[Federal Register Volume 72, Number 248 (Friday, December 28, 2007)]
[Notices]
[Page 73823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-25128]


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FEDERAL DEPOSIT INSURANCE CORPORATION


Statement of Policy for Section 19 of the Federal Deposit 
Insurance Act

AGENCY: Federal Deposit Insurance Corporation (``FDIC'').

ACTION: Final agency policy statement (amended).

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SUMMARY: On October 13, 2006, Section 19 of the Federal Deposit 
Insurance Act was modified to address institution-affiliated parties 
participating in the affairs of Bank Holding Companies and Savings and 
Loan Holding Companies. The FDIC is introducing a footnote to its 
Statement of Policy for Section 19 of the Federal Deposit Insurance Act 
(``SOP'') that will provide the public with a better understanding of 
the FDIC's scope given the Federal Reserve System's and Office of 
Thrift Supervision's new authority under Section 19. The FDIC is not 
seeking comment on the footnote clarifying the SOP, and the change is 
effective upon publication in the Federal Register.

DATES: The change to the policy statement is effective December 28, 
2007.

FOR FURTHER INFORMATION CONTACT: Martin P. Thompson, Review Examiner 
(202) 898-6767, or John P. Henrie, Field Supervisor, (678) 916-2220 in 
the Division of Supervision and Consumer Protection; or Michael P. 
Condon, Counsel, (202) 898-6536, or Richard Bogue, Counsel, (202) 898-
3726, in the Legal Division.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. 1829, 
prohibits, without the prior written consent of the FDIC, a person 
convicted of any criminal offense involving dishonesty or breach of 
trust or money laundering, or who has agreed to enter into a pretrial 
diversion or similar program in connection with a prosecution for such 
offense, from becoming or continuing as an institution-affiliated party 
(``IAP''), owning or controlling, directly or indirectly, an insured 
depository institution (``insured institution''), or otherwise 
participating, directly or indirectly, in the conduct of the affairs of 
the insured institution. In addition, the law forbids an insured 
institution from permitting such a person to engage in any conduct or 
to continue any relationship prohibited by Section 19. The FDIC's SOP 
was enacted in November 1998 to provide the public with guidance 
relating to Section 19, and the application thereof.
    The Financial Services Regulatory Relief Act of 2006 \1\ modified 
Section 19 to address IAPs affiliated with Bank Holding Companies and 
Savings and Loan Holding Companies. The FDIC has amended the SOP to 
introduce a technical change that will provide the public with a better 
understanding of the FDIC's scope given the FRS' and OTS' new authority 
under Section 19.
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    \1\ This Statement of Policy applies only to insured depository 
institutions and their institution-affiliated parties. In addition 
to the requirement to file an application with the FDIC, such 
individuals may also need to comply with any filing requirements 
established by the Board of Governors of the Federal Reserve System 
under 12 U.S.C. Sec.  1829(d), in the case of a bank holding 
company, or with the Office of Thrift Supervision under 12 U.S.C. 
Sec.  1829(e), in the case of a savings and loan holding company.
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II. Clarifying Amendment to the Statement of Policy

FDIC Statement of Policy for Section 19 of the FDI Act

    1. The first sentence of the first paragraph of subsection A is 
amended by adding footnote number 1.
A. Scope of Section 19
    Section 19 covers institution-affiliated parties, as defined by 12 
U.S.C. 1813(u), and others who are participants in the conduct of the 
affairs of an insured institution.\1\ * * *
    By Order of the Board of Directors.

    Dated at Washington, DC, the 19th day of December 2007.

    Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. E7-25128 Filed 12-27-07; 8:45 am]
BILLING CODE 6714-01-P