[Federal Register Volume 65, Number 55 (Tuesday, March 21, 2000)]
[Rules and Regulations]
[Pages 15053-15057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-6849]



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  Federal Register / Vol. 65, No. 55 / Tuesday, March 21, 2000 / Rules 
and Regulations  

[[Page 15053]]



FEDERAL RESERVE SYSTEM

12 CFR Part 225

[Regulation Y; Docket No. R-1057]


Bank Holding Companies and Change in Bank Control

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Interim rule with request for public comments.

-----------------------------------------------------------------------

SUMMARY: The Board of Governors is adopting on an interim basis, 
effective immediately, amendments to the interim rule published in the 
Federal Register on January 25, 2000, that established procedures for 
bank holding companies and foreign banks that operate a branch, agency, 
or commercial lending company in the United States to elect to become 
financial holding companies. The rule was promulgated on an interim 
basis, effective March 11, 2000, to implement provisions of the 
recently enacted Gramm-Leach-Bliley Act that enable bank holding 
companies and foreign banks that meet applicable statutory requirements 
to become financial holding companies and thereby engage in a broader 
range of financial and other activities than are permissible for bank 
holding companies.
    As a result of its experience in processing elections under the 
interim rule, the Board is amending the interim rule to make three 
changes concerning the elections by foreign banks. First, in order to 
make the processing of elections by foreign banks parallel to the 
processing of elections filed by domestic bank holding companies, the 
interim rule is being amended to permit elections filed by foreign 
banks that meet the rule's well managed and well capitalized standards 
to become effective on the 31st day after filing, unless the Board 
finds the election ineffective or the foreign bank agrees to extend the 
review period. Second, in order to make the requirements for foreign 
banks consistent with the requirements imposed on bank holding 
companies, the Board is amending the interim rule to require that all 
U.S. depository institution subsidiaries (such as thrifts and nonbank 
trust companies) of electing foreign banks be well capitalized and well 
managed and have satisfactory or better composite and Community 
Reinvestment Act ratings. Third, the Board is amending the interim rule 
to encourage foreign banks that are chartered in countries where no 
other bank from that country has received a comprehensive consolidated 
supervision determination from the Board to use the pre-clearance 
process provided by the interim rule if such bank is considering making 
an financial holding company election. The Board also is seeking 
comment on whether comprehensive consolidated supervision should be 
required in connection with comparability determinations on capital and 
management. Finally, the Board is amending provisions of the interim 
rule applicable to bank holding companies by removing the compliance 
rating component from the definition of well managed for depository 
institutions for purposes of determining qualification as a financial 
holding company.
    The Board solicits comments on all aspects of the interim rule, 
including these amendments, and will amend the rule as appropriate in 
response to comments received.

DATES: These amendments to the interim rule are effective on March 15, 
2000. Comments on these amendments to the interim rule must be received 
by April 17, 2000.

ADDRESSES: Comments should refer to docket number R-1057 and should be 
sent to Ms. Jennifer J. Johnson, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue, NW, 
Washington, DC, 20551 or mailed electronically to 
[email protected]. Comments addressed to Ms. Johnson 
also may be delivered to the Board's mail room between the hours of 
8:45 a.m. and 5:15 p.m. and, outside of those hours, to the Board's 
security control room. Both the mail room and the security control room 
are accessible from the Eccles Building courtyard entrance, located on 
20th Street between Constitution Avenue and C Street, NW Members of the 
public may inspect comments in Room MP-500 of the Martin Building 
between 9:00 a.m. and 5:00 p.m. on weekdays.

FOR FURTHER INFORMATION CONTACT: Ann E. Misback, Assistant General 
Counsel (202/452-3788), Thomas M. Corsi, Managing Senior Counsel (202/
452-3275), or Christopher W. Clubb, Senior Counsel (202/452-3904), 
Legal Division; for the hearing impaired only, Telecommunications 
Device for the Deaf (TDD), Janice Simms (202) 872-4984.

SUPPLEMENTARY INFORMATION:

Background

    Title I of the Gramm-Leach-Bliley Act (Pub. L. No. 106-102, 113 
Stat. 1338 (1999)) amends section 4 of the Bank Holding Company Act (12 
U.S.C. 1843) (``BHC Act'') to authorize bank holding companies and 
foreign banks that qualify as ``financial holding companies'' to engage 
in securities, insurance, and other activities that are financial in 
nature or incidental to a financial activity. The Gramm-Leach-Bliley 
Act defines a financial holding company as a bank holding company that 
meets certain eligibility requirements. In order for a bank holding 
company to become a financial holding company and be eligible to engage 
in the new activities authorized under the Gramm-Leach-Bliley Act, the 
Act requires that all depository institutions controlled by the bank 
holding company be well capitalized and well managed. With regard to a 
foreign bank that operates a branch or agency or owns or controls a 
commercial lending company in the United States, the Act requires the 
Board to apply comparable capital and management standards that give 
due regard to the principle of national treatment and equality of 
competitive opportunity.
    In order to implement the provisions of the Gramm-Leach-Bliley Act 
governing the creation and conduct of financial holding companies, on 
January 19, 2000, the Board amended its Regulation Y by adding subpart 
I to establish procedures for bank holding companies as well as foreign 
banks that operate a branch, agency, or commercial lending company in 
the United States to elect to become financial holding companies. The 
Board promulgated the

[[Page 15054]]

rule on an interim basis, effective March 11, 2000 (65 FR 3785, January 
25, 2000).

Amendments to Interim Rule

    Based on its experience to date, the Board is amending the interim 
rule as it was issued on January 19, 2000, in order to address three 
issues that arose in connection with processing elections filed by 
foreign banks. In addition, the Board is amending the regulatory 
definition of well managed in the interim rule that is applicable to 
depository institutions for purposes of determining qualification for 
financial holding company status.
    With respect to the foreign bank provisions, the first amendment is 
intended to make the processing of elections filed by foreign banks 
parallel to the processing of elections filed by domestic bank holding 
companies. Under the provisions of the interim rule as issued on 
January 19, 2000, an election to become a financial holding company by 
a foreign bank or company is not effective until the Board makes an 
affirmative finding that the foreign bank's capital and management meet 
standards comparable to those applicable to U.S. banks owned by 
financial holding companies. In contrast, a domestic bank holding 
company's election to become a financial holding company is effective 
within 31 days of its filing unless the Board determines that it is 
ineffective.
    In adopting the interim rule, the Board was concerned that it would 
be unable to carry out its statutory responsibility to apply comparable 
standards to foreign banks within the constraint of a short notice 
process and thus adopted the review procedure described above. The 
Board's experience, however, in reviewing and acting on the elections 
filed by foreign banks that meet the standards set out in the interim 
rule indicates that such elections may be reviewed and comparable 
standards may be applied within a 31 day notice period. Accordingly, 
based on this experience and to accommodate concerns expressed 
regarding the difference in process applicable to foreign banks, the 
Board has decided to amend the interim rule to adopt a 31 day review 
process for foreign bank elections, as is currently applicable for bank 
holding company elections.
    Under the amendment, if a foreign bank meets the rule's 
quantitative capital requirements, as well as the well managed 
standards, an election filed by that foreign bank would become 
effective on the 31st day after filing, unless the Board were to find 
the election ineffective or the foreign bank agreed to extend the 
review period. The Board would retain the ability to find the election 
ineffective because the capital is not comparable to the capital 
required for a U.S. bank owned by a financial holding company. In 
addition, the rule is being amended to allow the Board to find an 
election ineffective if the Board does not have sufficient information 
to assess whether the foreign bank meets the standards. The Board is of 
the view that these changes would ensure that foreign banks that meet 
the rule's requirements will receive treatment on the same basis as 
U.S. bank holding companies. If a foreign bank does not meet the rule's 
specified requirements, it may nevertheless file a pre-clearance 
request for a specific determination on the comparability of its 
capital and management.
    The second change is intended to clarify the interim rule with 
respect to foreign banks that do not have a U.S. subsidiary bank, but 
may have other U.S. depository institution subsidiaries, such as 
thrifts and nonbank trust companies. As mentioned above, the Gramm-
Leach-Bliley Act requires that all depository institutions controlled 
by a bank holding company be well capitalized and well managed in order 
for that bank holding company to be eligible to become a financial 
holding company. The interim rule as issued on January 19, 2000, 
required only that a foreign bank and each of its U.S. branches, 
agencies, and commercial lending subsidiaries be well capitalized and 
well managed in order for the foreign bank to be eligible to be treated 
as a financial holding company. In order to make the requirements for 
foreign banks consistent with the requirement imposed on bank holding 
companies, the interim rule is being amended to require that all U.S. 
depository institution subsidiaries of the foreign bank must be well 
capitalized and well managed in order for the foreign bank to be 
eligible to be treated as a financial holding company. As a result, the 
rule also is being amended to require that the foreign bank certify in 
any declaration filed that its U.S. depository institution subsidiaries 
are well capitalized and well managed.
    The third change relates to the review of comprehensive 
consolidated supervision (``CCS'') in connection with financial holding 
company elections by foreign banks. Home country supervision is an 
important element in the determination that a bank is well managed and 
the Board expects that most foreign banks that elect to be treated as 
financial holding companies will be subject to comprehensive 
consolidated supervision. The interim rule permits a foreign bank or 
company to request a review of its qualifications to be treated as a 
financial holding company prior to formally filing its election. In 
order to facilitate the Board's review of whether the management of a 
foreign bank meets standards comparable to those required of a U.S. 
bank owned by a financial holding company, the interim rule is being 
amended to encourage foreign banks that have not been reviewed by the 
Board with respect to home country supervision and that are chartered 
in countries where no other bank from that country has received a CCS 
determination from the Board (including a determination that the home 
country supervisor is actively working toward a system of CCS) to use 
the pre-clearance process if such bank is considering making an 
election to be treated as a financial holding company. In addition, the 
Board is requesting comment on whether a foreign bank should be 
required to meet a CCS standard in order to be treated as a financial 
holding company.
    The amendment to the interim rule regarding bank holding companies 
is a revision of the definition of well managed applicable to a 
depository institution for purposes of determining qualification as a 
financial holding company under the Gramm-Leach-Bliley Act. For this 
purpose, the Board initially adopted the existing Regulation Y 
definition of well managed. The Board's definition requires that a 
depository institution have at least a satisfactory composite 
examination rating and at least a satisfactory rating for both 
management and compliance. This three-part definition was initially 
adopted by the Board as part of its effort to determine whether a bank 
holding company qualifies for expedited treatment in applications 
processing. In that context, a bank holding company qualified for 
expedited processing if 80 percent of the depository institution assets 
of the company were well managed. In order to become and remain a 
financial holding company under the Gramm-Leach-Bliley Act, all of the 
depository institution assets of a bank holding company must be well 
managed.
    The Gramm-Leach-Bliley Act does not address compliance ratings in 
determining whether an institution is well managed. Accordingly, the 
Board is amending its regulatory definition of ``well managed'' for 
purposes of determining qualification as a financial holding company to 
reflect the two-part test in the statute. Thus, a depository 
institution will be considered well

[[Page 15055]]

managed for this purpose if it has a satisfactory composite rating and 
a satisfactory rating for management.
    The Board continues to believe that compliance ratings are 
important, and will address issues relating to compliance in other 
contexts. In particular, the Board and other federal banking agencies 
have supervisory authority to take full action against an institution 
if compliance issues are raised. In addition, each agency may consider 
compliance ratings when determining whether to approve any merger or 
expansion proposal involving the depository institution or the parent 
bank holding company of the institution.
    For these reasons, the Board is amending its interim rule to remove 
the compliance rating component from the definition of well managed in 
Regulation Y for purposes of determining qualification as a financial 
holding company.

Regulatory Flexibility Act Analysis

    In accordance with section 3(a) of the Regulatory Flexibility Act 
(5 U.S.C. 603(a)), the Board published an initial regulatory 
flexibility analysis with the interim rule on January 25, 2000. The 
amendments contained herein do not change that analysis.

Administrative Procedure Act

    The interim rule became effective on March 11, 2000 without review 
of public comments. These amendments are effective March 15, 2000. 
Pursuant to 5 U.S.C. 553, the Board finds that it is impracticable to 
review public comments prior to the effective date of the interim rule, 
and that there is good cause to make the interim rule effective 
immediately, due to the fact that the rule sets forth procedures to 
implement statutory changes that became effective on March 11, 2000. 
The Board is seeking public comment on the interim rule until March 27, 
2000, and will accept comments on the amendments until April 17, 2000. 
The Board will amend the rule as appropriate after reviewing the 
comments.

Paperwork Reduction Act

    The amendments to the interim rule do not affect the collections of 
information outlined in the interim rule issued by the Board on January 
19, 2000.

List of Subjects in 12 CFR Part 225

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

    For the reasons set out in the preamble, the Board amends 12 CFR 
part 225 as follows:

PART 225--BANK HOLDING COMPANY 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), 1831(i), 1831p-
1, 1843(c)(8), 1844(b), 1972(l), 3106, 3108, 3310, 3331-3351, 3907, 
and 3909.

    2. Section 225.2(s)(1) introductory text is revised to read as 
follows:


Sec. 225.2  Definitions.

* * * * *
    (s) Well managed--(1) In general. Except as otherwise provided in 
this part, a company or depository institution is well managed if:
* * * * *

    3. In Sec. 225.81, paragraph (c) is redesignated as paragraph (d), 
and a new paragraph (c) is added to read as follows:


Sec. 225.81  What is a financial holding company?

* * * * *
    (c) Well managed--(1) In general. For purposes of this subpart, a 
depository institution is well managed if:
    (i) At its most recent inspection or examination or subsequent 
review by the appropriate Federal banking agency for the depository 
institution, the institution received:
    (A) At least a satisfactory composite rating; and
    (B) At least a satisfactory rating for management; or
    (ii) In the case of a depository institution that has not received 
an examination rating, the Board has determined, after a review of 
managerial and other resources of the depository institution and after 
consulting the appropriate Federal banking agency for the institution, 
that the institution is well managed.
    (2) Merged institutions. A depository institution that results from 
the merger of two or more depository institutions that are well managed 
shall be considered to be well managed unless the Board determines 
otherwise after consulting with the appropriate Federal banking agency 
for each depository institution involved in the merger.
* * * * *

    4. Sections 225.90 through 225.94 are revised to read as follows:


Sec. 225.90  What are the requirements for a foreign bank to be treated 
as a financial holding company?

    (a) Foreign banks as financial holding companies. A foreign bank 
that operates a branch or agency or owns or controls a commercial 
lending company in the United States, and any company that owns or 
controls such a foreign bank, will be treated as a financial holding 
company if:
    (1) The foreign bank, and any U.S. depository institution that is 
owned or controlled by the foreign bank or company, is and remains well 
capitalized and well managed; and
    (2) The foreign bank, or the company that owns the foreign bank, 
has made an effective election to be treated as a financial holding 
company under this subpart.
    (b) Standards for ``well capitalized.'' A foreign bank will be 
considered ``well capitalized'' if either:
    (1)(i) Its home country supervisor, as defined in Sec. 211.21 of 
the Board's Regulation K (12 CFR 211.21), has adopted risk-based 
capital standards consistent with the Capital Accord of the Basel 
Committee on Banking Supervision (Basel Accord);
    (ii) The foreign bank maintains a Tier 1 capital to total risk-
based assets ratio of 6 percent and a total capital to total risk-based 
assets ratio of 10 percent, as calculated under its home country 
standard;
    (iii) The foreign bank maintains a Tier 1 capital to total assets 
leverage ratio of at least 3 percent; and
    (iv) The foreign bank's capital is comparable to the capital 
required for a U.S. bank owned by a financial holding company; or
    (2) The foreign bank has obtained a determination from the Board 
under Sec. 225.91(c) that the foreign bank's capital is otherwise 
comparable to the capital that would be required of a U.S. bank owned 
by a financial holding company.
    (c) Standards for ``well managed.'' A foreign bank will be 
considered ``well managed'' if:
    (1) Each of the U.S. branches, agencies, and commercial lending 
subsidiaries of the foreign bank has received at least a satisfactory 
composite rating at its most recent assessment;
    (2) The home country supervisor of the foreign bank considers the 
overall operations of the foreign bank to be satisfactory or better; 
and
    (3) The management of the foreign bank meets standards comparable 
to those required of a U.S. bank owned by a financial holding company.

[[Page 15056]]

Sec. 225.91  How may a foreign bank elect to be treated as a financial 
holding company?

    (a) Filing requirement. A foreign bank that operates a branch or 
agency or owns or controls a commercial lending company in the United 
States, or a company that owns or controls such a foreign bank, may 
elect to be treated as a financial holding company by filing a written 
declaration with the appropriate Reserve Bank.
    (b) Contents of declaration. The declaration must:
    (1) State that the foreign bank or the company elects to be treated 
as a financial holding company;
    (2) Provide the risk-based and leverage capital ratios of the 
foreign bank as of the close of the most recent quarter and as of the 
close of the most recent audited reporting period;
    (3) Certify that the foreign bank meets the standards of well 
capitalized set out in Sec. 225.90(b)(1)(i), (ii) and (iii) or 
Sec. 225.90(b)(2) as of the date the foreign bank or company files its 
election;
    (4) Certify that the foreign bank is well managed as defined in 
Sec. 225.90(c)(1) as of the date the foreign bank or company files its 
election;
    (5) Certify that all U.S. depository institutions controlled by the 
foreign bank or company are well capitalized and well managed as of the 
date the foreign bank or company files its election; and
    (6) Provide the capital ratios for all relevant capital measures 
(as defined in section 38 of the Federal Deposit Insurance Act) as of 
the close of the previous quarter for each U.S. depository institution 
controlled by the foreign bank or company.
    (c) Pre-clearance process. Before filing an election to be treated 
as a financial holding company, a foreign bank or company may file a 
request for review of its qualifications to be treated as a financial 
holding company. The Board will endeavor to make a determination on 
such requests within 30 days of receipt. A foreign bank chartered in a 
country where no other bank from that country has been reviewed by the 
Board for comprehensive consolidated supervision under the Bank Holding 
Company Act or the International Banking Act is encouraged to use this 
process.


Sec. 225.92  How does an election by a foreign bank become effective?

    (a) In general. An election described in Sec. 225.91 is effective 
on the 31st day after the date that an election was received by the 
appropriate Federal Reserve Bank, unless the Board notifies the foreign 
bank or company prior to that time that:
    (1) The election is ineffective; or
    (2) The period is extended with the consent of the foreign bank or 
company making the election.
    (b) Earlier notification that an election is effective. The Board 
or the appropriate Federal Reserve Bank may notify a foreign bank or 
company that its election to be treated as a financial holding company 
is effective prior to the 31st day after the election was filed with 
the appropriate Federal Reserve Bank. Such notification must be in 
writing.
    (c) Under what circumstances will the Board find an election to be 
ineffective? An election to be treated as financial holding company 
shall not be effective if, during the period provided in paragraph (a) 
of this section, the Board finds that:
    (1) The foreign bank certificant, or any foreign bank that operates 
a branch or agency or owns or controls a commercial lending company in 
the United States and is controlled by a foreign company certificant, 
is not both well capitalized and well managed;
    (2) Any insured depository institution controlled by the foreign 
bank or company (except an institution excluded under paragraph (d) of 
this section) or any U.S. branch of a foreign bank that is insured by 
the Federal Deposit Insurance Corporation has not achieved at least a 
rating of ``satisfactory record of meeting community needs'' under 
Community Reinvestment Act at the institution's most recent 
examination;
    (3) Any U.S. depository institution subsidiary of the foreign bank 
or company is not both well capitalized and well managed; or
    (4) The Board does not have sufficient information to assess 
whether the foreign bank or company making the election meets the 
requirements of this subpart.
    (d) How is CRA performance of recently acquired insured depository 
institutions considered? An insured depository institution will be 
excluded for purposes of the review of CRA ratings described in 
paragraph (c)(2) of this section consistent with the provisions of 
Sec. 225.82(e).
    (e) Factors used in the Board's determination regarding 
comparability of capital and management. In determining whether a 
foreign bank is well capitalized and well managed in accordance with 
comparable capital and management standards, the Board will give due 
regard to national treatment and equality of competitive opportunity. 
In this regard, the Board may take into account the foreign bank's 
composition of capital, accounting standards, long-term debt ratings, 
reliance on government support to meet capital requirements, the extent 
to which the foreign bank is subject to comprehensive consolidated 
supervision, and other factors that may affect analysis of capital and 
management. The Board will consult with the home country supervisor for 
the foreign bank as appropriate.


Sec. 225.93  What are the consequences of a foreign bank failing to 
continue to meet applicable capital and management requirements?

    (a) Notice by the Board. If a foreign bank or company has made an 
effective election to be treated as a financial holding company under 
this subpart and the Board finds that the foreign bank, or any U.S. 
depository institution owned or controlled by the foreign bank or 
company, ceases to be well capitalized or well managed, the Board will 
notify the foreign bank or company in writing that it is not in 
compliance with the applicable requirement(s) for a financial holding 
company and identify the areas of noncompliance.
    (b) Notification by a financial holding company required. Promptly 
upon becoming aware that the foreign bank, or any U.S. depository 
institution owned or controlled by the foreign bank or company, has 
ceased to be well capitalized or well managed, the foreign bank, or any 
company that controls such foreign bank, must notify the Board and 
identify the area of noncompliance.
    (c) Execution of agreement acceptable to the Board--(1) Agreement 
required; time period. Within 45 days after receiving a notice under 
paragraph (a) of this section, the foreign bank or company must execute 
an agreement acceptable to the Board to comply with all applicable 
capital and management requirements.
    (2) Extension of time for executing agreement. Upon request by a 
company, the Board may extend the 45-day period under paragraph (c)(1) 
of this section if the Board determines that granting additional time 
is appropriate under the circumstances. A request by a company for 
additional time must include an explanation of why an extension is 
necessary.
    (3) Agreement requirements. An agreement required by paragraph 
(c)(1) of this section to correct a capital or management deficiency 
must:
    (i) Explain the specific actions that the foreign bank or company 
will take to correct all areas of noncompliance;
    (ii) Provide a schedule within which each action will be taken;
    (iii) Provide any other information that the Board may require; and

[[Page 15057]]

    (iv) Be acceptable to the Board.
    (d) Limitations during period of noncompliance. Until the Board 
determines that a company has corrected the conditions described in a 
notice under paragraph (a) of this section:
    (1) The Board may impose any limitations or conditions on the 
conduct or the U.S. activities of the foreign bank or company or any of 
its affiliates as the Board finds to be appropriate and consistent with 
the purposes of the Bank Holding Company Act; and
    (2) The company and its affiliates may not engage in any new 
activity in the United States or acquire control or shares of any 
company under section 4(k) of the Bank Holding Company Act (12 U.S.C. 
1843(k)) without prior approval from the Board.
    (e) Consequences of failure to correct conditions within 180 days--
(1) Termination of offices and divestiture. If a foreign bank or 
company does not correct the conditions described in a notice under 
paragraph (a) of this section within 180 days of receipt of the notice 
or such additional time as the Board may permit, the Board may order 
the foreign bank or company to terminate the foreign bank's U.S. 
branches and agencies and divest any commercial lending companies owned 
or controlled by the foreign bank or company. Such divestiture must be 
done in accordance with the terms and conditions established by the 
Board.
    (2) Alternative method of complying with a divestiture order. A 
foreign bank or company may comply with an order issued under paragraph 
(e)(1) of this section by ceasing to engage (both directly and through 
any subsidiary) in all activities that are not permissible for a 
foreign bank to conduct under sections 2(h) and 4(c) of the Bank 
Holding Company Act (12 U.S.C. 1841(h) and 1843(c)). The termination of 
activities must be done within the time period referred to in paragraph 
(e)(1) of this section and subject to terms and conditions acceptable 
to the Board.
    (f) Consultation with other Agencies. In taking any action under 
this section, the Board will consult with the relevant Federal and 
state regulatory authorities.


Sec. 225.94  What are the consequences of an insured branch or 
depository institution failing to maintain a satisfactory or better 
rating under the Community Reinvestment Act?

    (a) Insured branch as an ``insured depository institution.'' A U.S. 
branch of a foreign bank that is insured by the Federal Deposit 
Insurance Corporation shall be treated as an ``insured depository 
institution'' for purposes of Sec. 225.84.
    (b) Applicability. The provisions of Sec. 225.84, with the 
modifications contained in this section, shall apply to a foreign bank 
that operates an insured branch referred to in paragraph (a) of this 
section or an insured depository institution in the United States, and 
any company that owns or controls such a foreign bank, that has made an 
effective election under Sec. 225.92 in the same manner and to the same 
extent as they apply to a financial holding company.

    By order of the Board of Governors of the Federal Reserve 
System, March 15, 2000.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 00-6849 Filed 3-20-00; 8:45 am]
BILLING CODE 6210-01-P