[Federal Register Volume 67, Number 249 (Friday, December 27, 2002)]
[Rules and Regulations]
[Pages 79246-79270]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-31922]



[[Page 79245]]

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

Part II





Federal Deposit Insurance Corporation





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



12 CFR Part 303, et al.



Filing Procedures; Unsafe and Unsound Banking Practices; Registration 
of Transfer Agents; International Banking; Management Official 
Interlocks; and Golden Parachutes and Indemnification Payments; FDIC 
Statement of Policy on Bank Merger Transactions; Application for 
Deposit Insurance; Filing Procedures; Corporate Powers; Final Rule, 
Proposed Rule, and Notices

  Federal Register / Vol. 249, No. 67 / Friday, December 27, 2002 / 
Rules and Regulations  

[[Page 79246]]


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

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 303

RIN 3064-AC51


Filing Procedures; 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.

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

SUMMARY: The FDIC is amending its regulations governing application, 
notice and request procedures to reflect changes from an internal 
reorganization order, which included the consolidation of the Division 
of Supervision and the Division of Compliance and Consumer Affairs into 
the Division of Supervision and Consumer Protection. The FDIC has also 
determined that the delegations of authority found in its filing 
procedures regulation should be removed to allow for greater 
flexibility in its delegation and decision making process.

EFFECTIVE DATE: December 27, 2002.

FOR FURTHER INFORMATION CONTACT: Division of Supervision and Consumer 
Protection: Steven D. Fritts, Associate Director, 202/898/3723, Mindy 
West, Examination Specialist, 202/898/7221. Legal Division: Supervision 
and Legislation Branch, Susan van den Toorn, Counsel, 202/898/8707, 
Robert C. Fick, Counsel, 202/898/8962, FDIC, Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

    On July 2, 2002, the FDIC published in the Federal Register a final 
rule implementing the decision by the FDIC, through an internal 
reorganization order dated June 30, 2002 to merge certain divisions of 
the FDIC and, as a result, to change the names of the ``Division of 
Supervision'' ``DOS'' and the ``Division of Compliance and Consumer 
Affairs'' ``DCA'' to the ``Division of Supervision and Consumer 
Protection (DSC)'' and make changes to the names of other divisions of 
the FDIC. 67 FR 44351, July 2, 2002. The rule made the name changes to 
chapter III of title 12 of the Code of Federal Regulations. 
Specifically, the rule changed all references to the ``Division of 
Supervision'' and the ``Division of Compliance and Consumer Affairs'' 
to the ``Division of Supervision and Consumer Protection (DSC).'' The 
FDIC noted at that time that it intended to make further revisions to 
12 CFR chapter III to reflect other changes as a result of the 
reorganization. This final rule constitutes those changes. In chapter 
III, part 303 of the FDIC's regulations (12 CFR part 303) (part 303) 
contains the procedures to be followed with respect to applications, 
notices, or requests (collectively ``filings'') required to be filed by 
statute or regulation. With the creation of the new Division of 
Supervision and Consumer Protection (DSC), the internal FDIC 
administrative scheme set forth in the previous part 303, approved by 
the Board in 1998 (63 FR 44686, August 20, 1998), must be amended to 
reflect the new organizational structure.

II. Discussion

    Throughout part 303 there are numerous references to DOS and DCA 
and the Directors and Deputy Directors of those Divisions and an 
administrative scheme for the approval, denial or modification of 
applications, notices or requests based on the existence of two 
separate divisions. The FDIC's internal reorganization of those 
divisions thus necessitates a revision of the regulation to reflect the 
new structure. The new part 303 reflects that new organizational 
structure.
    A primary purpose of the new structure was to streamline management 
and certain decision making processes. To support these efforts and 
provide greater flexibility in the future, the FDIC decided to remove 
the delegation authority found in part 303. The FDIC Board of Directors 
has affirmed and adopted the delegations of authority for DSC to act on 
certain supervisory applications and enforcement actions. In addition, 
the Board has also authorized these delegations of authority to be 
transferred from its regulation in part 303 and reissued in a Financial 
Institution Letter. The delegations of authority state which 
individuals within the FDIC are authorized to approve or deny specific 
applications and issue enforcement actions and what authority the Board 
has retained. While the FDIC has codified these delegations in its 
rules and regulations for many years, there is no statutory requirement 
that the agency's internal delegations authority be published in its 
regulation. In order to provide the maximum amount of flexibility and 
efficiency, the FDIC is moving its delegation of authority from the 
regulation to its Internet Web site (http://www.fdic.gov), where the 
delegations will be maintained. The public will be able to access the 
delegations of authority to determine which individuals are authorized 
to act on behalf of the FDIC. Instructions relating to the filing of 
applications will remain in part 303 of the FDIC's regulations.

III. Public Comment Waiver and Effective Date

    As noted, this final rule reflects changes in part 303 as a result 
of the FDIC internal reorganization and does not affect any regulatory 
requirement imposed by the FDIC on the public. The changes are matters 
of ``agency organization, procedure, or practice'' and are thus not 
subject to the general requirement of the Administrative Procedure Act 
(APA) for notice and comment, pursuant to 5 U.S.C. 553(b)(3)(A). The 
changes are technical and non-substantive in nature and impact. Thus, 
the FDIC finds, for good cause, that the APA notice-and-comment 
provisions are unnecessary. 5 U.S.C. 553(b)(3)(B). This final rule is 
also effective immediately, because: (a) The changes are technical and 
procedural; (b) the public does not need a delayed period of time to 
conform or adjust; and (c) the current part 303 contains references to 
offices that have been merged with others and which should be corrected 
as promptly as possible. Therefore, it is determined that good cause 
exists for making these amendments effective on publication in the 
Federal Register, pursuant to 5 U.S.C. 553(d)(3).

IV. Paperwork Reduction Act

    This final rule does not create or modify any collection of 
information pursuant to the Paperwork Reduction Act (44 U.S.C. 3501 et 
seq.). Consequently, no information has been submitted to the Office of 
Management and Budget for review.

V. Regulatory Flexibility Act

    A regulatory flexibility analysis under the Regulatory Flexibility 
Act (RFA) is required only when an agency must publish a notice of 
proposed rulemaking. 5 U.S.C. 603 and 604. As already noted, the FDIC 
has determined that publication of a notice of proposed rulemaking is 
not necessary here. Accordingly, the RFA does not require a regulatory 
flexibility analysis.

VI. Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that this final rule will not affect family 
well being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat. 
2681 (1998).

[[Page 79247]]

List of Subjects in 12 CFR Part 303

    Administrative practice and procedure, Bank deposit insurance, 
Banks, banking, Bank merger, Branching, Foreign branches, Foreign 
investments, Golden parachute payments, Reporting and record keeping 
requirements.


    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 revises 
12 CFR part 303 as follows:

PART 303--FILING PROCEDURES

Sec.
303.0 Scope.
Subpart A--Rules of General Applicability
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--303.13 [Reserved]
303.14 Being ``engaged in the business of receiving deposits other 
than trust funds.''
303.15--303.19 [Reserved]
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--303.39 [Reserved]
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--303.59 [Reserved]
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--303.79 [Reserved]
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--303.99 [Reserved]
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--303.119 [Reserved]
Subpart G--Activities of Insured State Banks
303.120 Scope.
303.121 Filing procedures.
303.122 Processing.
303.123-303.139 [Reserved]
Subpart H-Activities of Insured Savings Associations
303.140 Scope.
303.141 Filing procedures.
303.142 Processing.
303.143-303.159 [Reserved]
Subpart I--Mutual-to-Stock Conversions
303.160 Scope.
303.161 Filing procedures.
303.162 Waiver from compliance.
303.163 Processing.
303.164-303.179 [Reserved]
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 Investmentby insured state nonmember banks in foreign 
organizations; Sec.  347.108.
303.184 Moving an insured branch of a foreign bank.
303.185 Merger 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
303.188-303.199 [Reserved]
Subpart K--Prompt Corrective Action
303.200 Scope.
303.201 Filing procedures.
303.202 Processing.
303.203 Applications for capital distribution.
303.204 Applicationsfor acquisitions, branching, and new lines of 
business.
303.205 Applications for bonuses and increased compensation for 
senior executive officers.
303.206 Application for payment of principal or interest on 
subordinated debt.
303.207 Restricted activities for critically undercapitalized 
institutions.
303.208-303.219 [Reserved]
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.
303.224-303.239 [Reserved]
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.
303.253-303.259 [Reserved]
Subpart N--[Reserved]

    Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817, 1818, 1819, 
(Seventh and Tenth), 1820, 1823, 1828, 1831e, 1831p-l, 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.
    (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.

    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

[[Page 79248]]

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.


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 
designee 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 designee 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 and appropriate regional director mean, 
respectively, the FDIC region and the FDIC regional director 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 FDIC 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, and the appropriate regional director is the regional 
director for that region; 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 FDIC region for the institution 
and any individual associated with the 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, and the 
appropriate regional director is the regional director for that region.
    (h) Associate director means any associate director of the Division 
of Supervision and Consumer Protection (DSC) or, in the event such 
title become obsolete, any official of equivalent authority within the 
division.
    (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 and Consumer Protection (DSC) or, in the event such title 
become obsolete, any official of equivalent or higher authority within 
the division.
    (n) Deputy regional director means any deputy regional director of 
the Division of Supervision and Consumer Protection (DSC) or, in the 
event such title become obsolete, any official of equivalent authority 
within the same FDIC region of DSC.
    (o) Appropriate FDIC office means the office designated by the 
appropriate regional director or designee.
    (p) DSC means the Division of Supervision and Consumer Protection 
or, in the event the Division of Supervision and Consumer Protection is 
reorganized, such successor division.
    (q) Director means the Director of the Division of Supervision and 
Consumer Protection (DSC) or, in the event such title become obsolete, 
any official of equivalent or higher authority within the division.
    (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 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)).
    (aa) Regional counsel means a regional counsel of the Legal 
Division or, in the event the title becomes

[[Page 79249]]

obsolete, any official of equivalent authority within the Legal 
Division.
    (bb) Regional director means any regional director in the Division 
of Supervision and Consumer Protection (DSC), or in the event such 
title become obsolete, any official of equivalent authority within the 
division.
    (cc) [Reserved]
    (dd) Standard conditions means the conditions that the FDIC may 
impose as a routine matter when approving a 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 ] 303.61(a) 
of this part), 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.
    (ee) Tier 1 capital shall have the same meaning as provided in ] 
325.2(v) of this chapter (12 CFR 325.2(v)).
    (ff) Total assets shall have the same meaning as provided in ] 
325.2(x) of this chapter (12 CFR 325.2(x)).


Sec.  303.3  General filing procedures.

    Unless stated otherwise, filings should be submitted to the 
appropriate FDIC office. Forms and instructions for submitting filings 
may be obtained from any FDIC regional director. 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 FDIC 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 
FDIC office 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;
    (v) The address of the appropriate FDIC office where comments may 
be sent (the same location where the filing will be made);
    (vi) The closing date of the public comment period as specified in 
the appropriate subpart; and
    (vii) That the nonconfidential portions of the application are on 
file in the appropriate FDIC 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 of the Federal 
Deposit Insurance Corporation at the appropriate FDIC office [insert 
address of 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 at the 
appropriate FDIC 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.

[[Page 79250]]

    (e) Joint public notices. For a transaction subject to public 
notice requirements by the FDIC and another 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 appropriate FDIC office 
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 ' 303.8(c). 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 FDIC office. The public file 
will be produced for review not more than one business day after 
receipt by the appropriate FDIC 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(f) 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, Attn: FOIA/Privacy Group, Legal Division, 550 17th 
Street, NW., Washington, DC 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 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 FDIC 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 FDIC determines that other good cause exists.
    (3) Solicitation of comments. Whenever appropriate, the appropriate 
regional director 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 
Sec.  303.10 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 before the end of the 
comment period; or
    (ii) To the appropriate regional director, 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, 
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, 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 send a copy of the notice of hearing to

[[Page 79251]]

the applicant, to the person requesting the hearing, and to anyone else 
requesting a copy.
    (2) The presiding officer shall be the regional director or 
designee or such other person as may be named by the Board or the 
Director. 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 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, 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 Sec.  303.10.
    (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 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 regional director 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. The 
resolution shall be made available for public inspection and copying in 
the Office of the General Counsel, Executive Secretary Section 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 General Counsel, Executive 
Secretary Section 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 FDIC 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 (International 
Banking), expedited processing will not be available for any filing 
that the appropriate regional director does not have delegated 
authority to approve.
    (2) Removal of filing from expedited processing. The FDIC 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 
determines that the filing presents a significant CRA or compliance 
concern;
    (iii) For any filing, the appropriate regional director 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 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 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
    (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

[[Page 79252]]

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), change 
in senior executive officer or board of directors (subpart F) or denial 
of an application pursuant to section 19 of the FDI Act (subpart L) 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) and (3) 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.
    (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) [Reserved]
    (5) [Reserved]
    (6) Processing. The FDIC 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 Sec.  303.11(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. 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:
    (i) 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
    (ii) That the decision on the filing is contrary to law or 
regulation or was granted due to clerical or administrative error.
    (iii) 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 
Sec.  303.11(g)(2)(ii), before taking action under this Sec.  
303.11(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 Sec.  
303.11(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 of 
this part. 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 Sec.  
303.11(g).
    (4) Effective date. All orders issued pursuant to this section 
shall become effective immediately upon issuance unless otherwise 
stated therein.


Sec. Sec.  303. 12-303.13  [Reserved]


Sec.  303.14  Being ``engaged in the business of receiving deposits 
other than trust funds.''

    (a) Except as provided in paragraphs (b), (c), and (d) of this 
section, a depository institution shall be ``engaged in the business of 
receiving deposits other than trust funds'' only if it maintains one or 
more non-trust deposit accounts in the minimum aggregate amount of 
$500,000.
    (b) An applicant for federal deposit insurance under section 5 of 
the FDI Act, 12 U.S.C. 1815(a), shall be deemed to be ``engaged in the 
business of receiving deposits other than trust funds'' from the date 
that the FDIC approves deposit insurance for the institution until one 
year after it opens for business.
    (c) Any depository institution that fails to satisfy the minimum 
deposit standard specified in paragraph (a) of this section as of two 
consecutive call report dates (i.e., March 31st, June 30th, September 
30th, and December 31st) shall be subject to a determination by the 
FDIC that the institution is not ``engaged in the business of receiving 
deposits other than trust funds'' and to termination of its insured 
status under section 8(p) of the FDI Act, 12 U.S.C. 1818(p). For 
purposes of this paragraph, the first three call report dates after the 
institution opens for business are excluded.
    (d) Notwithstanding any failure by an insured depository 
institution to satisfy the minimum deposit standard in paragraph (a) of 
this section, the institution shall continue to be ``engaged in the 
business of receiving deposits other than trust funds'' for purposes of 
section 3 of the FDI Act until the institution's insured status is 
terminated by the FDIC pursuant to a proceeding under section 8(a) or 
section 8(p) of the FDI Act. 12 U.S.C. 1818(a) or 1818(p).


Sec. Sec.  303.15-303.19  [Reserved]

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

[[Page 79253]]

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.


Sec.  303.21  Filing procedures.

    (a) Applications for deposit insurance shall be filed with the 
appropriate FDIC office. 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 
director.
    (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 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 FDIC office. Comments by interested parties must be 
received by the appropriate regional director 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 
FDIC office. 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 
FDIC office. 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 FDIC 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

[[Page 79254]]

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. Sec.  303.26--303.39  [Reserved]

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


Sec.  303.40  Scope.

    (a) General. This subpart sets forth the application requirements 
and procedures 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 FDIC 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. 1 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 FDIC office 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 (1 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 (1 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;
    (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 
of this subpart, 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

[[Page 79255]]

U.S.C. 1831o and 1828(d)) may be filed concurrently or as a single 
application.
    (d) Additional information. The FDIC 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 
inSec.  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(c) 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 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 FDIC office 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 FDIC office, 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 FDIC 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 FDIC 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. Sec.  303.46-303.59  [Reserved]

Subpart D--Merger Transactions


Sec.  303.60  Scope.

    This subpart sets forth the application requirements and procedures 
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'' (1 FDIC Law, Regulations, Related Acts 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

[[Page 79256]]

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 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'' (1 FDIC 
Law, Regulations, Related Acts (FDIC) 5391; see Sec.  309.4(a) and (b) 
of this chapter for availability.)
    (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 FDIC office. The appropriate forms and 
instructions may be obtained upon request from any FDIC regional 
director.
    (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 of this subpart; 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 (12 CFR part 325); 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

[[Page 79257]]

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 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 
FDIC office 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 FDIC office within 10 days after the first publication.


Sec. Sec.  303.66--303.79  [Reserved]

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)).


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 (12 U.S.C. 1817j).
    (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

[[Page 79258]]

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 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 
FDIC office within 90 calendar days after the acquisition and provides 
any relevant information requested by the FDIC.
    (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 FDIC office within 90 
calendar days after receiving notice of the acquisition and provides 
any relevant information requested by the FDIC.
    (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 FDIC office 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 director.
    (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 FDIC office 
immediately of any material changes in a notice submitted to the FDIC, 
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 FDIC 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 FDIC 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 appropriate FDIC office 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 FDIC office, 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 
FDIC office.
    (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

[[Page 79259]]

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 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 of the 
FDIC (give address of appropriate FDIC office) within 20 days following 
the required newspaper publication.


Sec. Sec.  303.87-303.99  [Reserved]

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. 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 FDIC 
office, to serve as a senior executive officer or 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 FDIC office 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

[[Page 79260]]

shall be filed with the appropriate FDIC office 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 director. The FDIC 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 FDIC office. The FDIC 
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. Sec.  303.104-303.119  [Reserved]

Subpart G--Activities of Insured State Banks


Sec.  303.120  Scope.

    This subpart sets forth procedures for complying with notice and 
application requirements contained in subpart A of part 362 of this 
chapter, governing insured state banks and their subsidiaries engaging 
in activities which are not permissible for national banks and their 
subsidiaries. This subpart sets forth procedures for complying with 
notice and application requirements contained in subpart B of part 362 
of this chapter, governing certain activities of insured state 
nonmember banks, their subsidiaries, and certain affiliates. This 
subpart also sets forth procedures for complying with the notice 
requirements contained in subpart E of part 362 of this chapter, 
governing subsidiaries of insured state nonmember banks engaging in 
financial activities.


Sec.  303.121  Filing procedures.

    (a) Where to file. A notice or application required by subpart A, 
subpart B, or subpart E of part 362 of this chapter shall be submitted 
in writing to the appropriate FDIC office.
    (b) Contents of filing. A complete letter notice or letter 
application shall include the following information:
    (1) Filings generally. (i) A brief description of the activity and 
the manner in which it will be conducted;
    (ii) The amount of the bank's existing or proposed direct or 
indirect investment in the activity as well as calculations sufficient 
to indicate compliance with any specific capital ratio or investment 
percentage limitation detailed in subpart A, B, or E of part 362 of 
this chapter;
    (iii) A copy of the bank's business plan regarding the conduct of 
the activity;
    (iv) A citation to the state statutory or regulatory authority for 
the conduct of the activity;
    (v) A copy of the order or other document from the appropriate 
regulatory authority granting approval for the bank to conduct the 
activity if such approval is necessary and has already been granted;
    (vi) A brief description of the bank's policy and practice with 
regard to any anticipated involvement in the activity by a director, 
executive office or principal shareholder of the bank or any related 
interest of such a person; and
    (vii) A description of the bank's expertise in the activity.
    (2) [Reserved]
    (3) Copy of application or notice filed with another agency. If an 
insured state bank has filed an application or notice with another 
federal or state regulatory authority which contains all of the 
information required by paragraph (b) (1) of this section, the insured 
state bank may submit a copy to the FDIC in lieu of a separate filing.
    (4) Additional information. The FDIC may request additional 
information to complete processing.


Sec.  303.122  Processing.

    (a) Expedited processing. A notice filed by an insured state bank 
seeking to commence or continue an activity under Sec.  
362.3(a)(2)(iii)(A)(2), Sec.  362.4(b)(3)(i), or Sec.  362.4(b)(5) of 
this chapter 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 a basis for that decision. The 
FDIC may remove the notice from expedited processing for any of the 
reasons set forth in Sec.  303.11(c)(2). Absent such removal, a notice 
processed under expedited processing is deemed approved 30 days after 
receipt of a complete notice by the FDIC (subject to extension for an 
additional 15 days upon written notice to the bank) or on such earlier 
date authorized by the FDIC in writing.
    (b) Standard processing for applications and notices that have been 
removed from expedited processing. For an application filed by an 
insured state bank seeking to commence or continue an activity under 
Sec.  362.3(a)(2)(iii)(A)(2), Sec.  362.3(b)(2)(i), Sec.  
362.3(b)(2)(ii)(A), Sec.  362.3(b)(2)(ii)(C), Sec.  362.4(b)(1), Sec.  
362.4(b)(4), Sec.  362.5(b)(2), or Sec.  362.8(b) or seeking a waiver 
or modification under Sec.  362.18(e) or Sec.  362.18(g)(3) of this 
chapter or for notices which are not processed pursuant to the 
expedited processing procedures, the FDIC will provide the insured 
State bank with written notification of the final action as soon as the 
decision is rendered. The FDIC will normally review and act in such 
cases within 60 days after receipt of a completed application or notice 
(subject to extension for an additional 30 days upon written notice to 
the bank), but failure of the FDIC to act prior to the expiration of 
these periods does not constitute approval.


Sec. Sec.  303.123-303.139  [Reserved]

Subpart H--Activities of Insured Savings Associations


Sec.  303.140  Scope.

    This subpart sets forth procedures for complying with the notice 
and application requirements contained in subpart C of part 362 of this 
chapter, governing insured state savings

[[Page 79261]]

associations and their service corporations engaging in activities 
which are not permissible for federal savings associations and their 
service corporations. This subpart also sets forth procedures for 
complying with the notice requirements contained in subpart D of part 
362 of this chapter, governing insured savings associations which 
establish or engage in new activities through a subsidiary.


Sec.  303.141  Filing procedures.

    (a) Where to file. All applications and notices required by subpart 
C or subpart D of part 362 of this chapter are to be in writing and 
filed with the appropriate FDIC office.
    (b) Contents of filing--(1) Filings generally. A complete letter 
notice or letter application shall include the following information:
    (i) A brief description of the activity and the manner in which it 
will be conducted;
    (ii) The amount of the association's existing or proposed direct or 
indirect investment in the activity as well as calculations sufficient 
to indicate compliance with any specific capital ratio or investment 
percentage limitation detailed in subpart C or D of part 362 of this 
chapter;
    (iii) A copy of the association's business plan regarding the 
conduct of the activity;
    (iv) A citation to the state statutory or regulatory authority for 
the conduct of the activity;
    (v) A copy of the order or other document from the appropriate 
regulatory authority granting approval for the association to conduct 
the activity if such approval is necessary and has already been 
granted;
    (vi) A brief description of the association's policy and practice 
with regard to any anticipated involvement in the activity by a 
director, executive officer or principal shareholder of the association 
or any related interest of such a person; and
    (vii) A description of the association's expertise in the activity.
    (2) [Reserved]
    (3) Copy of application or notice filed with another agency. If an 
insured savings association has filed an application or notice with 
another federal or state regulatory authority which contains all of the 
information required by paragraph (b)(1) of this section, the insured 
state bank may submit a copy to the FDIC in lieu of a separate filing.
    (4) Additional information. The FDIC may request additional 
information to complete processing.


Sec.  303.142  Processing.

    (a) Expedited processing. A notice filed by an insured state 
savings association seeking to commence or continue an activity under 
Sec.  362.11(b)(2)(ii) of this chapter 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 a basis for that 
decision. The FDIC may remove the notice from expedited processing for 
any of the reasons set forth in Sec.  303.11(c)(2). Absent such 
removal, a notice processed under expedited processing is deemed 
approved 30 days after receipt of a complete notice by the FDIC 
(subject to extension for an additional 15 days upon written notice to 
the bank) or on such earlier date authorized by the FDIC in writing.
    (b) Standard processing for applications and notices that have been 
removed from expedited processing. For an application filed by an 
insured state savings association seeking to commence or continue an 
activity under Sec.  362.11(a)(2)(ii), Sec.  362.11(b)(2)(i), Sec.  
362.12(b)(1) of this chapter or for notices which are not processed 
pursuant to the expedited processing procedures, the FDIC will provide 
the insured state savings association with written notification of the 
final action as soon as the decision is rendered. The FDIC will 
normally review and act in such cases within 60 days after receipt of a 
completed application or notice (subject to extension for an additional 
30 days upon written notice to the bank), but failure of the FDIC to 
act prior to the expiration of these periods does not constitute 
approval.
    (c) Notices of activities in excess of an amount permissible for a 
federal savings association; subsidiary notices. Receipt of a notice 
filed by an insured state savings association as required by Sec.  
362.11(b)(3) or Sec.  362.15 of this chapter will be acknowledged in 
writing by the FDIC. The notice will be reviewed at the appropriate 
FDIC office, which will take such action as it deems necessary and 
appropriate.


Sec. Sec.  303.143--303.159  [Reserved]

Subpart I--Mutual-To-Stock Conversions


Sec.  303.160  Scope.

    This subpart sets forth the notice requirements and procedures 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 FDIC office 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 FDIC office 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;

[[Page 79262]]

    (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 
inSec.  303.163 shall commence on the date of receipt of a 
substantially complete notice. The FDIC 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 FDIC office 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), 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. Sec.  303.164-303.179  [Reserved]

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.


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

[[Page 79263]]

the meaning of Sec.  303.2(r) if the insured branch:
    (1) Received an FDIC-assigned composite ROCA supervisory rating 
(which rates risk management, operational controls, compliance, and 
asset quality) 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 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 FDIC office 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 FDIC 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 FDIC office.
    (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 FDIC 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) of this part 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 FDIC office no later than 30 days after the branch is 
closed.


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 FDIC 
office no later than 30 days after taking such action. The FDIC 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 FDIC office.
    (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, 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

[[Page 79264]]

by subpart A of part 347, 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.
    (3) Additional information. The FDIC 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 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 FDIC office no later than 30 days after the divestiture.


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 FDIC office 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 of Policy on NEPA'' (1 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 
AStatement of Policy on NHPA'' (1 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 FDIC 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 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) Other approval criteria. (1) The FDIC may approve an 
application under this section if the criteria in paragraphs (d)(1)(i) 
through (d)(1)(vi) of this section is 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

[[Page 79265]]

been filed and remains unresolved, the Director or designee 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 FDIC, other than the standard conditions defined in 
Sec.  303.2(dd) which may be imposed without the applicant's written 
consent.


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 FDIC office.
    (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.
    (3) Additional information. The FDIC may request additional 
information to complete processing.
    (4) 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 FDIC 
office.
    (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 Sec. Sec.  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
    (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 FDIC 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 FDIC office.
    (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 FDIC may request additional 
information to complete processing.


Sec. Sec.  303.188-303.199  [Reserved]

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,

[[Page 79266]]

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 FDIC office. 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 of this 
part 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.


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

[[Page 79267]]

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.


Sec. Sec.  303.208--303.219  [Reserved]

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) Where to file. An application under section 19 of the FDI Act 
shall be filed with the appropriate FDIC office.
    (b) Contents of filing. Application forms may be obtained from any 
FDIC regional director. 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. Sec.  303.224--303.239  [Reserved]

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.


Sec.  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) Where to file. Applicants shall submit a letter application to 
the appropriate FDIC office.
    (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 (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 inSec.  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.


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) Where to file. Applicants shall submit to the appropriate FDIC 
office a completed form, ``Application for Consent To Exercise Trust 
Powers''. This form may be obtained from any FDIC regional director.
    (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.

[[Page 79268]]

    (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.


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) Where to file. Applicants shall submit a letter application to 
the appropriate FDIC office.
    (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 paragraph 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.


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).
    (b) Where to file. Applicants shall submit a letter application to 
the appropriate FDIC regional director.
    (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.

[[Page 79269]]

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) Where to file. Applicants shall submit a letter application to 
the appropriate FDIC office.
    (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.


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) Where to file. Applicants shall submit a letter application to 
the appropriate FDIC regional director. 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.


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) Where to file. Applicants shall submit a letter application to 
the appropriate FDIC office.
    (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.
    (e) Processing. The FDIC will provide the applicant with written 
notification of the final action when the decision is rendered.


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) Where to file. Applicants shall submit a letter application to 
the appropriate FDIC office.
    (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.


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.

[[Page 79270]]

    (b) Procedures to be followed in filing initial requests for 
relief. Requests for relief from reimbursement shall be filed with the 
appropriate FDIC office or 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 
for reconsideration and provide the applicant with written notification 
of its determination within 60 days of its receipt of the request for 
reconsideration.
    (e) 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 FDIC office for reconsideration of such request in 
accordance with the procedures set forth inSec.  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 (12 CFR part 348).
    (b) Where to file. Applicants shall submit a letter application to 
the appropriate FDIC office.
    (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 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.


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) Where to file. Applicants should submit a letter application to 
the appropriate FDIC regional director.
    (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.


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) Where to file. Applicants shall submit a letter application to 
the appropriate FDIC office.
    (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.


Sec. Sec.  303.253-303.259  [Reserved]

    By order of the Board of Directors.
    Dated at Washington, DC, this 3rd day of December, 2002.

Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. 02-31922 Filed 12-26-02; 8:45 am]
BILLING CODE 6714-01-P