation for part 215 continues to read as 
follows:

    Authority: 12 U.S.C. 248(i), 375a(10), 375b(9) and (10), 
1817(k)(3) and 1972(2)(G)(ii); Pub.L. 102-242, 105 Stat. 2236.


Sec. 215.3  [Amended]

    2. In Sec. 215.3, paragraph (a)(3) is amended by removing the 
reference to ``Sec. 208.8(d) of this chapter'' and by adding in its 
place ``Sec. 208.24 of this chapter.''

PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL 
(REGULATION Y)

    1. The authority citation for part 225 continues to read as 
follows:

    Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1, 
1843(c)(8), 1844(b), 1972(l), 3106, 3108, 3310, 3331-3351, 3907, and 
3909.


Sec. 225.4  [Amended]

    2. In Sec. 225.4, paragraph (d) is amended by removing the term 
``municipal securities dealer'' from the heading and the phrase ``a 
municipal securities dealer,'' from the text; by removing the reference 
to ``Secs. 208.8(0)-(j)'' and adding in its place ``Secs. 208.31-
208.33''; and by removing the reference to ``(12 CFR 208.8(f)-(j))'' 
and adding in its place ``(12 CFR 208.31-208.33).''
    3. In Sec. 225.4, paragraph (f) is amended by removing the 
reference to ``Sec. 208.20'' and adding in its place ``Sec. 208.62'' 
and by removing the reference to ``(12 CFR 208.20)'' and by adding in 
its place ``(12 CFR 208.62).''

Appendix A to Part 225 [Amended]

    4. In Appendix A to part 225, section III.B.5.b. is amended by 
removing the reference to ``(12 CFR 208.30)'' and adding in its place 
``(12 CFR 208.40.)''

PART 262--RULES OF PROCEDURE

    1. The authority citation for part 262 continues to read as 
follows:

    Authority: 5 U.S.C. 552, 12 U.S.C. 321, 1828(c), and 1842.

Sec. 262.3  [Amended]

    2. In Sec. 262.3, paragraphs (b)(1)(i)(A) and (b)(1)(i)(C) are 
removed and paragraphs (b)(1)(i)(B), (b)(1)(i)(D), and (b)(1)(i)(E) are 
redesignated as paragraphs (b)(1)(i)(A) through (b)(1)(i)(C), 
respectively.

PART 263--RULES OF PRACTICE FOR HEARINGS

    1. The authority citation for part 263 continues to read as 
follows:

    Authority: 5 U.S.C. 504; 12 U.S.C. 248, 324, 504, 505, 1817(j), 
1818, 1828(c), 1831o, 1831p-1, 1847(b), 1847(d), 1884(b), 
1972(2)(F), 3105, 3107, 3108, 3907, 3909; 15 U.S.C. 21, 78o-4, 78o-
5, 78u-2; and 28 U.S.C. 2461 note.


Sec. 263.201  [Amended]

    2. In Sec. 263.201, paragraph (a) is amended by removing the 
reference to ``subpart B of part 208'' and adding in its place 
``subpart D of part 208.''


Sec. 263.203  [Amended]

    3. In Sec. 263.203, paragraph (a)(1)(i)(A) is amended by removing 
the reference ``Sec. 208.33(c) of Regulation H (12 CFR 208.33(c))'' and 
by adding in its place `` 208.43(c) of Regulation H (12 CFR 
208.43(c)).''


Sec. 263.205  [Amended]

    4. In Sec. 263.205, paragraph (b)(2) is amended by removing the 
reference to ``subpart B of Regulation H (12 CFR part 208, subpart B)'' 
and adding in its place ``subpart D of Regulation H (12 CFR part 208, 
subpart D).''

PART 265--RULES REGARDING DELEGATION OF AUTHORITY

    1. The authority citation for part 265 continues to read as 
follows:

    Authority: 12 U.S.C. 248(i) and (k).


Sec. 265.7  [Amended]

    2. In 265.7, paragraphs (f)(6)(i) and (ii) are amended by removing 
the reference to ``Sec. 208.16'' and adding in their place 
``Sec. 208.36.''
    3. Section 265.11 is amended as follows:
    a. Paragraph (a)(7) is amended by removing the reference to ``(12 
CFR 208.11(c))'' and adding in its place ``(12 CFR 209.3(e)).''
    b. Paragraph (e)(1) is revised.
    c. Paragraph (e)(3) is revised.

[[Page 58622]]

    d. Paragraph (e)(4) introductory text is revised.
    e. Paragraph (e)(5) introductory text is revised.
    f. Paragraph (e)(7) is revised.
    g. Paragraph (e)(8) is amended by removing the reference to 
``Regulation P (12 CFR 216)'' and adding in its place ``Regulation H 
(12 CFR part 208).''
    h. Paragraph (e)(12) is revised.
    The revisions read as follows:


Sec. 265.11  Functions delegated to Federal Reserve Banks.

* * * * *
    (e) Member banks--(1) Approval of membership applications. To 
approve applications for membership in the Federal Reserve System under 
section 9 of the Federal Reserve Act (12 USC 321 et seq.) and 
Regulation H (12 CFR part 208) if the Reserve Bank is satisfied that 
approval is warranted after considering the factors set forth in 12 CFR 
208.3(b).
* * * * *
    (3) Approval of branch applications. To approve a state member 
bank's establishment of a domestic branch under section 9 of the 
Federal Reserve Act (12 USC 321 et seq.) and Regulation H (12 CFR part 
208) if the Reserve Bank is satisfied that approval is warranted after 
considering the factors set forth in 12 CFR 208.6(b).
    (4) Declaration of dividends in excess of net profits. To permit a 
state member bank under section 9(6) of the Federal Reserve Act (12 USC 
324 and 60) to declare dividends in excess of the amounts allowed in 12 
CFR 208.5(c) if the Reserve Bank is satisfied that approval is 
warranted after giving consideration to:
 * * * * *
    (5) Reduction of capital stock. To permit a state member bank under 
section 9(11) of the Federal Reserve Act (12 USC 239) to reduce its 
capital stock below the amounts set forth in 12 CFR 208.5(d) if the 
state member bank's capitalization thereafter will be:
 * * * * *
    (7) Investment in bank premises in excess of capital stock. To 
permit a state member bank to invest in bank premises under section 24A 
of the Federal Reserve Act (12 USC 371a) in an amount in excess of that 
set forth in 12 CFR 208.21(a), if the Reserve Bank is satisfied that 
approval is warranted after giving consideration to the bank's 
capitalization in relation to the character and condition of its assets 
and to its deposit liabilities and other corporate responsibilities, 
including the volume of its risk assets and of its marginal and 
inferior quality assets, all considered in relation to the strength of 
its management.
 * * * * *
    (12) Public welfare investments. To permit a state member bank to 
make a public welfare investment that meets the conditions of 12 CFR 
208.22(b)(1)-(3), (b)(5) and (b)(7), if the Reserve Bank is satisfied 
that:
    (i) The state member bank received at least an overall rating of 
``3'' as of its most recent consumer compliance examination; and
    (ii) The aggregate of all such investments of the state member bank 
does not exceed 10 percent of its capital stock and surplus as defined 
under 12 CFR 208.2(d).
 * * * * *
    By order of the Board of Governors of the Federal Reserve 
System, October 26, 1998.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 98-29097 Filed 10-30-98; 8:45 am]
BILLING CODE 6210-01-P