[Title 12 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 1999 Edition]
[From the U.S. Government Publishing Office]
12
Banks and Banking
[[Page i]]
PARTS 300 TO 499
Revised as of January 1, 1999
CONTAINING
A CODIFICATION OF DOCUMENTS
OF GENERAL APPLICABILITY
AND FUTURE EFFECT
AS OF JANUARY 1, 1999
With Ancillaries
Published by
the Office of the Federal Register
National Archives and Records
Administration
as a Special Edition of
the Federal Register
[[Page ii]]
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON: 1999
For sale by U.S. Government Printing Office
Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328
[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 12:
Chapter III--Federal Deposit Insurance Corporation 3
Chapter IV--Export-Import Bank of the United States 427
Finding Aids:
Table of CFR Titles and Chapters........................ 481
Alphabetical List of Agencies Appearing in the CFR...... 499
Redesignation Tables.................................... 509
List of CFR Sections Affected--Transferred Regulations
Formerly Appearing in Title 12 CFR, Chapter V......... 515
List of CFR Sections Affected........................... 517
[[Page iv]]
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 12 CFR 303.0 refers
to title 12, part 303,
section 0.
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[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
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parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
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OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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OBSOLETE PROVISIONS
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[[Page vii]]
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Raymond A. Mosley,
Director,
Office of the Federal Register.
January 1, 1999.
[[Page ix]]
THIS TITLE
Title 12--Banks and Banking is composed of six volumes. The parts in
these volumes are arranged in the following order: parts 1-199, 200-219,
220-299, 300-499, 500-599, and part 600-end. The first volume containing
parts 1-199 is comprised of chapter I--Comptroller of the Currency,
Department of the Treasury. The second and third volumes containing
parts 200-299 are comprised of chapter II--Federal Reserve System. The
fourth volume containing parts 300-499 is comprised of chapter III--
Federal Deposit Insurance Corporation and chapter IV--Export-Import Bank
of the United States. The fifth volume containing parts 500-599 is
comprised of chapter V--Office of Thrift Supervision, Department of the
Treasury. The sixth volume containing part 600-end is comprised of
chapter VI--Farm Credit Administration, chapter VII--National Credit
Union Administration, chapter VIII--Federal Financing Bank, chapter IX--
Federal Housing Finance Board, chapter XI--Federal Financial
Institutions Examination Council, chapter XIV--Farm Credit System
Insurance Corporation, chapter XV--Department of the Treasury, chapter
XVII--Office of Federal Housing Enterprise Oversight, Department of
Housing and Urban Development and chapter XVIII--Community Development
Financial Institutions Fund, Department of the Treasury. The contents of
these volumes represent all of the current regulations codified under
this title of the CFR as of January 1, 1999.
Redesignation tables appear in the volumes containing parts 1-199,
parts 300-499, parts 500-599, and part 600-end.
For this volume, Gregory R. Walton was Chief Editor. The Code of
Federal Regulations publication program is under the direction of
Frances D. McDonald, assisted by Alomha S. Morris.
[[Page x]]
[[Page 1]]
TITLE 12--BANKS AND BANKING
(This book contains parts 300 to 499)
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Part
chapter iii--Federal Deposit Insurance Corporation.......... 303
chapter iv--Export-Import Bank of the United States......... 400
[[Page 3]]
CHAPTER III--FEDERAL DEPOSIT INSURANCE CORPORATION
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SUBCHAPTER A--PROCEDURE AND RULES OF PRACTICE
Part Page
300-302 [Reserved]
303 Filing procedures and delegations of
authority............................... 5
304 Forms, instructions, and reports............ 68
305-306 [Reserved]
307 Notification of changes of insured status... 72
308 Rules of practice and procedure............. 72
309 Disclosure of information................... 133
310 Privacy Act regulations..................... 146
311 Rules governing public observation of
meetings of the Corporation's Board of
Directors............................... 151
312 Assessment of fees upon entrance to or exit
from the Bank Insurance Fund or the
Savings Association Insurance Fund...... 156
SUBCHAPTER B--REGULATIONS AND STATEMENTS OF GENERAL POLICY
323 Appraisals.................................. 162
324 [Reserved]
325 Capital maintenance......................... 166
326 Minimum security devices and procedures and
Bank Secrecy Act compliance............. 211
327 Assessments................................. 213
328 Advertisement of membership................. 231
329 Interest on deposits........................ 235
330 Deposit insurance coverage.................. 238
331-332 [Reserved]
333 Extension of corporate powers............... 252
334 [Reserved]
335 Securities of nonmember insured banks....... 254
336 FDIC employees.............................. 260
337 Unsafe and unsound banking practices........ 263
338 Fair housing................................ 276
339 Loans in areas having special flood hazards. 280
340 [Reserved]
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341 Registration of securities transfer agents.. 284
342 [Reserved]
343 Insured State nonmember banks which are
municipal securities dealers............ 286
344 Recordkeeping and confirmation requirements
for securities transactions............. 287
345 Community reinvestment...................... 294
346 [Reserved]
347 International banking....................... 313
348 Management official interlocks.............. 336
349 Reports and public disclosure of
indebtedness of executive officers and
principal shareholders to a State
nonmember bank and its correspondent
banks................................... 340
350 Disclosure of financial and other
information by FDIC-insured State
nonmember banks......................... 343
351 [Reserved]
352 Nondiscrimination on the basis of handicap.. 346
353 Suspicious activity reports................. 350
357 Determination of economically depressed
regions................................. 352
359 Golden parachute and indemnification
payments................................ 353
360 Resolution and receivership rules........... 360
361 Minority and Women Outreach Program--
Contracting............................. 364
362 Activities of insured State banks and
insured savings associations............ 366
363 Annual independent audits and reporting
requirements............................ 387
364 Standards for Safety and Soundness.......... 396
365 Real Estate Lending Standards............... 401
366 Contractor Conflicts of Interest............ 406
367 Suspension and Exclusion of Contractor and
Termination of Contracts................ 413
368 Government securities sales practices....... 421
369 Prohibition against use of interstate
branches primarily for deposit
production.............................. 424
[[Page 5]]
SUBCHAPTER A--PROCEDURE AND RULES OF PRACTICE
PARTS 300-302 [RESERVED]
PART 303--FILING PROCEDURES AND DELEGATIONS OF AUTHORITY--Table of Contents
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 General rules governing delegations of authority.
303.13 Delegations of authority to officials in the Division of
Supervision and the Division of Compliance and Consumer
Affairs.
Subpart B--Deposit Insurance
303.20 Scope.
303.21 Filing procedures.
303.22 Processing.
303.23 Public notice requirements.
303.24 Application for deposit insurance for an interim institution.
303.25 Continuation of deposit insurance upon withdrawing from
membership in the Federal Reserve System.
303.26 Delegation of authority.
303.27 Authority retained by the FDIC Board of Directors.
Subpart C--Establishment and Relocation of Domestic Branches and Offices
303.40 Scope.
303.41 Definitions.
303.42 Filing procedures.
303.43 Processing.
303.44 Public notice requirements.
303.45 Special provisions.
303.46 Delegation of authority.
Subpart D--Merger Transactions
303.60 Scope.
303.61 Definitions.
303.62 Transactions requiring prior approval.
303.63 Filing procedures.
303.64 Processing.
303.65 Public notice requirements.
303.66 Delegation of authority.
303.67 Authority retained by the FDIC Board of Directors
Subpart E--Change in Bank Control
303.80 Scope.
303.81 Definitions.
303.82 Transactions requiring prior notice.
303.83 Transactions not requiring prior notice.
303.84 Filing procedures.
303.85 Processing.
303.86 Public notice requirements.
303.87 Delegation of authority.
Subpart F-- Change of Director or Senior Executive Officer
303.100 Scope.
303.101 Definitions.
303.102 Filing procedures and waiver of prior notice.
303.103 Processing.
303.104 Delegation of authority.
Subpart G--Activities of Insured State Banks
303.120 Scope.
303.121 Filing procedures.
303.122 Processing.
303.123 Delegation of authority.
Subpart H--Activities of Insured Savings Associations
303.140 Scope.
303.141 Filing procedures.
303.142 Processing.
303.143 Delegation of authority.
Subpart I--Mutual-to-Stock Conversions
303.160 Scope.
303.161 Filing procedures.
303.162 Waiver from compliance.
303.163 Processing.
303.164 Delegation of authority.
Subpart J--International Banking
303.180 Scope.
303.181 Definitions.
303.182 Establishing, moving or closing a foreign branch of a state
nonmember bank; Sec. 347.103.
303.183 Investment by insured state nonmember banks in foreign
organizations; Sec. 347.108.
303.184 Moving an insured branch of a foreign bank.
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303.185 Mergers transactions involving foreign banks or foreign
organizations.
303.186 Exemptions from insurance requirement for a state branch of a
foreign bank; Sec. 347.206.
303.187 Approval for an insured state branch of a foreign bank to
conduct activities not permissible for federal branches;
Sec. 347.213 .
Subpart K--Prompt Corrective Action
303.200 Scope.
303.201 Filing procedures.
303.202 Processing.
303.203 Applications for capital distribution.
303.204 Applications for acquisitions, branching, and new lines of
business.
303.205 Applications for bonuses and increased compensation for senior
executive officers.
303.206 Application for payment of principal or interest on
subordinated debt.
303.207 Restricted activities for critically undercapitalized
institutions.
303.208 Delegation of authority.
Subpart L--Section 19 of the FDI Act (Consent to Service of Persons
Convicted of Certain Criminal Offenses)
303.220 Scope.
303.221 Filing procedures.
303.222 Service at another insured depository institution.
303.223 Applicant's right to hearing following denial.
303.224 Delegation of authority.
Subpart M--Other Filings
303.240 General.
303.241 Reduce or retire capital stock or capital debt instruments.
303.242 Exercise of trust powers.
303.243 Brokered deposit waivers.
303.244 Golden parachute and severance plan payments.
303.245 Waiver of liability for commonly controlled depository
institutions.
303.246 Insurance fund conversions.
303.247 Conversion with diminution of capital.
303.248 Continue or resume status as an insured institution following
termination under section 8 of the FDI Act.
303.249 Truth in Lending Act--relief from reimbursement.
303.250 Management official interlocks.
303.251 Modification of conditions.
303.252 Extension of time.
Subpart N--Enforcement Delegations
303.260 Scope.
303.261 Issuance of notification to primary regulator under section
8(a) of the FDI Act (12 U.S.C. 1818(a)).
303.262 Issuance of notice of intention to terminate insured status
under section 8(a) of the FDI Act (12 U.S.C. 1818(a)).
303.263 Cease-and-desist actions under section 8(b) of the FDI Act (12
U.S.C. 1818(b)).
303.264 Temporary cease-and-desist orders under section 8(c) of the FDI
Act (12 U.S.C. 1818(c)).
303.265 Removal and prohibition actions under section 8(e) of the FDI
Act (12 U.S.C. 1818(e)).
303.266 Suspension and removal action under section 8(g) of the FDI Act
(12 U.S.C. 1818(g)).
303.267 Termination of insured status under section 8(p) of the FDI Act
(12 U.S.C. 1818(p)).
303.268 Termination of insured status under section 8(q) of the FDI Act
(12 U.S.C. 1818(q)).
303.269 Civil money penalties.
303.270 Notices of assessment under section 5(e) of the FDI Act (12
U.S.C. 1815(e)).
303.271 Prompt corrective action directives and capital plans under
section 38 of the FDI Act (12 U.S.C. 1831o) and part 325 of
this chapter.
303.272 Investigations under section 10(c) of the FDI Act (12 U.S.C.
1820(c)).
303.273 Unilateral settlement offers.
303.274 Acceptance of written agreements.
303.275 Modifications and terminations of enforcement actions and
orders.
303.276 Enforcement of outstanding enforcement orders.
303.277 Compliance plans under section 39 of the FDI Act (12 U.S.C.
1831p-1) (standards for safety and soundness) and part 308 of
this chapter.
303.278 Enforcement matters where authority is not delegated.
Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817, 1818, 1819
(Seventh and Tenth), 1820, 1823, 1828, 1831a, 1831e, 1831o, 1831p-1,
1835a, 3104, 3105, 3108, 3207; 15 U.S.C. 1601-1607.
Source: 63 FR 44713, Aug. 20, 1998, unless otherwise noted.
Sec. 303.0 Scope.
(a) This part describes the procedures to be followed by both the
FDIC and applicants with respect to applications, requests, or notices
(filings) required to be filed by statute or regulation. Additional
details concerning processing are explained in related FDIC statements
of policy. This part also sets forth delegations of authority from the
FDIC's Board of Directors to the Directors of the Division of
Supervision (DOS), the Division of Compliance and Consumer Affairs
(DCA), the General
[[Page 7]]
Counsel of the Legal Division, the Executive Secretary, and, in some
cases, their designees to act on certain filings and enforcement
matters.
(b) Additional application procedures may be found in the following
FDIC regulations:
(1) 12 CFR part 327--Assessments (Request for review of assessment
risk classification);
(2) 12 CFR part 328--Advertisement of Membership (Application for
temporary waiver of advertising requirements);
(3) 12 CFR part 345--Community Reinvestment (CRA strategic plans and
requests for designation as a wholesale or limited purpose institution);
Subpart A--Rules of General Applicability
Sec. 303.1 Scope.
This subpart A prescribes the general procedures for submitting
filings to the FDIC which are required by statute or regulation. This
subpart also prescribes the procedures to be followed by the FDIC,
applicants and interested parties during the process of considering a
filing, including public notice and comment. This subpart explains the
availability of expedited processing for eligible depository
institutions (defined in Sec. 303.2(r)). Certain terms used throughout
this part are also defined in this subpart. Finally, this subpart sets
forth general principles governing delegations of authority by the
FDIC's Board of Directors.
Sec. 303.2 Definitions.
For purposes of this part:
(a) Act or FDI Act means the Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.).
(b) Adjusted part 325 total assets means adjusted 12 CFR part 325
total assets as calculated and reflected in the FDIC's Report of
Examination.
(c) Adverse comment means any objection, protest, or other adverse
written statement submitted by an interested party relative to a filing.
The term adverse comment shall not include any comment concerning the
Community Reinvestment Act (CRA), fair lending, consumer protection, or
civil rights that the appropriate regional director or deputy regional
director (DCA) determines to be frivolous (for example, raising issues
between the commenter and the applicant that have been resolved). The
term adverse comment also shall not include any other comment that the
appropriate regional director or deputy regional director (DOS)
determines to be frivolous (for example, a non-substantive comment
submitted primarily as a means of delaying action on the filing).
(d) Amended order to pay means an order to forfeit and pay civil
money penalties, the amount of which has been changed from that assessed
in the original notice of assessment of civil money penalties.
(e) Applicant means a person or entity that submits a filing to the
FDIC.
(f) Application means a submission requesting FDIC approval to
engage in various corporate activities and transactions.
(g) Appropriate FDIC region, appropriate FDIC regional office,
appropriate regional director, appropriate deputy regional director,
appropriate regional counsel mean, respectively, the FDIC region, and
the FDIC regional office, regional director, deputy regional director,
and regional counsel, which the FDIC designates as follows:
(1) When an institution or proposed institution that is the subject
of a filing or administrative action is not and will not be part of a
group of related institutions, the appropriate region for the
institution and any individual associated with the institution is the
FDIC region in which the institution or proposed institution is or will
be located; or
(2) When an institution or proposed institution that is the subject
of a filing or administrative action is or will be part of a group of
related institutions, the appropriate region for the institution and any
individual associated with the institution is the FDIC region in which
the group's major policy and decision makers are located, or any other
region the FDIC designates on a case-by-case basis.
(h) Associate director means any associate director of the Division
of Supervision (DOS) or the Division of Compliance and Consumer Affairs
(DCA) or, in the event such titles become obsolete,
[[Page 8]]
any official of equivalent authority within the respective divisions.
(i) Book capital means total equity capital which is comprised of
perpetual preferred stock, common stock, surplus, undivided profits and
capital reserves, as those items are defined in the instructions of the
Federal Financial Institutions Examination Council (FFIEC) for the
preparation of Consolidated Reports of Condition and Income for insured
banks.
(j) Comment means any written statement of fact or opinion submitted
by an interested party relative to a filing.
(k) Corporation or FDIC means the Federal Deposit Insurance
Corporation.
(l) CRA protest means any adverse comment from the public related to
a pending filing which raises a negative issue relative to the Community
Reinvestment Act (CRA) (12 U.S.C. 2901 et seq.), whether or not it is
labeled a protest and whether or not a hearing is requested.
(m) Deputy Director means the Deputy Director of the Division of
Supervision (DOS) or the Deputy Director of the Division of Compliance
and Consumer Affairs (DCA) or, in the event such titles become obsolete,
any official of equivalent or higher authority within the respective
divisions.
(n) Deputy regional director means any deputy regional director of
the Division of Supervision (DOS) or the Division of Compliance and
Consumer Affairs (DCA) or, in the event such titles become obsolete, any
official of equivalent authority within the same FDIC region of DOS or
DCA.
(o) DCA means the Division of Compliance and Consumer Affairs or, in
the event the Division of Compliance and Consumer Affairs is
reorganized, such successor division.
(p) DOS means the Division of Supervision or, in the event the
Division of Supervision is reorganized, such successor division.
(q) Director means the Director of the Division of Supervision (DOS)
or the Director of the Division of Compliance and Consumer Affairs (DCA)
or, in the event such titles become obsolete, any official of equivalent
or higher authority within the respective divisions.
(r) Eligible depository institution means a depository institution
that meets the following criteria:
(1) Received an FDIC-assigned composite rating of 1 or 2 under the
Uniform Financial Institutions Rating System (UFIRS) as a result of its
most recent federal or state examination;
(2) Received a satisfactory or better Community Reinvestment Act
(CRA) rating from its primary federal regulator at its most recent
examination, if the depository institution is subject to examination
under part 345 of this chapter;
(3) Received a compliance rating of 1 or 2 from its primary federal
regulator at its most recent examination;
(4) Is well-capitalized as defined in the appropriate capital
regulation and guidance of the institution's primary federal regulator;
and
(5) Is not subject to a cease and desist order, consent order,
prompt corrective action directive, written agreement, memorandum of
understanding, or other administrative agreement with its primary
federal regulator or chartering authority.
(s) Filing means an application, notice or request submitted to the
FDIC under this part.
(t) General Counsel means the head of the Legal Division of the FDIC
or any official within the Legal Division exercising equivalent
authority for purposes of this part.
(u) Insider means a person who is or is proposed to be a director,
officer, organizer, or incorporator of an applicant; a shareholder who
directly or indirectly controls 10 percent or more of any class of the
applicant's outstanding voting stock; or the associates or interests of
any such person.
(v) Institution-affiliated party shall have the same meaning as
provided in section 3(u) of the Act (12 U.S.C. 1813(u)).
(w) NEPA means the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.).
(x) NHPA means the National Historic Preservation Act of 1966 (16
U.S.C. 470 et seq.).
[[Page 9]]
(y) Notice means a submission notifying the FDIC that a depository
institution intends to engage in or has commenced certain corporate
activities or transactions.
(z) Notice of assessment of civil money penalties means a notice of
assessment of civil money penalties, findings of fact and conclusions of
law, and order to pay issued pursuant to sections 7(a)(1), 7(j)(15),
8(i) or 18(h) of the Act (12 U.S.C. 1817(a)(1), 1817(j)(15), 1818(i), or
1828(h)), section 106(b) of the Bank Holding Company Act (12 U.S.C.
1972), section 910(d) of the International Lending Supervision Act of
1983 (12 U.S.C. 3909), or any other provision of law providing for the
assessment of civil money penalties by the FDIC.
(aa) Notice of charges means a notice of charges and of hearing
setting forth the allegations of unsafe or unsound practices or
violations and fixing the time and place of the hearing issued under
section 8(b) of the Act (12 U.S.C. 1818(b)).
(bb) Notice to primary regulator means the notice described in
section 8(a)(2)(A) of the Act concerning termination of deposit
insurance (12 U.S.C. 1818(a)(2)(A)).
(cc) Regional counsel means a regional counsel of the Legal Division
or, in the event the title becomes obsolete, any official of equivalent
authority within the Legal Division. The authority delegated to a
regional counsel may be exercised, when confirmed in writing by the
regional counsel, by a deputy regional counsel, or any official of
equivalent or higher authority in the Supervision and Legislation Branch
of the Legal Division.
(dd) Regional director means any regional director in the Division
of Supervision (DOS) or the Division of Compliance and Consumer Affairs
(DCA), or in the event such titles become obsolete, any official of
equivalent authority within the respective divisions.
(ee) Section 8 orders:
(1) Section 8(a) order means an order terminating the insured status
of a depository institution under section 8(a) of the Act (12 U.S.C.
1818(a)).
(2) Section 8(b) order, cease-and-desist order means a final order
to cease and desist issued under section 8(b) of the Act (12 U.S.C.
1818(b)).
(3) Section 8(c) order, temporary cease-and-desist order means a
temporary order to cease and desist issued under section 8(c) of the Act
(12 U.S.C. 1818(c)).
(4) Section 8(e) order means a final order of removal or prohibition
issued under section 8(e) of the Act (12 U.S.C. 1818(e)).
(5) Section 8(e)(3) order, temporary order of suspension means a
temporary order of suspension or prohibition issued under section
8(e)(3) of the Act (12 U.S.C. 1818(e)(3)).
(6) Section 8(g) order means an order of suspension or order of
prohibition issued under section 8(g) of the Act (12 U.S.C. 1818(g)).
(ff) Standard conditions means the conditions that any FDIC official
acting under delegated authority may impose as a routine matter when
approving a filing, whether or not the applicant has agreed to their
inclusion. The following conditions, or variations thereof, are standard
conditions:
(1) That the applicant has obtained all necessary and final
approvals from the appropriate federal or state authority or other
appropriate authority;
(2) That if the transaction does not take effect within a specified
time period, or unless, in the meantime, a request for an extension of
time has been approved, the consent granted shall expire at the end of
the specified time period;
(3) That until the conditional commitment of the FDIC becomes
effective, the FDIC retains the right to alter, suspend or withdraw its
commitment should any interim development be deemed to warrant such
action; and
(4) In the case of a merger transaction (as defined in
Sec. 303.61(a)), including a corporate reorganization, that the proposed
transaction not be consummated before the 30th calendar day (or shorter
time period as may be prescribed by the FDIC with the concurrence of the
Attorney General) after the date of the order approving the merger
transaction.
(gg) Tier 1 capital shall have the same meaning as provided in
Sec. 325.2(t) of this chapter.
(hh) Total assets shall have the same meaning as provided in
Sec. 325.2(v) of this chapter.
[[Page 10]]
Sec. 303.3 General filing procedures.
Unless stated otherwise, filings should be submitted to the
appropriate regional director (DOS). Forms and instructions for
submitting filings may be obtained from any FDIC regional office (DOS).
If no form is prescribed, the filing should be in writing; be signed by
the applicant or a duly authorized agent; and contain a concise
statement of the action requested. For specific filing and content
requirements, consult the appropriate subparts of this part. The FDIC
may require the applicant to submit additional information.
Sec. 303.4 Computation of time.
For purposes of this part, the FDIC begins computing the relevant
period on the day after an event occurs (e.g., the day after a
substantially complete filing is received by the FDIC or the day after
publication begins) through the last day of the relevant period. When
the last day is a Saturday, Sunday or federal holiday, the period runs
until the end of the next business day.
Sec. 303.5 Effect of Community Reinvestment Act performance on filings.
Among other factors, the FDIC takes into account the record of
performance under the Community Reinvestment Act (CRA) of each applicant
in considering a filing for approval of:
(a) The establishment of a domestic branch;
(b) The relocation of the bank's main office or a domestic branch;
(c) The relocation of an insured branch of a foreign bank;
(d) A transaction subject to the Bank Merger Act; and
(e) Deposit insurance.
Sec. 303.6 Investigations and examinations.
The Board of Directors, Directors of (DOS) or (DCA), the associate
directors, or the appropriate regional director or appropriate deputy
regional director (DOS) or (DCA) acting under delegated authority may
examine or investigate and evaluate facts related to any filing under
this chapter to the extent necessary to reach an informed decision and
take any action necessary or appropriate under the circumstances.
Sec. 303.7 Public notice requirements.
(a) General. The public must be provided with prior notice of a
filing to establish a domestic branch, relocate a domestic branch or the
main office, relocate an insured branch of a foreign bank, engage in a
merger transaction, initiate a change of control transaction, or request
deposit insurance. The public has the right to comment on, or to
protest, these types of proposed transactions during the relevant
comment period. In order to fully apprise the public of this right, an
applicant shall publish a public notice of its filing in a newspaper of
general circulation. For specific publication requirements, consult
subparts B (Deposit Insurance), C (Branches and Relocations), D (Merger
Transactions), E (Change in Bank Control), and J (International Banking)
of this part.
(b) Confirmation of publication. The applicant shall mail or
otherwise deliver a copy of the newspaper notice to the appropriate
regional director (DOS) as part of its filing, or, if a copy is not
available at the time of filing, promptly after publication.
(c) Content of notice. (1) The public notice referred to in
paragraph (a) of this section shall consist of the following:
(i) Name and address of the applicant(s). In the case of an
application for deposit insurance for a de novo bank, include the names
of all organizers or incorporators. In the case of an application to
establish a branch, include the location of the proposed branch or, in
the case of an application to relocate a branch or main office, include
the current and proposed address of the office. In the case of a merger
application, include the names of all parties to the transaction. In the
case of a notice of acquisition of control, include the name(s) of the
acquiring parties. In the case of an application to relocate an insured
branch of a foreign bank, include the current and proposed address of
the branch;
(ii) Type of filing being made;
(iii) Name of the depository institution(s) that is the subject
matter of the filing;
(iv) That the public may submit comments to the appropriate FDIC
regional director (DOS);
[[Page 11]]
(v) The address of the appropriate FDIC regional office (DOS) where
comments may be sent (the same location that where the filing will be
made);
(vi) The closing date of the public comment period as specified in
the appropriate subpart of this part; and
(vii) That the nonconfidential portions of the application are on
file in the regional office and are available for public inspection
during regular business hours; photocopies of the nonconfidential
portion of the application file will be made available upon request.
(2) The requirements of paragraphs (c)(1)(iv) through (vii) of this
section may be satisfied through use of the following notice:
Any person wishing to comment on this application may file his or
her comments in writing with the regional director (DOS) of the Federal
Deposit Insurance Corporation at its regional office [insert address of
regional office] not later than [insert closing date of the public
comment period specified in the appropriate subpart of part 303]. The
non-confidential portions of the application are on file in the regional
office and are available for public inspection during regular business
hours. Photocopies of the nonconfidential portion of the application
file will be made available upon request.
(d) Multiple transactions. The FDIC may consider more than one
transaction, or a series of transactions, to be a single filing for
purposes of the publication requirements of this section. When
publishing a single public notice for multiple transactions, the
applicant shall explain in the public notice how the transactions are
related. The closing date of the comment period shall be the closing
date of the longest public comment period that applies to any of the
related transactions.
(e) Joint public notices. For a transaction subject to public notice
requirements by the FDIC and another federal or state banking authority,
the FDIC will accept publication of a single joint notice containing all
the information required by both the FDIC and the other federal agency
or state banking authority, provided that the notice states that
comments must be submitted to the FDIC and, if applicable, the other
federal or state banking authority.
(f) Where public notice is required, the FDIC may determine on a
case-by-case basis that unusual circumstances surrounding a particular
filing warrant modification of the publication requirements.
Sec. 303.8 Public access to filing.
(a) General. For filings subject to a public notice requirement, any
person may inspect or request a copy of the non-confidential portions of
a filing (the public file) until 180 days following final disposition of
a filing. Following the 180-day period, non-confidential portions of an
application file will be made available in accordance with paragraph (c)
of this section. The public file generally consists of portions of the
filing, supporting data, supplementary information, and comments
submitted by interested persons (if any) to the extent that the
documents have not been afforded confidential treatment. To view or
request photocopies of the public file, an oral or written request
should be submitted to the appropriate regional director (DOS). The
public file will be produced for review not more than one business day
after receipt by the regional office of the request (either written or
oral) to see the file. The FDIC may impose a fee for photocopying in
accordance with Sec. 309.5(c) of this chapter at the rates the FDIC
publishes annually in the Federal Register.
(b) Confidential treatment. (1) The applicant may request that
specific information be treated as confidential. The following
information generally is considered confidential:
(i) Personal information, the release of which would constitute a
clearly unwarranted invasion of privacy;
(ii) Commercial or financial information, the disclosure of which
could result in substantial competitive harm to the submitter; and
(iii) Information, the disclosure of which could seriously affect
the financial condition of any depository institution.
(2) If an applicant requests confidential treatment for information
that the FDIC does not consider to be confidential, the FDIC may include
that information in the public file after notifying the applicant. On
its own initiative, the FDIC may determine that certain information
should be treated as
[[Page 12]]
confidential and withhold that information from the public file.
(c) FOIA requests. A written request for information withheld from
the public file, or copies of the public file following closure of the
file 180 days after final disposition, should be submitted pursuant to
the Freedom of Information Act (5 U.S.C. 552) and part 309 of this
chapter to the FDIC, Office of the Executive Secretary, 550 17th Street,
N.W., Washington, D.C. 20429.
Sec. 303.9 Comments.
(a) Submission of comments. For filings subject to a public notice
requirement, any person may submit comments to the appropriate FDIC
regional director (DOS) during the comment period.
(b) Comment period--(1) General. Consult appropriate subparts of
this part for the comment period applicable to a particular filing.
(2) Extension. The appropriate regional director or deputy regional
director (DOS) may extend or reopen the comment period if:
(i) The applicant fails to file all required information on a timely
basis to permit review by the public or makes a request for confidential
treatment not granted by the FDIC that delays the public availability of
that information;
(ii) Any person requesting an extension of time satisfactorily
demonstrates to the FDIC that additional time is necessary to develop
factual information that the FDIC determines may materially affect the
application; or
(iii) The appropriate regional director or deputy regional director
(DOS) determines that other good cause exists.
(3) Solicitation of comments. Whenever appropriate, the appropriate
regional director (DOS) may solicit comments from any person or
institution which might have an interest in or be affected by the
pending filing.
(4) Applicant response. The FDIC will provide copies of all comments
received to the applicant and may give the applicant an opportunity to
respond.
Sec. 303.10 Hearings and other meetings.
(a) Matters covered. This section covers hearings and other
proceedings in connection with filings and determinations for or by:
(1) Deposit insurance by a proposed new depository institution or
operating non-insured institution;
(2) An insured state nonmember bank to establish a domestic branch
or to relocate a main office or domestic branch;
(3) Relocation of an insured branch of a foreign bank;
(4)(i) Merger transaction which requires the FDIC's prior approval
under the Bank Merger Act (12 U.S.C. 1828(c));
(ii) Except as otherwise expressly provided, the provisions of this
section shall not be applicable to any proposed merger transaction which
the FDIC Board of Directors determines must be acted upon immediately to
prevent the probable failure of one of the institutions involved, or
must be handled with expeditious action due to an existing emergency
condition, as permitted by the Bank Merger Act (12 U.S.C. 1828(c)(6));
(5) Nullification of a decision on a filing; and
(6) Any other purpose or matter which the FDIC Board of Directors in
its sole discretion deems appropriate.
(b) Hearing requests. (1) Any person may submit a written request
for a hearing on a filing:
(i) To the appropriate regional director (DOS) before the end of the
comment period; or
(ii) To the appropriate regional director (DOS or DCA), pursuant to
a notice to nullify a decision on a filing issued pursuant to
Sec. 303.11(g)(2)(i) or (ii).
(2) The request must describe the nature of the issues or facts to
be presented and the reasons why written submissions would be
insufficient to make an adequate presentation of those issues or facts
to the FDIC. A person requesting a hearing shall simultaneously submit a
copy of the request to the applicant.
(c) Action on a hearing request. The appropriate regional director
(DOS or DCA), after consultation with the Legal Division, may grant or
deny a request for a hearing and may limit the issues that he or she
deems relevant or material. The FDIC generally grants a hearing request
only if it determines
[[Page 13]]
that written submissions would be insufficient or that a hearing
otherwise would be in the public interest.
(d) Denial of a hearing request. If the appropriate regional
director (DOS or DCA), after consultation with the Legal Division,
denies a hearing request, he or she shall notify the person requesting
the hearing of the reason for the denial. A decision to deny a hearing
request shall be a final agency determination and is not appealable.
(e) FDIC procedures prior to the hearing--(1) Notice of hearing. The
FDIC shall issue a notice of hearing if it grants a request for a
hearing or orders a hearing because it is in the public interest. The
notice of hearing shall state the subject and date of the filing, the
time and place of the hearing, and the issues to be addressed. The FDIC
shall send a copy of the notice of hearing to the applicant, to the
person requesting the hearing, and to anyone else requesting a copy.
(2) Presiding officer. The presiding officer shall be the Regional
Director (DOS or DCA) or his or her designee or such other person as may
be named by the Board or the Director (DOS or DCA). The presiding
officer is responsible for conducting the hearing and determining all
procedural questions not governed by this section.
(f) Participation in the hearing. Any person who wishes to appear
(participant) shall notify the appropriate regional director (DOS or
DCA) of his or her intent to participate in the hearing no later than 10
days from the date that the FDIC issues the Notice of Hearing. At least
5 days before the hearing, each participant shall submit to the
appropriate regional director (DOS or DCA), as well as to the applicant
and any other person as required by the FDIC, the names of witnesses, a
statement describing the proposed testimony of each witness, and one
copy of each exhibit the participant intends to present.
(g) Transcripts. The FDIC shall arrange for a hearing transcript.
The person requesting the hearing and the applicant each shall bear the
cost of one copy of the transcript for his or her use unless such cost
is waived by the presiding officer and incurred by the FDIC.
(h) Conduct of the hearing--(1) Presentations. Subject to the
rulings of the presiding officer, the applicant and participants may
make opening and closing statements and present and examine witnesses,
material, and data.
(2) Information submitted. Any person presenting material shall
furnish one copy to the FDIC, one copy to the applicant, and one copy to
each participant.
(3) Laws not applicable to hearings. The Administrative Procedure
Act (5 U.S.C. 551 et seq.), the Federal Rules of Evidence (28 U.S.C.
Appendix), the Federal Rules of Civil Procedure (28 U.S.C. Rule 1 et
seq.), and the FDIC's Rules of Practice and Procedure (12 CFR part 308)
do not govern hearings under this section.
(i) Closing the hearing record. At the applicant's or any
participant's request, or at the FDIC's discretion, the FDIC may keep
the hearing record open for up to 10 days following the FDIC's receipt
of the transcript. The FDIC shall resume processing the filing after the
record closes.
(j) Disposition and notice thereof. The presiding officer shall make
a recommendation to the FDIC within 20 days following the date the
hearing and record on the proceeding are closed. The FDIC shall notify
the applicant and all participants of the final disposition of a filing
and shall provide a statement of the reasons for the final disposition.
(k) Computation of time. In computing periods of time under this
section, the provisions of Sec. 308.12 of the FDIC's Rules of Practice
and Procedure (12 CFR 308.12) shall apply.
(l) Informal proceedings. The FDIC may arrange for an informal
proceeding with an applicant and other interested parties in connection
with a filing, either upon receipt of a written request for such a
meeting made during the comment period, or upon the FDIC's own
initiative. No later than 10 days prior to an informal proceeding, the
appropriate regional director (DOS or DCA) shall notify the applicant
and each person who requested a hearing or oral presentation of the
date, time, and place of the proceeding. The proceeding may assume any
form, including a meeting with FDIC representatives at
[[Page 14]]
which participants will be asked to present their views orally. The
appropriate regional director (DOS or DCA) may hold separate meetings
with each of the participants.
(m) Authority retained by FDIC Board of Directors to modify
procedures. The FDIC Board of Directors may delegate authority by
resolution on a case-by-case basis to the presiding officer to adopt
different procedures in individual matters and on such terms and
conditions as the Board of Directors determines in its discretion. Such
resolution shall be made available for public inspection and copying in
the Office of the Executive Secretary under the Freedom of Information
Act (5 U.S.C. 552(a)(2)).
Sec. 303.11 Decisions.
(a) General procedures. The FDIC may approve, conditionally approve,
deny, or not object to a filing after appropriate review and
consideration of the record. The FDIC will promptly notify the applicant
and any person who makes a written request of the final disposition of a
filing. If the FDIC denies a filing, the FDIC will immediately notify
the applicant in writing of the reasons for the denial.
(b) Authority retained by FDIC Board of Directors to modify
procedures. In acting on any filing under this part, the FDIC Board of
Directors may by resolution adopt procedures which differ from those
contained in this part when it deems it necessary or in the public
interest to do so. The resolution shall be made available for public
inspection and copying in the Office of the Executive Secretary under
the Freedom of Information Act (5 U.S.C. 552(a)(2)).
(c) Expedited processing. (1) A filing submitted by an eligible
depository institution as defined in Sec. 303.2(r) will receive
expedited processing as specified in the appropriate subparts of this
part unless the appropriate regional director or deputy regional
director (DOS) determines to remove the filing from expedited processing
for any of the reasons set forth in paragraph (c)(2) of this section.
Except for filings made pursuant to subpart J of this part
(International Banking), expedited processing will not be available for
any filing that the appropriate regional director (DOS) does not have
delegated authority to approve.
(2) Removal of filing from expedited processing. The appropriate
regional director or deputy regional director (DOS) may remove a filing
from expedited processing at any time prior to final disposition if:
(i) For filings subject to public notice under Sec. 303.7, an
adverse comment is received that warrants additional investigation or
review;
(ii) For filings subject to evaluation of CRA performance under
Sec. 303.5, a CRA protest is received that warrants additional
investigation or review, or the appropriate regional director (DCA)
determines that the filing presents a significant CRA or compliance
concern;
(iii) For any filing, the appropriate regional director (DOS)
determines that the filing presents a significant supervisory concern,
or raises a significant legal or policy issue; or
(iv) For any filing, the appropriate regional director (DOS)
determines that other good cause exists for removal.
(3) For purposes of this section, a significant CRA concern
includes, but is not limited to, a determination by the appropriate
regional director (DCA) that, although a depository institution may have
an institution-wide rating of satisfactory or better, a depository
institution's CRA rating is less than satisfactory in a state or multi-
state metropolitan statistical area, or a depository institution's CRA
performance is less than satisfactory in a metropolitan statistical area
as defined in 12 CFR 345.12 (MSA) or in the non-MSA portion of a state
in which it seeks to expand through approval of an application for a
deposit facility as defined in 12 U.S.C. 2902(3).
(4) If the FDIC determines that it is necessary to remove a filing
from expedited processing pursuant to paragraph (c)(2) of this section,
the FDIC promptly will provide the applicant with a written explanation.
(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
[[Page 15]]
transactions shall govern for purposes of approval.
(e) Abandonment of filing. A filing must contain all information set
forth in the applicable subpart of this part. To the extent necessary to
evaluate a filing, the FDIC may require an applicant to provide
additional information. If information requested by the FDIC is not
provided within the time period specified by the agency, the FDIC may
deem the filing abandoned and shall provide written notification to the
applicant and any interested parties that submitted comments to the FDIC
that the file has been closed.
(f) Appeals and requests for reconsideration.--(1) General. Appeal
procedures for a denial of a change in bank control (subpart E of this
part), change in senior executive officer or board of directors (subpart
F of this part) or denial of an application pursuant to section 19 of
the FDI Act (subpart L of this part) are contained in 12 CFR part 308,
subparts D, L, and M, respectively. For all other filings covered by
this chapter for which appeal procedures are not provided by regulation
or other written guidance, the procedures specified in paragraphs (f)
(2) through (5) of this section shall apply. A decision to deny a
request for a hearing is a final agency determination and is not
appealable.
(2) Filing procedures. Within 15 days of receipt of notice from the
FDIC that its filing has been denied, any applicant may file a request
for reconsideration with the appropriate regional director (DOS), if the
filing initially was submitted to DOS, or the appropriate regional
director (DCA), if the filing initially was submitted to DCA.
(3) Content of filing. A request for reconsideration must contain
the following information:
(i) A resolution of the board of directors of the applicant
authorizing filing of the request if the applicant is a corporation, or
a letter signed by the individual(s) filing the request if the applicant
is not a corporation;
(ii) Relevant, substantive information that for good cause was not
previously set forth in the filing; and
(iii) Specific reasons why the FDIC should reconsider its prior
decision.
(4) Delegation of authority for requests for reconsideration. (i)
Authority is delegated to the Director and Deputy Director (DOS) and
(DCA), as appropriate and, where confirmed in writing by the appropriate
Director, to an associate director and the appropriate regional director
and deputy regional director, to grant a request for reconsideration,
after consultation with the Legal Division.
(ii) Authority is delegated to the Director and Deputy Director
(DOS) and (DCA), as appropriate and, where confirmed in writing, to an
associate director, to deny a request for reconsideration, after
consultation with the Legal Division. Such a denial is a final agency
decision and is not appealable.
(5) Reconsideration of the filing. If a request for reconsideration
is granted pursuant to this paragraph (f), the filing will be
reconsidered as follows:
(i) The Board of Directors will reconsider any such filing if the
filing was originally denied by the Board of Directors.
(ii) Authority is delegated to the FDIC's Supervisory Appeals Review
Committee to reconsider any such filing if the filing was originally
denied by the Director or Deputy Director or an associate director (DOS)
or (DCA), and to make the final agency decision on such filing, after
consultation with the Legal Division.
(iii) Authority is delegated to the Director or Deputy Director
(DOS) or (DCA), as appropriate, to reconsider any such filing that was
originally denied by a regional director or deputy regional director,
and to make the final agency decision on such filing, after consultation
with the Legal Division.
(iv) Notwithstanding paragraphs (f)(5)(ii) and (iii) of this
section, no reconsideration of a filing that originally required Legal
Division concurrence may be acted upon without Legal Division
concurrence.
(6) Processing. The appropriate regional director (DOS or DCA) will
notify the applicant whether reconsideration will be granted or denied
within 15 days of receipt of a request for reconsideration. If a request
for reconsideration is granted pursuant to this paragraph (f), the FDIC
will notify the applicant of the final agency decision
[[Page 16]]
on such filing within 60 days of its receipt of the request for
reconsideration.
(g) Nullification, withdrawal, revocation, amendment, and suspension
of decisions on filing.--(1) Grounds for action. (i) Except as otherwise
provided by law or regulation, the FDIC may nullify, withdraw, revoke,
amend or suspend a decision on a filing if it becomes aware at anytime:
(A) Of any material misrepresentation or omission related to the
filing or of any material change in circumstance that occurred prior to
the consummation of the transaction or commencement of the activity
authorized by the decision on the filing; or
(B) That the decision on the filing is contrary to law or regulation
or was granted due to clerical or administrative error.
(ii) Any person responsible for a material misrepresentation or
omission in a filing or supporting materials may be subject to an
enforcement action and other penalties, including criminal penalties
provided in Title 18 of the United States Code.
(2) Notice of intent and temporary order. (i) Except as provided in
paragraph (g)(2)(ii) of this section, before taking action under this
paragraph (g), the FDIC shall issue and serve on an applicant written
notice of its intent to take such action. A notice of intent to act on a
filing shall include:
(A) The reasons for the proposed action; and
(B) The date by which the applicant may file a written response with
the FDIC.
(ii) The FDIC may issue a temporary order on a decision on a filing
without providing an applicant a prior notice of intent if the FDIC
determines that:
(A) It is necessary to reevaluate the impact of a change in
circumstance prior to the consummation of the transaction or
commencement of the activity authorized by the decision on the filing;
or
(B) The activity authorized by the filing may pose a threat to the
interests of the depository institution's depositors or may threaten to
impair public confidence in the depository institution.
(iii) A temporary order shall provide the applicant with an
opportunity to make a written response in accordance with paragraph
(g)(3) of this section.
(3) Response to notice of intent or temporary order. An applicant
may file a written response to a notice of intent or a temporary order
within 15 days from the date of service of the notice or temporary
order. The written response should include:
(i) An explanation of why the proposed action or temporary order is
not warranted; and
(ii) Any other relevant information, mitigating circumstance,
documentation, or other evidence in support of the applicant's position.
An applicant may also request a hearing under Sec. 303.10. Failure by an
applicant to file a written response with the FDIC to a notice of intent
or a temporary order within the specified time period, shall constitute
a waiver of the opportunity to respond and shall constitute consent to a
final order under this paragraph (g).
(4) Effective date. All orders issued pursuant to this section shall
become effective immediately upon issuance unless otherwise stated
therein.
(5) Retained and delegated authority. The FDIC Board of Directors
retains authority to issue notices of intent and temporary and final
orders under this paragraph (g), as to any decision on a filing
originally acted on by the Board. For decisions on filings under this
paragraph (g) that were not originally acted on by the Board, authority
is delegated to the Director and Deputy Director (DOS and DCA) and,
where confirmed in writing by the appropriate Director, to an associate
director or the appropriate regional director or deputy regional
director, to issue notices of intent and final orders, after
consultation with the Legal Division. Authority is delegated to the
Director and Deputy Director (DOS and DCA) and, where confirmed in
writing by the appropriate Director, to an associate director, to issue
temporary orders under this paragraph (g), after consultation with the
Legal Division. This delegated authority may be exercised only by the
official who acted on the original filing or an official of equivalent
or higher authority.
[[Page 17]]
Sec. 303.12 General rules governing delegations of authority.
(a) Scope. This section contains general rules governing the FDIC
Board of Director's delegations of authority under this part. These
principles are procedural in nature only and are not substantive
standards. All delegations of authority, confirmations, limitations,
revisions, and rescissions under this part must be in writing and
maintained with the Office of the Executive Secretary.
(b) Authority not delegated. Except as otherwise expressly provided,
the FDIC Board of Directors does not delegate its authority.
(1) The FDIC Board of Directors retains and does not delegate the
authority to act on agreements with foreign regulatory or supervisory
authorities, matters that would establish or change existing Corporation
policy, matters that might attract unusual attention or publicity, or
involve an issue of first impression notwithstanding any existing
delegation of authority.
(2) The FDIC Board of Directors retains the authority to act on any
filing or enforcement matter upon which any member of the Board of
Directors wishes to act, even if the authority to act on such filing or
enforcement matter has been delegated.
(c) Exercise of delegated authority not mandated. Any FDIC official
with delegated authority under this part may elect not to exercise that
authority.
(d) Action by FDIC officials. In matters where the FDIC Board of
Directors has neither specifically delegated nor retained authority,
FDIC officials may take action with respect to matters which generally
involve conditions or circumstances requiring prompt action to protect
the interests of the FDIC and to achieve flexibility in and expedite its
operations and the exercise of FDIC functions under this part.
(e) Construction. The delegations of authority contained in this
part are to be broadly construed in favor of the existence of authority
in FDIC officials who act under delegated authority. Any exercise of
authority under this part by an FDIC official is conclusive evidence of
that official's authority.
(f) Written confirmations, limitations, revisions or rescissions.
Where the FDIC Board of Directors has delegated authority to the
Director (DOS), Director (DCA) or the General Counsel, or their
respective designees, each shall have the right to confirm, limit,
revise, or rescind any delegation of authority issued or approved by
them, respectively, to any subordinate official(s).
Sec. 303.13 Delegations of authority to officials in the Division of Supervision and the Division of Compliance and Consumer Affairs.
(a) CRA protests. Where a CRA protest is filed and remains
unresolved, authority is delegated to the Director and Deputy Director
(DCA) and, where confirmed in writing by the Director, to an associate
director or the appropriate regional director or deputy regional
director to concur that approval of any filing subject to CRA is
consistent with the purposes of CRA.
(b) Adequacy of filings. Authority is delegated to the Director and
Deputy Director (DOS) and, where confirmed in writing by the Director,
to an associate director and the appropriate regional director and
deputy regional director, to determine whether a filing is substantially
complete for purposes of commencing processing.
(c) National Historic Preservation Act. Authority is delegated to
the Director and Deputy Director (DOS) and, where confirmed in writing
by the Director, to an associate director and the appropriate regional
director and deputy regional director, to enter into memoranda of
agreement pursuant to regulations of the Advisory Council on Historic
Preservation which implement the National Historic Preservation Act of
1966 (16 U.S.C. 470).
(d) Modification of publication requirements. Authority is delegated
to the Director and Deputy Director (DOS) and, where confirmed in
writing by the Director, to an associate director and the appropriate
regional director and deputy regional director, to modify the
publication requirements for a particular filing where the unusual
circumstances surrounding the filing warrant such modification.
[[Page 18]]
Subpart B--Deposit Insurance
Sec. 303.20 Scope.
This subpart sets forth the procedures for applying for deposit
insurance for a proposed depository institution or an operating
noninsured depository institution under section 5 of the FDI Act (12
U.S.C. 1815). It also sets forth the procedures for requesting
continuation of deposit insurance for a state-chartered bank withdrawing
from membership in the Federal Reserve System and for interim
institutions chartered to facilitate a merger transaction. Related
delegations of authority are also set forth.
Sec. 303.21 Filing procedures.
(a) Applications for deposit insurance shall be filed with the
appropriate regional director (DOS). The relevant application forms and
instructions for applying for deposit insurance for an existing or
proposed depository institution may be obtained from any FDIC regional
office (DOS).
(b) An application for deposit insurance for an interim depository
institution shall be filed and processed in accordance with the
procedures set forth in Sec. 303.24, subject to the provisions of
Sec. 303.62(b)(2) regarding deposit insurance for interim institutions.
An interim institution is defined as a state- or federally-chartered
depository institution that does not operate independently but exists
solely as a vehicle to accomplish a merger transaction.
(c) A request for continuation of deposit insurance upon withdrawing
from membership in the Federal Reserve System shall be in letter form
and shall provide the information prescribed in Sec. 303.25.
Sec. 303.22 Processing.
(a) Expedited processing for proposed institutions. (1) An
application for deposit insurance for a proposed institution which will
be a subsidiary of an eligible depository institution as defined in
Sec. 303.2(r) or an eligible holding company will be acknowledged in
writing by the FDIC and will receive expedited processing unless the
applicant is notified in writing to the contrary and provided with the
basis for that decision. An eligible holding company is defined as a
bank or thrift holding company that has consolidated assets of $150
million or more, has an assigned composite rating of 2 or better, and
has at least 75 percent of its consolidated depository institution
assets comprised of eligible depository institutions. The FDIC may
remove an application from expedited processing for any of the reasons
set forth in Sec. 303.11(c)(2).
(2) Under expedited processing, the FDIC will take action on an
application within 60 days of receipt of a substantially complete
application or 5 days after the expiration of the comment period
described in Sec. 303.23, whichever is later. Final action may be
withheld until the FDIC has assurance that permission to organize the
proposed institution will be granted by the chartering authority.
Notwithstanding paragraph (a)(1) of this section, if the FDIC does not
act within the expedited processing period, it does not constitute an
automatic or default approval.
(b) Standard processing. For those applications that are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action when the
decision is rendered.
Sec. 303.23 Public notice requirements.
(a) De novo institutions and operating noninsured institutions. The
applicant shall publish a notice as prescribed in Sec. 303.7 in a
newspaper of general circulation in the community in which the main
office of the depository institution is or will be located. Notice shall
be published as close as practicable to, but no sooner than five days
before, the date the application is mailed or delivered to the
appropriate regional director (DOS). Comments by interested parties must
be received by the appropriate regional director (DOS) within 30 days
following the date of publication, unless the comment period has been
extended or reopened in accordance with Sec. 303.9(b)(2).
(b) Exceptions to public notice requirements. No publication shall
be required in connection with the granting of insurance to a new
depository institution established pursuant to the resolution of a
depository institution in default, or to an interim depository
institution
[[Page 19]]
formed solely to facilitate a merger transaction, or for a request for
continuation of federal deposit insurance by a state-chartered bank
withdrawing from membership in the Federal Reserve System.
Sec. 303.24 Application for deposit insurance for an interim institution.
(a) Application required. Subject to Sec. 303.62(b)(2), a deposit
insurance application is required for a state-chartered interim
institution if the related merger transaction is subject to approval by
a federal banking agency other than the FDIC. A separate application for
deposit insurance for an interim institution is not required in
connection with any merger requiring FDIC approval pursuant to subpart D
of this part.
(b) Content of separate application. A letter application for
deposit insurance for an interim institution, accompanied by a copy of
the related merger application, shall be filed with the appropriate
regional director (DOS). The letter application shall briefly describe
the transaction and contain a statement that deposit insurance is being
requested for an interim institution that does not operate independently
but exists solely as a vehicle to accomplish a merger transaction which
will be reviewed by a federal banking agency other than the FDIC.
(c) Processing. An application for deposit insurance for an interim
depository institution will be acknowledged in writing by the FDIC.
Final action will be taken within 21 days after receipt of a
substantially complete application, unless the applicant is notified in
writing that additional review is warranted. If the FDIC does not act
within the expedited processing period, it does not constitute an
automatic or default approval.
Sec. 303.25 Continuation of deposit insurance upon withdrawing from membership in the Federal Reserve System.
(a) Content of application. To continue its insured status upon
withdrawal from membership in the Federal Reserve System, a state-
chartered bank shall submit a letter application to the appropriate
regional director (DOS). A complete application shall consist of the
following information:
(1) A copy of the letter, and any attachments thereto, sent to the
appropriate Federal Reserve Bank setting forth the bank's intention to
terminate its membership;
(2) A copy of the letter from the Federal Reserve Bank acknowledging
the bank's notice to terminate membership;
(3) A statement regarding any anticipated changes in the bank's
general business plan during the next 12-month period; and
(4)(i) A statement by the bank's management that there are no
outstanding or proposed corrective programs or supervisory agreements
with the Federal Reserve System.
(ii) If such programs or agreements exist, a statement by the
applicant that its Board of Directors is willing to enter into similar
programs or agreements with the FDIC which would become effective upon
withdrawal from the Federal Reserve System.
(b) Processing. An application for deposit insurance under this
section will be acknowledged in writing by the FDIC. The appropriate
regional director (DOS) shall notify the applicant, within 15 days of
receipt of a substantially complete application, either that federal
deposit insurance will continue upon termination of membership in the
Federal Reserve System or that additional review is warranted and the
applicant will be notified, in writing, of the FDIC's final decision
regarding continuation of deposit insurance. If the FDIC does not act
within the expedited processing period, it does not constitute an
automatic or default approval.
Sec. 303.26 Delegation of authority.
(a) Proposed depository institutions. (1) Authority is delegated to
the Director and the Deputy Director (DOS) and, where confirmed in
writing by the Director, to an associate director and the appropriate
regional director and deputy regional director, to approve applications
for deposit insurance for proposed depository institutions. For the
delegate to exercise this authority, the criteria in paragraphs
(a)(1)(i) through
[[Page 20]]
(a)(1)(v) of this section must be satisfied and the applicant shall have
agreed in writing to comply with any conditions imposed by the delegate,
other than those listed in paragraph (d) of this section which may be
imposed without the applicant's consent:
(i) The factors set forth in section 6 of the Act (12 U.S.C. 1816)
have been considered and favorably resolved;
(ii) No unresolved management interlocks, as prohibited by the
Depository Institution Management Interlocks Act (12 U.S.C. 3201 et
seq.), part 348 of this chapter or any other applicable implementing
regulation, exist;
(iii) The application is in conformity with the standards and
guidelines for the granting of deposit insurance established in the FDIC
statement of policy ``Applications for Deposit Insurance'' (2 FDIC Law,
Regulations and Related Acts (FDIC) 5349; see Sec. 309.4(a) and (b) of
this chapter for availability);
(iv) Compliance with the CRA, the NEPA, the NHPA and any applicable
related regulations, including 12 CFR part 345, has been considered and
favorably resolved; and
(v) No CRA protest as defined in Sec. 303.2(l) has been filed which
remains unresolved or, where such a protest has been filed and remains
unresolved, the Director (DCA), Deputy Director (DCA), an associate
director (DCA) or the appropriate regional director (DCA) or deputy
regional director (DCA) concurs that approval is consistent with the
purposes of the CRA and the applicant agrees in writing to any
conditions imposed regarding the CRA.
(2) Authority is delegated to the Director and Deputy Director (DOS)
and, where confirmed in writing by the Director, to an associate
director and the appropriate regional director and deputy regional
director, to approve applications for deposit insurance filed by or on
behalf of proposed interim depository institutions formed or organized
solely for the purpose of facilitating a merger transaction which will
be reviewed by a responsible agency as defined in section 18(c)(2) of
the FDI Act. For the delegate to exercise this authority, the criteria
in paragraphs (a)(1)(i) through (a)(1)(v) of this section must be
satisfied and the applicant must agree in writing to comply with any
conditions imposed by the delegate, other than those listed in paragraph
(d) of this section which may be imposed without the applicant's
consent.
(b) Operating noninsured depository institutions. Authority is
delegated to the Director and the Deputy Director (DOS) and, where
confirmed in writing by the Director, to an associate director and the
appropriate regional director and deputy regional director, to approve
applications for deposit insurance by operating noninsured depository
institutions. For the delegate to exercise this authority, the following
criteria must be satisfied and the applicant must have agreed in writing
to comply with any condition imposed by the delegate, other than those
listed in paragraph (d) of this section which may be imposed without the
applicant's consent:
(1) The applicant is determined to be eligible for federal deposit
insurance for the class of institution to which the applicant belongs in
the state (as defined in section 3(a) of the Act (12 U.S.C. 1813(a)) in
which the applicant is located;
(2) The factors set forth in section 6 of the Act (12 U.S.C. 1816)
have been considered and favorably resolved;
(3) No unresolved management interlocks, as prohibited by the
Depository Institution Management Interlocks Act (12 U.S.C. 3201 et
seq.), part 348 of this chapter or any other applicable implementing
regulation, exist;
(4) The application is in conformity with the standards and
guidelines for the granting of deposit insurance to operating noninsured
depository institutions established in the FDIC statement of policy
``Applications for Deposit Insurance'' (2 FDIC Law, Regulations and
Related Acts (FDIC) 5349);
(5) Compliance with the CRA, the NEPA, the NHPA, and any applicable
related regulations, including 12 CFR part 345, has been considered and
favorably resolved; and
(6) No CRA protest as defined in Sec. 303.2(l) has been filed which
remains unresolved or, where such a protest has been filed and remains
unresolved, the Director (DCA), Deputy Director (DCA), an associate
director (DCA) or the appropriate regional director (DCA)
[[Page 21]]
or deputy regional director (DCA) concurs that approval is consistent
with the purposes of the CRA and the applicant agrees in writing to any
conditions imposed regarding the CRA.
(c) Continuation of deposit insurance upon withdrawing from
membership in the Federal Reserve System. Authority is delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate director and the appropriate regional
director and deputy regional director to approve continuation of federal
deposit insurance where the applicant has agreed in writing to comply
with any conditions imposed by the delegate, other than the standard
conditions defined in Sec. 303.2(ff) which may be imposed without the
applicant's written consent.
(d) Conditions that may be imposed under delegated authority.
Following are conditions which may be imposed by a delegate in approving
applications for deposit insurance without affecting the authority
granted under paragraphs (a) and (b) of this section:
(1) The applicant will provide a specific amount of initial paid-in
capital;
(2) With respect to a proposed depository institution that has
applied for deposit insurance pursuant to this subpart, the Tier 1
capital to assets leverage ratio (as defined in the appropriate capital
regulation and guidance of the institution's primary federal regulator)
will be maintained at not less than eight percent throughout the first
three years of operation and that an adequate allowance for loan and
lease losses will be provided;
(3) Any changes in proposed management or proposed ownership to the
extent of 10 percent or more of stock, including new acquisitions of or
subscriptions to 10 percent or more of stock shall be approved by the
FDIC prior to the opening of the depository institution for business;
(4) The applicant will adopt an accrual accounting system for
maintaining the books of the depository institution;
(5) Where applicable, deposit insurance will not become effective
until the applicant has been granted a charter as a depository
institution, has authority to conduct a depository institution business,
and its establishment and operation as a depository institution have
been fully approved by the appropriate state and/or federal supervisory
authority;
(6) Where deposit insurance is granted to an interim institution
formed or organized solely to facilitate a related transaction, deposit
insurance will only become effective in conjunction with consummation of
the related transaction;
(7) Where applicable, a registered or proposed bank holding company,
or a registered or proposed thrift holding company, has obtained
approval of the Board of Governors of the Federal Reserve System or the
Office of Thrift Supervision to acquire voting stock control of the
proposed depository institution prior to its opening for business;
(8) Where applicable, the applicant has submitted any proposed
contracts, leases, or agreements relating to construction or rental of
permanent quarters to the appropriate regional director for review and
comment;
(9) Where applicable, full disclosure has been made to all proposed
directors and stockholders of the facts concerning the interest of any
insider in any transactions being effected or then contemplated,
including the identity of the parties to the transaction and the terms
and costs involved. An insider is one who is or is proposed to be a
director, officer, or incorporator of an applicant; a shareholder who
directly or indirectly controls 10 or more percent of any class of the
applicant's outstanding voting stock; or the associates or interests of
any such person;
(10) The person(s) selected to serve as the principal operating
officer(s) shall be acceptable to the appropriate regional director
(DOS);
(11) The applicant will have adequate fidelity coverage;
(12) The depository institution will obtain an audit of its
financial statements by an independent public accountant annually for at
least the first three years after deposit insurance is effective,
furnish a copy of any reports by the independent auditor (including any
management letters) to the appropriate FDIC regional office within 15
[[Page 22]]
days after their receipt by the depository institution and notify the
appropriate FDIC regional office within 15 days when a change in its
independent auditor occurs; and
(13) Any standard condition defined in Sec. 303.2(ff).
Sec. 303.27 Authority retained by the FDIC Board of Directors.
Without limiting the Board of Director's authority, the Board of
Directors retains authority to deny applications for deposit insurance
and approve applications for deposit insurance where the applicant does
not agree in writing to comply with any condition imposed by the FDIC,
other than the standard conditions listed in Secs. 303.2(ff) and
303.26(d), which may be imposed without the applicant's written consent.
Subpart C--Establishment and Relocation of Domestic Branches and Offices
Sec. 303.40 Scope.
(a) General. This subpart sets forth the application requirements,
procedures and the delegations of authority for insured state nonmember
banks to establish a branch, relocate a branch or main office, and
retain existing branches after the interstate relocation of the main
office subject to the approval by the FDIC pursuant to sections 13(f),
13(k), 18(d) and 44 of the FDI Act.
(b) Merger transaction. Applications for approval of the acquisition
and establishment of branches in connection with a merger transaction
under section 18(c) of the FDI Act (12 U.S.C. 1828(c)), are processed in
accordance with subpart D (Merger Transactions) of this part.
(c) Insured branches of foreign banks and foreign branches of
domestic banks. Applications regarding insured branches of foreign banks
and foreign branches of domestic banks are processed in accordance with
subpart J (International Banking) of this part.
(d) Interstate acquisition of individual branch. Applications
requesting approval of the interstate acquisition of an individual
branch or branches located in a state other than the applicant's home
state without the acquisition of the whole bank are treated as
interstate bank merger transactions under section 44 of the FDI Act (12
U.S.C. 1831a(u)), and are processed in accordance with subpart D (Merger
Transactions) of this part.
Sec. 303.41 Definitions.
For purposes of this subpart:
(a) Branch includes any branch bank, branch office, additional
office, or any branch place of business located in any State of the
United States or in any territory of the United States, Puerto Rico,
Guam, American Samoa, the Trust Territory of the Pacific Islands, the
Virgin Islands, and the Northern Mariana Islands at which deposits are
received or checks paid or money lent. A branch does not include an
automated teller machine, an automated loan machine, or a remote service
unit. The term branch also includes the following:
(1) A messenger service that is operated by a bank or its affiliate
that picks up and delivers items relating to transactions in which
deposits are received or checks paid or money lent. A messenger service
established and operated by a non-affiliated third party generally does
not constitute a branch for purposes of this subpart. Banks contracting
with third parties to provide messenger services should consult with the
appropriate regional director (DOS) to determine if the messenger
service constitutes a branch.
(2) A mobile branch, other than a messenger service, that does not
have a single, permanent site and uses a vehicle that travels to various
locations to enable the public to conduct banking business. A mobile
branch may serve defined locations on a regular schedule or may serve a
defined area at varying times and locations.
(3) A temporary branch that operates for a limited period of time
not to exceed one year as a public service, such as during an emergency
or disaster situation.
(4) A seasonal branch that operates at various periodically
recurring intervals, such as during state and local fairs, college
registration periods, and other similar occasions.
[[Page 23]]
(b) Branch relocation means a move within the same immediate
neighborhood of the existing branch that does not substantially affect
the nature of the business of the branch or the customers of the branch.
Moving a branch to a location outside its immediate neighborhood is
considered the closing of an existing branch and the establishment of a
new branch. Closing of a branch is covered in the FDIC Statement of
Policy Concerning Branch Closing Notices and Policies (2 FDIC Law,
Regulations, Related Acts 5391; see Sec. 309.4 (a) and (b) of this
chapter for availability).
(c) De novo branch means a branch of a bank which is established by
the bank as a branch and does not become a branch of such bank as a
result of:
(1) The acquisition by the bank of an insured depository institution
or a branch of an insured depository institution; or
(2) The conversion, merger, or consolidation of any such institution
or branch.
(d) Home state means the state by which the bank is chartered.
(e) Host state means a state, other than the home state of the bank,
in which the bank maintains, or seeks to establish and maintain, a
branch.
Sec. 303.42 Filing procedures.
(a) General. An applicant shall submit an application to the
appropriate regional director (DOS) on the date the notice required by
Sec. 303.44 is published, or within 5 days after the date of the last
required publication.
(b) Content of filing. A complete letter application shall include
the following information:
(1) A statement of intent to establish a branch, or to relocate the
main office or a branch;
(2) The exact location of the proposed site including the street
address. With regard to messenger services, specify the geographic area
in which the services will be available. With regard to a mobile branch
specify the community or communities in which the vehicle will operate
and the manner in which it will be used;
(3) Details concerning any involvement in the proposal by an insider
of the bank as defined in Sec. 303.2(u), including any financial
arrangements relating to fees, the acquisition of property, leasing of
property, and construction contracts;
(4) A statement on the impact of the proposal on the human
environment, including, information on compliance with local zoning laws
and regulations and the effect on traffic patterns for purposes of
complying with the applicable provisions of the NEPA and the FDIC
Statement of Policy on NEPA (2 FDIC Law, Regulations, Related Acts 5185;
see Sec. 309.4 (a) and (b) of this chapter for availability);
(5) A statement as to whether or not the site is eligible for
inclusion in the National Register of Historic Places for purposes of
complying with applicable provisions of the NHPA and the FDIC Statement
of Policy on NHPA (2 FDIC Law, Regulations, Related Acts 5175; see
Sec. 309.4 (a) and (b) of this chapter for availability) including
documentation of consultation with the State Historic Preservation
Officer, as appropriate;
(6) Comments on any changes in services to be offered, the community
to be served, or any other effect the proposal may have on the
applicant's compliance with the CRA;
(7) A copy of each newspaper publication required by Sec. 303.44,
the name and address of the newspaper, and date of the publication;
(8) When an application is submitted to relocate the main office of
the applicant from one state to another, a statement of the applicant's
intent regarding retention of branches in the state where the main
office exists prior to relocation.
(c) Undercapitalized institutions. Applications to establish a
branch by applicants subject to section 38 of the FDI Act (12 U.S.C.
1831o) also should provide the information required by Sec. 303.204.
Applications pursuant to sections 38 and 18(d) of the FDI Act (12 U.S.C.
1831o and 1828(d)) may be filed concurrently or as a single application.
(d) Additional information. The appropriate regional director (DOS)
may request additional information to complete processing.
Sec. 303.43 Processing.
(a) Expedited processing for eligible depository institutions. An
application
[[Page 24]]
filed under this subpart by an eligible depository institution as
defined in Sec. 303.2(r) will be acknowledged in writing by the FDIC and
will receive expedited processing, unless the applicant is notified in
writing to the contrary and provided with the basis for that decision.
The FDIC may remove an application from expedited processing for any of
the reasons set forth in Sec. 303.11(c)(2). Absent such removal, an
application processed under expedited processing will be deemed approved
on the latest of the following:
(1) The 21st day after receipt by the FDIC of a substantially
complete filing;
(2) The 5th day after expiration of the comment period described in
Sec. 303.44; or
(3) In the case of an application to establish and operate a de novo
branch in a state that is not the applicant's home state and in which
the applicant does not maintain a branch, the 5th day after the FDIC
receives confirmation from the host state that the applicant has both
complied with the filing requirements of the host state and submitted a
copy of the application with the FDIC to the host state bank supervisor.
(b) Standard processing. For those applications which are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action when the
decision is rendered.
Sec. 303.44 Public notice requirements.
(a) Newspaper publications. For applications to establish or
relocate a branch, a notice as described in Sec. 303.7(b) shall be
published once in a newspaper of general circulation. For applications
to relocate a main office, notice shall be published at least once each
week on the same day for two consecutive weeks. The required publication
shall be made in the following communities:
(1) To establish a branch. In the community in which the main office
is located and in the communities to be served by the branch (including
messenger services and mobile branches).
(2) To relocate a main office. In the community in which the main
office is currently located and in the community to which it is proposed
the main office will relocate.
(3) To relocate a branch. In the community in which the branch is
located.
(b) Public comments. Comments by interested parties must be received
by the appropriate regional director (DOS) within 15 days after the date
of the last newspaper publication required by paragraph (a) of this
section, unless the comment period has been extended or reopened in
accordance with Sec. 303.9(b)(2).
(c) Lobby notices. In the case of applications to relocate a main
office or a branch, a copy of the required newspaper publication shall
be posted in the public lobby of the office to be relocated for at least
15 days beginning on the date of the last published notice required by
paragraph (a) of this section.
Sec. 303.45 Special provisions.
(a) Emergency or disaster events. (1) In the case of an emergency or
disaster at a main office or a branch which requires that an office be
immediately relocated to a temporary location, applicants shall notify
the appropriate regional director (DOS) within 3 days of such temporary
relocation.
(2) Within 10 days of the temporary relocation resulting from an
emergency or disaster, the bank shall submit a written application to
the appropriate regional director (DOS), that identifies the nature of
the emergency or disaster, specifies the location of the temporary
branch, and provides an estimate of the duration the bank plans to
operate the temporary branch.
(3) As part of the review process, the appropriate regional director
(DOS) will determine on a case by case basis whether additional
information is necessary and may waive public notice requirements.
(b) Redesignation of main office and existing branch. In cases where
an applicant desires to redesignate its main office as a branch and
redesignate an existing branch as the main office, a single application
shall be submitted. The appropriate regional director (DOS) may waive
the public notice requirements in instances where an application
presents no significant or novel policy, supervisory, CRA, compliance or
legal concerns. A waiver will be
[[Page 25]]
granted only to a redesignation within the applicant's home state.
(c) Expiration of approval. Approval of an application expires if
within 18 months after the approval date a branch has not commenced
business or a relocation has not been completed.
Sec. 303.46 Delegation of authority.
(a) Approval of applications. (1) Where the applicant agrees in
writing to comply with any conditions imposed by the delegate, other
than the standard conditions defined in Sec. 303.2(ff) which may be
imposed without the applicant's written consent, authority is delegated
to the Director and Deputy Director (DOS) and, where confirmed in
writing by the Director, to an associate director and the appropriate
regional director and deputy regional director, to approve the following
applications:
(i) Establish a branch;
(ii) Establish and operate a de novo branch in a state that is not
the applicant's home state and in which the applicant does not maintain
a branch;
(iii) Relocate a main office (including an application to relocate a
main office to another state and retain existing branches); and
(iv) Relocate a branch.
(2) For the delegate to exercise this authority, the criteria in
paragraphs (c)(1) through (c)(7) of this section must be satisfied.
(3) Where the applicant does not agree in writing to comply with any
condition imposed by the delegate, authority is delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate director to approve the applications
listed in paragraph (a)(1) of this section.
(b) Denial of applications. (1) Authority is delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate director and the appropriate regional
director and deputy regional director, to deny an application to
establish a temporary branch.
(2) Authority is delegated to the Director and Deputy Director (DOS)
and, where confirmed in writing by the Director, to an associate
director to deny an application for consent to:
(i) Establish a branch;
(ii) Establish and operate a de novo branch in a state that is not
the applicant's home state and in which the applicant does not maintain
a branch;
(iii) Relocate a main office (including an application to relocate a
main office to another state and retain existing branches); and
(iv) Relocate a branch.
(c) Criteria for delegated authority. The following criteria must be
satisfied before the authority delegated in paragraph (a) of this
section may be exercised:
(1) The factors set forth in section 6 of the FDI Act (12 U.S.C.
1816) have been considered and favorably resolved except that this
criterion does not apply to applications to establish messenger services
and temporary branches;
(2) The applicant meets the capital requirements set forth in 12 CFR
part 325 and the FDIC ``Statement of Policy on Capital Adequacy'' (12
CFR part 325, appendix B) or agrees in writing to increase capital so as
to be in compliance with the requirements of 12 CFR part 325 before or
at the consummation of the transaction which is the subject of the
filing, except that this criterion does not apply to applications to
establish messenger services and temporary branches, or to relocate
branches or main offices;
(3) Any financial arrangements which have been made in connection
with the proposed branch or relocation and which involve the applicant's
insiders are fair and reasonable in comparison to similar arrangements
that could have been made with independent third parties;
(4) Compliance with the CRA, the NEPA, the NHPA, and any applicable
related regulations, including 12 CFR part 345, has been considered and
favorably resolved;
(5) No CRA protest as defined in Sec. 303.2(l) has been filed which
remains unresolved or, where such a protest has been filed and remains
unresolved, the Director (DCA), Deputy Director (DCA), an associate
director (DCA) or the appropriate regional director or deputy regional
director (DCA) concurs that approval is consistent with the purposes of
the CRA and the applicant
[[Page 26]]
agrees in writing to any conditions imposed regarding the CRA;
(6) An applicant with one or more existing branches in a state other
than the applicant's home state has not failed the credit needs test in
a host state under section 109 of the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (12 U.S.C. 1835a);
(7) Additionally, for applications submitted to establish and
operate a de novo branch in a state that is not the applicant's home
state and in which the applicant does not maintain a branch:
(i) Confirmation by the appropriate regional director (DOS) that the
applicant has complied with that state's filing requirements and that
the applicant also has submitted to the host state bank supervisor a
copy of its FDIC filing to establish and operate a de novo branch;
(ii) Determination by the FDIC that the applicant is adequately
capitalized as of the date of the filing and will continue to be
adequately capitalized and adequately managed upon consummation of the
transaction;
(iii) Confirmation that the host state has in effect a law that
meets the requirements of section 18(d)(4)(A) of the FDI Act (12 U.S.C.
1828(d)(4)(A)); and
(iv) Compliance with section 44(b)(3) of the FDI Act (12 U.S.C.
1831u(b)(3)); and
(8) Additionally, for applications submitted to relocate a main
office from one state to another where the applicant seeks to retain
branches in the state where the applicant's main office exists prior to
an interstate relocation of the main office, confirmation that the
filing meets the requirements of section 18(d)(3)(B) of the FDI Act (12
U.S.C. 1828(d)(3)(B)).
Subpart D--Merger Transactions
Sec. 303.60 Scope.
This subpart sets forth the application requirements, procedures,
and delegations of authority for transactions subject to FDIC approval
under the Bank Merger Act, section 18(c) of the FDI Act (12 U.S.C.
1828(c)). Additional guidance is contained in the FDIC ``Statement of
Policy on Bank Merger Transactions'' (2 FDIC Law, Regulations, Related
Acts (FDIC) 5145; see Sec. 309.4 (a) and (b) of this chapter for
availability).
Sec. 303.61 Definitions.
For purposes of this subpart:
(a) Merger transaction includes any transaction:
(1) In which an insured depository institution merges or
consolidates with any other insured depository institution or, either
directly or indirectly, acquires the assets of, or assumes liability to
pay any deposits made in, any other insured depository institution; or
(2) In which an insured depository institution merges or
consolidates with any noninsured bank or institution or assumes
liability to pay any deposits made in, or similar liabilities of, any
noninsured bank or institution, or in which an insured depository
institution transfers assets to any noninsured bank or institution in
consideration of the assumption of any portion of the deposits made in
the insured depository institution.
(b) Corporate reorganization means a merger transaction between
commonly-owned institutions, between an insured depository institution
and its subsidiary, or between an insured depository institution and its
holding company, provided that the merger transaction would have no
effect on competition or otherwise have significance under the statutory
standards set forth in section 18(c) of the FDI Act (12 U.S.C. 1828(c)).
For purposes of this paragraph, institutions are commonly-owned if more
than 50 percent of the voting stock of each of the institutions is owned
by the same company, individual, or group of closely-related individuals
acting in concert.
(c) Interim merger transaction means a merger transaction (other
than a purchase and assumption transaction) between an operating
depository institution and a newly-formed depository institution or
corporation that will not operate independently and that exists solely
for the purpose of facilitating a corporate reorganization.
(d) Optional conversion (Oakar transaction) means a merger
transaction in which an insured depository institution assumes deposit
liabilities insured
[[Page 27]]
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'' (2 FDIC Law,
Regulations, Related Acts (FDIC) 5391).
(5) Undercapitalized institutions. Applications for a merger
transaction by applicants subject to section 38 of the FDI Act (12
U.S.C. 1831o) should also provide the information required by
Sec. 303.204. Applications pursuant to sections 38 and 18(c) of the FDI
Act (12 U.S.C, 1831o and 1828(c)) may be filed concurrently or as a
single application.
(6) Certification of assumption of deposit liability. An insured
depository institution assuming deposit liabilities of another insured
institution must provide certification of assumption of deposit
liability to the FDIC in accordance with 12 CFR part 307.
Sec. 303.63 Filing procedures.
(a) General. Applications required under this subpart shall be filed
with the appropriate regional director (DOS). The appropriate forms and
instructions may be obtained upon request from any DOS regional office.
(b) Merger transactions. Applications for approval of merger
transactions shall be accompanied by copies of all agreements or
proposed agreements relating to the merger transaction and
[[Page 28]]
any other information requested by the FDIC.
(c) Interim merger transactions. Applications for approval of
interim merger transactions and any related deposit insurance
applications shall be made by filing the forms and other documents
required by paragraphs (a) and (b) of this section and such other
information as may be required by the FDIC for consideration of the
request for deposit insurance.
(d) Optional conversions. If the proposed merger transaction is an
optional conversion, the merger application shall include a statement
that the proposed merger transaction is a transaction covered by section
5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)).
Sec. 303.64 Processing.
(a) Expedited processing for eligible depository institutions.--(1)
General. An application filed under this subpart by an eligible
depository institution as defined in Sec. 303.2(r) and which meets the
additional criteria in paragraph (a)(4) of this section will be
acknowledged by the FDIC in writing and will receive expedited
processing, unless the applicant is notified in writing to the contrary
and provided with the basis for that decision. The FDIC may remove an
application from expedited processing for any of the reasons set forth
in Sec. 303.11(c)(2).
(2) Under expedited processing, the FDIC will take action on an
application by the date that is the latest of:
(i) 45 days after the date of the FDIC's receipt of a substantially
complete merger application; or
(ii) 10 days after the date of the last notice publication required
under Sec. 303.65; or
(iii) 5 days after receipt of the Attorney General's report on the
competitive factors involved in the proposed transaction; or
(iv) For an interstate merger transaction subject to the provisions
of section 44 of the FDI Act (12 U.S.C. 1831u), 5 days after the FDIC
receives confirmation from the host state (as defined in Sec. 303.41(e))
that the applicant has both complied with the filing requirements of the
host state and submitted a copy of the FDIC merger application to the
host state's bank supervisor.
(3) Notwithstanding paragraph (a)(1) of this section, if the FDIC
does not act within the expedited processing period, it does not
constitute an automatic or default approval.
(4) Criteria. The FDIC will process an application using expedited
procedures if:
(i) Immediately following the merger transaction, the resulting
institution will be ``well-capitalized'' pursuant to subpart B of part
325 of this chapter; and
(ii)(A) All parties to the merger transaction are eligible
depository institutions as defined in Sec. 303.2(r); or
(B) The acquiring party is an eligible depository institution as
defined in Sec. 303.2(r) and the amount of the total assets to be
transferred does not exceed an amount equal to 10 percent of the
acquiring institution's total assets as reported in its report of
condition for the quarter immediately preceding the filing of the merger
application.
(b) Standard processing. For those applications not processed
pursuant to the expedited procedures, the FDIC will provide the
applicant with written notification of the final action taken by the
FDIC on the application when the decision is rendered.
Sec. 303.65 Public notice requirements.
(a) General. Except as provided in paragraph (b) of this section, an
applicant for approval of a merger transaction must publish notice of
the proposed transaction on at least three occasions at approximately
equal intervals in a newspaper of general circulation in the community
or communities where the main offices of the merging institutions are
located or, if there is no such newspaper in the community, then in the
newspaper of general circulation published nearest thereto.
(1) First publication. The first publication of the notice should be
as close as practicable to the date on which the application is filed
with the FDIC, but no more than 5 days prior to the filing date.
(2) Last publication. The last publication of the notice shall be on
the 25th day after the first publication or, if the newspaper does not
publish on the 25th
[[Page 29]]
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
regional director (DOS) within 30 days after the first publication of
the notice, unless the comment period has been extended or reopened in
accordance with Sec. 303.9(b)(2). If the FDIC has determined that an
emergency exists requiring expeditious action, comments must be received
by the appropriate regional director within 10 days after the first
publication.
Sec. 303.66 Delegation of authority.
(a) General.--(1) Bank Merger Act approval. Subject to paragraphs
(a)(3) and (e) of this section, authority is delegated in paragraphs
(b), (c), and (d) of this section to the designated FDIC officials to
approve under the Bank Merger Act, 18(c) of the FDI Act (12 U.S.C.
1828(c)), applications filed under this subpart.
(2) Interstate merger approval. With respect to an interstate merger
transaction covered by section 44 of the FDI Act (12 U.S.C. 1831u), in
addition to the authority delegated to any official in paragraph (b),
(c), or (d) of this section to approve the merger transaction under the
Bank Merger Act, authority is also delegated to such official to approve
the merger transaction under section 44. This delegation is subject to
paragraph (a)(3) of this section and to the condition that the merger
transaction is eligible for FDIC approval under section 44.
(3) Combined approvals. The delegations in paragraphs (a)(2), (b),
(c), and (d) of this section do not apply to an interstate bank merger
transaction covered both by section 44 and by the Bank Merger Act unless
the merger transaction is being approved pursuant to delegated authority
under both section 44 and the Bank Merger Act.
(b) Basic delegation. Authority is delegated to the Director and
Deputy Director (DOS) and, where confirmed in writing by the Director,
to an associate director, and the appropriate regional director and
deputy regional director to approve applications under the Bank Merger
Act. For the delegate to exercise this authority, the following criteria
must be satisfied:
(1) The resulting institution would meet all applicable capital
requirements upon consummation of the transaction (or, where the
resulting entity is an insured branch of a foreign bank, would be in
compliance with 12 CFR 347.211 upon consummation of the transaction);
and
(2) The factors set forth in section 18(c)(5) of the Act (12 U.S.C.
1828(c)(5)) have been considered and favorably resolved; and
(3)(i) The merging institutions do not operate in the same relevant
geographic market(s); or
(ii) In each relevant geographic market in which more than one of
the merging institutions operate, the resulting institution upon
consummation
[[Page 30]]
of the merger transaction would hold no more than 15 percent of the
total deposits held by banks and/or other depository institutions (as
appropriate) in the market; or
(iii) In each relevant geographic market in which more than one of
the merging institutions operate, the resulting institution upon
consummation of the merger transaction would hold no more than 25
percent of the total deposits held by banks and/or other depository
institutions (as appropriate) in the market, and the Attorney General
has notified the FDIC in writing that the proposed merger transaction
would not have a significantly adverse effect on competition; and
(4) Compliance with the CRA and any applicable related regulations,
including 12 CFR part 345, has been considered and favorably resolved;
and
(5) No CRA protest as defined in Sec. 303.2(l) has been filed which
remains unresolved or, where such a protest has been filed and remains
unresolved, the Director (DCA), Deputy Director (DCA), associate
director (DCA), the appropriate regional director (DCA), or deputy
regional director (DCA) concurs that approval is consistent with the
purposes of the CRA, and the applicant agrees in writing to any
conditions imposed regarding the CRA; and
(6) The applicant agrees in writing to comply with any conditions
imposed by the delegate, other than the standard conditions defined in
Sec. 303.2(ff), which may be imposed without the applicant's written
consent.
(c) Additional delegations. In addition to the delegations otherwise
provided for in this section, and subject to the criteria set forth in
paragraphs (b)(1), (2), (4), (5), and (6) of this section, authority is
delegated to the Director and to the Deputy Director (DOS) and, where
confirmed in writing by the Director, to an associate director, to
approve an application for a merger transaction upon the consummation of
which the resulting institution would hold not more than 35 percent of
the total deposits held by banks and/or other depository institutions
(as appropriate) in any relevant geographic market in which more than
one of the merging institutions operate, and the Attorney General has
notified the FDIC in writing that the merger transaction would not have
a significantly adverse effect on competition.
(d) Corporate reorganizations; interim merger transactions. In
addition to the delegations otherwise provided for in this section,
authority is delegated to the Director and to the Deputy Director (DOS)
and, where confirmed in writing by the Director, to an associate
director and the appropriate regional director and deputy regional
director, to approve:
(1) An application for a corporate reorganization or an interim
merger transaction that satisfies the criteria set forth in paragraphs
(b)(5) and (6) of this section; and
(2) Any related application for deposit insurance.
(e) Limitations. The delegations in paragraphs (b) through (d) of
this section do not apply if:
(1) The Attorney General has determined that the merger transaction
would have a significantly adverse effect on competition; or
(2) The FDIC has made a determination pursuant to section 18 (c)(6)
of the FDI Act (12 U.S.C. 1828(c)(6)) that an emergency exists requiring
expeditious action or that the transaction must be consummated
immediately in order to avoid a probable failure.
(f) Review of competitive factors reports. In deciding whether to
approve a merger transaction under the authority delegated by this
section, the delegate shall review any reports provided by the Attorney
General, the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, or the Director of the Office of Thrift
Supervision in response to a request by the FDIC for reports on the
competitive factors involved in the proposed merger transaction.
(g) Competitive factor reports provided by the FDIC. Authority is
delegated to the Director and the Deputy Director (DOS) and, where
confirmed in writing by the Director, to an associate director and the
appropriate regional director and deputy regional director, to furnish
requested reports to the Board of Governors of the Federal Reserve
System, the Comptroller of the Currency, or the Director of the Office
of Thrift Supervision on the competitive
[[Page 31]]
factors involved in any merger transaction subject to approval by one of
those agencies, if the delegate determines that the proposed merger
transaction would not have a substantially adverse effect on
competition.
Sec. 303.67 Authority retained by the FDIC Board of Directors.
Without limiting the authority of the Board of Directors, the Board
of Directors retains authority to act on applications covered by this
subpart if the criteria or other conditions for delegation are not
satisfied. This includes the retention of authority to deny applications
for merger transactions. It further includes retention of authority to
approve applications for merger transactions where:
(a) The limitations specified in Sec. 303.66(e) preclude action
under delegated authority;
(b) The applicant does not agree in writing to comply with any
conditions imposed by the delegate, other than the standard conditions
defined in Sec. 303.2(ff), which may be imposed without the applicant's
written consent; or
(c) The resulting institution, upon consummation of a merger
transaction other than a corporate reorganization, would have more than
35 percent of the total deposits held by banks and/or other depository
institutions (as appropriate) in any relevant geographic market in which
more than one of the merging institutions operate.
Subpart E--Change in Bank Control
Sec. 303.80 Scope.
This subpart sets forth the procedures for submitting a notice to
acquire control of an insured state nonmember bank pursuant to the
Change in Bank Control Act of 1978, section 7(j) of the FDI Act (12
U.S.C. 1817(j)), and delegations of authority regarding such filings.
Sec. 303.81 Definitions.
For purposes of this subpart:
(a) Acquisition means a purchase, assignment, transfer, pledge or
other disposition of voting shares, or an increase in percentage
ownership of an insured state nonmember bank resulting from a redemption
of voting shares.
(b) Acting in concert means knowing participation in a joint
activity or parallel action towards a common goal of acquiring control
of an insured state nonmember bank, whether or not pursuant to an
express agreement.
(c) Control means the power, directly or indirectly, to direct the
management or policies of an insured bank or to vote 25 percent or more
of any class of voting shares of an insured bank.
(d) Person means an individual, corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization, and any other form of entity; and a voting
trust, voting agreement, and any group of persons acting in concert.
Sec. 303.82 Transactions requiring prior notice.
(a) Prior notice requirement. Any person acting directly or
indirectly, or through or in concert with one or more persons, shall
give the FDIC 60 days prior written notice, as specified in Sec. 303.84,
before acquiring control of an insured state nonmember bank, unless the
acquisition is exempt under Sec. 303.83.
(b) Acquisitions requiring prior notice.--(1) Acquisition of
control. The acquisition of control, unless exempted, requires prior
notice to the FDIC.
(2) Rebuttable presumption of control. The FDIC presumes that an
acquisition of voting shares of an insured state nonmember bank
constitutes the acquisition of the power to direct the management or
policies of an insured bank requiring prior notice to the FDIC, if,
immediately after the transaction, the acquiring person (or persons
acting in concert) will own, control, or hold with power to vote 10
percent or more of any class of voting shares of the institution, and
if:
(i) The institution has registered shares under section 12 of the
Securities Exchange Act of 1934 (15 U.S.C. 78l); or
(ii) No other person will own, control or hold the power to vote a
greater percentage of that class of voting shares immediately after the
transaction. If
[[Page 32]]
two or more persons, not acting in concert, each propose to acquire
simultaneously equal percentages of 10 percent or more of a class of
voting shares of an insured state nonmember bank, each such person shall
file prior notice with the FDIC.
(c) Acquisitions of loans in default. The FDIC presumes an
acquisition of a loan in default that is secured by voting shares of an
insured state nonmember bank to be an acquisition of the underlying
shares for purposes of this section.
(d) Other transactions. Transactions other than those set forth in
paragraph (b)(2) of this section resulting in a person's control of less
than 25 percent of a class of voting shares of an insured state
nonmember bank are not deemed by the FDIC to constitute control for
purposes of the Change in Bank Control Act.
(e) Rebuttal of presumptions. Prior notice to the FDIC is not
required for any acquisition of voting shares under the presumption of
control set forth in this section, if the FDIC finds that the
acquisition will not result in control. The FDIC will afford any person
seeking to rebut a presumption in this section an opportunity to present
views in writing or, if appropriate, orally before its designated
representatives at an informal meeting.
Sec. 303.83 Transactions not requiring prior notice.
(a) Exempt transactions. The following transactions do not require
notice to the FDIC under this subpart:
(1) The acquisition of additional voting shares of an insured state
nonmember bank by a person who:
(i) Held the power to vote 25 percent or more of any class of voting
shares of that institution continuously since March 9, 1979, or since
that institution commenced business, whichever is later; or
(ii) Is presumed, under Sec. 303.82(b)(2), to have controlled the
institution continuously since March 9, 1979, if the aggregate amount of
voting shares held does not exceed 25 percent or more of any class of
voting shares of the institution or, in other cases, where the FDIC
determines that the person has controlled the bank continuously since
March 9, 1979;
(2) The acquisition of additional shares of a class of voting shares
of an insured state nonmember bank by any person (or persons acting in
concert) who has lawfully acquired and maintained control of the
institution (for purposes of Sec. 303.82) after complying with the
procedures of the Change in Bank Control Act to acquire voting shares of
the institution under this subpart;
(3) Acquisitions of voting shares subject to approval under section
3 of the Bank Holding Company Act (12 U.S.C. 1842(a)), section 18(c) of
the FDI Act (12 U.S.C. 1828(c)), or section 10 of the Home Owners' Loan
Act (12 U.S.C. 1467a);
(4) Transactions exempt under the Bank Holding Company Act:
foreclosures by institutional lenders, fiduciary acquisitions by banks,
and increases of majority holdings by bank holding companies described
in sections 2(a)(5), 3(a)(A), or 3(a)(B) respectively of the Bank
Holding Company Act (12 U.S.C. 1841(a)(5), 1842(a)(A), and 1842(a)(B));
(5) A customary one-time proxy solicitation;
(6) The receipt of voting shares of an insured state nonmember bank
through a pro rata stock dividend; and
(7) The acquisition of voting shares in a foreign bank, which has an
insured branch or branches in the United States. (This exemption does
not extend to the reports and information required under paragraphs 9,
10, and 12 of the Change in Bank Control Act of 1978 (12 U.S.C. 1817(j)
(9), (10), and (12)).
(b) Prior notice exemption. (1) The following acquisitions of voting
shares of an insured state nonmember bank, which otherwise would require
prior notice under this subpart, are not subject to the prior notice
requirements if the acquiring person notifies the appropriate regional
director (DOS) within 90 calendar days after the acquisition and
provides any relevant information requested by the regional director
(DOS):
(i) The acquisition of voting shares through inheritance;
(ii) The acquisition of voting shares as a bona fide gift; or
[[Page 33]]
(iii) The acquisition of voting shares in satisfaction of a debt
previously contracted in good faith, except that the acquiror of a
defaulted loan secured by a controlling amount of a state nonmember
bank's voting securities shall file a notice before the loan is
acquired.
(2) The following acquisitions of voting shares of an insured state
nonmember bank, which otherwise would require prior notice under this
subpart, are not subject to the prior notice requirements if the
acquiring person notifies the appropriate regional director (DOS) within
90 calendar days after receiving notice of the acquisition and provides
any relevant information requested by the regional director (DOS):
(i) A percentage increase in ownership of voting shares resulting
from a redemption of voting shares by the issuing bank; or
(ii) The sale of shares by any shareholder that is not within the
control of a person resulting in that person becoming the largest
shareholder.
(3) Nothing in paragraph (b)(1) of this section limits the authority
of the FDIC to disapprove a notice pursuant to Sec. 303.85(c).
Sec. 303.84 Filing procedures.
(a) Filing notice. (1) A notice required under this subpart shall be
filed with the appropriate regional director (DOS) and shall contain all
the information required by paragraph 6 of the Change in Bank Control
Act, section 7 (j) of the FDI Act, (12 U.S.C. 1817(j)(6)), or prescribed
in the designated interagency form which may be obtained from any FDIC
regional office.
(2) The FDIC may waive any of the informational requirements of the
notice if the FDIC determines that it is in the public interest.
(3) A notificant shall notify the appropriate regional director
(DOS) immediately of any material changes in a notice submitted to the
regional director (DOS), including changes in financial or other
conditions.
(4) When the acquiring person is an individual, or group of
individuals acting in concert, the requirement to provide personal
financial data may be satisfied by a current statement of assets and
liabilities and an income summary, as required in the designated
interagency form, together with a statement of any material changes
since the date of the statement or summary. The appropriate regional
director (DOS) may require additional information if appropriate.
(b) Other laws. Nothing in this subpart shall affect any obligation
which the acquiring person(s) may have to comply with the federal
securities laws or other laws.
Sec. 303.85 Processing.
(a) Acceptance of notice. The 60-day notice period specified in
Sec. 303.82 shall commence on the date of receipt of a substantially
complete notice. The regional director (DOS) shall notify the person or
persons submitting a notice under this subpart in writing of the date
the notice is accepted for processing. The FDIC may request additional
information at any time.
(b) Time period for FDIC action; consummation of acquisition. (1)
The notificant(s) may consummate the proposed acquisition 60 days after
submission to the regional director (DOS) of a substantially complete
notice under paragraph (a) of this section, unless within that period
the FDIC disapproves the proposed acquisition or extends the 60-day
period.
(2) The notificant(s) may consummate the proposed transaction before
the expiration of the 60-day period if the FDIC notifies the
notificant(s) in writing of its intention not to disapprove the
acquisition.
(c) Disapproval of acquisition of control. Subpart D of 12 CFR part
308 sets forth the rules of practice and procedure for a notice of
disapproval.
Sec. 303.86 Public notice requirements.
(a) Publication--(1) Newspaper announcement. Any person(s) filing a
notice under this subpart shall publish an announcement soliciting
public comment on the proposed acquisition. The announcement shall be
published in a newspaper of general circulation in the community in
which the home office of the state nonmember bank to be acquired is
located. The announcement shall be published as close as is practicable
to the date the notice is filed with the appropriate regional director
[[Page 34]]
(DOS), but in no event more than 10 calendar days before or after the
filing date.
(2) Contents of newspaper announcement. The newspaper announcement
shall conform to the public notice requirements set forth in Sec. 303.7.
(b) Delay of publication. The FDIC may permit delay in the
publication required by this section if the FDIC determines, for good
cause, that it is in the public interest to grant such a delay. Requests
for delay of publication may be submitted to the appropriate regional
director (DOS).
(c) Shortening or waiving notice. The FDIC may shorten the public
comment period to a period of not less than 10 days, or waive the public
comment or newspaper publication requirements of this paragraph, or act
on a notice before the expiration of a public comment period, if it
determines in writing either that an emergency exists or that disclosure
of the notice, solicitation of public comment, or delay until expiration
of the public comment period would seriously threaten the safety or
soundness of the bank to be acquired.
(d) Consideration of public comments. In acting upon a notice filed
under this subpart, the FDIC shall consider all public comments received
in writing within 20 days following the required newspaper publication
or, if the FDIC has shortened the public comment period pursuant to
paragraph (c) of this section, within such shorter period.
(e) Publication if filing is subsequent to acquisition of control.
(1) Whenever a notice of a proposed acquisition of control is not filed
in accordance with the Change in Bank Control Act and these regulations,
the acquiring person(s) shall, within 10 days of being so directed by
the FDIC, publish an announcement of the acquisition of control in a
newspaper of general circulation in the community in which the home
office of the state nonmember bank to be acquired is located.
(2) The newspaper announcement shall contain the name(s) of the
acquiror(s), the name of the depository institution involved, and the
date of the acquisition of the stock. The announcement shall also
contain a statement indicating that the FDIC is currently reviewing the
acquisition of control. The announcement also shall state that any
person wishing to comment on the change in control may do so by
submitting written comments to the appropriate regional director (DOS)
of the FDIC (give address of regional office) within 20 days following
the required newspaper publication.
Sec. 303.87 Delegation of authority.
(a) Authority is delegated to the Director and the Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director and the appropriate regional director and deputy regional
director, to issue a written notice of the FDIC's intent not to
disapprove an acquisition of control of an insured state nonmember bank.
(b) The authority delegated by paragraph (a) of this section shall
include the power to:
(1) Act in situations where information is submitted on acquisitions
arising out of events beyond the person's control, as set forth in
Sec. 303.83(b);
(2) Extend notice periods;
(3) Determine whether a notice should be filed under section 7(j) of
the Act (12 U.S.C. 1817(j)) by a person acquiring less than 25 percent
of any class of voting shares of an insured state nonmember bank; and
(4) Delay or waive publication, waive or shorten the public comment
period, or act on a proposed acquisition of control prior to the
expiration of the public comment period, as provided in
Secs. 303.86(a)(3) and (4).
(c) Authority is delegated to the Director and Deputy Director (DOS)
and, where confirmed in writing by the Director, to an associate
director, to disapprove an acquisition of control of an insured state
nonmember bank.
Subpart F--Change of Director or Senior Executive Officer
Sec. 303.100 Scope.
This subpart sets forth the circumstances under which an insured
state nonmember bank must notify the FDIC of a change in any member of
its board of directors or any senior executive officer and the
procedures for filing such notice, as well as applicable delegations of
authority. This subpart
[[Page 35]]
implements section 32 of the FDI Act (12 U.S.C. 1831i).
Sec. 303.101 Definitions.
For purposes of this subpart:
(a) Director means a person who serves on the board of directors or
board of trustees of an insured state nonmember bank, except that this
term does not include an advisory director who:
(1) Is not elected by the shareholders;
(2) Is not authorized to vote on any matters before the board of
directors or board of trustees or any committee thereof;
(3) Solely provides general policy advice to the board of directors
or board of trustees and any committee thereof; and
(4) Has not been identified by the FDIC as a person who performs the
functions of a director for purposes of this subpart.
(b) Senior executive officer means a person who holds the title of
president, chief executive officer, chief operating officer, chief
managing official (in an insured state branch of a foreign bank), chief
financial officer, chief lending officer, or chief investment officer,
or, without regard to title, salary, or compensation, performs the
function of one or more of these positions. Senior executive officer
also includes any other person identified by the FDIC, whether or not
hired as an employee, with significant influence over, or who
participates in, major policymaking decisions of the insured state
nonmember bank.
(c) Troubled condition means any insured state nonmember bank that:
(1) Has a composite rating, as determined in its most recent report
of examination of 4 or 5 under the Uniform Financial Institutions Rating
System (UFIRS), or in the case of an insured state branch of a foreign
bank, an equivalent rating; or
(2) Is subject to a proceeding initiated by the FDIC for termination
or suspension of deposit insurance; or
(3) Is subject to a cease-and-desist order or written agreement
issued by either the FDIC or the appropriate state banking authority
that requires action to improve the financial condition of the bank or
is subject to a proceeding initiated by the FDIC or state authority
which contemplates the issuance of an order that requires action to
improve the financial condition of the bank, unless otherwise informed
in writing by the FDIC; or
(4) Is informed in writing by the FDIC that it is in troubled
condition for purposes of the requirements of this subpart on the basis
of the bank's most recent report of condition or report of examination,
or other information available to the FDIC.
Sec. 303.102 Filing procedures and waiver of prior notice.
(a) Insured state nonmember banks. An insured state nonmember bank
shall give the FDIC written notice, as specified in paragraph (c)(1) of
this section, at least 30 days prior to adding or replacing any member
of its board of directors, employing any person as a senior executive
officer of the bank, or changing the responsibilities of any senior
executive officer so that the person would assume a different senior
executive officer position, if:
(1) The bank is not in compliance with all minimum capital
requirements applicable to the bank as determined on the basis of the
bank's most recent report of condition or report of examination;
(2) The bank is in troubled condition; or
(3) The FDIC determines, in connection with its review of a capital
restoration plan required under section 38(e)(2) of the FDI Act (12
U.S.C. 1831o(e)(2)) or otherwise, that such notice is appropriate.
(b) Insured branches of foreign banks. In the case of the addition
of a member of the board of directors or a change in senior executive
officer in a foreign bank having an insured state branch, the notice
requirement shall not apply to such additions and changes in the foreign
bank parent, but only to changes in senior executive officers in the
state branch.
(c) Waiver of prior notice--(1) Waiver requests. The FDIC may permit
an individual, upon petition by the bank to the appropriate regional
director (DOS), to serve as a senior executive officer or director
before filing the notice required under this subpart if the FDIC finds
that:
[[Page 36]]
(i) Delay would threaten the safety or soundness of the bank;
(ii) Delay would not be in the public interest; or
(iii) Other extraordinary circumstances exist that justify waiver of
prior notice.
(2) Automatic waiver. In the case of the election of a new director
not proposed by management at a meeting of the shareholders of an
insured state nonmember bank, the prior 30-day notice is automatically
waived and the individual immediately may begin serving, provided that a
complete notice is filed with the appropriate regional director (DOS)
within two business days after the individual's election.
(3) Effect on disapproval authority. A waiver shall not affect the
authority of the FDIC to disapprove a notice within 30 days after a
waiver is granted under paragraph (c)(1) of this section or the election
of an individual who has filed a notice and is serving pursuant to an
automatic waiver under paragraph (c)(2) of this section.
(d)(1) Content of filing. The notice required by paragraph (a) of
this section shall be filed with the appropriate regional director (DOS)
and shall contain information pertaining to the competence, experience,
character, or integrity of the individual with respect to whom the
notice is submitted, as prescribed in the designated interagency form
which is available from any FDIC regional office. The regional director
or his or her designee may require additional information.
(2) Modification. The FDIC may modify or accept other information in
place of the requirements of paragraph (d)(1) of this section for a
notice filed under this subpart.
Sec. 303.103 Processing.
(a) Processing. The 30-day notice period specified in
Sec. 303.102(a) shall begin on the date substantially all information
required to be submitted by the notificant pursuant to
Sec. 303.102(c)(1) is received by the appropriate regional director
(DOS). The regional director shall notify the bank submitting the notice
of the date on which the notice is accepted for processing and of the
date on which the 30-day notice period will expire. If processing cannot
be completed within 30 days, the notificant will be advised in writing,
prior to expiration of the 30-day period, of the reason for the delay in
processing and of the additional time period, not to exceed 60 days, in
which processing will be completed.
(b) Commencement of service--(1) At expiration of period. A proposed
director or senior executive officer may begin service after the end of
the 30-day period or any other additional period as provided under
paragraph (a) of this section, unless the FDIC disapproves the notice
before the end of the period.
(2) Prior to expiration of period. A proposed director or senior
executive officer may begin service before the end of the 30-day period
or any additional time period as provided under paragraph (a) of this
section, if the FDIC notifies the bank and the individual in writing of
the FDIC's intention not to disapprove the notice.
(c) Notice of disapproval. The FDIC may disapprove a notice filed
under Sec. 303.102 if the FDIC finds that the competence, experience,
character, or integrity of the individual with respect to whom the
notice is submitted indicates that it would not be in the best interests
of the depositors of the bank or in the best interests of the public to
permit the individual to be employed by, or associated with, the bank.
Subpart L of 12 CFR part 308 sets forth the rules of practice and
procedure for a notice of disapproval.
Sec. 303.104 Delegation of authority.
The following authority is delegated to the Director and Deputy
Director (DOS) and, where confirmed in writing by the Director, to an
associate director and the appropriate regional director or deputy
regional director to:
(a) Designate an insured state nonmember bank as being in troubled
condition;
(b) Grant waivers of the prior notice requirement;
(c) Extend the 30-day processing period for an additional period of
up to 60 days in the event of extenuating circumstances; and
(d) Issue notices of disapproval or notices of intent not to
disapprove under this subpart.
[[Page 37]]
Subpart G--Activities of Insured State Banks
Source: 63 FR 66325, Dec. 1, 1998, unless otherwise noted.
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 also 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.
Sec. 303.121 Filing procedures.
(a) Where to file. A notice or application required by subpart A or
subpart B of part 362 of this chapter shall be submitted in writing to
the appropriate regional director (DOS).
(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 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 or B 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 appropriate regional director (DOS)
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. 362.4(b)(3)(i),
Sec. 362.4(b)(5), or Sec. 362.8(a)(2) 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), 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)(2),
Sec. 362.4(b)(4), Sec. 362.5(b)(2), Sec. 362.8(a)(2), or Sec. 362.8(b)
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
[[Page 38]]
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. 303.123 Delegations of authority.
(a) Instruments having the character of debt securities. Authority
is delegated to the Director (DOS) to make determinations contemplated
under Secs. 362.2(h) and 362.3(b)(2)(iii)(B) of this chapter.
(b) Other applications, notices, and actions. The authority to
review and act upon applications and notices filed pursuant to this
subpart G and to take any other action authorized by this subpart G or
subparts A and B of part 362 of this chapter is delegated to the
Director (DOS), and except as limited by paragraph (a) of this section,
to the Deputy Director and where confirmed in writing by the Director to
an associate director and the appropriate regional director and deputy
regional director.
Subpart H--Activities of Insured Savings Associations
Source: 63 FR 66325, Dec. 1, 1998, unless otherwise noted.
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 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 regional director.
(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 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 appropriate regional director (DOS)
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)(i), Sec. 362.12(b)(2)(i), or Sec. 362.12(b)(4) of this
[[Page 39]]
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), Sec. 362.11(b)(2), 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 appropriate regional director (DOS). The notice will be
reviewed at the appropriate regional office, which will take such action
as it deems necessary and appropriate.
Sec. 303.143 Delegations of authority.
(a) Instruments having the character of debt securities. Authority
is delegated to the Director (DOS) to make determinations contemplated
under Secs. 362.2(h) and 362.3(b)(2)(iii)(B) of this chapter.
(b) Other applications, notices, and actions. The authority to
review and act upon applications and notices filed pursuant to this
subpart H and to take any other action authorized by this subpart H or
subparts C and D of part 362 of this chapter is delegated to the
Director (DOS), and except as limited by paragraph (a) of this section,
to the Deputy Director and where confirmed in writing by the Director to
an associate director and the appropriate regional director and deputy
regional director.
Subpart I--Mutual-to-Stock Conversions
Sec. 303.160 Scope.
This subpart sets forth the notice requirements, procedures, and
delegations of authority for the conversion of an insured mutual state-
chartered savings bank to the stock form of ownership. The substantive
requirements governing such conversions are contained in Sec. 333.4 of
this chapter.
Sec. 303.161 Filing procedures.
(a) Prior notice required. In addition to complying with the
substantive requirements in Sec. 333.4 of this chapter, an insured
state-chartered mutually owned savings bank that proposes to convert
from mutual to stock form shall file with the FDIC a notice of intent to
convert to stock form.
(b) General. (1) A notice required under this subpart shall be filed
in letter form with the appropriate regional director (DOS) at the same
time as required conversion application materials are filed with the
institution's state regulator.
(2) An insured mutual savings bank chartered by a state that does
not require the filing of a conversion application shall file a notice
in letter form with the appropriate regional director (DOS) as soon as
practicable after adoption of its plan of conversion.
(c) Content of notice. The notice shall provide a description of the
proposed conversion and include all materials that have been filed with
any state or federal banking regulator and any state or federal
securities regulator. At a minimum, the notice shall include, as
applicable, copies of:
[[Page 40]]
(1) The plan of conversion, with specific information concerning the
record date used for determining eligible depositors and the
subscription offering priority established in connection with any
proposed stock offering;
(2) Certified board resolutions relating to the conversion;
(3) A business plan, including a detailed discussion of how the
capital acquired in the conversion will be used, expected earnings for
at least a three-year period following the conversion, and a
justification for any proposed stock repurchases;
(4) The charter and bylaws of the converted institution;
(5) The bylaws and operating plans of any other entities formed in
connection with the conversion transaction, such as a holding company or
charitable foundation;
(6) A full appraisal report, prepared by an independent appraiser,
of the value of the converting institution and the pricing of the stock
to be sold in the conversion transaction;
(7) Detailed descriptions of any proposed management or employee
stock benefit plans or employment agreements and a discussion of the
rationale for the level of benefits proposed, individually and by
participant group;
(8) Indemnification agreements;
(9) A preliminary proxy statement and sample proxy;
(10) Offering circular(s) and order form;
(11) All contracts or agreements relating to solicitation,
underwriting, market-making, or listing of conversion stock and any
agreements among members of a group regarding the purchase of
unsubscribed shares;
(12) A tax opinion concerning the federal income tax consequences of
the proposed conversion;
(13) Consents from experts to use their opinions as part of the
notice; and
(14) An estimate of conversion-related expenses.
(d) Additional information. The FDIC, in its discretion, may request
any additional information it deems necessary to evaluate the proposed
conversion. The institution proposing to convert from mutual to stock
form shall promptly provide such information to the FDIC.
(e) Acceptance of notice. The 60-day notice period specified in
Sec. 303.163 shall commence on the date of receipt of a substantially
complete notice. The appropriate regional director (DOS) shall notify
the institution proposing to convert in writing of the date the notice
is accepted.
(f) Related applications. Related applications that require FDIC
action may include:
(1) Applications for deposit insurance, as required by subpart B of
this part; and
(2) Applications for consent to merge, as required by subpart D of
this part.
Sec. 303.162 Waiver from compliance.
(a) General. An institution proposing to convert from mutual to
stock form may file with the appropriate regional director (DOS) a
letter requesting waiver of compliance with this subpart or Sec. 333.4
of this chapter:
(1) When compliance with any provision of this section or Sec. 333.4
of this chapter would be inconsistent or in conflict with applicable
state law; or
(2) For any other good cause shown.
(b) Content of filing. In making a request for waiver under
paragraph (a) of this section, the institution shall demonstrate that
the requested waiver, if granted, would not result in any effects that
would be detrimental to the safety and soundness of the institution,
entail a breach of fiduciary duty on part of the institution's
management or otherwise be detrimental or inequitable to the
institution, its depositors, any other insured depository
institution(s), 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;
[[Page 41]]
(3) The participation of depositors in approving the transaction;
(4) The form of the proxy statement required for the vote of the
depositors/members on the conversion;
(5) Any proposed increased compensation and other remuneration
(including stock grants, stock option rights and other similar benefits)
to be granted to officers and directors/trustees of the bank in
connection with the conversion;
(6) The adequacy and independence of the appraisal of the value of
the mutual savings bank for purposes of determining the price of the
shares of stock to be sold;
(7) The process by which the bank's trustees approved the appraisal,
the pricing of the stock, and the proposed compensation arrangements for
insiders;
(8) The nature and apportionment of stock subscription rights; and
(9) The bank's plans to fulfill its commitment to serving the
convenience and needs of its community.
(b) Additional considerations. (1) In reviewing the notice and other
materials submitted under this subpart, the FDIC will take into account
the extent to which the proposed conversion transaction conforms with
the various provisions of the mutual-to-stock conversion regulations of
the Office of Thrift Supervision (OTS) (12 CFR part 563b), as currently
in effect at the time the notice is submitted. Any non-conformity with
those provisions will be closely reviewed.
(2) Conformity with the OTS requirements will not be sufficient for
FDIC regulatory purposes if the FDIC determines that the proposed
conversion transaction would pose a risk to the bank's safety or
soundness, violate any law or regulation, or present a breach of
fiduciary duty.
(c) Notice period. (1) The period in which the FDIC may object to
the proposed conversion transaction shall be the later of:
(i) 60 days after receipt of a substantially complete notice of
proposed conversion; or
(ii) 20 days after the last applicable state or other federal
regulator has approved the proposed conversion.
(2) The FDIC may, in its discretion, extend the initial 60-day
period for up to an additional 60 days by providing written notice to
the institution.
(d) Letter of non-objection. If the FDIC determines, in its
discretion, that the proposed conversion transaction would not pose a
risk to the institution's safety or soundness, violate any law or
regulation, or present a breach of fiduciary duty, then the FDIC shall
issue to the institution proposing to convert a letter of non-objection
to the proposed conversion.
(e) Letter of objection. If the FDIC determines, in its discretion,
that the proposed conversion transaction poses a risk to the
institution's safety or soundness, violates any law or regulation, or
presents a breach of fiduciary duty, then the FDIC shall issue a letter
to the institution stating its objection(s) to the proposed conversion
and advising the institution not to consummate the proposed conversion
until such letter is rescinded. A copy of the letter of objection shall
be furnished to the institution's primary state regulator and any other
state or federal banking regulator and state or federal securities
regulator involved in the conversion.
(f) Consummation of the conversion. (1) An institution may
consummate the proposed conversion upon either:
(i) The receipt of a letter of non-objection; or
(ii) The expiration of the notice period.
(2) If a letter of objection is issued, then the institution shall
not consummate the proposed conversion until the FDIC rescinds such
letter.
Sec. 303.164 Delegation of authority.
(a) Authority is delegated to the Director and Deputy Director (DOS)
to issue a letter of non-objection to an institution proposing to
convert when the proposed conversion transaction is determined not to
pose a risk to the institution's safety or soundness, violate any law or
regulation, present a breach of fiduciary duty, and not to raise any
unique legal or policy issues. Such authority will be exercised in
accordance with the time periods contained in
[[Page 42]]
Sec. 303.163, unless the institution proposing to convert agrees to a
longer time period.
(b) Authority to approve or deny a waiver under Sec. 303.162 is
retained by the Board of Directors.
(c) Authority is delegated to the Director and Deputy Director (DOS)
and, where confirmed in writing by the Director, to an associate
director and the appropriate regional director and deputy regional
director to accept notices of intent to convert to stock form and to
extend the initial 60-day period within which FDIC may object by an
additional 60 days.
Subpart J--International Banking
Sec. 303.180 Scope.
This subpart sets forth procedures for complying with application
requirements relating to the foreign activities of insured state
nonmember banks, U.S. activities of insured branches of foreign banks,
and certain foreign mergers of insured depository institutions. Related
delegations of authority are also set forth in the subpart.
Sec. 303.181 Definitions.
For the purposes of this subpart, the following additional
definitions apply:
(a) Board of Governors means the Board of Governors of the Federal
Reserve System.
(b) Comptroller means the Office of the Comptroller of the Currency.
(c) Eligible insured branch. An insured branch will be treated as an
eligible depository institution within the meaning of Sec. 303.2(r) if
the insured branch:
(1) Received an FDIC-assigned composite ROCA rating of 1 or 2 as a
result of its most recent federal or state examination, and the FDIC,
Comptroller, or Board of Governors have not expressed concern about the
condition or operations of the foreign banking organization or the
support it offers the branch;
(2) Received a satisfactory or better Community Reinvestment Act
(CRA) rating from its primary federal regulator at its most recent
examination, if the depository institution is subject to examination
under part 345 of this chapter;
(3) Received a compliance rating of 1 or 2 from its primary federal
regulator at its most recent examination;
(4) Is well-capitalized as defined in subpart B of part 325 of this
chapter; and
(5) Is not subject to a cease and desist order, consent order,
prompt corrective action directive, written agreement, memorandum of
understanding, or other administrative agreement with any U.S. bank
regulatory authority.
(d) Federal branch means a federal branch of a foreign bank as
defined by Sec. 347.202 of this chapter.
(e) Foreign bank means a foreign bank as defined by Sec. 347.202 of
this chapter.
(f) Foreign branch means a foreign branch of an insured state
nonmember bank as defined by Sec. 347.102 of this chapter.
(g) Foreign organization means a foreign organization as defined by
Sec. 347.102 of this chapter.
(h) Insured branch means an insured branch of a foreign bank as
defined by Sec. 347.202 of this chapter.
(i) Noninsured branch means a noninsured branch of a foreign bank as
defined by Sec. 347.202 of this chapter.
(j) State branch means a state branch of a foreign bank as defined
by Sec. 347.202 of this chapter.
Sec. 303.182 Establishing, moving or closing a foreign branch of a state nonmember bank; Sec. 347.103.
(a) Notice procedures for general consent. Notice in the form of a
letter from an eligible depository institution establishing or
relocating a foreign branch pursuant to Sec. 347.103(b) of this chapter
shall be provided to the appropriate regional director (DOS) no later
than 30 days after taking such action, and include the location of the
foreign branch, including a street address, and a statement that the
foreign branch has not been located on a site on the World Heritage List
or on the foreign country's equivalent of the National Register of
Historic Places (National Register), in accordance with section 402 of
the National Historic Preservation Act Amendments of 1980 (NHPA
Amendments Act) (16 U.S.C. 470a-2). The regional director will provide
written acknowledgment of receipt of the notice.
[[Page 43]]
(b) Filing procedures for other branch establishments. (1) Where to
file. An applicant seeking to establish a foreign branch other than
under Sec. 347.103(b) of this chapter shall submit an application to the
appropriate regional director (DOS).
(2) Content of filing. A complete letter application shall include
the following information:
(i) The exact location of the proposed foreign branch, including the
street address, and a statement whether the foreign branch will be
located on a site on the World Heritage List or on the foreign country's
equivalent of the National Register, in accordance with section 402 of
the NHPA Amendments Act;
(ii) Details concerning any involvement in the proposal by an
insider of the applicant, as defined in Sec. 303.2(u), including any
financial arrangements relating to fees, the acquisition of property,
leasing of property, and construction contracts;
(iii) A brief description of the applicant's business plan with
respect to the foreign branch; and
(iv) A brief description of the activities of the branch, and to the
extent any activities are not authorized by Sec. 347.103(a) of this
chapter, the applicant's reasons why they should be approved.
(3) Additional information. The appropriate regional director (DOS)
may request additional information to complete processing.
(c) Processing--(1) Expedited processing for eligible depository
institutions. An application filed under Sec. 347.103(c) of this chapter
by an eligible depository institution as defined in Sec. 303.2(r)
seeking to establish a foreign branch by expedited processing will be
acknowledged in writing by the FDIC and will receive expedited
processing, unless the applicant is notified in writing to the contrary
and provided with the basis for that decision. The FDIC may remove the
application from expedited processing for any of the reasons set forth
in Sec. 303.11(c)(2). Absent such removal, an application processed
under expedited processing is deemed approved 45 days after receipt of a
substantially complete application by the FDIC, or on such earlier date
authorized by the FDIC in writing.
(2) Standard processing. For those applications which are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action when the
decision is rendered.
(d) Closing. Notices of branch closing under Sec. 347.103(f) of this
chapter, in the form of a letter including the name, location, and date
of closing of the closed branch, shall be filed with the appropriate
regional director (DOS) no later than 30 days after the branch is
closed.
(e) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, if confirmed in writing by the Director,
to an associate director and the appropriate regional director and
deputy regional director to approve an application under paragraph (c)
of this section if the following criteria are satisfied:
(1) The requirements of section 402 the NHPA Amendments Act have
been favorably resolved;
(2) The applicant will only conduct activities authorized by
Sec. 347.103(a) of this chapter; and
(3) If the foreign branch will be located in a foreign country in
which applicable law or practice would limit the FDIC's access to
information for supervisory purposes, the delegate is satisfied that
adequate arrangements have been made (through conditions imposed in
connection with the approval and agreed to in writing by the applicant)
to ensure that the FDIC will have necessary access to information for
supervisory purposes.
Sec. 303.183 Investment by insured state nonmember banks in foreign organizations; Sec. 347.108.
(a) Notice procedures for general consent. Notice in the form of a
letter from an eligible depository institution making direct or indirect
investments in a foreign organization pursuant to Sec. 347.108(a) of
this chapter shall be provided to the appropriate regional director
(DOS) no later than 30 days after taking such action. The appropriate
regional director will provide written acknowledgment of receipt of the
notice.
(b) Filing procedures for other investments. (1) Where to file. An
applicant seeking to make a foreign investment other than under
Sec. 347.108(a) of this
[[Page 44]]
chapter shall submit an application to the appropriate regional director
(DOS).
(2) Content of filing. A complete application shall include the
following information:
(i) Basic information about the terms of the proposed transaction,
the amount of the investment in the foreign organization and the
proportion of its ownership to be acquired;
(ii) Basic information about the foreign organization, its financial
position and income, including any available balance sheet and income
statement for the prior year, or financial projections for a new foreign
organization;
(iii) A listing of all shareholders known to hold ten percent or
more of any class of the foreign organization's stock or other evidence
of ownership, and the amount held by each;
(iv) A brief description of the applicant's business plan with
respect to the foreign organization;
(v) A brief description of any business or activities which the
foreign organization will conduct directly or indirectly in the United
States, and to the extent such activities are not authorized by subpart
A of part 347 of this chapter, the applicant's reasons why they should
be approved;
(vi) A brief description of the foreign organization's activities,
and to the extent such activities are not authorized by subpart A of
part 347 of this chapter, the applicant's reasons why they should be
approved; and
(vii) If the applicant seeks approval to engage in underwriting or
dealing activities, a description of the applicant's plans and
procedures to address all relevant risks.
(3) Additional information. The appropriate regional director (DOS)
may request additional information to complete processing.
(c) Processing.--(1) Expedited processing for eligible depository
institutions. An application filed under Sec. 347.108(b) of this chapter
by an eligible depository institution as defined in Sec. 303.2(r)
seeking to make direct or indirect investments in a foreign organization
by expedited processing will be acknowledged in writing by the FDIC and
will receive expedited processing, unless the applicant is notified in
writing to the contrary and provided with the basis for that decision.
The FDIC may remove the application from expedited processing for any of
the reasons set forth in Sec. 303.11(c)(2). Absent such removal, an
application processed under expedited processing is deemed approved 45
days after receipt of a complete application by the FDIC, or on such
earlier date authorized by the FDIC in writing.
(2) Standard processing. For those applications which are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action when the
decision is rendered.
(d) Divestiture. If an insured state nonmember bank holding 50
percent or more of the voting equity interests of a foreign organization
or otherwise controlling the foreign organization divests itself of such
ownership or control, the insured state nonmember bank shall file a
notice in the form of a letter, including the name, location, and date
of divestiture of the foreign organization, with the appropriate
regional director (DOS) no later than 30 days after the divestiture.
(e) Delegations of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, if confirmed in writing by the Director,
to an associate director and the appropriate regional director and
deputy regional director to approve applications under paragraph (c) of
this section so long as:
(1) The investment complies with the amount limits in Sec. 347.104
through Sec. 347.107 of this chapter and is in a foreign organization
which only conducts such activities as authorized thereunder; and
(2) For foreign investments resulting in the applicant holding 20
percent or more of the voting equity interests of the foreign
organization or controlling such organization, if the organization is
located in a foreign country in which applicable law or practice would
limit the FDIC's access to information for supervisory purposes, the
delegate is satisfied that adequate arrangements have been made (through
conditions imposed in connection with the approval and agreed to in
writing by the applicant) to ensure that the FDIC will
[[Page 45]]
have necessary access to information for supervisory purposes.
Sec. 303.184 Moving an insured branch of a foreign bank.
(a) Filing procedures.--(1) Where and when to file. An application
by an insured branch of a foreign bank seeking the FDIC's consent to
move from one location to another, as required by section 18(d)(1) of
the FDI Act (12 U.S.C. 1828(d)(1)), shall be submitted in writing to the
appropriate regional director (DOS) on the date the notice required by
paragraph (c) of this section is published, or within 5 days after the
date of the last required publication.
(2) Content of filing. A complete letter application shall include
the following information:
(i) The exact location of the proposed site, including the street
address;
(ii) Details concerning any involvement in the proposal by an
insider of the applicant, as defined in Sec. 303.2(u), including any
financial arrangements relating to fees, the acquisition of property,
leasing of property, and construction contracts;
(iii) A statement of the impact of the proposal on the human
environment, including information on compliance with local zoning laws
and regulations and the effect on traffic patterns, for purposes of
complying with the applicable provisions of the NEPA, and the FDIC
``Statement Policy on NEPA'' (2 FDIC Law, Regulations, Related Acts
5185; see Sec. 309.4 (a) and (b) of this chapter for availability);
(iv) A statement as to whether or not the site is eligible for
inclusion in the National Register of Historic Places for purposes of
complying with the applicable provisions of the NHPA, and the FDIC
``Statement on NHPA'' (2 FDIC Law, Regulations, Related Acts 5175; see
Sec. 309.4 (a) and (b) of this chapter for availability), including
documentation of consultation with the State Historic Preservation
Officer, as appropriate;
(v) Comments on any changes in services to be offered, the community
to be served, or any other effect the proposal may have on the
applicant's compliance with the CRA; and
(vi) A copy of the newspaper publication required by paragraph (c)
of this section, as well as the name and address of the newspaper and
the date of the publication.
(3) Comptroller's application. If the applicant is filing an
application with the Comptroller which contains the information required
by paragraph (a)(2) of this section, the applicant may submit a copy to
the FDIC in lieu of a separate application.
(4) Additional information. The appropriate regional director (DOS)
may request additional information to complete processing.
(b) Processing.--(1) Expedited processing for eligible insured
branches. An application filed by an eligible insured branch as defined
in Sec. 303.181(c) will be acknowledged in writing by the FDIC and will
receive expedited processing, unless the applicant is notified to the
contrary and provided with the basis for that decision. The FDIC may
remove an application from expedited processing for any of the reasons
set forth in Sec. 303.11(c)(2). Absent such removal, an application
processed under expedited processing will be deemed approved on the
latest of the following:
(i) The 21st day after the FDIC's receipt of a substantially
complete application; or
(ii) The 5th day after expiration of the comment period described in
paragraph (c) of this section.
(2) Standard processing. For those applications that are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action as soon as
the decision is rendered.
(c) Publication requirement and comment period.--(1) Newspaper
publications. The applicant shall publish a notice of its proposal to
move from one location to another, as described in Sec. 303.7(b), in a
newspaper of general circulation in the community in which the insured
branch is located prior to its being moved and in the community to which
it is to be moved. The notice shall include the insured branch's current
and proposed addresses.
(2) Public comments. All public comments must be received by the
appropriate regional director (DOS) within 15 days after the date of the
last newspaper publication required by paragraph (c)(1) of this section,
unless the comment period has been extended or
[[Page 46]]
reopened in accordance with Sec. 303.9(b)(2).
(3) Lobby notices. If the insured branch has a public lobby, a copy
of the newspaper publication shall be posted in the public lobby for at
least 15 days beginning on the date of the publication required by
paragraph (c)(1) of this section.
(d) Delegation of authority. (1) Authority is delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate director and the appropriate regional
director and deputy regional director to approve an application under
this section. For the delegate to exercise this authority, the criteria
in paragraphs (d)(1)(i) through (d)(1)(vi) of this section must be
satisfied:
(i) The factors set forth in section 6 of the FDI Act (12 U.S.C.
1816) have been considered and favorably resolved;
(ii) The applicant is at least adequately capitalized as defined in
subpart B of part 325 of this chapter;
(iii) Any financial arrangements which have been made in connection
with the proposed relocation and which involve the applicant's
directors, officers, major shareholders, or their interests are fair and
reasonable in comparison to similar arrangements that could have been
made with independent third parties;
(iv) Compliance with the CRA, the NEPA, the NHPA and any applicable
related regulations, including 12 CFR part 345, has been considered and
favorably resolved;
(v) No CRA protest as defined in Sec. 303.2(l) has been filed which
remains unresolved or, where such a protest has been filed and remains
unresolved, the Director (DCA), Deputy Director (DCA), an associate
director (DCA) or the appropriate regional director or deputy regional
director (DCA) concurs that approval is consistent with the purposes of
the CRA and the applicant agrees in writing to any conditions imposed
regarding the CRA; and
(vi) The applicant agrees in writing to comply with any conditions
imposed by the delegate, other than the standard conditions defined in
Sec. 303.2(ff) which may be imposed without the applicant's written
consent.
(2) Authority is delegated to the Director and Deputy Director (DOS)
and, where confirmed in writing by the Director, to an associate
director, to approve applications under this section which meet all
criteria in paragraph (d)(1) of this section except that the applicant
does not agree in writing to comply with any condition imposed by the
delegate, other than the standard conditions defined in Sec. 303.2(ff)
which may be imposed without the applicant's written consent.
(3) Authority is delegated to the Director and Deputy Director (DOS)
and, where confirmed in writing by the Director, to an associate
director, to deny applications under this section.
Sec. 303.185 Merger transactions involving foreign banks or foreign organizations.
(a) Merger transactions involving an insured branch of a foreign
bank. Merger transactions requiring the FDIC's prior approval as set
forth in Sec. 303.62 include any merger transaction in which the
resulting institution is an insured branch of a foreign bank which is
not a federal branch, or any merger transaction which involves any
insured branch and any uninsured institution. In such cases:
(1) References to an eligible depository institution in subpart D of
this part include an eligible insured branch as defined in Sec. 303.181;
(2) The definition of a corporate reorganization in Sec. 303.61(b)
includes a merger transaction between an insured branch and other
branches, agencies, or subsidiaries in the United States of the same
foreign bank; and
(3) For the purposes of Sec. 303.62(b)(1) on interstate mergers, a
merger transaction involving an insured branch is one involving the
acquisition of a branch of an insured bank without the acquisition of
the bank for purposes of section 44 of the FDI Act (12 U.S.C. 1831u)
only when the merger transaction involves fewer than all the insured
branches of the same foreign bank in the same state.
(b) Certain merger transactions with foreign organizations outside
any State. Merger transactions requiring the FDIC's prior approval as
set forth in Sec. 303.62 include any merger transaction
[[Page 47]]
in which an insured depository institution becomes directly liable for
obligations which will, after the merger transaction, be treated as
deposits under section 3(l)(5)(A)(i)-(ii) of the FDI Act (12 U.S.C.
1813(l)(5)(A)(i)-(ii)), as a result of a merger or consolidation with a
foreign organization or an assumption of liabilities of a foreign
organization.
Sec. 303.186 Exemptions from insurance requirement for a state branch of a foreign bank; Sec. 347.206.
(a) Filing procedures.--(1) Where to file. An application by a state
branch for consent to operate as a noninsured state branch, as permitted
by Sec. 347.206(b) of this chapter, shall be submitted in writing to the
appropriate regional director (DOS).
(2) Content of filing. A complete letter application shall include
the following information:
(i) The kinds of deposit activities in which the state branch
proposes to engage;
(ii) The expected source of deposits;
(iii) The manner in which deposits will be solicited;
(iv) How the activity will maintain or improve the availability of
credit to all sectors of the United States economy, including the
international trade finance sector;
(v) That the activity will not give the foreign bank an unfair
competitive advantage over United States banking organizations; and
(vi) A resolution by the applicant's board of directors, or evidence
of approval by senior management if a resolution is not required
pursuant to the applicant's organizational documents, authorizing the
filing of the application.
(2) Additional information. The appropriate regional director (DOS)
may request additional information to complete processing.
(b) Processing. The FDIC will provide the applicant with written
notification of the final action taken.
Sec. 303.187 Approval for an insured state branch of a foreign bank to conduct activities not permissible for federal branches; Sec. 347.213.
(a) Filing procedures.--(1) Where to file. An application by an
insured state branch seeking approval to conduct activities not
permissible for a federal branch, as required by Sec. 347.213(a) of this
chapter, shall be submitted in writing to the appropriate regional
director (DOS).
(2) Content of filing. A complete letter application shall include
the following information:
(i) A brief description of the activity, including the manner in
which it will be conducted and an estimate of the expected dollar volume
associated with the activity;
(ii) An analysis of the impact of the proposed activity on the
condition of the United States operations of the foreign bank in general
and of the branch in particular, including a copy of the feasibility
study, management plan, financial projections, business plan, or similar
document concerning the conduct of the activity;
(iii) A resolution by the applicant's board of directors, or
evidence of approval by senior management if a resolution is not
required pursuant to the applicant's organizational documents,
authorizing the filing of the application;
(iv) A statement by the applicant of whether it is in compliance
with Secs. 347.210 and 347.211 of this chapter, Pledge of assets and
Asset maintenance, respectively;
(v) A statement by the applicant that it has complied with all
requirements of the Board of Governors concerning applications to
conduct the activity in question and the status of each such
application, including a copy of the Board of Governors' disposition of
such application, if applicable; and
(vi) A statement of why the activity will pose no significant risk
to the Bank Insurance Fund.
(3) Board of Governors application. If the application to the Board
of Governors contains the information required by paragraph (a) of this
section, the applicant may submit a copy to the FDIC in lieu of a
separate letter application.
(4) Additional information. The appropriate regional director (DOS)
may request additional information to complete processing.
(b) Divestiture or cessation.--(1) Where to file. Divestiture plans
necessitated
[[Page 48]]
by a change in law or other authority, as required by Sec. 347.213(e) of
this chapter, shall be submitted in writing to the appropriate regional
director (DOS).
(2) Content of filing. A complete letter application shall include
the following information:
(i) A detailed description of the manner in which the applicant
proposes to divest itself of or cease the activity in question; and
(ii) A projected timetable describing how long the divestiture or
cessation is expected to take.
(3) Additional information. The appropriate regional director (DOS)
may request additional information to complete processing.
(c) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional director
and deputy regional director, to approve plans of divestiture and
cessation submitted pursuant to paragraph (b) of this section.
Subpart K--Prompt Corrective Action
Sec. 303.200 Scope.
(a) General. (1) This subpart covers applications filed pursuant to
section 38 of the FDI Act (12 U.S.C. 1831o), which requires insured
depository institutions that are not adequately capitalized to receive
approval prior to engaging in certain activities. Section 38 restricts
or prohibits certain activities and requires an insured depository
institution to submit a capital restoration plan when it becomes
undercapitalized. The restrictions and prohibitions become more severe
as an institution's capital level declines.
(2) Definitions of the capital categories referenced in this Prompt
Corrective Action subpart may be found in subpart B of part 325 of this
chapter, Sec. 325.103(b) for state nonmember banks and Sec. 325.103(c)
for insured branches of foreign banks.
(b) Institutions covered. Restrictions and prohibitions contained in
subpart B of part 325 of this chapter apply primarily to insured state
nonmember banks and insured branches of foreign banks, as well as to
directors and senior executive officers of those institutions. Portions
of subpart B of part 325 of this chapter also apply to all insured
depository institutions that are deemed to be critically
undercapitalized.
Sec. 303.201 Filing procedures.
Applications shall be filed with the appropriate regional director
(DOS). The application shall contain the information specified in each
respective section of this subpart, and shall be in letter form as
prescribed in Sec. 303.3. Additional information may be requested by the
FDIC. Such letter shall be signed by the president, senior officer or a
duly authorized agent of the insured depository institution and be
accompanied by a certified copy of a resolution adopted by the
institution's board of directors or trustees authorizing the
application.
Sec. 303.202 Processing.
The FDIC will provide the applicant with a subsequent written
notification of the final action taken as soon as the decision is
rendered.
Sec. 303.203 Applications for capital distributions.
(a) Scope. An insured state nonmember bank and any insured branch of
a foreign bank shall submit an application for capital distribution if,
after having made a capital distribution, the institution would be
undercapitalized, significantly undercapitalized, or critically
undercapitalized.
(b) Content of filing. An application to repurchase, redeem, retire
or otherwise acquire shares or ownership interests of the insured
depository institution shall describe the proposal, the shares or
obligations which are the subject thereof, and the additional shares or
obligations of the institution which will be issued in at least an
amount equivalent to the distribution. The application also shall
explain how the proposal will reduce the institution's financial
obligations or otherwise improve its financial condition. If the
proposed action also requires an application under section 18(i) of the
FDI Act (12 U.S.C. 1828(i)) as implemented by Sec. 303.241 regarding
prior consent to
[[Page 49]]
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
[[Page 50]]
respect to which the institution is required to provide notice to the
appropriate federal banking agency. Materiality will be determined on a
case-by-case basis;
(2) Extend credit for any highly leveraged transaction (as defined
in part 325 of this chapter);
(3) Amend the institution's charter or bylaws, except to the extent
necessary to carry out any other requirement of any law, regulation, or
order;
(4) Make any material change in accounting methods;
(5) Engage in any covered transaction (as defined in section 23A(b)
of the Federal Reserve Act (12 U.S.C. 371c(b));
(6) Pay excessive compensation or bonuses. Part 364 of this chapter
provides guidance for determining excessive compensation; or
(7) Pay interest on new or renewed liabilities at a rate that would
increase the institution's weighted average cost of funds to a level
significantly exceeding the prevailing rates of interest on insured
deposits in the institution's normal market area. Section 337.6 of this
chapter (Brokered deposits) provides guidance for defining the relevant
terms of this provision; however this provision does not supersede the
general prohibitions contained in Sec. 337.6 of this chapter.
Sec. 303.208 Delegation of authority.
Authority is delegated to the Director and Deputy Director (DOS)
and, where confirmed in writing by the Director, to an associate
director and the appropriate regional director and deputy regional
director, to approve or deny the following applications, requests or
petitions submitted pursuant to this subpart:
(a) Applications filed pursuant to section 38 of the FDI Act (12
U.S.C. 1831o) (prompt corrective action), including applications to make
a capital distribution;
(b) Applications for acquisitions, branching, and new lines of
business (except that the delegation is limited to the authority as
delegated to approve or deny any concurrent application filed pursuant
to section 18 (c) or (d) of the FDI Act (12 U.S.C. 1828 (c) or (d));
(c) Applications to pay a bonus or increase compensation;
(d) Applications for an exception to pay principal or interest on
subordinated debt; and
(e) Applications by critically undercapitalized insured depository
institutions to engage in any restricted activity listed in this
subpart.
Subpart L--Section 19 of the FDI Act (Consent to Service of Persons
Convicted of Certain Criminal Offenses)
Sec. 303.220 Scope.
This subpart covers applications under section 19 of the FDI Act (12
U.S.C. 1829). Pursuant to section 19, any person who has been convicted
of any criminal offense involving dishonesty, breach of trust, or money
laundering, or has agreed to enter into a pretrial diversion or similar
program in connection with a prosecution for such offense, may not
become, or continue as, an institution-affiliated party of an insured
depository institution; own or control, directly or indirectly, any
insured depository institution; or otherwise participate, directly or
indirectly, in the conduct of the affairs of any insured depository
institution without the prior written consent of the FDIC.
Sec. 303.221 Filing procedures.
(a) Regional office. An application under section 19 shall be filed
with the appropriate regional director (DOS).
(b) Contents of filing. Application forms may be obtained from any
FDIC regional office. The FDIC may require additional information beyond
that sought in the form, as warranted, in individual cases.
Sec. 303.222 Service at another insured depository institution.
In the case of a person who has already been approved by the FDIC
under this subpart or section 19 of the FDI Act in connection with a
particular insured depository institution, such person may not become an
institution affiliated party, or own or control directly or indirectly
another insured depository institution, or participate in
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the conduct of the affairs of another insured depository institution,
without the prior written consent of the FDIC.
Sec. 303.223 Applicant's right to hearing following denial.
An applicant may request a hearing following a denial of an
application in accordance with the provisions of part 308 of this
chapter.
Sec. 303.224 Delegation of authority.
(a) Approvals. Authority is delegated to the Director and Deputy
Director (DOS) and, where confirmed in writing by the Director, to an
associate director or to the appropriate regional director and deputy
regional director, to approve applications made by insured depository
institutions pursuant to section 19 of the FDI Act, after consultation
with the Legal Division; provided however, that authority may not be
delegated to the regional director or deputy regional director where the
applicant's primary supervisory authority interposes any objection to
such application.
(b) Denials. Authority is delegated to the Director and Deputy
Director (DOS) and, where confirmed in writing by the Director, to an
associate director, to deny applications made by insured depository
institutions pursuant to section 19 of the FDI Act.
(c) Concurrent legal certification. The authority to deny
applications delegated under this section shall be exercised only upon
the concurrent certification by the General Counsel and, where confirmed
in writing by the General Counsel, his or her designee, that the action
taken is not inconsistent with section 19 of the FDI Act.
(d) Conditions on application approvals. Regional directors and
deputy regional directors acting under delegated authority under this
subpart may impose any of the following conditions on the approval of
applications, as appropriate in individual cases:
(1) A participant or institution-affiliated party of an institution
shall be bonded to the same extent as others in similar positions; and/
or
(2) When deemed necessary, the prior consent of the appropriate
regional director (DOS) shall be required for any proposed significant
changes in duties and/or responsibilities of the person who is the
subject of the application.
(e) Authority not delegated by FDIC Board of Directors. The FDIC
Board of Directors has not delegated its authority to consider and act
upon an application under section 19 of the FDI Act after a hearing held
in accordance with the provisions of part 308 of this chapter.
Subpart M--Other Filings
Sec. 303.240 General.
This subpart sets forth the filing procedures to be followed when
seeking the FDIC's consent to engage in certain activities or accomplish
other matters as specified in the individual sections contained herein.
For those matters covered by this subpart that also have substantive
FDIC regulations or related statements of policy, references to the
relevant regulations or statements of policy are contained in the
specific sections.
303.241 Reduce or retire capital stock or capital debt instruments.
(a) Scope. This section contains the procedures to be followed by an
insured state nonmember bank to seek the prior approval of the FDIC to
reduce the amount or retire any part of its common or preferred stock,
or to retire any part of its capital notes or debentures pursuant to
section 18(i)(1) of the Act (12 U.S.C. 1828(i)(1)).
(b) Filing procedures. Applicants shall submit a letter application
to the appropriate regional director (DOS).
(c) Content of filing. The application shall contain the following:
(1) The type and amount of the proposed change to the capital
structure and the reason for the change;
(2) A schedule detailing the present and proposed capital structure;
(3) The time period that the proposal will encompass;
(4) If the proposal involves a series of transactions affecting Tier
1 capital components which will be consummated over a period of time
which shall not exceed twelve months, the application shall certify that
the insured depository institution will maintain itself as a well-
capitalized institution as defined in part 325 of this chapter,
[[Page 52]]
both before and after each of the proposed transactions;
(5) If the proposal involves the repurchase of capital instruments,
the amount of the repurchase price and the basis for establishing the
fair market value of the repurchase price;
(6) A statement that the proposal will be available to all holders
of a particular class of outstanding capital instruments on an equal
basis, and if not, the details of any restrictions; and
(7) The date that the applicant's board of directors approved the
proposal.
(d) Additional information. The FDIC may request additional
information at any time during processing of the application.
(e) Undercapitalized institutions. Procedures regarding applications
by an undercapitalized insured depository institution to retire capital
stock or capital debt instruments pursuant to section 38 of the FDI Act
(12 U.S.C. 1831o) are set forth in subpart K of this part (Prompt
Corrective Action), Sec. 303.203. Applications pursuant to sections 38
and 18(i) may be filed concurrently, or as a single application.
(f) Expedited processing for eligible depository institutions. An
application filed under this section by an eligible depository
institution as defined in Sec. 303.2(r) will be acknowledged in writing
by the FDIC and will receive expedited processing, unless the applicant
is notified in writing to the contrary and provided with the basis for
that decision. The FDIC may remove an application from expedited
processing for any of the reasons set forth in Sec. 303.11(c)(2). Absent
such removal, an application processed under expedited processing will
be deemed approved 20 days after the FDIC's receipt of a substantially
complete application.
(g) Standard processing. For those applications that are not
processed pursuant to expedited procedures, the FDIC will provide the
applicant with written notification of the final action as soon as the
decision is rendered.
(h) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional director
and deputy regional director, to approve or deny an application pursuant
to section 18(i)(1) of the FDI Act (12 U.S.C. 1828(i)) to reduce the
amount or retire any part of common or preferred capital stock, or to
retire any part of capital notes or debentures.
Sec. 303.242 Exercise of trust powers.
(a) Scope. This section contains the procedures to be followed by a
state nonmember bank to seek the FDIC's prior consent to exercise trust
powers. The FDIC's prior consent to exercise trust powers is not
required in the following circumstances:
(1) Where a state nonmember bank received authority to exercise
trust powers from its chartering authority prior to December 1, 1950; or
(2) Where an insured depository institution continues to conduct
trust activities pursuant to authority granted by its chartering
authority subsequent to a charter conversion or withdrawal from
membership in the Federal Reserve System.
(b) Filing procedures. Applicants shall submit to the appropriate
regional director (DOS) a completed form, ``Application for Consent To
Exercise Trust Powers.'' This form may be obtained from any FDIC
regional office.
(c) Content of filing. The filing shall consist of the completed
trust application form.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Expedited processing for eligible depository institutions. An
application filed under this section by an eligible depository
institution as defined in Sec. 303.2(r) will be acknowledged in writing
by the FDIC and will receive expedited processing, unless the applicant
is notified in writing to the contrary and provided with the basis for
that decision. The FDIC may remove an application from expedited
processing for any of the reasons set forth in Sec. 303.11(c)(2). Absent
such removal, an application processed under expedited procedures will
be deemed approved 30 days after the FDIC's receipt of a substantially
complete application.
(f) Standard processing. For those applications that are not
processed pursuant to the expedited procedures, the
[[Page 53]]
FDIC will provide the applicant with written notification of the final
action when the decision is rendered.
(g) Delegation of authority. (1) Where the criteria listed in
paragraph (g)(2) of this section are satisfied and the applicant agrees
in writing to comply with any conditions imposed by the approving FDIC
official, other than the standard conditions defined in Sec. 303.2(ff),
which may be imposed without the applicant's written consent, authority
is delegated to the Director and Deputy Director (DOS) and, where
confirmed in writing by the Director, to an associate director and the
appropriate regional director and deputy regional director, to approve
applications for the FDIC's consent to exercise trust powers.
(2) The following criteria must be satisfied before the authority
delegated in paragraph (g)(1) of this section may be exercised:
(i) The factors set forth in section 6 of the FDI Act (12 U.S.C.
1816) have been considered and favorably resolved;
(ii) The proposed management of the trust business is determined to
be capable of satisfactorily handling the anticipated business; and
(iii) The applicant's board of directors formally has adopted the
FDIC Statement of Principles of Trust Department Management available
from any FDIC regional office.
(h) Denials and certain conditional approvals. Authority is
delegated to the Director and Deputy Director (DOS) and, where confirmed
in writing by the Director, to an associate director to:
(1) Deny applications for trust powers; and
(2) Approve applications for trust powers where the criteria listed
in paragraph (g)(2) of this section are satisfied but the applicant does
not agree in writing to comply with any condition imposed by the
delegate, other than the standard conditions defined in Sec. 303.2(ff)
which may be imposed without the applicant's written consent.
Sec. 303.243 Brokered deposit waivers.
(a) Scope. Pursuant to section 29 of the FDI Act (12 U.S.C. 1831f)
and part 337 of this chapter, an adequately capitalized insured
depository institution may not accept, renew or roll over any brokered
deposits unless it has obtained a waiver from the FDIC. A well-
capitalized insured depository institution may accept brokered deposits
without a waiver, and an undercapitalized insured depository institution
may not accept, renew or roll over any brokered deposits under any
circumstances. This section contains the procedures to be followed to
file with the FDIC for a brokered deposit waiver. The FDIC will provide
notice to the depository institution's appropriate federal banking
agency and any state regulatory agency, as appropriate, that a request
for a waiver has been filed and will consult with such agency or
agencies, prior to taking action on the institution's request for a
waiver. Prior notice and/or consultation shall not be required in any
particular case if the FDIC determines that the circumstances require it
to take action without giving such notice and opportunity for
consultation.
(b) Filing procedures. Applicants shall submit a letter application
to the appropriate regional director (DOS).
(c) Content of filing. The application shall contain the following:
(1) The time period for which the waiver is requested;
(2) A statement of the policy governing the use of brokered deposits
in the institution's overall funding and liquidity management program;
(3) The volume, rates and maturities of the brokered deposits held
currently and anticipated during the waiver period sought, including any
internal limits placed on the terms, solicitation and use of brokered
deposits;
(4) How brokered deposits are costed and compared to other funding
alternatives and how they are used in the institution's lending and
investment activities, including a detailed discussion of asset growth
plans;
(5) Procedures and practices used to solicit brokered deposits,
including an identification of the principal sources of such deposits;
(6) Management systems overseeing the solicitation, acceptance and
use of brokered deposits;
(7) A recent consolidated financial statement with balance sheet and
income statements; and
[[Page 54]]
(8) The reasons the institution believes its acceptance, renewal or
rollover of brokered deposits would pose no undue risk.
(d) Additional information. The FDIC may request additional
information at any time during processing of the application.
(e) Expedited processing for eligible depository institutions. An
application filed under this section by an eligible depository
institution as defined in this Sec. 303.243(e) will be acknowledged in
writing by the FDIC and will receive expedited processing, unless the
applicant is notified in writing to the contrary and provided with the
basis for that decision. For the purpose of this section, an applicant
will be deemed an eligible depository institution if it satisfies all of
the criteria contained in Sec. 303.2(r) except that the applicant may be
adequately capitalized rather than well-capitalized. The FDIC may remove
an application from expedited processing for any of the reasons set
forth in Sec. 303.11(c)(2). Absent such removal, an application
processed under expedited procedures will be deemed approved 21 days
after the FDIC's receipt of a substantially complete application.
(f) Standard processing. For those filings which are not processed
pursuant to the expedited procedures, the FDIC will provide the
applicant with written notification of the final action as soon as the
decision is rendered.
(g) Conditions for approval. A waiver issued pursuant to this
section shall:
(1) Be for a fixed period, generally no longer than two years, but
may be extended upon refiling; and
(2) May be revoked by the FDIC at any time by written notice to the
institution.
(h) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional director
and deputy regional director, to approve or deny brokered deposit waiver
applications. Based upon a preliminary review, any delegate may grant a
temporary waiver for a short period in order to facilitate the orderly
processing of a filing for a waiver.
Sec. 303.244 Golden parachute and severance plan payments.
(a) Scope. Pursuant to section 18(k) of the FDI Act (12 U.S.C.
1828(k)) and part 359 of this chapter, an insured depository institution
or depository institution holding company may not make golden parachute
payments or excess nondiscriminatory severance plan payments unless the
depository institution or holding company obtains permission to make
such payments in accordance with the rules contained in part 359 of this
chapter. This section contains the procedures to file for the FDIC's
consent when such consent is necessary under part 359 of this chapter.
(1) Golden parachute payments. A troubled insured depository
institution or a troubled depository institution holding company is
prohibited from making golden parachute payments (as defined in
Sec. 359.1(f)(1) of this chapter) unless it obtains the consent of the
appropriate federal banking agency and the written concurrence of the
FDIC. Therefore, in the case of golden parachute payments, the
procedures in this section apply to all troubled insured depository
institutions and troubled depository institution holding companies.
(2) Excess nondiscriminatory severance plan payments. In the case of
excess nondiscriminatory severance plan payments as provided by
Sec. 359.1(f)(2)(v) of this chapter, the FDIC's consent is necessary for
state nonmember banks that meet the criteria set forth in
Sec. 359.1(f)(1)(ii) of this chapter. In addition, the FDIC's consent is
required for all insured depository institutions or depository
institution holding companies that meet the same criteria and seek to
make payments in excess of the 12-month amount specified in
Sec. 359.1(f)(2)(v) of this chapter.
(b) Filing procedures. Applicants shall submit a letter application
to the appropriate FDIC regional director (DOS).
(c) Content of filing. The application shall contain the following:
(1) The reasons why the applicant seeks to make the payment;
(2) An identification of the institution-affiliated party who will
receive the payment;
[[Page 55]]
(3) A copy of any contract or agreement regarding the subject matter
of the filing;
(4) The cost of the proposed payment and its impact on the
institution's capital and earnings; and
(5) The reasons why consent to the payment should be granted.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with a
subsequent written notification of the final action taken as soon as the
decision is rendered.
(f) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional director
and deputy regional director, to approve or to deny filings to make:
(1) Excess nondiscriminatory severance plan payments as provided by
12 CFR 359.1(f)(2)(v); and
(2) Golden parachute payments permitted by 12 CFR 359.4.
Sec. 303.245 Waiver of liability for commonly controlled depository institutions.
(a) Scope. Section 5(e) of the FDI Act (12 U.S.C. 1815(e)) creates
liability for commonly controlled insured depository institutions for
losses incurred or anticipated to be incurred by the FDIC in connection
with the default of a commonly controlled insured depository institution
or any assistance provided by the FDIC to any commonly controlled
insured depository institution in danger of default. In addition to
certain statutory exceptions and exclusions contained in sections
5(e)(6), (7) and (8), the FDI Act also permits the FDIC, in its
discretion, to exempt any insured depository institution from this
liability if it determines that such exemption is in the best interests
of the Bank Insurance Fund (BIF) or the Savings Association Insurance
Fund (SAIF). This section describes procedures to request a conditional
waiver of liability pursuant to section 5 of the FDI Act (12 U.S.C.
1815(e)(5)(A)).
(b) Definition. Conditional waiver of liability means an exemption
from liability pursuant to section 5(e) of the FDI Act (12 U.S.C.
1815(e)) subject to terms and conditions.
(c) Filing procedures. Applicants shall submit a letter application
to the appropriate regional director (DOS).
(d) Content of filing. The application shall contain the following
information:
(1) The basis for requesting a waiver;
(2) The existence of any significant events (e.g., change in
control, capital injection, etc.) that may have an impact upon the
applicant and/or any potentially liable institution;
(3) Current, and if applicable, pro forma financial information
regarding the applicant and potentially liable institution(s); and
(4) The benefits to the appropriate FDIC insurance fund resulting
from the waiver and any related events.
(e) Additional information. The FDIC may request additional
information at any time during the processing of the filing.
(f) Processing. The FDIC will provide the applicant with written
notification of the final action as soon as the decision is rendered.
(g) Failure to comply with terms of conditional waiver. In the event
a conditional waiver of liability is issued, failure to comply with the
terms specified therein may result in the termination of the conditional
waiver of liability. The FDIC reserves the right to revoke the
conditional waiver of liability after giving the applicant written
notice of such revocation and a reasonable opportunity to be heard on
the matter pursuant to Sec. 303.10.
(h) Authority retained by FDIC Board of Directors. The FDIC Board of
Directors retains the authority to act on any application for waiver of
liability of commonly controlled depository institutions.
Sec. 303.246 Insurance fund conversions.
(a) Scope. This section contains the procedures to be followed by an
insured depository institution to seek the FDIC's prior approval to
engage in an insurance fund conversion that involves the transfer of
deposits between the SAIF and the BIF. Optional conversion transactions,
commonly referred to as Oakar transactions, pursuant to
[[Page 56]]
section 5(d)(3) of the FDI Act (12 U.S.C. 1815(d)(3)), which do not
involve the transfer of deposits between the SAIF and the BIF, are
governed by the procedures set forth in subpart D (Merger Transactions)
of this part.
(b) Filing procedures. Applicants shall submit a letter application
to the appropriate FDIC regional director (DOS). The filing shall be
signed by representatives of each institution participating in the
transaction. Insurance fund conversions which are proposed in
conjunction with a merger application filed by a state nonmember bank
pursuant to section 18(c) of the FDI Act (12 U.S.C. 1828(c)) should be
included with that filing.
(c) Content of filing. The application shall include the following
information:
(1) A description of the transaction;
(2) The amount of deposits involved in the conversion transaction;
(3) A pro forma balance sheet and income statement for each
institution upon consummation of the transaction; and
(4) Certification by each party to the transaction that applicable
entrance and exit fees will be paid pursuant to part 312 of this
chapter.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with written
notification of the final action as soon as the decision is rendered.
(f) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional director
and deputy regional director, to approve or deny filings for insurance
fund conversions involving the transfers of deposits between the SAIF
and the BIF.
Sec. 303.247 Conversion with diminution of capital.
(a) Scope. This section contains the procedures to be followed by an
insured federal depository institution seeking the prior written consent
of the FDIC pursuant to section 18(i)(2) of the FDI Act (12 U.S.C.
1828(i)(2)) to convert from an insured federal depository institution to
an insured state nonmember bank (except a District bank) where the
capital stock or surplus of the resulting bank will be less than the
capital stock or surplus, respectively, of the converting institution at
the time of the shareholders' meeting approving such conversion.
(b) Filing procedures. Applicants shall submit a letter application
to the appropriate regional director (DOS).
(c) Content of filing. The application shall contain the following
information:
(1) A description of the proposed transaction;
(2) A schedule detailing the present and proposed capital structure;
and
(3) A copy of any documents submitted to the state chartering
authority with respect to the charter conversion.
(d) Additional information. The FDIC may request additional
information at any time during the processing.
(e) Processing. The FDIC will provide the applicant with written
notification of the final action when the decision is rendered.
(f) Delegation of authority.--(1) Approvals. Authority is delegated
to the Director and Deputy Director (DOS) and, where confirmed in
writing by the Director, to an associate director and the appropriate
regional director and deputy regional director, to approve applications
to convert with diminution of capital.
(2) Denials. Authority is delegated to the Director and Deputy
Director (DOS) and, where confirmed in writing by the Director, to an
associate director to deny applications to convert with diminution of
capital.
Sec. 303.248 Continue or resume status as an insured institution following termination under section 8 of the FDI Act.
(a) Scope. This section relates to an application by a depository
institution whose insured status has been terminated under section 8 of
the FDI Act (12 U.S.C. 1818) for permission to continue or resume its
status as an insured depository institution. This section covers
institutions whose deposit insurance continues in effect for any purpose
or for any length of time under
[[Page 57]]
the terms of an FDIC order terminating deposit insurance, but does not
cover operating non-insured depository institutions which were
previously insured by the FDIC, or any non-insured, non-operating
depository institution whose charter has not been surrendered or
revoked.
(b) Filing procedures. Applicants shall submit a letter application
to the appropriate regional director (DOS).
(c) Content of filing. The filing shall contain the following
information:
(1) A complete statement of the action requested, all relevant
facts, and the reason for such requested action; and
(2) A certified copy of the resolution of the depository
institution's board of directors authorizing submission of the filing.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with written
notification of the final action as soon as the decision is rendered.
(f) Authority retained by FDIC Board of Directors. The FDIC Board of
Directors retains the authority to act on any application to continue or
resume status as an insured institution following termination under
section 8 of the FDI Act (12 U.S.C. 1818).
Sec. 303.249 Truth in Lending Act--relief from reimbursement.
(a) Scope. This section applies to requests for relief from
reimbursement pursuant to the Truth in Lending Act (15 U.S.C. 1601 et
seq.) and Regulation Z (12 CFR part 226). Related delegations of
authority are also set forth.
(b) Procedures to be followed in filing initial requests for relief.
Requests for relief from reimbursement shall be filed with the
appropriate regional director (DCA) within 60 days after receipt of the
compliance report of examination containing the request to conduct a
file search and make restitution to affected customers. The filing shall
contain a complete and concise statement of the action requested, all
relevant facts, the reasons and analysis relied upon as the basis for
such requested action, and all supporting documentation.
(c) Additional information. The FDIC may request additional
information at any time during processing of any such requests.
(d) Processing. The FDIC will acknowledge receipt of the request and
provide the applicant with written notification of its determination
within 60 days of its receipt of the request.
(e) Delegation of authority.--(1) Denial of initial requests for
relief. Authority is delegated to the Director and Deputy Director
(DCA), and where confirmed in writing by the Director, to an associate
director, or to the appropriate regional director or deputy regional
director, to deny initial requests for relief from the requirement for
reimbursement under section 608(a)(2) of the Truth in Lending
Simplification and Reform Act (15 U.S.C. 1607(e)(2)); provided, however,
that a regional director or deputy regional director is not authorized
to deny any request where the estimated amount of reimbursement is
greater than $25,000.
(2) Approval of initial requests for relief. Authority is delegated
to the Director and Deputy Director (DCA), and where confirmed in
writing by the director, to an associate director, to approve requests
for relief from the requirement for reimbursement under section
608(a)(2) of the Truth in Lending Simplification and Reform Act (15
U.S.C. 1607(a)(2)).
(f) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his or
her designee, or, in cases where a regional director or deputy regional
director denies requests for relief, by the appropriate regional
counsel, that the action taken is not inconsistent with the Truth in
Lending Simplification and Reform Act.
(g) Procedures to be followed in filing requests for
reconsideration. Within 15 days of receipt of written notice that its
request for relief has been denied, the requestor may petition the
appropriate regional director (DCA) for reconsideration of such request
in accordance with the procedures set forth in Sec. 303.11(f).
[[Page 58]]
Sec. 303.250 Management official interlocks.
(a) Scope. This section contains the procedures to be followed by an
insured state nonmember bank to seek the approval of FDIC to establish
an interlock pursuant to the Depository Institutions Management
Interlocks Act (12 U.S.C. 3207), section 13 of the FDI Act (12 U.S.C.
1823(k)) and part 348 of this chapter.
(b) Filing procedures. Applicants shall submit a letter application
to the appropriate regional director (DOS).
(c) Content of filing. The application shall contain the following:
(1) A description of the proposed interlock;
(2) A statement of reason as to why the interlock will not result in
a monopoly or a substantial lessening of competition; and
(3) If the applicant is seeking an exemption set forth in Sec. 348.5
or Sec. 348.6 of this chapter, a description of the particular exemption
which is being requested and a statement of reasons as to why the
exemption is applicable.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with written
notification of the final action when the decision is rendered.
(f) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS), and where confirmed in writing by the
Director, to an associate director and the appropriate regional
director, deputy regional director, to approve or deny a request to
establish a management official interlock pursuant to Sec. 348.5 or
Sec. 348.6 of this chapter or section 205(8) of the Depository
Institutions Management Interlocks Act (12 U.S.C. 3207, 12 U.S.C.
1823(k)).
Sec. 303.251 Modification of conditions.
(a) Scope. This section contains the procedures to be followed by an
insured depository institution to seek the prior consent of the FDIC to
modify the requirement of a prior approval of a filing issued by the
FDIC.
(b) Filing procedures. Applicants should submit a letter application
to the appropriate FDIC regional director (DOS).
(c) Content of filing. The application should contain the following
information:
(1) A description of the original approved application;
(2) A description of the modification requested; and
(3) The reason for the request.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with a written
notification of the final action as soon as the decision is rendered.
(f) Delegation of authority. Authority is delegated to the Director
and Deputy Director (DOS) and, where confirmed in writing by the
Director, to an associate director and the appropriate regional director
and deputy regional director, to approve or deny requests to modify the
requirements of a prior approval of a filing issued by the FDIC subject
to the following criteria;
(1) The Legal Division is consulted to the same extent as was
required for approval of the original filing; and
(2) The approving delegate had the authority to approve the original
filing.
Sec. 303.252 Extension of time.
(a) Scope. This section contains the procedures to be followed by an
insured depository institution to seek the prior consent of the FDIC for
additional time to fulfill a condition required in an approval of a
filing issued by the FDIC or to consummate a transaction which was the
subject of an approval by the FDIC.
(b) Filing procedures. Applicants shall submit a letter application
to the appropriate regional director (DOS).
(c) Content of filing. The application shall contain the following
information:
(1) A description of the original approved application;
(2) Identification of the original time limitation;
(3) The additional time period requested; and
(4) The reason for the request.
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(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Processing. The FDIC will provide the applicant with written
notification of the final action as soon as the decision is rendered.
(f) Delegation of authority. (1) Except as provided in paragraph
(f)(2) of this section, authority is delegated to the Director and
Deputy Director (DOS) and, where confirmed in writing by the Director,
to an associate director and the appropriate regional director and
deputy regional director, to approve or deny requests for extensions of
time within which to perform acts or fulfill conditions required by a
prior FDIC action on a filing of the insured depository institution.
(2) Limits on exercise of delegated authority. (i) An extension of
time may not exceed one year; however, more than one extension may be
granted regarding a particular filing.
(ii) Notwithstanding the delegations in paragraph (f)(1) of this
section, no delegate shall have the authority to deny an extension of
time request unless that delegate has the authority under this part to
deny the original filing upon which the extension of time is predicated.
Subpart N--Enforcement Delegations
Sec. 303.260 Scope.
This subpart contains delegations of authority relating to the
initiation, prosecution, and settlement of administrative enforcement
actions under the FDI Act and other laws and regulations enforced by the
FDIC, including investigations and subpoenas.
Sec. 303.261 Issuance of notification to primary regulator under section 8(a) of the FDI Act (12 U.S.C. 1818(a)).
(a) Book capital less than 2 percent. Authority is delegated to the
Director and Deputy Director (DOS), and where confirmed in writing by
the Director, to an associate director and to the appropriate regional
director and deputy regional director, to issue notifications to primary
regulator when the respondent depository institution's book capital is
less than 2 percent of total assets; provided that authority may not be
delegated to the regional director or deputy regional director whenever
the respondent depository institution has issued any mandatory
convertible debt or any form of Tier 2 capital (such as limited life
preferred stock, subordinated notes and debentures).
(b) Tier 1 capital less than 2 percent. Authority is delegated to
the Director and Deputy Director (DOS) and, where confirmed in writing
by the Director, to an associate director, to issue notifications to
primary regulator when the respondent depository institution's adjusted
Tier 1 capital is less than 2 percent of adjusted part 325 total assets
as defined in Sec. 303.2(b).
(c) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his or
her designee, or, in cases where a regional director or deputy regional
director issues notifications to primary regulator, by the appropriate
regional counsel, that the allegations contained in the findings of
violations of law or regulation and/or unsafe or unsound practices and/
or unsafe or unsound condition, if proven, constitute a basis for the
issuance of a notification to primary regulator pursuant to section 8(a)
of the FDI Act (12 U.S.C. 1818(a)).
Sec. 303.262 Issuance of notice of intention to terminate insured status under section 8(a) of the FDI Act (12 U.S.C. 1818(a)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS), and where confirmed in writing by the Director, to an
associate director, to issue notices of intent to terminate insured
status when the respondent depository institution has failed to correct
any violations of law or regulation and/or unsafe or unsound practices
and/or unsafe or unsound condition as specified in the relevant
notification to primary regulator.
(b) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or,
[[Page 60]]
where confirmed in writing by the General Counsel, by his or her
designee, that the allegations contained in the findings in the notice
of intention to terminate insured status of violations of law or
regulation and/or unsafe or unsound practices and/or unsafe or unsound
condition, if proven, constitute a basis for termination of the insured
status of the respondent depository institution pursuant to section 8(a)
of the FDI Act (12 U.S.C. 1818(a)).
Sec. 303.263 Cease-and-desist actions under section 8(b) of the FDI Act (12 U.S.C. 1818(b)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS), to the Director and Deputy Director (DCA), and where
confirmed in writing by the appropriate Director, to an associate
director and to the appropriate regional director and deputy regional
director to issue:
(1) Notices of charges; and
(2) Cease-and-desist orders (with or without a prior notice of
charges) where the respondent depository institution or individual
respondent consents to the issuance of the cease-and-desist order prior
to the filing by an administrative law judge of proposed findings of
fact, conclusions of law and recommended decision with the Executive
Secretary of the FDIC.
(b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA)
may issue a joint notice of charges or cease-and-desist order under this
section, where such notice or order addresses both safety and soundness
and consumer compliance matters. A joint notice or order will require
the signatures of both Directors or their Deputy Directors or associate
directors, appropriate regional directors or deputy regional directors.
(c) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his or
her designee, or, in cases where a regional director or deputy regional
director issues the notice of charges or the stipulated cease-and-desist
order, by the appropriate regional counsel, that the allegations
contained in the notice of charges, if proven, constitute a basis for
the issuance of a section 8(b) order, or that the stipulated cease-and-
desist order is authorized under section 8(b) of the FDI Act, and, upon
its effective date, shall be a cease-and-desist order which has become
final for purposes of enforcement pursuant to the FDI Act.
Sec. 303.264 Temporary cease-and-desist orders under section 8(c) of the FDI Act (12 U.S.C. 1818(c)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS) and to the Director and Deputy Director (DCA), and where
confirmed in writing by the appropriate Director, to an associate
director, to issue temporary cease-and-desist orders.
(b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA)
may issue a joint temporary cease-and-desist order where such order
addresses both safety and soundness and consumer compliance matters. A
joint notice or order will require the signatures of both Directors or
their Deputy Directors or associate directors.
(c) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his or
her designee, that the action is not inconsistent with section 8(c) of
the FDI Act (12 U.S.C. 1818(c)) and the temporary cease-and-desist order
is enforceable in a United States District Court.
Sec. 303.265 Removal and prohibition actions under section 8(e) of the FDI Act (12 U.S.C. 1818(e)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS) or the Director and Deputy Director (DCA) and, where
confirmed in writing by the appropriate Director, to an associate
director, to issue:
(1) Notices of intention to remove an institution-affiliated party
from office or to prohibit an institution-affiliated party from further
participation in the conduct of the affairs of an insured depository
institution pursuant to sections 8(e) (1) and (2) of the FDI Act (12
U.S.C. 1818(e) (1) and (2)), and temporary orders of suspension pursuant
to
[[Page 61]]
section 8(e)(3) of the FDI Act (12 U.S.C. 1818(e)(3)); and
(2) Orders of removal, suspension or prohibition from participation
in the conduct of the affairs of an insured depository institution where
the institution-affiliated party consents to the issuance of such orders
prior to the filing by an administrative law judge of proposed findings
of fact, conclusions of law and a recommended decision with the
Executive Secretary of the FDIC.
(b) Joint DOS-DCA action. The Director (DOS) and the Director (DCA)
may issue joint notices and orders pursuant to this section where such
notice or order addresses both safety and soundness and consumer
compliance matters. A joint notice or order will require the signatures
of both directors or their deputy directors or associate directors.
(c) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his or
her designee, that the allegations contained in the notice of intent, if
proven, constitute a basis for the issuance of a notice of intent
pursuant to section 8(e) of the FDI Act, or that the stipulated section
8(e) order is not inconsistent with section 8(e) of the FDI Act, and,
upon issuance, shall be an order which has become final for purposes of
enforcement pursuant to the FDI Act.
Sec. 303.266 Suspension and removal action under section 8(g) of the FDI Act (12 U.S.C. 1818(g)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS), to the Director and Deputy Director (DCA), and where
confirmed in writing by the appropriate Director, to an associate
director, to issue orders of suspension or prohibition to an
institution-affiliated party who is charged in any information,
indictment, or complaint, or who is convicted of or enters a pretrial
diversion or similar program, as to any criminal offense cited in or
covered by section 8(g) of the FDI Act, when such institution-affiliated
party consents to the suspension or prohibition.
(b) Delegation of authority where suspension or prohibition
mandated. Authority is delegated to the Director and Deputy Director
(DOS), to the Director and Deputy Director (DCA), and where confirmed in
writing by the appropriate Director, to an associate director, to issue
orders of suspension and prohibition to any institution-affiliated party
who is charged in any information, indictment, or complaint, or who is
convicted or enters a pretrial diversion or similar program, as to any
criminal offense involving mandatory suspension or prohibition under
sections 8(g)(1) (A)(ii) and (C)(ii) of the FDI Act (12 U.S.C.
1818(g)(1) (A)(ii) and (C)(ii)), whether or not such institution-
affiliated party consents to the suspension or prohibition.
(c) Joint DOS-DCA action. The Director (DOS) and the Director (DCA)
may issue joint orders pursuant to this section where such order
addresses both safety and soundness and consumer compliance matters. A
joint order will require the signatures of both Directors or their
Deputy Directors or associate directors.
(d) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his or
her designee, that the action taken is not inconsistent with section
8(g) of the FDI Act (12 U.S.C. 1818(g)) and the order is enforceable in
a United States District Court pursuant to sections 8(i) and 8(j) of the
FDI Act (12 U.S.C. 1818 (i) and (j)).
Sec. 303.267 Termination of insured status under section 8(p) of the FDI Act (12 U.S.C. 1818(p)).
(a) General. Authority is delegated to the Executive Secretary to
issue consent orders terminating the insured status of insured
depository institutions that have ceased to engage in the business of
receiving deposits other than trust funds pursuant to section 8(p) of
the FDI Act (12 U.S.C. 1818(p)).
(b) DOS and legal concurrence. The authority delegated under this
section shall be exercised only upon the recommendation and concurrence
of the Director or Deputy Director (DOS) and,
[[Page 62]]
when confirmed in writing by the Director, an associate director, and
upon the certification of the General Counsel and, where confirmed in
writing by the General Counsel, by his or her designee, that the action
taken is not inconsistent with section 8(p) of the FDI Act (12 U.S.C.
1818(p)).
Sec. 303.268 Termination of insured status under section 8(q) of the FDI Act (12 U.S.C. 1818(q)).
(a) General. Authority is delegated to the Executive Secretary to
issue consent orders terminating the insured status of an insured
depository institution where the liabilities of the insured institution
for deposits shall have been assumed by another insured depository
institution or depository institutions, whether by way of merger,
consolidation, or other statutory assumption, or pursuant to contract,
pursuant to section 8(q) of the FDI Act (12 U.S.C. 1818(q)).
(b) DOS and legal concurrence. The authority delegated under this
section shall be exercised only upon the recommendation and concurrence
of the Director or Deputy Director (DOS) or, when confirmed in writing
by the Director, an associate director, and upon the certification of
the General Counsel or, where confirmed in writing by the General
Counsel, by his or her designee, that the action taken is not
inconsistent with section 8(q) of the FDI Act (12 U.S.C. 1818(q)).
Sec. 303.269 Civil money penalties.
(a) General. Authority is delegated to the Director and Deputy
Director (DOS), to the Director and Deputy Director (DCA), and where
confirmed in writing by the appropriate Director, to an associate
director, to issue:
(1) Notice of assessment of civil money penalties; and
(2) Final orders to pay (with or without a prior notice of
assessment of civil money penalty) where the insured depository
institution or institution-affiliated party consents to the issuance of
the order to pay and waives, as applicable, receipt of a notice of
assessment of civil money penalty and the right to an administrative
hearing.
(b) Legal concurrence. The authority delegated under paragraph (a)
of this section shall be exercised only upon concurrent certification by
the General Counsel or, where confirmed in writing by the General
Counsel, by his or her designee, that the allegations contained in the
notice of assessment, if proven, constitute a basis for assessment of
civil money penalties, or that the stipulated final order to pay is
authorized under the FDI Act, and upon its effective date, shall be an
order to pay which has become final for purposes of enforcement pursuant
to the FDI Act.
(c) Joint DOS-DCA action. The Director (DOS) and the Director (DCA)
may issue joint notices pursuant to paragraph (a) of this section where
such notice addresses both safety and soundness and consumer compliance
matters. A joint notice will require the signatures of both Directors or
their Deputy Directors or associate directors.
(d) Prosecution of civil money penalty actions and collection of
civil money penalties. Authority is delegated to the General Counsel or,
where confirmed in writing, to his or her designee, to prosecute
administrative civil money penalty actions and to collect civil money
penalties under this section.
Sec. 303.270 Notices of assessment under section 5(e) of the FDI Act (12 U.S.C. 1815(e)).
(a) General. Authority is delegated to the Director and Deputy
Director (DOS), and where confirmed in writing by the Director, to an
associate director, to issue notices of assessment of liability to
commonly controlled insured depository institutions for the estimated
amount of loss to the deposit insurance funds.
(b) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his or
her designee, that the action taken is not inconsistent with section
5(e) of the FDI Act (12 U.S.C. 1815(e)).
[[Page 63]]
Sec. 303.271 Prompt corrective action directives and capital plans under section 38 of the FDI Act (12 U.S.C. 1831o) and part 325 of this chapter.
(a) General--notices, directives and orders. Authority is delegated
to the Director and Deputy Director (DOS), and where confirmed in
writing by the Director, to an associate director, and to the
appropriate regional director and deputy regional director, to accept,
reject, require new or revised capital restoration plans, or make any
other determinations with respect to the implementation of capital
restoration plans and, in accordance with subpart Q of part 308 of this
chapter, to issue:
(1) Notices of intent to issue capital directives;
(2) Directives to insured state nonmember banks that fail to
maintain capital in accordance with the requirements contained in part
325 of this chapter;
(3) Notices of intent to issue prompt corrective action directives,
except directives issued pursuant to section 38(f)(2)(F)(ii) of the FDI
Act (12 U.S.C. 1831(f)(2)(F)(ii));
(4) Directives to insured depository institutions pursuant to
section 38 of the FDI Act (12 U.S.C. 1831o), with or without the consent
of the respondent bank to the issuance of the directive, except
directives issued pursuant to section 38(f)(2)(F)(ii) of the FDI Act (12
U.S.C. 1831o(f)(2)(F)(ii));
(5) Directives to insured depository institutions requiring
immediate action or imposing proscriptions pursuant to section 38 of the
FDI Act (12 U.S.C. 1831o) and part 325 of this chapter, and in
accordance with the requirements contained in Sec. 308.201(a)(2) of this
chapter;
(6) Notices of intent to reclassify insured banks pursuant to
Secs. 325.103(d) and 308.202 of this chapter;
(7) Directives to reclassify insured banks pursuant to
Secs. 325.103(d) and 308.202 of this chapter with the consent of the
respondent bank to the issuance of the directive; and
(8) Orders on request for informal hearings to reconsider
reclassifications and designate the presiding officer at the hearing
pursuant to Sec. 308.202 of this chapter.
(b) Notices--dismissal of director and officer. Authority is
delegated to the Director and Deputy Director (DOS) and, where confirmed
in writing by the Director, to an associate director, to:
(1) Issue notices of intent to issue a prompt corrective action
directive ordering the dismissal from office of a director or senior
executive officer pursuant to section 38(f)(2)(F)(ii) of the FDI Act (12
U.S.C. 1831o(f)(2)(F)(ii)) and in accordance with the requirements
contained in Sec. 308.203 of this chapter;
(2) Issue directives ordering the dismissal from office of a
director or senior executive officer pursuant to section 38(f)(2)(F)(ii)
of the FDI Act (12 U.S.C. 1831o(f)(2)(F)(ii)); and
(3) Issue orders of dismissal from office of a director or senior
executive officer pursuant to section 38(f)(2)(F)(ii) of the FDI Act (12
U.S.C. 1831o(f)(2)(F)(ii)) where the individual consents to the issuance
of such order prior to the filing of a recommendation by the presiding
officer with the FDIC.
(c) Reclassification of institution other than on basis of capital.
Authority is delegated to the Director and Deputy Director (DOS), and
where confirmed in writing by the Director, to an associate director,
to:
(1) Act on recommended decisions of presiding officers pursuant to a
request for reconsideration of a reclassification in accordance with the
requirements contained in Sec. 308.202 of this chapter; and
(2) Act on requests for rescission of a reclassification.
(d) Appeals of immediately effective PCA directives. Authority is
delegated to the Director and Deputy Director (DOS), and where confirmed
in writing by the Director, to an associate director, to act on appeals
from immediately effective directives issued pursuant to section 38 of
the FDI Act (12 U.S.C. 1831o) and Sec. 308.201 of this chapter.
(e) Informal hearings. Authority is delegated to the Executive
Secretary of the FDIC to issue orders for informal hearings and
designate presiding officers on directives issued pursuant to section
38(f)(2)(F)(ii) of the FDI Act (12 U.S.C. 1831o(f)(2)(F)(ii)).
(f) Legal concurrence. The authority delegated under this section
shall be
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exercised only upon the concurrent certification by the General Counsel
or, where confirmed in writing by the General Counsel, by his or her
designee, or, in cases where a regional director or deputy regional
director issues a notice, directive, or order, by the appropriate
regional counsel, that the action taken is not inconsistent with section
38 of the FDI Act (12 U.S.C. 1831o) and part 325 of this chapter.
Sec. 303.272 Investigations under section 10(c) of the FDI Act (12 U.S.C. 1820(c)).
(a) Authority of division directors. Authority is delegated to the
Director and Deputy Director (DOS), to the Director and Deputy Director
(DCA), to the Director and Deputy Director of the Division of
Resolutions and Receiverships, and where confirmed in writing by the
appropriate Director, to an associate director, and to the appropriate
regional director and deputy regional director, to issue an order of
investigation pursuant to section 10(c) of the FDI Act (12 U.S.C.
1820(c)) and subpart K of part 308 of this chapter.
(b) Authority of General Counsel. Authority is delegated to the
General Counsel, and where confirmed in writing by the General Counsel,
to his or her designee, to issue an order of investigation pursuant to
sections 8 through 13 of the FDI Act (12 U.S.C. 1818-1823), as
appropriate, and subpart K of part 308 of this chapter.
(c) Concurrence in certain situations. In issuing an order of
investigation that pertains to an open insured depository institution or
an institution making application to become an insured depository
institution, or a post-conservatorship or post-receivership order of
investigation, the authority delegated under this section shall be
exercised only upon the concurrent execution of the order of
investigation by the Director or Deputy Director (DOS), or the Director
or Deputy Director (DCA), or the Director or Deputy Director of the
Division of Resolutions and Receiverships, their respective associate
directors, and the General Counsel or his or her designee. In the case
of a joint order of investigation, such authority shall be exercised
only upon the concurrent execution of the order of investigation by both
Directors or Deputy Directors, or their associate directors, and upon
the certification and execution of the order by the General Counsel or
his or her designee.
Sec. 303.273 Unilateral settlement offers.
(a) General. Authority is delegated to the Director and Deputy
Director (DOS), to the Director and Deputy Director (DCA), and where
confirmed in writing by the appropriate Director, to an associate
director, to accept, deny or enter into negotiations for or regarding
settlement and settlement offers with insured depository institutions,
or with an institution-affiliated party, pertaining to or arising in
connection with a proceeding under part 308 of this chapter. In cases
where a proceeding under part 308 of this chapter was issued jointly by
DOS and DCA, both Directors or Deputy Directors, or their associate
directors, must agree to accept, deny or enter into negotiations
regarding settlement and settlement offers with insured depository
institutions or with an institution-affiliated party.
(b) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his or
her designee, that the action taken is not inconsistent with the FDI
Act.
Sec. 303.274 Acceptance of written agreements.
(a) Written agreements under section 8(a) of the FDI Act. Authority
is delegated to the Director and Deputy Director (DOS), and where
confirmed in writing by the Director, to an associate director, to
accept or enter into any written agreements with insured depository
institutions, or any institution-affiliated party pertaining to any
matter which may be addressed by the FDIC pursuant to section 8(a) of
the FDI Act (12 U.S.C. 1818(a)).
(b) Written agreements in lieu of cease-and-desist orders. Authority
is delegated to the Director and Deputy Director (DOS) and to the
Director and Deputy Director (DCA), and where confirmed in writing by
the appropriate Director,
[[Page 65]]
to an associate director, to accept or enter into any written agreements
with insured depository institutions, or any institution-affiliated
party pertaining to any safety and soundness or consumer compliance
matter which may be addressed by the FDIC pursuant to section 8(b) of
the FDI Act (12 U.S.C. 1818(b)) or any other provision of the FDI Act
which addresses safety and soundness or consumer compliance matters. In
cases which would address both safety and soundness and consumer
compliance matters, the Directors, or their designees, may accept or
enter into joint written agreements with insured depository institutions
or any institution-affiliated party.
(c) Written agreements as condition attendant to FDIC filings
contained in this part. Authority is delegated to the Director and
Deputy Director (DOS), and to the Director and Deputy Director (DCA), as
appropriate, and, where confirmed in writing by the appropriate
Director, to an associate director, and to the appropriate regional
director and deputy regional director, to accept or enter into any
written agreements with any insured depository institution, any
institution-affiliated party or any other petitioner which contains
conditions precedent to the FDIC's non-objection to a filing pursuant to
this part. A written agreement under this paragraph (c) shall not affect
an institution's rating for prompt corrective action purposes, unless
the written agreement expressly provides to the contrary.
(d) Legal concurrence. The authority delegated under this section
shall be exercised only upon concurrent certification by the General
Counsel or, where confirmed in writing by the General Counsel, by his or
her designee, that the action taken is not inconsistent with the FDI
Act.
Sec. 303.275 Modifications and terminations of enforcement actions and orders.
(a) Termination of section 8(a) (12 U.S.C. 1818(a)) orders and
agreements. Authority is delegated to the Director and Deputy Director
(DOS) and, where confirmed in writing by the Director, to an associate
director, and to the appropriate regional director and deputy regional
director, to terminate outstanding section 8(a) orders and agreements
and to terminate actions and agreements which are pending pursuant to
section 8(a) of the FDI Act when the depository institution is closed by
a federal or state authority or merges into another institution.
(b) Termination of section 8(a) (12 U.S.C. 1818(a)) notification to
primary regulator issued by Board of Directors. Authority is delegated
to the Director and Deputy Director (DOS), and where confirmed in
writing by the Director, to an associate director, and to the
appropriate regional director and deputy regional director, to terminate
notifications to primary regulator issued by the Board of Directors
pursuant to section 8(a) of the FDI Act where the respondent depository
institution is in material compliance with such notification or for good
cause shown.
(c) Termination of section 8(a) (12 U.S.C. 1818(a)) notice of intent
to terminate insured status. In cases where the Board of Directors has
issued a notice of intent to terminate insured status pursuant to
section 8(a) of the FDI Act, authority is delegated to the Director and
Deputy Director (DOS) and, where confirmed in writing by the Director,
to an associate director, and to the appropriate regional director and
deputy regional director, to terminate the actions pending pursuant to
such notice of intent to terminate insured status where the respondent
depository institution is in material compliance with the applicable
notification to primary regulator or for good cause shown.
(d) Sections 8(b) and 8(c)(12 U.S.C. 1818(b) and (c)) actions and
orders. (1) Authority is delegated to the Director and Deputy Director
(DOS) and to the Director and Deputy Director (DCA), as appropriate and,
where confirmed in writing by the appropriate Director, to an associate
director, and to the appropriate regional director and deputy regional
director, to terminate outstanding section 8(b) and section 8(c) orders
and agreements and to terminate actions and agreements which are pending
pursuant to sections 8(b) and 8(c) of the FDI Act when the depository
institution is closed by a federal or state authority or merges into
another institution. In cases where a joint order was
[[Page 66]]
issued by DOS and DCA, both Directors, or their Deputy Directors or
associate directors, or the appropriate regional directors or deputy
regional directors, must execute the order of termination.
(2) Authority is delegated to the Director and Deputy Director (DOS)
and to the Director and Deputy Director (DCA), as appropriate, and where
confirmed in writing by the appropriate Director, to an associate
director, and to the appropriate regional director and deputy regional
director, to terminate outstanding section 8(b) orders issued by the
Board of Directors either where material compliance with the section
8(b) order has been achieved by the respondent depository institution or
individual respondent or for good cause shown. In cases where an order
issued by the Board of Directors addresses both safety and soundness and
consumer compliance matters, both Directors or Deputy Director, or the
designees of the Directors, must execute the order of termination.
(e) Modification and termination of section 8(e) (12 U.S.C. 1818(e))
orders and actions. Authority is delegated to the Director and Deputy
Director (DOS) and the Director and Deputy Director (DCA), as
appropriate, and where confirmed in writing by the appropriate Director,
to an associate director, to modify or terminate outstanding section
8(e) orders and pending actions and to grant consent under section
8(e)(7)(B) of the Act (12 U.S.C. 1818(e)(7)(B)) for the modification or
termination of an outstanding section 8(e) order issued by another
Federal financial institution regulatory agency where:
(1) The respondent has demonstrated his or her fitness to
participate in any manner in the conduct of the affairs of an insured
depository institution; and
(2) The respondent has shown that his or her participation would not
pose a risk to the institution's safety and soundness; and
(3) The respondent has proven that his or her participation would
not erode public confidence in the institution.
(f) Modification and termination of section 8(g) (12 U.S.C. 1818(g))
orders and actions. Pursuant to section 8(j) of the FDI Act (12 U.S.C.
1818(j)), authority is delegated to the Director and Deputy Director
(DOS) and the Director and Deputy Director (DCA), as appropriate, and
where confirmed in writing by the appropriate Director, to an associate
director, to approve requests for modifications or terminations of
section 8(g) orders issued by either the Board of Directors or under
delegated authority.
(g) Other matters not specifically addressed. For all outstanding or
pending notices, actions, orders, directives and agreements not
specifically addressed in this subpart, the delegations of authority
contained in this subpart shall include the authority to modify or
terminate any outstanding or pending notice, order, directive or
agreement issued pursuant to delegated authority, as may be appropriate.
(h) Termination of pending actions--general. Any pending enforcement
action may be dismissed or terminated by the Director or Deputy Director
of DOS or DCA, as appropriate, at any time prior to the commencement of
a hearing on the merits by an administrative law judge. Once a hearing
on the merits has been convened by an administrative law judge, a
pending enforcement action may be dismissed or terminated by stipulation
or consent of the affected parties no later than 14 days after the
administrative law judge has closed the record of the hearing. Only the
FDIC Board of Directors may terminate or dismiss an enforcement action
more than 14 days after the record has been closed by an administrative
law judge.
(i) Legal concurrence. Any dismissals, modifications or terminations
pursuant to this section shall be exercised only upon concurrent
certification by the General Counsel or, where confirmed in writing by
the General Counsel, by his or her designee, or, in cases where a
regional director or deputy regional director acts under delegated
authority, by the appropriate regional counsel, that the action taken is
not inconsistent with the FDI Act.
[[Page 67]]
Sec. 303.276 Enforcement of outstanding enforcement orders.
After consultation with the Director (DOS) or the Director (DCA), or
a Deputy Director or an associate director, or the appropriate regional
director or deputy regional director, as may be appropriate, the General
Counsel or designee is authorized to initiate and prosecute any action
to enforce any effective and outstanding order or temporary order issued
under 12 U.S.C. 1817, 1818, 1820, 1828, 1829, 1831l, 1831o, 1972, or
3909, or any provision thereof, in the appropriate United States
District Court.
Sec. 303.277 Compliance plans under section 39 of the FDI Act (12 U.S.C. 1831p-1) (standards for safety and soundness) and part 308 of this chapter.
(a) Compliance plans. Authority is delegated to the Director and
Deputy Director (DOS), and where confirmed in writing by the Director,
to an associate director, and to the appropriate regional director and
deputy regional director, to accept, to reject, to require new or
revised compliance plans, or to make any other determinations with
respect to the implementation of compliance plans pursuant to subpart R
of part 308 of this chapter.
(b) Notices, orders, and other action. Authority is delegated to the
Director and Deputy Director (DOS) and, where confirmed in writing by
the Director, to an associate director, to:
(1) Issue notices of intent to issue an order requiring the bank to
correct a safety and soundness deficiency or to take or refrain from
taking other actions pursuant to section 39 of the FDI Act (12 U.S.C.
1831p-1) and in accordance with the requirements contained in
Sec. 308.304(a)(1) of this chapter;
(2) Issue an order requiring the bank immediately to correct a
safety and soundness deficiency or to take or refrain from taking other
actions pursuant to section 39 of the FDI Act (12 U.S.C. 1831p-1) and in
accordance with the requirements contained in Sec. 308.304(a)(2) of this
chapter; and
(3) Act on requests for modification or rescission of an order.
(c) Legal concurrence--compliance plans. The authority delegated
under this section as to compliance plans shall be exercised only upon
the concurrent certification by the General Counsel or, where confirmed
in writing by the General Counsel, by his or her designee, or, in cases
where a regional director or deputy regional director accepts, rejects
or requires new or revised compliance plans or makes any other
determinations with respect to compliance plans, by the appropriate
regional counsel, that the action taken is not inconsistent with the FDI
Act.
(d) Legal concurrence--notices and orders. The authority delegated
under this section as to notices and orders shall be exercised only upon
the concurrent certification by the General Counsel or, where confirmed
in writing by the General Counsel, by his or her designee that the
allegations contained in the notice of intent, if proven, constitute a
basis for the issuance of a final order pursuant to section 39 of the
FDI Act or that the issuance of a final order is not inconsistent with
section 39 of the FDI Act or that the stipulated section 39 order is not
inconsistent with section 39 of the FDI Act and is an order which has
become final for purposes of enforcement pursuant to the FDI Act.
Sec. 303.278 Enforcement matters where authority is not delegated.
Without limiting the Board of Directors' authority, the Board of
Directors has retained the authority to act upon the following
enforcement matters:
(a) Notifications to primary regulator under section 8(a) of the FDI
Act (12 U.S.C. 1818(a)) when the respondent bank's book capital is at or
above 2 percent of total assets and adjusted Tier 1 capital is at or
above 2 percent of adjusted part 325 total assets as defined in
Sec. 303.2(b);
(b) Orders terminating insured status under section 8(a) of the FDI
Act (12 U.S.C. 1818(a));
(c) Cease-and-desist orders under section 8(b) of the FDI Act (12
U.S.C. 1818(b)) when the respondent depository institution or individual
does not consent to the issuance of such orders;
(d) Temporary orders of suspension and prohibition under section
8(e) of the FDI Act (12 U.S.C. 1818(e));
[[Page 68]]
(e) Orders of removal, suspension or prohibition from participation
in the conduct of the affairs of an insured depository institution under
section 8(e) of the FDI Act (12 U.S.C. 1818(e)) when the individual does
not consent to the issuance of such orders;
(f) Orders of suspension or prohibition to an indicted director,
officer or person participating in the conduct of the affairs of an
insured depository institution and orders of removal or prohibition to a
convicted director, officer or person participating in the conduct of
the affairs of an insured depository institution under section 8(g) of
the FDI Act (12 U.S.C. 1818(g)) when such director, officer or person
does not consent to the suspension or removal;
(g) Final orders to pay civil money penalties where respondents do
not consent to the assessment of civil money penalties and hearings have
been held;
(h) Denials of requests for modifications or terminations of orders
issued pursuant to section 8(g) of the FDI Act;
(i) Grants or denials of requests for reinstatement to office,
whether or not an informal hearing has been requested, pursuant to
Sec. 308.203 of this chapter; and
(j) Grants or denials of requests for waivers of liability of
commonly controlled insured depository institutions as to assessments
under section 5(e) of the FDI Act (12 U.S.C. 1815(e)).
PART 304--FORMS, INSTRUCTIONS AND REPORTS--Table of Contents
Sec.
304.1 Purpose and scope.
304.2 Forms and instructions--general.
304.3 Certified statements.
304.4 Reports of condition and income.
304.5 Other forms.
304.6 [Reserved]
304.7 Display of control numbers.
Appendix A to Part 304--List of Forms
Authority: 5 U.S.C. 552; 12 U.S.C. 1817, 1818, 1819, 1820; Public
Law 102-242, 105 Stat. 2251 (12 U.S.C. 1817 note).
Source: 51 FR 36684, Oct. 15, 1986, unless otherwise noted.
Sec. 304.1 Purpose and scope.
This part is issued under section 552 of title 5 of the United
States Code (5 U.S.C. 552), which requires that each agency shall make
available to the public information pertaining to the description of
forms available or the places at which forms may be obtained, and
instructions as to the scope and content of reports and other
submittals. The forms mentioned in this part are limited to those which
are not already mentioned elsewhere within the rules and regulations of
the Federal Deposit Insurance Corporation. However, appendix A to this
part lists forms required by the FDIC and identifies the sections of
FDIC's regulations where the forms are referenced.
[51 FR 36684, Oct. 15, 1986, as amended at 62 FR 4896, Feb. 3, 1997]
Sec. 304.2 Forms and instructions--general.
Necessary forms with their related instructions to be used in
connection with applications, reports, and other submittals can be
obtained from FDIC regional offices--Division of Supervision. The FDIC
regional offices are listed in the directory of the FDIC Law,
Regulations and Related Acts looseleaf service, published by the FDIC. A
listing of FDIC forms can also be obtained by writing to the FDIC,
Division of Supervision, 550 17th Street, NW, Washington, D.C. 20429.
The forms are also available in the FDIC Public Information Center at
801 17th Street, NW, Washington, D.C. 20429.
[62 FR 4896, Feb. 3, 1997]
Sec. 304.3 Certified statements.
The certified statements required to be filed by insured
institutions under the provisions of section 7 of the Federal Deposit
Insurance Act (12 U.S.C. 1817), as amended, shall be filed in accordance
with part 327 of this chapter. The applicable forms are Form 6420/07A--
Form 6420/07H which show the computation of the semiannual assessment
due to the Corporation from an insured depository institution. As
provided for in part 327 of this chapter, the forms will be furnished to
insured depository institutions by the Corporation twice each calendar
year and the completed statement must be returned to the Corporation by
each institution.
[62 FR 4896, Feb. 3, 1997]
[[Page 69]]
Sec. 304.4 Reports of condition and income.
(a) Description. Forms FFIEC 031, 032, 033, and 034, Consolidated
Reports of Condition and Income, are quarterly reports for insured state
nonmember banks (except District banks) of different asset sizes or with
foreign offices, as appropriate, that are required to be prepared as of
the close of business on the following report dates: March 31, June 30,
September 30, and December 31. These reports are also known as the
``Call Report.'' The Call Report includes a balance sheet, an income
statement, and a statement of changes in equity capital of the reporting
bank. Supporting schedules request additional detail with respect to
charge-offs and recoveries, income from international operations,
specific asset and liability accounts, off-balance sheet items, past due
and nonaccrual assets, information for assessment purposes, and
regulatory capital. All assets and liabilities, including contingent
assets and liabilities, must be reported in, or otherwise taken into
account in the preparation of, the Call Report. Reporting banks must
also submit annually such information on small business and small farm
lending as the FDIC may need to assess the availability of credit to
these sectors of the economy. Call Reports must be prepared in
accordance with the appropriate instructions contained in the Federal
Financial Institutions Examination Council booklet entitled
``Instructions--Consolidated Reports of Condition and Income''. The
report forms, the instructions for completing the reports, and the
accompanying materials will be furnished to all insured state nonmember
banks (except District banks) by, or may be obtained upon request from,
the Call Reports Analysis Unit, Division of Supervision, FDIC,
Washington, D.C. 20429.
(b) Submission of reports. All insured state nonmember banks (except
District banks) shall file their completed reports by the method and
with the appropriate collection agent for the FDIC as designated in the
materials accompanying the report forms each quarter. Completed reports
must be received no more than 30 calendar days after the report date,
subject to the timely filing provisions set forth in the
``Instructions--Consolidated Reports of Condition and Income'' and in
the materials accompanying the report forms each quarter. Any bank which
has or has had more than one foreign office, other than a shell branch
or an International Banking Facility, may take an additional 15 calendar
days to submit its Call Reports. A bank using any of these additional 15
calendar days to complete its reports is required to submit its reports
electronically.
[62 FR 4896, Feb. 3, 1997]
Sec. 304.5 Other forms.
The forms described in this section have been prepared for the use
of banks.
(a) Form 8020/05: Summary of Deposits. Form 8020/05 is a report on
the amount of deposits for each authorized office of an insured bank
with branches; unit banks do not report. Reports as of June 30 of each
year must be submitted no later than the immediately succeeding July 31.
The report is filed with the appropriate collection agent for the FDIC
as designated in the materials accompanying the survey forms each year.
The report forms and the instructions for completing the reports will be
furnished to all such banks by, or may be obtained upon request from the
Trust and Survey Group, Division of Supervision, FDIC, 550 17th Street,
NW, Washington, D.C. 20429.
(b) Form 6120/06: Notification of Performance of Bank Services. Form
6120/06 may be used to satisfy the notice requirement for bank service
arrangements that is contained in section 7 of the Bank Service
Corporation Act (12 U.S.C. 1867), as amended. In lieu of the form, a
bank may satisfy the requirement by submitting a letter stating: The
name of the servicer; the address at which the service is performed; the
service being performed; and the date the service commenced. Either the
form or the letter containing the notice information must be submitted
to the regional director--Division of Supervision of the region in which
the bank's main office is located within 30 days of the making of the
bank service contract or the performance of the bank service, whichever
occurs first.
[[Page 70]]
(c) Form FFIEC 001: Annual Report of Trust Assets. This report must
be filed by all insured state nonmember commercial and savings banks
operating trust departments or banks granted consent by the Corporation
to exercise trust powers, and their trust subsidiaries. The report must
be filed no later than February 15th of each year. When circumstances
necessitate, additional information may be required about certain
operations of the trust department. The report must be prepared and
submitted in accordance with the appropriate instructions. The report is
filed with the appropriate collection agent for the FDIC as designated
in the report form and instructions. The report forms and instructions
for completing the report will be furnished automatically to all such
banks by, or may be obtained upon request from the Trust and Survey
Group, Division of Supervision, FDIC, 550 17th Street, NW, Washington,
D.C. 20429.
(d) Form FFIEC 002: Report of Assets and Liabilities of U.S.
Branches and Agencies of Foreign Banks. Form FFIEC 002 is a report in
the form of a statement of the assets and liabilities of U.S. branches
and agencies of foreign banks together with supporting schedules that
request additional detail with respect to selected assets and
liabilities, off-balance sheet items, and, in the case of insured
branches, information for assessment purposes. All assets and
liabilities, including contingent assets and liabilities, must be
reported in, or otherwise taken into account in the preparation of, this
report. Insured branches must also submit annually such information on
small business and small farm lending as the FDIC may need to assess the
availability of credit to these sectors of the economy. The report must
be prepared in accordance with the instructions contained in the
instruction booklet for the report, copies of which are furnished to all
U.S. branches and agencies of foreign banks by the Federal Reserve
System. The Board of Governors of the Federal Reserve System collects
and processes the report on behalf of FDIC-supervised branches. The
report is submitted quarterly to the appropriate Federal Reserve
district bank.
(e) Form FFIEC 004: Report on Indebtedness of Executive Officers and
Principal Shareholders and their Related Interests to Correspondent
Banks. Form FFIEC 004 is a recommended form that may be used by the
executive officers and principal shareholders of an insured state
nonmember bank to report to the board of directors of their bank on
their indebtedness (and that of their related interests) to
correspondent banks, as required by part 349 of this chapter. The
reports or any form containing identical information must be submitted
to the bank's board of directors by January 31 of each year and cover
indebtedness to correspondent banks during the preceding calendar year.
Form FFIEC 004 is mailed annually by the FDIC to each insured state
nonmember bank.
[62 FR 4897, Feb. 3, 1997]
Sec. 304.6 [Reserved]
Sec. 304.7 Display of control numbers.
The following sections of this part of FDIC's regulations containing
collection of information requirements are listed with the control
numbers assigned by the Office of Management and Budget:
------------------------------------------------------------------------
Currently
Section of 12 CFR Part 304 Assigned OMB
Control No.
------------------------------------------------------------------------
304.3................................................... 3064-0057
304.4(a)................................................ 3064-0052
304.4(b)................................................ 3064-0054
304.5(a)................................................ 3064-0061
304.5(b)................................................ 3064-0029
304.5(c)................................................ 3064-0024
304.5(d)................................................ 7100-0032
304.5(e)................................................ 3064-0023
------------------------------------------------------------------------
Appendix A to Part 304--List of Forms
Note: See footnotes at end of table.
----------------------------------------------------------------------------------------------------------------
Section of FDICs
regulations (12 CFR
Form Title chapter III) where the OMB No.
form is referenced
----------------------------------------------------------------------------------------------------------------
FDIC 6112/01.......................... Initial Statement of 335.413................. 3064-0030
Beneficial Ownership of
Equity Securities (Form F-7).
[[Page 71]]
FDIC 6112/02.......................... Statement of Changes in 335.414................. 3064-0030
Beneficial Ownership of
Equity Securities (Form F-8).
FDIC 6120/06.......................... Notification of Bank Services. 304.5(b)................ 3064-0029
FDIC 6200/05.......................... Application for Federal 303.1................... 3064-0001
Deposit Insurance (Commercial
Banks).
FDIC 6200/06.......................... Financial Report.............. (\1\)................... 3064-0006
FDIC 6200/07.......................... Application for Federal 303.1................... 3064-0069
Deposit Insurance for
Operating Noninsured
Institutions.
FDIC 6200/09.......................... Application for Consent to (\2\)................... 3064-0025
Exercise Trust Powers.
FDIC 6220/01.......................... Application for a Merger or 303.3................... 3064-0016
Other Transaction Pursuant to
Section 19(c) of the Federal
Deposit Insurance Act.
FDIC 6220/07.......................... Application for a Merger or 303.7(b)(1) and 303.3... 3064-0015
Other Transaction Pursuant to
Section 18(c) of the Federal
Deposit Insurance Act
(Phantom or Corporate
Reorganization).
FDIC 6342/12.......................... Request for Deregistration 341.5................... 3064-0027
Registered Transfer Agent.
FDIC 6420/07.......................... Certified Statement........... 304.3(a)................ 3064-0057
FDIC 6440/12.......................... Loan/Application Register..... 338.8(\3\).............. 7100-0247
FDIC 6710/06.......................... Suspicious Activity Report.... 353.1................... 3064-0077
FDIC 6710/07.......................... Application Pursuant to (\4\)................... 3064-0018
Section 19 of the Federal
Deposit Insurance Act.
FDIC 6810/01.......................... Notification of Addition of a 333.2................... 3064-0097
Director or Employment of a
Senior Executive Officer.
FDIC 6822/01.......................... Notice of Acquisition of 303.4(b)................ 3064-0019
Control.
FDIC 8020/05.......................... Summary of Deposits........... 304.5(a)................ 3064-0061
FFIEC 001............................. Annual Report of Trust Assets. 304.5(c)................ 3064-0024
FFIEC 002............................. Report of Assets and 304.5(d)................ 7100-0032
Liabilities of U.S. Branches
and Agencies of Foreign Banks.
FFIEC 004............................. Report on Indebtedness of 304.5(e)................ 3064-0023
Executive Officers and
Principal Shareholders and
their Related Interests to
Correspondent Banks.
FFIEC 009............................. Country Exposure Report....... 351.3(b)................ 3064-0017
FFIEC 009a............................ Country Exposure Information 351.3................... 3064-0017
Report.
FFIEC 019............................. Country Exposure Report for (\5\)................... 3064-0017
U.S. Branches and Agencies of
Foreign Banks.
FFIEC 030............................. Foreign Branch Report of 347.6(b)................ 3064-0011
Condition.
FFIEC 031............................. Consolidated Reports of 304.4................... 3064-0052
Condition and Income for a
Bank with Domestic and
Foreign Offices.
FFIEC 032............................. Consolidated Reports of 304.4................... 3064-0052
Condition and Income for a
Bank with Domestic Offices
Only and Total Assets of $300
Million or More.
FFIEC 033............................. Consolidated Reports of 304.4................... 3064-0052
Condition and Income for a
Bank with Domestic Offices
Only and Total Assets of $100
Million or More But Less Than
$300 Million.
FFIEC 034............................. Consolidated Reports of 304.4................... 3064-0052
Condition and Income for a
Bank with Domestic Offices
Only and Total Assets of Less
than $100 Million.
FFIEC 035............................. Monthly Consolidated Foreign (\6\)................... 1557-0156
Currency Report of Banks in
the United States.
GFIN.................................. Notice of Government (\7\)................... 1535-0089
Securities Broker or
Government Securities Dealer
Activities to be Filed by a
Financial Institution Under
Section 15C(a)(1)(B).
GFIN-W................................ Notice by Financial (\7\)................... 7100-0224
Institutions of Termination
of Activities as a Government
Securities Broker or
Government Securities Dealer.
GFIN-4................................ Disclosure Form for Person (\7\)................... 1535-0089
Associated With a Financial
Institution Government
Securities Broker or Dealer.
GFIN-5................................ Uniform Termination Notice for (\7\)................... 1535-0089
Person Associated With a
Financial Institution
Government Securities Broker
or Dealer.
MSD 4................................. Uniform Application for 343.3................... 3064-0022
Municipal Securities
Principal or Municipal
Securities Representative
Associated With a Bank
Municipal Securities Dealer.
MSD 5................................. Uniform Termination for 343.3................... 3064-0022
Municipal Securities
Principal or Municipal
Securities Representative
Associated With a Bank
Municipal Securities Dealer.
TA-1.................................. Transfer Agent Registration 341.6................... 3064-0026
and Amendment Form.
----------------------------------------------------------------------------------------------------------------
Notes:
[[Page 72]]
\1\ Not referenced in 12 CFR chapter III. The report form is submitted by each individual director or officer of
a proposed or operating bank applying to the FDIC for federal deposit insurance as a state nonmember bank, or
by a person proposing to acquire ownership or control of an insured state nonmember bank.
\2\ The report form can be obtained from the HMDA Assistance line by telephoning (202) 452-2016.
\3\ Not referenced in 12 CFR chapter III. The application form is submitted by insured state nonmember banks
applying for FDIC consent to exercise trust powers.
\4\ Not referenced in 12 CFR chapter III. The application form is submitted by FDIC-insured banks applying for
FDIC consent to employ persons who have been convicted of crimes involving dishonesty or breach of trust.
\5\ Not referenced in 12 CFR chapter III. The report form is submitted by state chartered and federally-licensed
branches and agencies of foreign banks in the U.S. with $30 million or more in total direct claims on foreign
residents. The Federal Reserve Board collects and processes the report on behalf of FDIC-supervised branches.
The report is submitted quarterly to the appropriate Federal Reserve district bank.
\6\ Not referenced in 12 CFR chapter III. The report form is submitted by banks (other than savings banks) and
bank holding companies with a dollar equivalent of $100 million or more in assets, liabilities, foreign
exchange contracts bought and foreign exchange contracts sold in any six specific foreign currencies as of the
end of a month. The Office of the Comptroller of the Currency collects and processes this monthly report on
behalf of insured state nonmember banks.
\7\ Not referenced in 12 CFR chapter III. The report form is submitted by banks or persons associated with banks
required to file under section 15C of the Securities and Exchange Act of 1934.
[62 FR 4897, Feb. 3, 1997]
PARTS 305-306 [RESERVED]
PART 307--NOTIFICATION OF CHANGES OF INSURED STATUS--Table of Contents
Sec.
307.1 Certification of assumption of deposit liabilities.
307.2 Notice to be given when deposit liabilities are not assumed.
Authority: Sec. 2, Pub. L. 797, 64 Stat. 879, 880 as amended by
secs. 202, 204, Pub. L. 89-694, 80 Stat. 1046, 1054, and sec. 6(c)(14),
Pub. L. 95-369, 92 Stat. 618 (12 U.S.C. 1818(a), 1818(o)); sec. 304,
Pub. L. 95-630, 92 Stat. 3676 (12 U.S.C. 1818(q); sec. 9, Pub. L. 797,
64 Stat. 881 (12 U.S.C. 1819).
Sec. 307.1 Certification of assumption of deposit liabilities.
Whenever the deposit liabilities of an insured bank or insured
branch of a foreign bank are assumed by another insured bank (whether by
merger, consolidation, or other statutory assumption, or by contract),
the assuming or resulting bank shall certify to the FDIC that it has
agreed to assume the deposit liabilities of the bank whose deposits were
assumed. The certification shall be made within 30 days after the
assumption takes effect and shall state the date the assumption took
effect. This certification shall be considered satisfactory evidence of
the assumption.
[48 FR 24031, May 31, 1983]
Sec. 307.2 Notice to be given when deposit liabilities are not assumed.
Any insured bank or insured branch of a foreign bank whose insured
status is voluntarily terminated, but whose deposit liabilities are not
assumed shall give notice to each of its depositors of the date of the
termination of its insured status under the Federal Deposit Insurance
Act. The notice to depositors shall be given in a form, in a manner and
at a time approved by the appropriate FDIC Regional Director. The FDIC
may require the bank to take other steps that it considers necessary for
the protection of depositors.
[48 FR 24031, May 31, 1983]
PART 308--RULES OF PRACTICE AND PROCEDURE--Table of Contents
Subpart A--Uniform Rules of Practice and Procedure
Sec.
308.1 Scope.
308.2 Rules of construction.
308.3 Definitions.
308.4 Authority of Board of Directors.
308.5 Authority of the administrative law judge.
308.6 Appearance and practice in adjudicatory proceedings.
308.7 Good faith certification.
308.8 Conflicts of interest.
308.9 Ex parte communications.
308.10 Filing of papers.
308.11 Service of papers.
308.12 Construction of time limits.
308.13 Change of time limits.
308.14 Witness fees and expenses.
308.15 Opportunity for informal settlement.
308.16 FDIC's right to conduct examination.
308.17 Collateral attacks on adjudicatory proceeding.
308.18 Commencement of proceeding and contents of notice.
308.19 Answer.
308.20 Amended pleadings.
308.21 Failure to appear.
308.22 Consolidation and severance of actions.
308.23 Motions.
[[Page 73]]
308.24 Scope of document discovery.
308.25 Request for document discovery from parties.
308.26 Document subpoenas to nonparties.
308.27 Deposition of witness unavailable for hearing.
308.28 Interlocutory review.
308.29 Summary disposition.
308.30 Partial summary disposition.
308.31 Scheduling and prehearing conferences.
308.32 Prehearing submissions.
308.33 Public hearings.
308.34 Hearing subpoenas.
308.35 Conduct of hearings.
308.36 Evidence.
308.37 Post-hearing filings.
308.38 Recommended decision and filing of record.
308.39 Exceptions to recommended decision.
308.40 Review by Board of Directors.
308.41 Stays pending judicial review.
Subpart B--General Rules of Procedure
308.101 Scope of Local Rules.
308.102 Authority of Board of Directors and Executive Secretary.
308.103 Appointment of administrative law judge.
308.104 Filings with the Board of Directors.
308.105 Custodian of the record.
308.106 Written testimony in lieu of oral hearing.
308.107 Document discovery.
Subpart C--Rules of Practice Before the FDIC and Standards of Conduct
308.108 Sanctions.
308.109 Suspension and disbarment.
Subpart D--Rules and Procedures Applicable to Proceedings Relating to
Disapproval of Acquisition of Control
308.110 Scope.
308.111 Grounds for disapproval.
308.112 Notice of disapproval.
308.113 Answer to notice of disapproval.
308.114 Burden of proof.
Subpart E--Rules and Procedures Applicable to Proceedings Relating to
Assessment of Civil Penalties for Willful Violations of the Change in
Bank Control Act
308.115 Scope.
308.116 Assessment of penalties.
308.117 Effective date of, and payment under, an order to pay.
308.118 Collection of penalties.
Subpart F--Rules and Procedures Applicable to Proceedings for
Involuntary Termination of Insured Status
308.119 Scope.
308.120 Grounds for termination of insurance.
308.121 Notification to primary regulator.
308.122 Notice of intent to terminate.
308.123 Notice to depositors.
308.124 Involuntary termination of insured status for failure to
receive deposits.
308.125 Temporary suspension of deposit insurance.
308.126 Special supervisory associations.
Subpart G--Rules and Procedures Applicable to Proceedings Relating to
Cease-and-Desist Orders
308.127 Scope.
308.128 Grounds for cease-and-desist orders.
308.129 Notice to state supervisory authority.
308.130 Effective date of order and service on bank.
308.131 Temporary cease-and-desist order.
Subpart H--Rules and Procedures Applicable to Proceedings Relating
to Assessment and Collection of Civil Money Penalties for Violation
of Cease-and-Desist Orders and of Certain Federal Statutes, Including
Call Report Penalties
308.132 Assessment of penalties.
308.133 Effective date of, and payment under, an order to pay.
Subpart I--Rules and Procedures for Imposition of Sanctions Upon
Municipal Securities Dealers or Persons Associated With Them and
Clearing Agencies or Transfer Agents
308.134 Scope.
308.135 Grounds for imposition of sanctions.
308.136 Notice to and consultation with the Securities and Exchange
Commission.
308.137 Effective date of order imposing sanctions.
Subpart J--Rules and Procedures Relating to Exemption Proceedings Under
Section 12(h) of the Securities Exchange Act of 1934
308.138 Scope.
308.139 Application for exemption.
308.140 Newspaper notice.
308.141 Notice of hearing.
308.142 Hearing.
308.143 Decision of Board of Directors.
[[Page 74]]
Subpart K--Procedures Applicable to Investigations Pursuant to Section
10(c) of the FDIA
308.144 Scope.
308.145 Conduct of investigation.
308.146 Powers of person conducting investigation.
308.147 Investigations confidential.
308.148 Rights of witnesses.
308.149 Service of subpoena.
308.150 Transcripts.
Subpart L--Procedures and Standards Applicable to a Notice of Change in
Senior Executive Officer or Director Pursuant to Section 32 of the FDIA
308.151 Scope.
308.152 Grounds for disapproval of notice.
308.153 Procedures where notice of disapproval issues pursuant to
Sec. 303.14 of this chapter.
308.154 Decision on review.
308.155 Hearing.
Subpart M--Procedures and Standards Applicable to an Application
Pursuant to Section 19 of the FDIA
308.156 Scope.
308.157 Relevant considerations.
308.158 Filing papers and effective date.
308.159 Denial of applications.
308.160 Hearings.
Subpart N--Rules and Procedures Applicable to Proceedings Relating to
Suspension, Removal, and Prohibition Where a Felony Is Charged
308.161 Scope.
308.162 Relevant considerations.
308.163 Notice of suspension, and orders of removal or prohibition.
308.164 Hearings.
Subpart O--Liability of Commonly Controlled Depository Institutions
308.165 Scope.
308.166 Grounds for assessment of liability.
308.167 Notice of assessment of liability.
308.168 Effective date of and payment under an order to pay.
Subpart P--Rules and Procedures Relating to the Recovery of Attorney
Fees and Other Expenses
308.169 Scope.
308.170 Filing, content, and service of documents.
308.171 Responses to application.
308.172 Eligibility of applicants.
308.173 Prevailing party.
308.174 Standards for awards.
308.175 Measure of awards.
308.176 Application for awards.
308.177 Statement of net worth.
308.178 Statement of fees and expenses.
308.179 Settlement negotiations.
308.180 Further proceedings.
308.181 Recommended decision.
308.182 Board of Directors action.
308.183 Payment of awards.
Subpart Q--Issuance and Review of Orders Pursuant to the Prompt
Corrective Action Provisions of the Federal Deposit Insurance Act
308.200 Scope.
308.201 Directives to take prompt corrective action.
308.202 Procedures for reclassifying a bank based on criteria other
than capital.
308.203 Order to dismiss a director or senior executive officer.
308.204 Enforcement of directives.
Subpart R--Submission and Review of Safety and Soundness Compliance
Plans and Issuance of Orders To Correct Safety and Soundness
Deficiencies
308.300 Scope.
308.301 Purpose.
308.302 Determination and notification of failure to meet a safety and
soundness standard and request for compliance plan.
308.303 Filing of safety and soundness compliance plan.
308.304 Issuance of orders to correct deficiencies and to take or
refrain from taking other actions.
308.305 Enforcement of orders.
Subpart S--Applications for a Stay or Review of Actions of Bank Clearing
Agencies
308.400 Scope.
308.401 Applications for stays of disciplinary sanctions or summary
suspensions by a bank clearing agency.
308.402 Applications for review of final disciplinary sanctions,
denials of participation, or prohibitions or limitations of
access to services imposed by bank clearing agencies.
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 1817,
1818, 1820, 1828, 1829, 1829b, 1831o, 1832(c), 1884(b), 1972, 3102,
3108(a), 3349, 3909, 4717; 15 U.S.C. 78 (h) and (i), 78o-4(c), 78o-5,
78q-1, 78s, 78u, 78u-2, 78u-3, and 78w; 28 U.S.C. 2461 note; 31 U.S.C.
330, 5321; 42 U.S.C. 4012a; sec. 31001(s), Pub. L. 104-134, 110 Stat.
1321-358.
Source: 56 FR 37975, Aug. 9, 1991, unless otherwise noted.
[[Page 75]]
Subpart A--Uniform Rules of Practice and Procedure
Sec. 308.1 Scope.
This subpart prescribes rules of practice and procedure applicable
to adjudicatory proceedings as to which hearings on the record are
provided for by the following statutory provisions:
(a) Cease-and-desist proceedings under section 8(b) of the Federal
Deposit Insurance Act (``FDIA'') (12 U.S.C. 1818(b));
(b) Removal and prohibition proceedings under section 8(e) of the
FDIA (12 U.S.C. 1818(e));
(c) Change-in-control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)) to determine whether the Federal Deposit
Insurance Corporation (``FDIC''), should issue an order to approve or
disapprove a person's proposed acquisition of an institution and/or
institution holding company;
(d) Proceedings under section 15C(c)(2) of the Securities Exchange
Act of 1934 (``Exchange Act'') (15 U.S.C. 78o-5), to impose sanctions
upon any government securities broker or dealer or upon any person
associated or seeking to become associated with a government securities
broker or dealer for which the FDIC is the appropriate regulatory
agency;
(e) Assessment of civil money penalties by the FDIC against
institutions, institution-affiliated parties, and certain other persons
for which it is the appropriate regulatory agency for any violation of:
(1) Sections 22(h) and 23 of the Federal Reserve Act (``FRA''), or
any regulation issued thereunder, and certain unsafe or unsound
practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1828(j);
(2) Section 106(b) of the Bank Holding Company Act Amendments of
1970 (``BHCA Amendments of 1970''), and certain unsafe or unsound
practices or breaches of fiduciary duty, pursuant to 12 U.S.C.
1972(2)(F);
(3) Any provision of the Change in Bank Control Act of 1978, as
amended (the ``CBCA''), or any regulation or order issued thereunder,
and certain unsafe or unsound practices, or breaches of fiduciary duty,
pursuant to 12 U.S.C. 1817(j)(16);
(4) Section 7(a)(1) of the FDIA, pursuant to 12 U.S.C. 1817(a)(1);
(5) Any provision of the International Lending Supervision Act of
1983 (``ILSA''), or any rule, regulation or order issued thereunder,
pursuant to 12 U.S.C. 3909;
(6) Any provision of the International Banking Act of 1978
(``IBA''), or any rule, regulation or order issued thereunder, pursuant
to 12 U.S.C. 3108;
(7) Certain provisions of the Exchange Act, pursuant to section 21B
of the Exchange Act (15 U.S.C. 78u-2);
(8) Section 1120 of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (``FIRREA'') (12 U.S.C. 3349), or any order or
regulation issued thereunder;
(9) The terms of any final or temporary order issued under section 8
of the FDIA or of any written agreement executed by the FDIC, the terms
of any condition imposed in writing by the FDIC in connection with the
grant of an application or request, certain unsafe or unsound practices
or breaches of fiduciary duty, or any law or regulation not otherwise
provided herein pursuant to 12 U.S.C. 1818(i)(2);
(10) Any provision of law referenced in section 102(f) of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or
regulation issued thereunder; and
(11) Any provision of law referenced in 31 U.S.C. 5321 or any order
or regulation issued thereunder;
(f) Remedial action under section 102(g) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(g)); and
(g) This subpart also applies to all other adjudications required by
statute to be determined on the record after opportunity for an agency
hearing, unless otherwise specifically provided for in the Local Rules.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
Sec. 308.2 Rules of construction.
For purposes of this subpart:
(a) Any term in the singular includes the plural, and the plural
includes the singular, if such use would be appropriate;
(b) Any use of a masculine, feminine, or neuter gender encompasses
all three, if such use would be appropriate;
[[Page 76]]
(c) The term counsel includes a non-attorney representative; and
(d) Unless the context requires otherwise, a party's counsel of
record, if any, may, on behalf of that party, take any action required
to be taken by the party.
Sec. 308.3 Definitions.
For purposes of this subpart, unless explicitly stated to the
contrary:
(a) Administrative law judge means one who presides at an
administrative hearing under authority set forth at 5 U.S.C. 556.
(b) Adjudicatory proceeding means a proceeding conducted pursuant to
these rules and leading to the formulation of a final order other than a
regulation.
(c) Board of Directors or Board means the Board of Directors of the
Federal Deposit Insurance Corporation or its designee.
(d) Decisional employee means any member of the Federal Deposit
Insurance Corporation's or administrative law judge's staff who has not
engaged in an investigative or prosecutorial role in a proceeding and
who may assist the Board of Directors or the administrative law judge,
respectively, in preparing orders, recommended decisions, decisions, and
other documents under the Uniform Rules.
(e) Designee of the Board of Directors means officers or officials
of the Federal Deposit Insurance Corporation acting pursuant to
authority delegated by the Board of Directors as provided in 12 CFR part
303 of this chapter or by specific resolution of the Board of Directors.
(f) Enforcement Counsel means any individual who files a notice of
appearance as counsel on behalf of the FDIC in an adjudicatory
proceeding.
(g) Executive Secretary means the Executive Secretary of the Federal
Deposit Insurance Corporation or his or her designee.
(h) FDIC means the Federal Deposit Insurance Corporation.
(i) Final order means an order issued by the FDIC with or without
the consent of the affected institution or the institution-affiliated
party, that has become final, without regard to the pendency of any
petition for reconsideration or review.
(j) Institution includes:
(1) Any bank as that term is defined in section 3(a) of the FDIA (12
U.S.C. 1813(a));
(2) Any bank holding company or any subsidiary (other than a bank)
of a bank holding company as those terms are defined in the BHCA (12
U.S.C. 1841 et seq.);
(3) Any savings association as that term is defined in section 3(b)
of the FDIA (12 U.S.C. 1813(b)), any savings and loan holding company or
any subsidiary thereof (other than a bank) as those terms are defined in
section 10(a) of the HOLA (12 U.S.C. 1467(a));
(4) Any organization operating under section 25 of the FRA (12
U.S.C. 601 et seq.);
(5) Any foreign bank or company to which section 8 of the IBA (12
U.S.C. 3106), applies or any subsidiary (other than a bank) thereof; and
(6) Any federal agency as that term is defined in section 1(b) of
the IBA (12 U.S.C. 3101(5)).
(k) Institution-affiliated party means any institution-affiliated
party as that term is defined in section 3(u) of the FDIA (12 U.S.C.
1813(u)).
(l) Local Rules means those rules promulgated by the FDIC in those
subparts of this part other than subpart A.
(m) Office of Financial Institution Adjudication (``OFIA'') means
the executive body charged with overseeing the administration of
administrative enforcement proceedings of the Office of the Comptroller
of the Currency (``OCC''), the Board of Governors of the Federal Reserve
Board (``FRB''), the FDIC, the Office of Thrift Supervision (``OTS'')
and the National Credit Union Administration (``NCUA'').
(n) Party means the FDIC and any person named as a party in any
notice.
(o) Person means an individual, sole proprietor, partnership,
corporation, unincorporated association, trust, joint venture, pool,
syndicate, agency or other entity or organization, including an
institution as defined in paragraph (j) of this section.
(p) Respondent means any party other than the FDIC.
(q) Uniform Rules means those rules in subpart A of this part that
pertain
[[Page 77]]
to the types of formal administrative enforcement actions set forth at
Sec. 308.01 and as specified in subparts B through P of this part.
(r) Violation includes any action (alone or with another or others)
for or toward causing, bringing about, participating in, counseling, or
aiding or abetting a violation.
Sec. 308.4 Authority of Board of Directors.
The Board of Directors may, at any time during the pendency of a
proceeding, perform, direct the performance of, or waive performance of,
any act which could be done or ordered by the administrative law judge.
Sec. 308.5 Authority of the administrative law judge.
(a) General rule. All proceedings governed by this part shall be
conducted in accordance with the provisions of chapter 5 of title 5 of
the United States Code. The administrative law judge shall have all
powers necessary to conduct a proceeding in a fair and impartial manner
and to avoid unnecessary delay.
(b) Powers. The administrative law judge shall have all powers
necessary to conduct the proceeding in accordance with paragraph (a) of
this section, including the following powers:
(1) To administer oaths and affirmations;
(2) To issue subpoenas, subpoenas duces tecum, and protective
orders, as authorized by this part, and to quash or modify any such
subpoenas and orders;
(3) To receive relevant evidence and to rule upon the admission of
evidence and offers of proof;
(4) To take or cause depositions to be taken as authorized by this
subpart;
(5) To regulate the course of the hearing and the conduct of the
parties and their counsel;
(6) To hold scheduling and/or pre-hearing conferences as set forth
in Sec. 308.31;
(7) To consider and rule upon all procedural and other motions
appropriate in an adjudicatory proceeding, provided that only the Board
of Directors shall have the power to grant any motion to dismiss the
proceeding or to decide any other motion that results in a final
determination of the merits of the proceeding;
(8) To prepare and present to the Board of Directors a recommended
decision as provided herein;
(9) To recuse himself or herself by motion made by a party or on his
or her own motion;
(10) To establish time, place and manner limitations on the
attendance of the public and the media for any public hearing; and
(11) To do all other things necessary and appropriate to discharge
the duties of a presiding officer.
Sec. 308.6 Appearance and practice in adjudicatory proceedings.
(a) Appearance before the FDIC or an administrative law judge--(1)
By attorneys. Any member in good standing of the bar of the highest
court of any state, commonwealth, possession, territory of the United
States, or the District of Columbia may represent others before the FDIC
if such attorney is not currently suspended or debarred from practice
before the FDIC.
(2) By non-attorneys. An individual may appear on his or her own
behalf; a member of a partnership may represent the partnership; a duly
authorized officer, director, or employee of any government unit,
agency, institution, corporation or authority may represent that unit,
agency, institution, corporation or authority if such officer; director,
or employee is not currently suspended or debarred from practice before
the FDIC.
(3) Notice of appearance. Any individual acting as counsel on behalf
of a party, including the FDIC, shall file a notice of appearance with
OFIA at or before the time that individual submits papers or otherwise
appears on behalf of a party in the adjudicatory proceeding. The notice
of appearance must include a written declaration that the individual is
currently qualified as provided in paragraph (a)(1) or (a)(2) of this
section and is authorized to represent the particular party. By filing a
notice of appearance on behalf of a party in an adjudicatory proceeding,
the counsel agrees and represents that he or she is authorized to accept
service on behalf of the represented party
[[Page 78]]
and that, in the event of withdrawal from representation, he or she
will, if required by the administrative law judge, continue to accept
service until new counsel has filed a notice of appearance or until the
represented party indicates that he or she will proceed on a pro se
basis.
(b) Sanctions. Dilatory, obstructionist, egregious, contemptuous or
contumacious conduct at any phase of any adjudicatory proceeding may be
grounds for exclusion or suspension of counsel from the proceeding.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
Sec. 308.7 Good faith certification.
(a) General requirement. Every filing or submission of record
following the issuance of a notice shall be signed by at least one
counsel of record in his or her individual name and shall state that
counsel's address and telephone number. A party who acts as his or her
own counsel shall sign his or her individual name and state his or her
address and telephone number on every filing or submission of record.
(b) Effect of signature. (1) The signature of counsel or a party
shall constitute a certification that: The counsel or party has read the
filing or submission of record; to the best of his or her knowledge,
information, and belief formed after reasonable inquiry, the filing or
submission of record is well-grounded in fact and is warranted by
existing law or a good faith argument for the extension, modification,
or reversal of existing law; and the filing or submission of record is
not made for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation.
(2) If a filing or submission of record is not signed, the
administrative law judge shall strike the filing or submission of
record, unless it is signed promptly after the omission is called to the
attention of the pleader or movant.
(c) Effect of making oral motion or argument. The act of making any
oral motion or oral argument by any counsel or party constitutes a
certification that to the best of his or her knowledge, information, and
belief formed after reasonable inquiry, his or her statements are well-
grounded in fact and are warranted by existing law or a good faith
argument for the extension, modification, or reversal of existing law,
and are not made for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation.
Sec. 308.8 Conflicts of interest.
(a) Conflict of interest in representation. No person shall appear
as counsel for another person in an adjudicatory proceeding if it
reasonably appears that such representation may be materially limited by
that counsel's responsibilities to a third person or by the counsel's
own interests. The administrative law judge may take corrective measures
at any stage of a proceeding to cure a conflict of interest in
representation, including the issuance of an order limiting the scope of
representation or disqualifying an individual from appearing in a
representative capacity for the duration of the proceeding.
(b) Certification and waiver. If any person appearing as counsel
represents two or more parties to an adjudicatory proceeding or also
represents a non-party on a matter relevant to an issue in the
proceeding, counsel must certify in writing at the time of filing the
notice of appearance required by Sec. 308.6(a):
(1) That the counsel has personally and fully discussed the
possibility of conflicts of interest with each such party and non-party;
and
(2) That each such party and non-party waives any right it might
otherwise have had to assert any known conflicts of interest or to
assert any non-material conflicts of interest during the course of the
proceeding.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
Sec. 308.9 Ex parte communications.
(a) Definition--(1) Ex parte communication means any material oral
or written communication relevant to the merits of an adjudicatory
proceeding that was neither on the record nor on reasonable prior notice
to all parties that takes place between:
[[Page 79]]
(i) An interested person outside the FDIC (including such person's
counsel); and
(ii) The administrative law judge handling that proceeding, the
Board of Directors, or a decisional employee.
(2) Exception. A request for status of the proceeding does not
constitute an ex parte communication.
(b) Prohibition of ex parte communications. From the time the notice
is issued by the FDIC until the date that the Board of Directors issues
its final decision pursuant to Sec. 308.40(c):
(1) No interested person outside the FDIC shall make or knowingly
cause to be made an ex parte communication to any member of the Board of
Directors, the administrative law judge, or a decisional employee; and
(2) No member of the Board of Directors, no administrative law
judge, or decisional employee shall make or knowingly cause to be made
to any interested person outside the FDIC any ex parte communication.
(c) Procedure upon occurrence of ex parte communication. If an ex
parte communication is received by the administrative law judge, any
member of the Board of Directors or other person identified in paragraph
(a) of this section, that person shall cause all such written
communications (or, if the communication is oral, a memorandum stating
the substance of the communication) to be placed on the record of the
proceeding and served on all parties. All other parties to the
proceeding shall have an opportunity, within ten days of receipt of
service of the ex parte communication, to file responses thereto and to
recommend any sanctions that they believe to be appropriate under the
circumstances. The administrative law judge or the Board of Directors
shall then determine whether any action should be taken concerning the
ex parte communication in accordance with paragraph (d) of this section.
(d) Sanctions. Any party or his or her counsel who makes a
prohibited ex parte communication, or who encourages or solicits another
to make any such communication, may be subject to any appropriate
sanction or sanctions imposed by the Board of Directors or the
administrative law judge including, but not limited to, exclusion from
the proceedings and an adverse ruling on the issue which is the subject
of the prohibited communication.
(e) Separation of functions. Except to the extent required for the
disposition of ex parte matters as authorized by law, the administrative
law judge may not consult a person or party on any matter relevant to
the merits of the adjudication, unless on notice and opportunity for all
parties to participate. An employee or agent engaged in the performance
of investigative or prosecuting functions for the FDIC in a case may
not, in that or a factually related case, participate or advise in the
decision, recommended decision, or agency review of the recommended
decision under Sec. 308.40 except as witness or counsel in public
proceedings.
[56 FR 37975, Aug. 9, 1991, as amended at 60 FR 24762, May 10, 1995]
Sec. 308.10 Filing of papers.
(a) Filing. Any papers required to be filed, excluding documents
produced in response to a discovery request pursuant to Secs. 308.25 and
308.26, shall be filed with the OFIA, except as otherwise provided.
(b) Manner of filing. Unless otherwise specified by the Board of
Directors or the administrative law judge, filing may be accomplished
by:
(1) Personal service;
(2) Delivering the papers to a reliable commercial courier service,
overnight delivery service, or to the U.S. Post Office for Express Mail
delivery;
(3) Mailing the papers by first class, registered, or certified
mail; or
(4) Transmission by electronic media, only if expressly authorized,
and upon any conditions specified, by the Board of Directors or the
administrative law judge. All papers filed by electronic media shall
also concurrently be filed in accordance with paragraph (c) of this
section.
(c) Formal requirements as to papers filed--(1) Form. All papers
filed must set forth the name, address, and telephone number of the
counsel or party making the filing and must be accompanied by a
certification setting forth when and how service has been made on all
other parties. All papers filed must be double-spaced and printed or
typewritten
[[Page 80]]
on 8\1/2\ x 11 inch paper, and must be clear and legible.
(2) Signature. All papers must be dated and signed as provided in
Sec. 308.7.
(3) Caption. All papers filed must include at the head thereof, or
on a title page, the name of the FDIC and of the filing party, the title
and docket number of the proceeding, and the subject of the particular
paper.
(4) Number of copies. Unless otherwise specified by the Board of
Directors, or the administrative law judge, an original and one copy of
all documents and papers shall be filed, except that only one copy of
transcripts of testimony and exhibits shall be filed.
Sec. 308.11 Service of papers.
(a) By the parties. Except as otherwise provided, a party filing
papers shall serve a copy upon the counsel of record for all other
parties to the proceeding so represented, and upon any party not so
represented.
(b) Method of service. Except as provided in paragraphs (c)(2) and
(d) of this section, a serving party shall use one or more of the
following methods of service:
(1) Personal service;
(2) Delivering the papers to a reliable commercial courier service,
overnight delivery service, or to the U.S. Post Office for Express Mail
delivery;
(3) Mailing the papers by first class, registered, or certified
mail; or
(4) Transmission by electronic media, only if the parties mutually
agree. Any papers served by electronic media shall also concurrently be
served in accordance with the requirements of Sec. 308.10(c).
(c) By the Board of Directors. (1) All papers required to be served
by the Board of Directors or the administrative law judge upon a party
who has appeared in the proceeding in accordance with Sec. 308.6, shall
be served by any means specified in paragraph (b) of this section.
(2) If a party has not appeared in the proceeding in accordance with
Sec. 308.6, the Board of Directors or the administrative law judge shall
make service by any of the following methods:
(i) By personal service;
(ii) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where the
individual resides or works;
(iii) If the person to be served is a corporation or other
association, by delivery to an officer, managing or general agent, or to
any other agent authorized by appointment or by law to receive service
and, if the agent is one authorized by statute to receive service and
the statute so requires, by also mailing a copy to the party;
(iv) By registered or certified mail addressed to the party's last
known address; or
(v) By any other method reasonably calculated to give actual notice.
(d) Subpoenas. Service of a subpoena may be made:
(1) By personal service;
(2) If the person to be served is an individual, by delivery to a
person of suitable age and discretion at the physical location where the
individual resides or works;
(3) By delivery to an agent which, in the case of a corporation or
other association, is delivery to an officer, managing or general agent,
or to any other agent authorized by appointment or by law to receive
service and, if the agent is one authorized by statute to receive
service and the statute so requires, by also mailing a copy to the
party;
(4) By registered or certified mail addressed to the person's last
known address; or
(5) In such other manner as is reasonably calculated to give actual
notice.
(e) Area of service. Service in any state, territory, possession of
the United States, or the District of Columbia, on any person or company
doing business in any state, territory, possession of the United States,
or the District of Columbia, or on any person as otherwise provided by
law, is effective without regard to the place where the hearing is held,
provided that if service is made on a foreign bank in connection with an
action or proceeding involving one or more of its branches or agencies
located in any state, territory, possession of the United States, or the
District of Columbia, service shall be made on at least one branch or
agency so involved.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20347, May 6, 1996]
[[Page 81]]
Sec. 308.12 Construction of time limits.
(a) General rule. In computing any period of time prescribed by this
subpart, the date of the act or event that commences the designated
period of time is not included. The last day so computed is included
unless it is a Saturday, Sunday, or Federal holiday. When the last day
is a Saturday, Sunday, or Federal holiday, the period runs until the end
of the next day that is not a Saturday, Sunday, or Federal holiday.
Intermediate Saturdays, Sundays, and Federal holidays are included in
the computation of time. However, when the time period within which an
act is to be performed is ten days or less, not including any additional
time allowed for in paragraph (c) of this section, intermediate
Saturdays, Sundays, and Federal holidays are not included.
(b) When papers are deemed to be filed or served. (1) Filing and
service are deemed to be effective:
(i) In the case of personal service or same day commercial courier
delivery, upon actual service;
(ii) In the case of overnight commercial delivery service, U.S.
Express Mail delivery, or first class, registered, or certified mail,
upon deposit in or delivery to an appropriate point of collection;
(iii) In the case of transmission by electronic media, as specified
by the authority receiving the filing, in the case of filing, and as
agreed among the parties, in the case of service.
(2) The effective filing and service dates specified in paragraph
(b) (1) of this section may be modified by the Board of Directors or
administrative law judge in the case of filing or by agreement of the
parties in the case of service.
(c) Calculation of time for service and filing of responsive papers.
Whenever a time limit is measured by a prescribed period from the
service of any notice or paper, the applicable time limits are
calculated as follows:
(1) If service is made by first class, registered, or certified
mail, add three calendar days to the prescribed period;
(2) If service is made by express mail or overnight delivery
service, add one calendar day to the prescribed period; or
(3) If service is made by electronic media transmission, add one
calendar day to the prescribed period, unless otherwise determined by
the Board of Directors or the administrative law judge in the case of
filing, or by agreement among the parties in the case of service.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20348, May 6, 1996]
Sec. 308.13 Change of time limits.
Except as otherwise provided by law, the administrative law judge
may, for good cause shown, extend the time limits prescribed by the
Uniform Rules or by any notice or order issued in the proceedings. After
the referral of the case to the Board of Directors pursuant to
Sec. 308.38, the Board of Directors may grant extensions of the time
limits for good cause shown. Extensions may be granted at the motion of
a party or of the Board of Directors after notice and opportunity to
respond is afforded all non-moving parties, or on the administrative law
judge's own motion.
Sec. 308.14 Witness fees and expenses.
Witnesses subpoenaed for testimony or depositions shall be paid the
same fees for attendance and mileage as are paid in the United States
district courts in proceedings in which the United States is a party,
provided that, in the case of a discovery subpoena addressed to a party,
no witness fees or mileage need be paid. Fees for witnesses shall be
tendered in advance by the party requesting the subpoena, except that
fees and mileage need not be tendered in advance where the FDIC is the
party requesting the subpoena. The FDIC shall not be required to pay any
fees to, or expenses of, any witness not subpoenaed by the FDIC.
Sec. 308.15 Opportunity for informal settlement.
Any respondent may, at any time in the proceeding, unilaterally
submit to Enforcement Counsel written offers or proposals for settlement
of a proceeding, without prejudice to the rights of any of the parties.
No such offer or proposal shall be made to any FDIC representative other
than Enforcement Counsel. Submission of a written settlement offer does
not provide a basis
[[Page 82]]
for adjourning or otherwise delaying all or any portion of a proceeding
under this part. No settlement offer or proposal, or any subsequent
negotiation or resolution, is admissible as evidence in any proceeding.
Sec. 308.16 FDIC's right to conduct examination.
Nothing contained in this subpart limits in any manner the right of
the FDIC to conduct any examination, inspection, or visitation of any
institution or institution-affiliated party, or the right of the FDIC to
conduct or continue any form of investigation authorized by law.
Sec. 308.17 Collateral attacks on adjudicatory proceeding.
If an interlocutory appeal or collateral attack is brought in any
court concerning all or any part of an adjudicatory proceeding, the
challenged adjudicatory proceeding shall continue without regard to the
pendency of that court proceeding. No default or other failure to act as
directed in the adjudicatory proceeding within the times prescribed in
this subpart shall be excused based on the pendency before any court of
any interlocutory appeal or collateral attack.
Sec. 308.18 Commencement of proceeding and contents of notice.
(a) Commencement of proceeding. (1)(i) Except for change-in-control
proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), a
proceeding governed by this subpart is commenced by issuance of a notice
by the FDIC.
(ii) The notice must be served by the Executive Secretary upon the
respondent and given to any other appropriate financial institution
supervisory authority where required by law.
(iii) The notice must be filed with the OFIA.
(2) Change-in-control proceedings under section 7(j)(4) of the FDIA
(12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the
FDIC.
(b) Contents of notice. The notice must set forth:
(1) The legal authority for the proceeding and for the FDIC's
jurisdiction over the proceeding;
(2) A statement of the matters of fact or law showing that the FDIC
is entitled to relief;
(3) A proposed order or prayer for an order granting the requested
relief;
(4) The time, place, and nature of the hearing as required by law or
regulation;
(5) The time within which to file an answer as required by law or
regulation;
(6) The time within which to request a hearing as required by law or
regulation; and
(7) That the answer and/or request for a hearing shall be filed with
OFIA.
Sec. 308.19 Answer.
(a) When. Within 20 days of service of the notice, respondent shall
file an answer as designated in the notice. In a civil money penalty
proceeding, respondent shall also file a request for a hearing within 20
days of service of the notice.
(b) Content of answer. An answer must specifically respond to each
paragraph or allegation of fact contained in the notice and must admit,
deny, or state that the party lacks sufficient information to admit or
deny each allegation of fact. A statement of lack of information has the
effect of a denial. Denials must fairly meet the substance of each
allegation of fact denied; general denials are not permitted. When a
respondent denies part of an allegation, that part must be denied and
the remainder specifically admitted. Any allegation of fact in the
notice which is not denied in the answer must be deemed admitted for
purposes of the proceeding. A respondent is not required to respond to
the portion of a notice that constitutes the prayer for relief or
proposed order. The answer must set forth affirmative defenses, if any,
asserted by the respondent.
(c) Default--(1) Effect of failure to answer. Failure of a
respondent to file an answer required by this section within the time
provided constitutes a waiver of his or her right to appear and contest
the allegations in the notice. If no timely answer is filed, Enforcement
Counsel may file a motion for entry of an order of default. Upon a
finding that no good cause has been shown for the
[[Page 83]]
failure to file a timely answer, the administrative law judge shall file
with the Board of Directors a recommended decision containing the
findings and the relief sought in the notice. Any final order issued by
the Board of Directors based upon a respondent's failure to answer is
deemed to be an order issued upon consent.
(2) Effect of failure to request a hearing in civil money penalty
proceedings. If respondent fails to request a hearing as required by law
within the time provided, the notice of assessment constitutes a final
and unappealable order.
Sec. 308.20 Amended pleadings.
(a) Amendments. The notice or answer may be amended or supplemented
at any stage of the proceeding. The respondent must answer an amended
notice within the time remaining for the respondent's answer to the
original notice, or within ten days after service of the amended notice,
whichever period is longer, unless the Board of Directors or
administrative law judge orders otherwise for good cause.
(b) Amendments to conform to the evidence. When issues not raised in
the notice or answer are tried at the hearing by express or implied
consent of the parties, they will be treated in all respects as if they
had been raised in the notice or answer, and no formal amendments are
required. If evidence is objected to at the hearing on the ground that
it is not within the issues raised by the notice or answer, the
administrative law judge may admit the evidence when admission is likely
to assist in adjudicating the merits of the action and the objecting
party fails to satisfy the administrative law judge that the admission
of such evidence would unfairly prejudice that party's action or defense
upon the merits. The administrative law judge may grant a continuance to
enable the objecting party to meet such evidence.
[61 FR 20348, May 6, 1996]
Sec. 308.21 Failure to appear.
Failure of a respondent to appear in person at the hearing or by a
duly authorized counsel constitutes a waiver of respondent's right to a
hearing and is deemed an admission of the facts as alleged and consent
to the relief sought in the notice. Without further proceedings or
notice to the respondent, the administrative law judge shall file with
the Board of Directors a recommended decision containing the findings
and the relief sought in the notice.
Sec. 308.22 Consolidation and severance of actions.
(a) Consolidation. (1) On the motion of any party, or on the
administrative law judge's own motion, the administrative law judge may
consolidate, for some or all purposes, any two or more proceedings, if
each such proceeding involves or arises out of the same transaction,
occurrence or series of transactions or occurrences, or involves at
least one common respondent or a material common question of law or
fact, unless such consolidation would cause unreasonable delay or
injustice.
(2) In the event of consolidation under paragraph (a)(1) of this
section, appropriate adjustment to the prehearing schedule must be made
to avoid unnecessary expense, inconvenience, or delay.
(b) Severance. The administrative law judge may, upon the motion of
any party, sever the proceeding for separate resolution of the matter as
to any respondent only if the administrative law judge finds that:
(1) Undue prejudice or injustice to the moving party would result
from not severing the proceeding; and
(2) Such undue prejudice or injustice would outweigh the interests
of judicial economy and expedition in the complete and final resolution
of the proceeding.
Sec. 308.23 Motions.
(a) In writing. (1) Except as otherwise provided herein, an
application or request for an order or ruling must be made by written
motion.
(2) All written motions must state with particularity the relief
sought and must be accompanied by a proposed order.
(3) No oral argument may be held on written motions except as
otherwise directed by the administrative law judge. Written memoranda,
briefs, affidavits or other relevant material or documents may be filed
in support of or in opposition to a motion.
[[Page 84]]
(b) Oral motions. A motion may be made orally on the record unless
the administrative law judge directs that such motion be reduced to
writing.
(c) Filing of motions. Motions must be filed with the administrative
law judge, except that following the filing of the recommended decision,
motions must be filed with the Executive Secretary for disposition by
the Board of Directors.
(d) Responses. (1) Except as otherwise provided herein, within ten
days after service of any written motion, or within such other period of
time as may be established by the administrative law judge or the
Executive Secretary, any party may file a written response to a motion.
The administrative law judge shall not rule on any oral or written
motion before each party has had an opportunity to file a response.
(2) The failure of a party to oppose a written motion or an oral
motion made on the record is deemed a consent by that party to the entry
of an order substantially in the form of the order accompanying the
motion.
(e) Dilatory motions. Frivolous, dilatory or repetitive motions are
prohibited. The filing of such motions may form the basis for sanctions.
(f) Dispositive motions. Dispositive motions are governed by
Secs. 308.29 and 308.30.
Sec. 308.24 Scope of document discovery.
(a) Limits on discovery. (1) Subject to the limitations set out in
paragraphs (b), (c), and (d) of this section, a party to a proceeding
under this subpart may obtain document discovery by serving a written
request to produce documents. For purposes of a request to produce
documents, the term ``documents'' may be defined to include drawings,
graphs, charts, photographs, recordings, data stored in electronic form,
and other data compilations from which information can be obtained, or
translated, if necessary, by the parties through detection devices into
reasonably usable form, as well as written material of all kinds.
(2) Discovery by use of deposition is governed by subpart I of this
part.
(3) Discovery by use of interrogatories is not permitted.
(b) Relevance. A party may obtain document discovery regarding any
matter, not privileged, that has material relevance to the merits of the
pending action. Any request to produce documents that calls for
irrelevant material, that is unreasonable, oppressive, excessive in
scope, unduly burdensome, or repetitive of previous requests, or that
seeks to obtain privileged documents will be denied or modified. A
request is unreasonable, oppressive, excessive in scope or unduly
burdensome if, among other things, it fails to include justifiable
limitations on the time period covered and the geographic locations to
be searched, the time provided to respond in the request is inadequate,
or the request calls for copies of documents to be delivered to the
requesting party and fails to include the requestor's written agreement
to pay in advance for the copying, in accordance with Sec. 308.25.
(c) Privileged matter. Privileged documents are not discoverable.
Privileges include the attorney-client privilege, work-product
privilege, any government's or government agency's deliberative-process
privilege, and any other privileges the Constitution, any applicable act
of Congress, or the principles of common law provide.
(d) Time limits. All discovery, including all responses to discovery
requests, shall be completed at least 20 days prior to the date
scheduled for the commencement of the hearing. No exceptions to this
time limit shall be permitted, unless the administrative law judge finds
on the record that good cause exists for waiving the requirements of
this paragraph.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20348, May 6, 1996]
Sec. 308.25 Request for document discovery from parties.
(a) General rule. Any party may serve on any other party a request
to produce for inspection any discoverable documents that are in the
possession, custody, or control of the party upon whom the request is
served. The request must identify the documents to be produced either by
individual item or by category, and must describe each
[[Page 85]]
item and category with reasonable particularity. Documents must be
produced as they are kept in the usual course of business or must be
organized to correspond with the categories in the request.
(b) Production or copying. The request must specify a reasonable
time, place, and manner for production and performing any related acts.
In lieu of inspecting the documents, the requesting party may specify
that all or some of the responsive documents be copied and the copies
delivered to the requesting party. If copying of fewer than 250 pages is
requested, the party to whom the request is addressed shall bear the
cost of copying and shipping charges. If a party requests 250 pages or
more of copying, the requesting party shall pay for the copying and
shipping charges. Copying charges are the current per-page copying rate
imposed by 12 CFR part 310 implementing the Freedom of Information Act
(5 U.S.C. 552). The party to whom the request is addressed may require
payment in advance before producing the documents.
(c) Obligation to update responses. A party who has responded to a
discovery request with a response that was complete when made is not
required to supplement the response to include documents thereafter
acquired, unless the responding party learns that:
(1) The response was materially incorrect when made; or
(2) The response, though correct when made, is no longer true and a
failure to amend the response is, in substance, a knowing concealment.
(d) Motions to limit discovery. (1) Any party that objects to a
discovery request may, within ten days of being served with such
request, file a motion in accordance with the provisions of Sec. 308.23
to strike or otherwise limit the request. If an objection is made to
only a portion of an item or category in a request, the portion objected
to shall be specified. Any objections not made in accordance with this
paragraph and Sec. 308.23 are waived.
(2) The party who served the request that is the subject of a motion
to strike or limit may file a written response within five days of
service of the motion. No other party may file a response.
(e) Privilege. At the time other documents are produced, the
producing party must reasonably identify all documents withheld on the
grounds of privilege and must produce a statement of the basis for the
assertion of privilege. When similar documents that are protected by
deliberative process, attorney-work-product, or attorney-client
privilege are voluminous, these documents may be identified by category
instead of by individual document. The administrative law judge retains
discretion to determine when the identification by category is
insufficient.
(f) Motions to compel production. (1) If a party withholds any
documents as privileged or fails to comply fully with a discovery
request, the requesting party may, within ten days of the assertion of
privilege or of the time the failure to comply becomes known to the
requesting party, file a motion in accordance with the provisions of
Sec. 308.23 for the issuance of a subpoena compelling production.
(2) The party who asserted the privilege or failed to comply with
the request may file a written response to a motion to compel within
five days of service of the motion. No other party may file a response.
(g) Ruling on motions. After the time for filing responses pursuant
to this section has expired, the administrative law judge shall rule
promptly on all motions filed pursuant to this section. If the
administrative law judge determines that a discovery request, or any of
its terms, calls for irrelevant material, is unreasonable, oppressive,
excessive in scope, unduly burdensome, or repetitive of previous
requests, or seeks to obtain privileged documents, he or she may deny or
modify the request, and may issue appropriate protective orders, upon
such conditions as justice may require. The pendency of a motion to
strike or limit discovery or to compel production is not a basis for
staying or continuing the proceeding, unless otherwise ordered by the
administrative law judge. Notwithstanding any other provision in this
part, the
[[Page 86]]
administrative law judge may not release, or order a party to produce,
documents withheld on grounds of privilege if the party has stated to
the administrative law judge its intention to file a timely motion for
interlocutory review of the administrative law judge's order to produce
the documents, and until the motion for interlocutory review has been
decided.
(h) Enforcing discovery subpoenas. If the administrative law judge
issues a subpoena compelling production of documents by a party, the
subpoenaing party may, in the event of noncompliance and to the extent
authorized by applicable law, apply to any appropriate United States
district court for an order requiring compliance with the subpoena. A
party's right to seek court enforcement of a subpoena shall not in any
manner limit the sanctions that may be imposed by the administrative law
judge against a party who fails to produce subpoenaed documents.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20348, May 6, 1996]
Sec. 308.26 Document subpoenas to nonparties.
(a) General rules. (1) Any party may apply to the administrative law
judge for the issuance of a document discovery subpoena addressed to any
person who is not a party to the proceeding. The application must
contain a proposed document subpoena and a brief statement showing the
general relevance and reasonableness of the scope of documents sought.
The subpoenaing party shall specify a reasonable time, place, and manner
for making production in response to the document subpoena.
(2) A party shall only apply for a document subpoena under this
section within the time period during which such party could serve a
discovery request under Sec. 308.24(d). The party obtaining the document
subpoena is responsible for serving it on the subpoenaed person and for
serving copies on all parties. Document subpoenas may be served in any
state, territory, or possession of the United States, the District of
Columbia, or as otherwise provided by law.
(3) The administrative law judge shall promptly issue any document
subpoena requested pursuant to this section. If the administrative law
judge determines that the application does not set forth a valid basis
for the issuance of the subpoena, or that any of its terms are
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
or she may refuse to issue the subpoena or may issue it in a modified
form upon such conditions as may be consistent with the Uniform Rules.
(b) Motion to quash or modify. (1) Any person to whom a document
subpoena is directed may file a motion to quash or modify such subpoena,
accompanied by a statement of the basis for quashing or modifying the
subpoena. The movant shall serve the motion on all parties, and any
party may respond to such motion within ten days of service of the
motion.
(2) Any motion to quash or modify a document subpoena must be filed
on the same basis, including the assertion of privilege, upon which a
party could object to a discovery request under Sec. 308.25(d), and
during the same time limits during which such an objection could be
filed.
(c) Enforcing document subpoenas. If a subpoenaed person fails to
comply with any subpoena issued pursuant to this section or any order of
the administrative law judge which directs compliance with all or any
portion of a document subpoena, the subpoenaing party or any other
aggrieved party may, to the extent authorized by applicable law, apply
to an appropriate United States district court for an order requiring
compliance with so much of the document subpoena as the administrative
law judge has not quashed or modified. A party's right to seek court
enforcement of a document subpoena shall in no way limit the sanctions
that may be imposed by the administrative law judge on a party who
induces a failure to comply with subpoenas issued under this section.
Sec. 308.27 Deposition of witness unavailable for hearing.
(a) General rules. (1) If a witness will not be available for the
hearing, a party desiring to preserve that witness' testimony for the
record may apply in accordance with the procedures set forth in
paragraph (a)(2) of this section,
[[Page 87]]
to the administrative law judge for the issuance of a subpoena,
including a subpoena duces tecum, requiring the attendance of the
witness at a deposition. The administrative law judge may issue a
deposition subpoena under this section upon showing that:
(i) The witness will be unable to attend or may be prevented from
attending the hearing because of age, sickness or infirmity, or will
otherwise be unavailable;
(ii) The witness' unavailability was not procured or caused by the
subpoenaing party;
(iii) The testimony is reasonably expected to be material; and
(iv) Taking the deposition will not result in any undue burden to
any other party and will not cause undue delay of the proceeding.
(2) The application must contain a proposed deposition subpoena and
a brief statement of the reasons for the issuance of the subpoena. The
subpoena must name the witness whose deposition is to be taken and
specify the time and place for taking the deposition. A deposition
subpoena may require the witness to be deposed at any place within the
country in which that witness resides or has a regular place of
employment or such other convenient place as the administrative law
judge shall fix.
(3) Any requested subpoena that sets forth a valid basis for its
issuance must be promptly issued, unless the administrative law judge on
his or her own motion, requires a written response or requires
attendance at a conference concerning whether the requested subpoena
should be issued.
(4) The party obtaining a deposition subpoena is responsible for
serving it on the witness and for serving copies on all parties. Unless
the administrative law judge orders otherwise, no deposition under this
section shall be taken on fewer than ten days' notice to the witness and
all parties. Deposition subpoenas may be served in any state, territory,
possession of the United States, or the District of Columbia, on any
person or company doing business in any state, territory, possession of
the United States, or the District of Columbia, or as otherwise
permitted by law.
(b) Objections to deposition subpoenas. (1) The witness and any
party who has not had an opportunity to oppose a deposition subpoena
issued under this section may file a motion with the administrative law
judge to quash or modify the subpoena prior to the time for compliance
specified in the subpoena, but not more than ten days after service of
the subpoena.
(2) A statement of the basis for the motion to quash or modify a
subpoena issued under this section must accompany the motion. The motion
must be served on all parties.
(c) Procedure upon deposition. (1) Each witness testifying pursuant
to a deposition subpoena must be duly sworn, and each party shall have
the right to examine the witness. Objections to questions or documents
must be in short form, stating the grounds for the objection. Failure to
object to questions or documents is not deemed a waiver except where the
ground for the objection might have been avoided if the objection had
been timely presented. All questions, answers, and objections must be
recorded.
(2) Any party may move before the administrative law judge for an
order compelling the witness to answer any questions the witness has
refused to answer or submit any evidence the witness has refused to
submit during the deposition.
(3) The deposition must be subscribed by the witness, unless the
parties and the witness, by stipulation, have waived the signing, or the
witness is ill, cannot be found, or has refused to sign. If the
deposition is not subscribed by the witness, the court reporter taking
the deposition shall certify that the transcript is a true and complete
transcript of the deposition.
(d) Enforcing subpoenas. If a subpoenaed person fails to comply with
any order of the administrative law judge which directs compliance with
all or any portion of a deposition subpoena under paragraph (b) or
(c)(3) of this section, the subpoenaing party or other aggrieved party
may, to the extent authorized by applicable law, apply to an appropriate
United States district court for an order requiring compliance with the
portions of the subpoena that
[[Page 88]]
the administrative law judge has ordered enforced. A party's right to
seek court enforcement of a deposition subpoena in no way limits the
sanctions that may be imposed by the administrative law judge on a party
who fails to comply with, or procures a failure to comply with, a
subpoena issued under this section.
Sec. 308.28 Interlocutory review.
(a) General rule. The Board of Directors may review a ruling of the
administrative law judge prior to the certification of the record to the
Board of Directors only in accordance with the procedures set forth in
this section and Sec. 308.23.
(b) Scope of review. The Board of Directors may exercise
interlocutory review of a ruling of, the administrative law judge if the
Board of Directors finds that:
(1) The ruling involves a controlling question of law or policy as
to which substantial grounds exist for a difference of opinion;
(2) Immediate review of the ruling may materially advance the
ultimate termination of the proceeding;
(3) Subsequent modification of the ruling at the conclusion of the
proceeding would be an inadequate remedy; or
(4) Subsequent modification of the ruling would cause unusual delay
or expense.
(c) Procedure. Any request for interlocutory review shall be filed
by a party with the administrative law judge within ten days of his or
her ruling and shall otherwise comply with Sec. 308.23. Any party may
file a response to a request for interlocutory review in accordance with
Sec. 308.23(d). Upon the expiration of the time for filing all
responses, the administrative law judge shall refer the matter to the
Board of Directors for final disposition.
(d) Suspension of proceeding. Neither a request for interlocutory
review nor any disposition of such a request by the Board of Directors
under this section suspends or stays the proceeding unless otherwise
ordered by the administrative law judge or the Board of Directors.
Sec. 308.29 Summary disposition.
(a) In general. The administrative law judge shall recommend that
the Board of Directors issue a final order granting a motion for summary
disposition if the undisputed pleaded facts, admissions, affidavits,
stipulations, documentary evidence, matters as to which official notice
may be taken, and any other evidentiary materials properly submitted in
connection with a motion for summary disposition show that:
(1) There is no genuine issue as to any material fact; and
(2) The moving party is entitled to a decision in its favor as a
matter of law.
(b) Filing of motions and responses. (1) Any party who believes that
there is no genuine issue of material fact to be determined and that he
or she is entitled to a decision as a matter of law may move at any time
for summary disposition in its favor of all or any part of the
proceeding. Any party, within 20 days after service of such a motion, or
within such time period as allowed by the administrative law judge, may
file a response to such motion.
(2) A motion for summary disposition must be accompanied by a
statement of the material facts as to which the moving party contends
there is no genuine issue. Such motion must be supported by documentary
evidence, which may take the form of admissions in pleadings,
stipulations, depositions, investigatory depositions, transcripts,
affidavits and any other evidentiary materials that the moving party
contends support his or her position. The motion must also be
accompanied by a brief containing the points and authorities in support
of the contention of the moving party. Any party opposing a motion for
summary disposition must file a statement setting forth those material
facts as to which he or she contends a genuine dispute exists. Such
opposition must be supported by evidence of the same type as that
submitted with the motion for summary disposition and a brief containing
the points and authorities in support of the contention that summary
disposition would be inappropriate.
(c) Hearing on motion. At the request of any party or on his or her
own motion, the administrative law judge may
[[Page 89]]
hear oral argument on the motion for summary disposition.
(d) Decision on motion. Following receipt of a motion for summary
disposition and all responses thereto, the administrative law judge
shall determine whether the moving party is entitled to summary
disposition. If the administrative law judge determines that summary
disposition is warranted, the administrative law judge shall submit a
recommended decision to that effect to the Board of Directors. If the
administrative law judge finds that no party is entitled to summary
disposition, he or she shall make a ruling denying the motion.
Sec. 308.30 Partial summary disposition.
If the administrative law judge determines that a party is entitled
to summary disposition as to certain claims only, he or she shall defer
submitting a recommended decision as to those claims. A hearing on the
remaining issues must be ordered. Those claims for which the
administrative law judge has determined that summary disposition is
warranted will be addressed in the recommended decision filed at the
conclusion of the hearing.
Sec. 308.31 Scheduling and prehearing conferences.
(a) Scheduling conference. Within 30 days of service of the notice
or order commencing a proceeding or such other time as parties may
agree, the administrative law judge shall direct counsel for all parties
to meet with him or her in person at a specified time and place prior to
the hearing or to confer by telephone for the purpose of scheduling the
course and conduct of the proceeding. This meeting or telephone
conference is called a ``scheduling conference.'' The identification of
potential witnesses, the time for and manner of discovery, and the
exchange of any prehearing materials including witness lists, statements
of issues, stipulations, exhibits and any other materials may also be
determined at the scheduling conference.
(b) Prehearing conferences. The administrative law judge may, in
addition to the scheduling conference, on his or her own motion or at
the request of any party, direct counsel for the parties to meet with
him or her (in person or by telephone) at a prehearing conference to
address any or all of the following:
(1) Simplification and clarification of the issues;
(2) Stipulations, admissions of fact, and the contents, authenticity
and admissibility into evidence of documents;
(3) Matters of which official notice may be taken;
(4) Limitation of the number of witnesses;
(5) Summary disposition of any or all issues;
(6) Resolution of discovery issues or disputes;
(7) Amendments to pleadings; and
(8) Such other matters as may aid in the orderly disposition of the
proceeding.
(c) Transcript. The administrative law judge, in his or her
discretion, may require that a scheduling or prehearing conference be
recorded by a court reporter. A transcript of the conference and any
materials filed, including orders, becomes part of the record of the
proceeding. A party may obtain a copy of the transcript at his or her
expense.
(d) Scheduling or prehearing orders. At or within a reasonable time
following the conclusion of the scheduling conference or any prehearing
conference, the administrative law judge shall serve on each party an
order setting forth any agreements reached and any procedural
determinations made.
Sec. 308.32 Prehearing submissions.
(a) Within the time set by the administrative law judge, but in no
case later than 14 days before the start of the hearing, each party
shall serve on every other party, his or her:
(1) Prehearing statement;
(2) Final list of witnesses to be called to testify at the hearing,
including name and address of each witness and a short summary of the
expected testimony of each witness;
(3) List of the exhibits to be introduced at the hearing along with
a copy of each exhibit; and
(4) Stipulations of fact, if any.
(b) Effect of failure to comply. No witness may testify and no
exhibits may be introduced at the hearing if such witness or exhibit is
not listed in
[[Page 90]]
the prehearing submissions pursuant to paragraph (a) of this section,
except for good cause shown.
Sec. 308.33 Public hearings.
(a) General rule. All hearings shall be open to the public, unless
the FDIC, in its discretion, determines that holding an open hearing
would be contrary to the public interest. Within 20 days of service of
the notice or, in the case of change-in-control proceedings under
section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)), within 20 days from
service of the hearing order, any respondent may file with the Executive
Secretary a request for a private hearing, and any party may file a
reply to such a request. A party must serve on the administrative law
judge a copy of any request or reply the party files with the Executive
Secretary. The form of, and procedure for, these requests and replies
are governed by Sec. 308.23. A party's failure to file a request or a
reply constitutes a waiver of any objections regarding whether the
hearing will be public or private.
(b) Filing document under seal. Enforcement Counsel, in his or her
discretion, may file any document or part of a document under seal if
disclosure of the document would be contrary to the public interest. The
administrative law judge shall take all appropriate steps to preserve
the confidentiality of such documents or parts thereof, including
closing portions of the hearing to the public.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
Sec. 308.34 Hearing subpoenas.
(a) Issuance. (1) Upon application of a party showing general
relevance and reasonableness of scope of the testimony or other evidence
sought, the administrative law judge may issue a subpoena or a subpoena
duces tecum requiring the attendance of a witness at the hearing or the
production of documentary or physical evidence at the hearing. The
application for a hearing subpoena must also contain a proposed subpoena
specifying the attendance of a witness or the production of evidence
from any state, territory, or possession of the United States, the
District of Columbia, or as otherwise provided by law at any designated
place where the hearing is being conducted. The party making the
application shall serve a copy of the application and the proposed
subpoena on every other party.
(2) A party may apply for a hearing subpoena at any time before the
commencement of a hearing. During a hearing, a party may make an
application for a subpoena orally on the record before the
administrative law judge.
(3) The administrative law judge shall promptly issue any hearing
subpoena requested pursuant to this section. If the administrative law
judge determines that the application does not set forth a valid basis
for the issuance of the subpoena, or that any of its terms are
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
or she may refuse to issue the subpoena or may issue it in a modified
form upon any conditions consistent with this subpart. Upon issuance by
the administrative law judge, the party making the application shall
serve the subpoena on the person named in the subpoena and on each
party.
(b) Motion to quash or modify. (1) Any person to whom a hearing
subpoena is directed or any party may file a motion to quash or modify
the subpoena, accompanied by a statement of the basis for quashing or
modifying the subpoena. The movant must serve the motion on each party
and on the person named in the subpoena. Any party may respond to the
motion within ten days of service of the motion.
(2) Any motion to quash or modify a hearing subpoena must be filed
prior to the time specified in the subpoena for compliance, but not more
than ten days after the date of service of the subpoena upon the movant.
(c) Enforcing subpoenas. If a subpoenaed person fails to comply with
any subpoena issued pursuant to this section or any order of the
administrative law judge which directs compliance with all or any
portion of a document subpoena, the subpoenaing party or any other
aggrieved party may seek enforcement of the subpoena pursuant to
Sec. 308.26(c).
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
[[Page 91]]
Sec. 308.35 Conduct of hearings.
(a) General rules. (1) Hearings shall be conducted so as to provide
a fair and expeditious presentation of the relevant disputed issues.
Each party has the right to present its case or defense by oral and
documentary evidence and to conduct such cross examination as may be
required for full disclosure of the facts.
(2) Order of hearing. Enforcement Counsel shall present its case-in-
chief first, unless otherwise ordered by the administrative law judge,
or unless otherwise expressly specified by law or regulation.
Enforcement Counsel shall be the first party to present an opening
statement and a closing statement, and may make a rebuttal statement
after the respondent's closing statement. If there are multiple
respondents, respondents may agree among themselves as to their order of
presentation of their cases, but if they do not agree the administrative
law judge shall fix the order.
(3) Examination of witnesses. Only one counsel for each party may
conduct an examination of a witness, except that in the case of
extensive direct examination, the administrative law judge may permit
more than one counsel for the party presenting the witness to conduct
the examination. A party may have one counsel conduct the direct
examination and another counsel conduct re-direct examination of a
witness, or may have one counsel conduct the cross examination of a
witness and another counsel conduct the re-cross examination of a
witness.
(4) Stipulations. Unless the administrative law judge directs
otherwise, all stipulations of fact and law previously agreed upon by
the parties, and all documents, the admissibility of which have been
previously stipulated, will be admitted into evidence upon commencement
of the hearing.
(b) Transcript. The hearing must be recorded and transcribed. The
reporter will make the transcript available to any party upon payment by
that party to the reporter of the cost of the transcript. The
administrative law judge may order the record corrected, either upon
motion to correct, upon stipulation of the parties, or following notice
to the parties upon the administrative law judge's own motion.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
Sec. 308.36 Evidence.
(a) Admissibility. (1) Except as is otherwise set forth in this
section, relevant, material, and reliable evidence that is not unduly
repetitive is admissible to the fullest extent authorized by the
Administrative Procedure Act and other applicable law.
(2) Evidence that would be admissible under the Federal Rules of
Evidence is admissible in a proceeding conducted pursuant to this
subpart.
(3) Evidence that would be inadmissible under the Federal Rules of
Evidence may not be deemed or ruled to be inadmissible in a proceeding
conducted pursuant to this subpart if such evidence is relevant,
material, reliable and not unduly repetitive.
(b) Official notice. (1) Official notice may be taken of any
material fact which may be judicially noticed by a United States
district court and any material information in the official public
records of any Federal or state government agency.
(2) All matters officially noticed by the administrative law judge
or Board of Directors shall appear on the record.
(3) If official notice is requested or taken of any material fact,
the parties, upon timely request, shall be afforded an opportunity to
object.
(c) Documents. (1) A duplicate copy of a document is admissible to
the same extent as the original, unless a genuine issue is raised as to
whether the copy is in some material respect not a true and legible copy
of the original.
(2) Subject to the requirements of paragraph (a) of this section,
any document, including a report of examination, supervisory activity,
inspection or visitation, prepared by an appropriate Federal financial
institution regulatory agency or state regulatory agency, is admissible
either with or without a sponsoring witness.
(3) Witnesses may use existing or newly created charts, exhibits,
calendars, calculations, outlines or other graphic material to
summarize, illustrate, or simplify the presentation of
[[Page 92]]
testimony. Such materials may, subject to the administrative law judge's
discretion, be used with or without being admitted into evidence.
(d) Objections. (1) Objections to the admissibility of evidence must
be timely made and rulings on all objections must appear on the record.
(2) When an objection to a question or line of questioning
propounded to a witness is sustained, the examining counsel may make a
specific proffer on the record of what he or she expected to prove by
the expected testimony of the witness, either by representation of
counsel or by direct interrogation of the witness.
(3) The administrative law judge shall retain rejected exhibits,
adequately marked for identification, for the record, and transmit such
exhibits to the Board of Directors.
(4) Failure to object to admission of evidence or to any ruling
constitutes a waiver of the objection.
(e) Stipulations. The parties may stipulate as to any relevant
matters of fact or the authentication of any relevant documents. Such
stipulations must be received in evidence at a hearing, and are binding
on the parties with respect to the matters therein stipulated.
(f) Depositions of unavailable witnesses. (1) If a witness is
unavailable to testify at a hearing, and that witness has testified in a
deposition to which all parties in a proceeding had notice and an
opportunity to participate, a party may offer as evidence all or any
part of the transcript of the deposition, including deposition exhibits,
if any.
(2) Such deposition transcript is admissible to the same extent that
testimony would have been admissible had that person testified at the
hearing, provided that if a witness refused to answer proper questions
during the depositions, the administrative law judge may, on that basis,
limit the admissibility of the deposition in any manner that justice
requires.
(3) Only those portions of a deposition received in evidence at the
hearing constitute a part of the record.
Sec. 308.37 Post-hearing filings.
(a) Proposed findings and conclusions and supporting briefs. (1)
Using the same method of service for each party, the administrative law
judge shall serve notice upon each party, that the certified transcript,
together with all hearing exhibits and exhibits introduced but not
admitted into evidence at the hearing, has been filed. Any party may
file with the administrative law judge proposed findings of fact,
proposed conclusions of law, and a proposed order within 30 days
following service of this notice by the administrative law judge or
within such longer period as may be ordered by the administrative law
judge.
(2) Proposed findings and conclusions must be supported by citation
to any relevant authorities and by page references to any relevant
portions of the record. A post-hearing brief may be filed in support of
proposed findings and conclusions, either as part of the same document
or in a separate document. Any party who fails to file timely with the
administrative law judge any proposed finding or conclusion is deemed to
have waived the right to raise in any subsequent filing or submission
any issue not addressed in such party's proposed finding or conclusion.
(b) Reply briefs. Reply briefs may be filed within 15 days after the
date on which the parties' proposed findings, conclusions, and order are
due. Reply briefs must be strictly limited to responding to new matters,
issues, or arguments raised in another party's papers. A party who has
not filed proposed findings of fact and conclusions of law or a post-
hearing brief may not file a reply brief.
(c) Simultaneous filing required. The administrative law judge shall
not order the filing by any party of any brief or reply brief in advance
of the other party's filing of its brief.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 20349, May 6, 1996]
Sec. 308.38 Recommended decision and filing of record.
(a) Filing of recommended decision and record. Within 45 days after
expiration of the time allowed for filing reply briefs under
Sec. 308.37(b), the administrative law judge shall file with and certify
to the Executive Secretary, for decision, the record of the proceeding.
[[Page 93]]
The record must include the administrative law judge's recommended
decision, recommended findings of fact, recommended conclusions of law,
and proposed order; all prehearing and hearing transcripts, exhibits,
and rulings; and the motions, briefs, memoranda, and other supporting
papers filed in connection with the hearing. The administrative law
judge shall serve upon each party the recommended decision, findings,
conclusions, and proposed order.
(b) Filing of index. At the same time the administrative law judge
files with and certifies to the Executive Secretary for final
determination the record of the proceeding, the administrative law judge
shall furnish to the Executive Secretary a certified index of the entire
record of the proceeding. The certified index shall include, at a
minimum, an entry for each paper, document or motion filed with the
administrative law judge in the proceeding, the date of the filing, and
the identity of the filer. The certified index shall also include an
exhibit index containing, at a minimum, an entry consisting of exhibit
number and title or description for: Each exhibit introduced and
admitted into evidence at the hearing; each exhibit introduced but not
admitted into evidence at the hearing; each exhibit introduced and
admitted into evidence after the completion of the hearing; and each
exhibit introduced but not admitted into evidence after the completion
of the hearing.
[61 FR 20350, May 6, 1996]
Sec. 308.39 Exceptions to recommended decision.
(a) Filing exceptions. Within 30 days after service of the
recommended decision, findings, conclusions, and proposed order under
Sec. 308.38, a party may file with the Executive Secretary written
exceptions to the administrative law judge's recommended decision,
findings, conclusions or proposed order, to the admission or exclusion
of evidence, or to the failure of the administrative law judge to make a
ruling proposed by a party. A supporting brief may be filed at the time
the exceptions are filed, either as part of the same document or in a
separate document.
(b) Effect of failure to file or raise exceptions. (1) Failure of a
party to file exceptions to those matters specified in paragraph (a) of
this section within the time prescribed is deemed a waiver of objection
thereto.
(2) No exception need be considered by the Board of Directors if the
party taking exception had an opportunity to raise the same objection,
issue, or argument before the administrative law judge and failed to do
so.
(c) Contents. (1) All exceptions and briefs in support of such
exceptions must be confined to the particular matters in, or omissions
from, the administrative law judge's recommendations to which that party
takes exception.
(2) All exceptions and briefs in support of exceptions must set
forth page or paragraph references to the specific parts of the
administrative law judge's recommendations to which exception is taken,
the page or paragraph references to those portions of the record relied
upon to support each exception, and the legal authority relied upon to
support each exception.
Sec. 308.40 Review by Board of Directors.
(a) Notice of submission to Board of Directors. When the Executive
Secretary determines that the record in the proceeding is complete, the
Executive Secretary shall serve notice upon the parties that the
proceeding has been submitted to the Board of Directors for final
decision.
(b) Oral argument before the Board of Directors. Upon the initiative
of the Board of Directors or on the written request of any party filed
with the Executive Secretary within the time for filing exceptions, the
Board of Directors may order and hear oral argument on the recommended
findings, conclusions, decision, and order of the administrative law
judge. A written request by a party must show good cause for oral
argument and state reasons why arguments cannot be presented adequately
in writing. A denial of a request for oral argument may be set forth in
the Board of Directors' final decision. Oral argument before the Board
of Directors must be on the record.
[[Page 94]]
(c) Final decision. (1) Decisional employees may advise and assist
the Board of Directors in the consideration and disposition of the case.
The final decision of the Board of Directors will be based upon review
of the entire record of the proceeding, except that the Board of
Directors may limit the issues to be reviewed to those findings and
conclusions to which opposing arguments or exceptions have been filed by
the parties.
(2) The Board of Directors shall render a final decision within 90
days after notification of the parties that the case has been submitted
for final decision, or 90 days after oral argument, whichever is later,
unless the Board of Directors orders that the action or any aspect
thereof be remanded to the administrative law judge for further
proceedings. Copies of the final decision and order of the Board of
Directors shall be served upon each party to the proceeding, upon other
persons required by statute, and, if directed by the Board of Directors
or required by statute, upon any appropriate state or Federal
supervisory authority.
Sec. 308.41 Stays pending judicial review.
The commencement of proceedings for judicial review of a final
decision and order of the FDIC may not, unless specifically ordered by
the Board of Directors or a reviewing court, operate as a stay of any
order issued by the FDIC. The Board of Directors may, in its discretion,
and on such terms as it finds just, stay the effectiveness of all or any
part of its order pending a final decision on a petition for review of
that order.
Subpart B--General Rules of Procedure
Sec. 308.101 Scope of Local Rules.
(a) Subparts B and C of the Local Rules prescribe rules of practice
and procedure to be followed in the administrative enforcement
proceedings initiated by the FDIC as set forth in Sec. 308.01 of the
Uniform Rules.
(b) Except as otherwise specifically provided, the Uniform Rules and
subpart B of the Local Rules shall not apply to subparts D through P of
the Local Rules.
(c) Subpart C of the Local Rules shall apply to any administrative
proceeding initiated by the FDIC.
Sec. 308.102 Authority of Board of Directors and Executive Secretary.
(a) The Board of Directors. (1) The Board of Directors may, at any
time during the pendency of a proceeding, perform, direct the
performance of, or waive performance of, any act which could be done or
ordered by the Executive Secretary.
(2) Nothing contained in this part 308 shall be construed to limit
the power of the Board of Directors granted by applicable statutes or
regulations.
(b) The Executive Secretary. When no administrative law judge has
jurisdiction over a proceeding, the Executive Secretary may act in place
of, and with the same authority as, an administrative law judge, except
that the Executive Secretary may not hear a case on the merits or make a
recommended decision on the merits to the Board of Directors.
Sec. 308.103 Appointment of administrative law judge.
(a) Appointment. Unless otherwise directed by the Board of Directors
or as otherwise provided in the Local Rules, a hearing within the scope
of this part 308 shall be held before an administrative law judge of the
Office of Financial Institution Adjudication (``OFIA'').
(b) Procedures. (1) The Executive Secretary shall promptly after
issuance of the notice refer the matter to the OFIA which shall secure
the appointment of an administrative law judge to hear the proceeding.
(2) OFIA shall advise the parties, in writing, that an
administrative law judge has been appointed.
Sec. 308.104 Filings with the Board of Directors.
(a) General rule. All materials required to be filed with or
referred to the Board of Directors in any proceedings under this part
308 shall be filed with the Executive Secretary, Federal Deposit
Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.
(b) Scope. Filings to be made with the Executive Secretary include
pleadings
[[Page 95]]
and motions filed during the proceeding; the record filed by the
administrative law judge after the issuance of a recommended decision;
the recommended decision filed by the administrative law judge following
a motion for summary disposition; referrals by the administrative law
judge of motions for interlocutory review; motions and responses to
motions filed by the parties after the record has been certified to the
Board of Directors; exceptions and requests for oral argument; and any
other papers required to be filed with the Board of Directors under this
part 308.
Sec. 308.105 Custodian of the record.
The Executive Secretary is the official custodian of the record when
no administrative law judge has jurisdiction over the proceeding. As the
official custodian, the Executive Secretary shall maintain the official
record of all papers filed in each proceeding.
Sec. 308.106 Written testimony in lieu of oral hearing.
(a) General rule. (1) At any time more than fifteen days before the
hearing is to commence, on the motion of any party or on his or her own
motion, the administrative law judge may order that the parties present
part or all of their case-in-chief and, if ordered, their rebuttal, in
the form of exhibits and written statements sworn to by the witness
offering such statements as evidence, provided that if any party
objects, the administrative law judge shall not require such a format if
that format would violate the objecting party's right under the
Administrative Procedure Act, or other applicable law, or would
otherwise unfairly prejudice that party.
(2) Any such order shall provide that each party shall, upon
request, have the same right of oral cross-examination (or redirect
examination) as would exist had the witness testified orally rather than
through a written statement. Such order shall also provide that any
party has a right to call any hostile witness or adverse party to
testify orally.
(b) Scheduling of submission of written testimony. (1) If written
direct testimony and exhibits are ordered under paragraph (a) of this
section, the administrative law judge shall require that it be filed
within the time period for commencement of the hearing, and the hearing
shall be deemed to have commenced on the day such testimony is due.
(2) Absent good cause shown, written rebuttal, if any, shall be
submitted and the oral portion of the hearing begun within 30 days of
the date set for filing written direct testimony.
(3) The administrative law judge shall direct, unless good cause
requires otherwise, that--
(i) All parties shall simultaneously file any exhibits and written
direct testimony required under paragraph (b)(1) of this section; and
(ii) All parties shall simultaneously file any exhibits and written
rebuttal required under paragraph (b)(2) of this section.
(c) Failure to comply with order to file written testimony. (1) The
failure of any party to comply with an order to file written testimony
or exhibits at the time and in the manner required under this section
shall be deemed a waiver of that party's right to present any evidence,
except testimony of a previously identified adverse party or hostile
witness. Failure to file written testimony or exhibits is, however, not
a waiver of that party's right of cross-examination or a waiver of the
right to present rebuttal evidence that was not required to be submitted
in written form.
(2) Late filings of papers under this section may be allowed and
accepted only upon good cause shown.
Sec. 308.107 Document discovery.
(a) Parties to proceedings set forth at Sec. 308.01 of the Uniform
Rules and as provided in the Local Rules may obtain discovery only
through the production of documents. No other form of discovery shall be
allowed.
(b) Any questioning at a deposition of a person producing documents
pursuant to a document subpoena shall be strictly limited to the
identification of documents produced by that person and a reasonable
examination to determine whether the subpoenaed person made an adequate
search for, and has produced, all subpoenaed documents.
[[Page 96]]
Subpart C--Rules of Practice Before the FDIC and Standards of Conduct
Sec. 308.108 Sanctions.
(a) General rule. Appropriate sanctions may be imposed when any
counsel or party has acted, or failed to act, in a manner required by
applicable statute, regulations, or order, and that act or failure to
act:
(1) Constitutes contemptuous conduct;
(2) Has in a material way injured or prejudiced some other party in
terms of substantive injury, incurring additional expenses including
attorney's fees, prejudicial delay, or otherwise;
(3) Is a clear and unexcused violation of an applicable statute,
regulation, or order; or
(4) Has unduly delayed the proceeding.
(b) Sanctions. Sanctions which may be imposed include any one or
more of the following:
(1) Issuing an order against the party;
(2) Rejecting or striking any testimony or documentary evidence
offered, or other papers filed, by the party;
(3) Precluding the party from contesting specific issues or
findings;
(4) Precluding the party from offering certain evidence or from
challenging or contesting certain evidence offered by another party;
(5) Precluding the party from making a late filing or conditioning a
late filing on any terms that are just; and
(6) Assessing reasonable expenses, including attorney's fees,
incurred by any other party as a result of the improper action or
failure to act.
(c) Limits on dismissal as a sanction. No recommendation of
dismissal shall be made by the administrative law judge or granted by
the Board of Directors based on the failure to hold a hearing within the
time period called for in this part 308, or on the failure of an
administrative law judge to render a recommended decision within the
time period called for in this part 308, absent a finding:
(1) That the delay resulted solely or principally from the conduct
of the FDIC enforcement counsel;
(2) That the conduct of the FDIC enforcement counsel is unexcused;
(3) That the moving respondent took all reasonable steps to oppose
and prevent the subject delay;
(4) That the moving respondent has been materially prejudiced or
injured; and
(5) That no lesser or different sanction is adequate.
(d) Procedure for imposition of sanctions. (1) The administrative
law judge, upon the request of any party, or on his or her own motion,
may impose sanctions in accordance with this section, provided that the
administrative law judge may only recommend to the Board of Directors
the sanction of entering a final order determining the case on the
merits.
(2) No sanction, other than refusing to accept late papers,
authorized by this section shall be imposed without prior notice to all
parties and an opportunity for any counsel or party against whom
sanctions would be imposed to be heard. Such opportunity to be heard may
be on such notice, and the response may be in such form, as the
administrative law judge directs. The opportunity to be heard may be
limited to an opportunity to respond orally immediately after the act or
inaction covered by this section is noted by the administrative law
judge.
(3) Requests for the imposition of sanctions by any party, and the
imposition of sanctions, shall be treated for interlocutory review
purposes in the same manner as any other ruling by the administrative
law judge.
(4) Section not exclusive. Nothing in this section shall be read as
precluding the administrative law judge or the Board of Directors from
taking any other action, or imposing any restriction or sanction,
authorized by applicable statute or regulation.
Sec. 308.109 Suspension and disbarment.
(a) Discretionary suspension and disbarment. (1) The Board of
Directors may suspend or revoke the privilege of any counsel to appear
or practice before the FDIC if, after notice of and opportunity for
hearing in the matter, that counsel is found by the Board of Directors:
[[Page 97]]
(i) Not to possess the requisite qualifications to represent others;
(ii) To be seriously lacking in character or integrity or to have
engaged in material unethical or improper professional conduct;
(iii) To have engaged in, or aided and abetted, a material and
knowing violation of the FDIA; or
(iv) To have engaged in contemptuous conduct before the FDIC.
Suspension or revocation on the grounds set forth in paragraphs (a)(1)
(ii), (iii), and (iv) of this section shall only be ordered upon a
further finding that the counsel's conduct or character was sufficiently
egregious as to justify suspension or revocation.
(2) Unless otherwise ordered by the Board of Directors, an
application for reinstatement by a person suspended or disbarred under
paragraph (a)(1) of this section may be made in writing at any time more
than three years after the effective date of the suspension or
disbarment and, thereafter, at any time more than one year after the
person's most recent application for reinstatement. The suspension or
disbarment shall continue until the applicant has been reinstated by the
Board of Directors for good cause shown or until, in the case of a
suspension, the suspension period has expired. An applicant for
reinstatement under this provision may, in the Board of Directors' sole
discretion, be afforded a hearing.
(b) Mandatory suspension and disbarment. (1) Any counsel who has
been and remains suspended or disbarred by a court of the United States
or of any state, territory, district, commonwealth, or possession; or
any person who has been and remains suspended or barred from practice
before the OCC, Board of Governors, the OTS, the NCUA, the Securities
and Exchange Commission, or the Commodity Futures Trading Commission; or
any person who has been convicted of a felony, or of a misdemeanor
involving moral turpitude, within the last ten years, shall be suspended
automatically from appearing or practicing before the FDIC. A
disbarment, suspension, or conviction within the meaning of this
paragraph (b) shall be deemed to have occurred when the disbarring,
suspending, or convicting agency or tribunal enters its judgment or
order, regardless of whether an appeal is pending or could be taken, and
includes a judgment or an order on a plea of nolo contendere or on
consent, regardless of whether a violation is admitted in the consent.
(2) Any person appearing or practicing before the FDIC who is the
subject of an order, judgment, decree, or finding of the types set forth
in paragraph (b)(1) of this section shall promptly file with the
Executive Secretary a copy thereof, together with any related opinion or
statement of the agency or tribunal involved. Failure to file any such
paper shall not impair the operation of any other provision of this
section.
(3) A suspension or disbarment under paragraph (b)(1) of this
section from practice before the FDIC shall continue until the applicant
has been reinstated by the Board of Directors for good cause shown,
provided that any person suspended or disbarred under paragraph (b)(1)
of this section shall be automatically reinstated by the Executive
Secretary, upon appropriate application, if all the grounds for
suspension or disbarment under paragraph (b)(1) of this section are
subsequently removed by a reversal of the conviction (or the passage of
time since the conviction) or termination of the underlying suspension
or disbarment. An application for reinstatement on any other grounds by
any person suspended or disbarred under paragraph (b)(1) of this section
may be filed at any time not less than one year after the applicant's
most recent application. An applicant for reinstatement under this
provision may, in the Board of Directors' sole discretion, be afforded a
hearing.
(c) Hearings under this section. Hearings conducted under this
section shall be conducted in substantially the same manner as other
hearings under the Uniform Rules, provided that in proceedings to
terminate an existing FDIC suspension or disbarment order, the person
seeking the termination of the order shall bear the burden of going
forward with an application and with proof, and that the Board of
Directors may, in its sole discretion, direct that any proceeding to
terminate an existing suspension or disbarment by the
[[Page 98]]
FDIC be limited to written submissions.
(d) Summary suspension for contemptuous conduct. A finding by the
administrative law judge of contemptuous conduct during the course of
any proceeding shall be grounds for summary suspension by the
administrative law judge of a counsel or other representative from any
further participation in that proceeding for the duration of that
proceeding.
(e) Practice defined. Unless the Board of Directors orders
otherwise, for the purposes of this section, practicing before the FDIC
includes, but is not limited to, transacting any business with the FDIC
as counsel or agent for any other person and the preparation of any
statement, opinion, or other paper by a counsel, which statement,
opinion, or paper is filed with the FDIC in any registration statement,
notification, application, report, or other document, with the consent
of such counsel.
Subpart D--Rules and Procedures Applicable to Proceedings Relating to
Disapproval of Acquisition of Control
Sec. 308.110 Scope.
Except as specifically indicated in this subpart, the rules and
procedures in this subpart, subpart B of the Local Rules, and the
Uniform Rules shall apply to proceedings in connection with the
disapproval by the Board of Directors or its designee of a proposed
acquisition of control of an insured nonmember bank.
Sec. 308.111 Grounds for disapproval.
The following are grounds for disapproval of a proposed acquisition
of control of an insured nonmember bank:
(a) The proposed acquisition of control would result in a monopoly
or would be in furtherance of any combination or conspiracy to
monopolize or attempt to monopolize the banking business in any part of
the United States;
(b) The effect of the proposed acquisition of control in any section
of the United States may be to substantially lessen competition or to
tend to create a monopoly or would in any other manner be in restraint
of trade, and the anticompetitive effects of the proposed acquisition of
control are not clearly outweighed in the public interest by the
probable effect of the transaction in meeting the convenience and needs
of the community to be served;
(c) The financial condition of any acquiring person might jeopardize
the financial stability of the bank or prejudice the interests of the
depositors of the bank;
(d) The competence, experience, or integrity of any acquiring person
or of any of the proposed management personnel indicates that it would
not be in the interest of the depositors of the bank, or in the interest
of the public, to permit such person to control the bank;
(e) Any acquiring person neglects, fails, or refuses to furnish to
the FDIC all the information required by the FDIC; or
(f) The FDIC determines that the proposed acquisition would result
in an adverse effect on the Bank Insurance Fund or the Savings
Association Insurance Fund.
Sec. 308.112 Notice of disapproval.
(a) General rule. (1) Within three days of the decision by the Board
of Directors or its designee to disapprove a proposed acquisition of
control of an insured nonmember bank, a written notice of disapproval
shall be mailed by first class mail to, or otherwise served upon, the
party seeking acquire control.
(2) The notice of disapproval shall:
(i) Contain a statement of the basis for the disapproval; and
(ii) Indicate that a hearing may be requested by filing a written
request with the Executive Secretary within ten days after service of
the notice of disapproval; and if a hearing is requested, that an answer
to the notice of disapproval, as required by Sec. 308.113, must be filed
within 20 days after service of the notice of disapproval.
(b) Waiver of hearing. Failure to request a hearing pursuant to this
section shall constitute a waiver of the opportunity for a hearing and
the notice of disapproval shall constitute a final and unappealable
order.
[[Page 99]]
(c) Section 308.18(b) of the Uniform Rules shall not apply to the
content of the Notice of Disapproval.
Sec. 308.113 Answer to notice of disapproval.
(a) Contents. (1) An answer to the notice of disapproval of a
proposed acquisition of control shall be filed within 20 days after
service of the notice of disapproval and shall specifically deny those
portions of the notice of disapproval which are disputed. Those portions
of the notice of disapproval which are not specifically denied are
deemed admitted by the applicant.
(2) Any hearing under this subpart shall be limited to those parts
of the notice of disapproval that are specifically denied.
(b) Failure to answer. Failure of a respondent to file an answer
required by this section within the time provided constitutes a waiver
of his or her right to appear and contest the allegations in the notice
of disapproval. If no timely answer is filed, Enforcement Counsel may
file a motion for entry of an order of default. Upon a finding that no
good cause has been shown for the failure to file a timely answer, the
administrative law judge shall file a recommended decision containing
the findings and relief sought in the notice. A final order issued by
the Board of Directors based upon a respondent's failure to answer is
deemed to be an order issued upon consent.
Sec. 308.114 Burden of proof.
The ultimate burden of proof shall be upon the person proposing to
acquire a depository institution. The burden of going forward with a
prima facie case shall be upon the FDIC.
Subpart E--Rules and Procedures Applicable to Proceedings Relating to
Assessment of Civil Penalties for Willful Violations of the Change in
Bank Control Act
Sec. 308.115 Scope.
The rules and procedures of this subpart, subpart B of the Local
Rules and the Uniform Rules shall apply to proceedings to assess civil
penalties against any person for willful violation of the Change in Bank
Control Act of 1978 (12 U.S.C. 1817(j)), or any regulation or order
issued pursuant thereto, in connection with the affairs of an insured
nonmember bank.
Sec. 308.116 Assessment of penalties.
(a) In general. The civil money penalty shall be assessed upon the
service of a Notice of Assessment which shall become final and
unappealable unless the respondent requests a hearing pursuant to
Sec. 308.19(c)(2).
(b) Amount. (1) Any person who violates any provision of the Change
in Bank Control Act or any rule, regulation, or order issued by the FDIC
pursuant thereto, shall forfeit and pay a civil money penalty of not
more than $5,000 for each day the violation continues.
(2) Any person who violates any provision of the Change in Bank
Control Act or any rule, regulation, or order issued by the FDIC
pursuant thereto; or recklessly engages in any unsafe or unsound
practice in conducting the affairs of a depository institution; or
breaches any fiduciary duty; which violation, practice or breach is part
of a pattern of misconduct; or causes or is likely to cause more than a
minimal loss to such institution; or results in pecuniary gain or other
benefit to such person, shall forfeit and pay a civil money penalty of
not more than $25,000 for each day such violation, practice or breach
continues.
(3) Any person who knowingly violates any provision of the Change in
Bank Control Act or any rule, regulation, or order issued by the FDIC
pursuant thereto; or engages in any unsafe or unsound practice in
conducting the affairs of a depository institution; or breaches any
fiduciary duty; and knowingly or recklessly causes a substantial loss to
such institution or a substantial pecuniary gain or other benefit to
such institution or a substantial pecuniary gain or other benefit to
such person by reason of such violation, practice or breach, shall
forfeit and pay a civil money penalty not to exceed:
(i) In the case of a person other than a depository institution--
$1,000,000 per day for each day the violation, practice or breach
continues; or
[[Page 100]]
(ii) In the case of a depository institution--an amount not to
exceed the lesser of $1,000,000 or one percent of the total assets of
such institution for each day the violation, practice or breach
continues.
(4) Adjustment of civil money penalties by the rate of inflation
pursuant to section 31001(s) of the Debt Collection Improvement Act.
After November 12, 1996:
(i) Any person who engages in a violation as set forth in paragraph
(b)(1) of this section shall forfeit and pay a civil money penalty of
not more than $5,500 for each day the violation continues.
(ii) Any person who engages in a violation, unsafe or unsound
practice or breach of fiduciary duty, as set forth in paragraph (b)(2)
of this section, shall forfeit and pay a civil money penalty of not more
than $27,500 for each day such violation, practice or breach continues.
(iii) Any person who knowingly engages in a violation, unsafe or
unsound practice or breach of fiduciary duty, as set forth in paragraph
(b)(3) of this section, shall forfeit and pay a civil money penalty not
to exceed:
(A) In the case of a person other than a depository institution--
$1,100,000 per day for each day the violation, practice or breach
continues; or
(B) In the case of a depository institution--an amount not to exceed
the lesser of $1,100,000 or one percent of the total assets of such
institution for each day the violation, practice or breach continues.
(c) Mitigating factors. In assessing the amount of the penalty, the
Board of Directors or its designee shall consider the gravity of the
violation, the history of previous violations, respondent's financial
resources, good faith, and any other matters as justice may require.
(d) Failure to answer. Failure of a respondent to file an answer
required by this section within the time provided constitutes a waiver
of his or her right to appear and contest the allegations in the notice
of disapproval. If no timely answer is filed, Enforcement Counsel may
file a motion for entry of an order of default. Upon a finding that no
good cause has been shown for the failure to file a timely answer, the
administrative law judge shall file a recommended decision containing
the findings and relief sought in the notice. A final order issued by
the Board of Directors based upon a respondent's failure to answer is
deemed to be an order issued upon consent.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 57990, Nov. 12, 1996]
Sec. 308.117 Effective date of, and payment under, an order to pay.
If the respondent both requests a hearing and serves an answer,
civil penalties assessed pursuant to this subpart are due and payable 60
days after an order to pay, issued after the hearing or upon default, is
served upon the respondent, unless the order provides for a different
period of payment. Civil penalties assessed pursuant to an order to pay
issued upon consent are due and payable within the time specified
therein.
Sec. 308.118 Collection of penalties.
The FDIC may collect any civil penalty assessed pursuant to this
subpart by agreement with the respondent, or the FDIC may bring an
action against the respondent to recover the penalty amount in the
appropriate United States district court. All penalties collected under
this section shall be paid over to the Treasury of the United States.
Subpart F--Rules and Procedures Applicable to Proceedings for
Involuntary Termination of Insured Status
Sec. 308.119 Scope.
(a) Involuntary termination of insurance pursuant to section 8(a) of
the FDIA. The rules and procedures in this subpart, subpart B of the
Local Rules and the Uniform Rules shall apply to proceedings in
connection with the involuntary termination of the insured status of an
insured bank depository institution or an insured branch of a foreign
bank pursuant to section 8(a) of the FDIA (12 U.S.C. 1818(a)), except
that the Uniform Rules and subpart B of the Local Rules shall not apply
to the temporary suspension of insurance pursuant to section 8(a)(8) of
the FDIA (12 U.S.C. 1818(a)(8)).
[[Page 101]]
(b) Involuntary termination of insurance pursuant to section 8(p) of
the Act. The rules and procedures in Sec. 308.124 of this subpart F
shall apply to proceedings in connection with the involuntary
termination of the insured status of an insured depository institution
or an insured branch of a foreign bank pursuant to section 8(p) of the
FDIA (12 U.S.C. 1818(p)). The Uniform Rules shall not apply to
proceedings under section 8(p) of the FDIA.
Sec. 308.120 Grounds for termination of insurance.
(a) General rule. The following are grounds for involuntary
termination of insurance pursuant to section 8(a) of the FDIA:
(1) An insured depository institution or its directors or trustees
have engaged or are engaging in unsafe or unsound practices in
conducting the business of such depository institution;
(2) An insured depository institution is in an unsafe or unsound
condition such that it should not continue operations as an insured
depository institution; or
(3) An insured depository institution or its directors or trustees
have violated an applicable law, rule, regulation, order, condition
imposed in writing by the FDIC in connection with the granting of any
application or other request by the insured depository institution or
have violated any written agreement entered into between the insured
depository institution and the FDIC.
(b) Extraterritorial acts of foreign banks. An act or practice
committed outside the United States by a foreign bank or its directors
or trustees which would otherwise be a ground for termination of insured
status under this section shall be a ground for termination if the Board
of Directors finds:
(1) The act or practice has been, is, or is likely to be a cause of,
or carried on in connection with or in furtherance of, an act or
practice committed within any state, territory, or possession of the
United States or the District of Columbia that, in and of itself, would
be an appropriate basis for action by the FDIC; or
(2) The act or practice committed outside the United States, if
proven, would adversely affect the insurance risk of the FDIC.
(c) Failure of foreign bank to secure removal of personnel. The
failure of a foreign bank to comply with any order of removal or
prohibition issued by the Board of Directors or the failure of any
person associated with a foreign bank to appear promptly as a party to a
proceeding pursuant to section 8(e) of the FDIA (12 U.S.C. 1818(e)),
shall be a ground for termination of insurance of deposits in any branch
of the bank.
Sec. 308.121 Notification to primary regulator.
(a) Service of notification. (1) Upon a determination by the Board
of Directors or its designee pursuant to Sec. 308.120 of an unsafe or
unsound practice or condition or of a violation, a notification shall be
served upon the appropriate Federal banking agency of the insured
depository institution, or the State banking supervisor if the FDIC is
the appropriate Federal banking agency.
The notification shall be served not less than 30 days before the Notice
of Intent to Terminate Insured Status required by section 8(a)(2)(B) of
the FDIA (12 U.S.C. 1818(a)(2)(B)), and Sec. 308.122, except that this
period for notification may be reduced or eliminated with the agreement
of the appropriate Federal banking agency.
(2) Appropriate Federal banking agency shall have the meaning given
that term in section 3(q) of the FDIA (12 U.S.C. 1813(q)), and shall be
the OCC in the case of a national bank, a District bank or an insured
Federal branch of a foreign bank; the FDIC in the case of an insured
nonmember bank, including an insured State branch of a foreign bank; the
Board of Governors in the case of a state member bank; or the OTS in the
case of an insured Federal or state savings association.
(3) In the case of a state nonmember bank, insured Federal branch of
a foreign bank, or state member bank, in addition to service of the
notification upon the appropriate Federal banking agency, a copy of the
notification shall be sent to the appropriate State banking supervisor.
(4) In instances in which a Temporary Order Suspending Insurance is
[[Page 102]]
issued pursuant to section 8(a)(8) of the FDIA (12 U.S.C. 1818(a)(8)),
the notification may be served concurrently with such order.
(b) Contents of notification. The notification shall contain the
FDIC's determination, and the facts and circumstances upon which such
determination is based, for the purpose of securing correction of such
practice, condition, or violation.
Sec. 308.122 Notice of intent to terminate.
(a) If, after serving the notification under Sec. 308.121, the Board
of Directors determines that any unsafe or unsound practices, condition,
or violation, specified in the notification, requires the termination of
the insured status of the insured depository institution, the Board of
Directors or its designee, if it determines to proceed further, shall
cause to be served upon the insured depository institution a notice of
its intention to terminate insured status not less than 30 days after
service of the notification, unless a shorter time period has been
agreed upon by the appropriate Federal banking agency.
(b) The Board of Directors or its designee shall cause a copy of the
notice to be sent to the appropriate Federal banking agency and to the
appropriate state banking supervisor, if any.
Sec. 308.123 Notice to depositors.
If the Board of Directors enters an order terminating the insured
status of an insured depository institution or branch, the insured
depository institution shall, on the day that order becomes final, or on
such other day as that order prescribes, mail a notification of
termination of insured status to each depositor at the depositor's last
address of record on the books of the insured depository institution or
branch. The insured depository institution shall also publish the
notification in two issues of a local newspaper of general circulation
and shall furnish the FDIC with proof of such publications. The
notification to depositors shall include information provided in
substantially the following form:
Notice
(Date)__________.
1. The status of the __________, as an (insured depository
institution) (insured branch) under the provisions of the Federal
Deposit Insurance Act, will terminate as of the close of business on the
________ day of____________, 19____.
2. Any deposits made by you after that date, either new deposits or
additions to existing deposits, will not be insured by the Federal
Deposit Insurance Corporation.
3. Insured deposits in the (depository institution) (branch) on the
________ day of____________, 19____, will continue to be insured, as
provided by Federal Deposit Insurance Act, for 2 years after the close
of business on the ________ day of ____________, 19____. Provided,
however, that any withdrawals after the close of business on the
________ day of ____________, 19____, will reduce the insurance coverage
by the amount of such withdrawals.
_______________________________________________________________________
(Name of (depository institution or branch)
_______________________________________________________________________
(Address)
The notification may include any additional information the depository
institution deems advisable, provided that the information required by
this section shall be set forth in a conspicuous manner on the first
page of the notification.
Sec. 308.124 Involuntary termination of insured status for failure to receive deposits.
(a) Notice to show cause. When the Board of Directors or its
designee has evidence that an insured depository institution is not
engaged in the business of receiving deposits, other than trust funds,
the Board of Directors or its designee shall give written notice of this
evidence to the depository institution and shall direct the depository
institution to show cause why its insured status should not be
terminated under the provisions of section 8(p) of the FDIA (12 U.S.C.
1818(p)). The insured depository institution shall have 30 days after
receipt of the notice, or such longer period as is prescribed in the
notice, to submit affidavits, other written proof, and any legal
arguments that it is engaged in the business of receiving deposits other
than trust funds.
(b) Notice of termination date. If, upon consideration of the
affidavits, other written proof, and legal arguments, the Board of
Directors determines that the depository institution is not engaged in
the business of receiving deposits, other than trust funds, the finding
[[Page 103]]
shall be conclusive and the Board of Directors shall notify the
depository institution that its insured status will terminate at the
expiration of the first full semiannual assessment period following
issuance of that notification.
(c) Notification to depositors of termination of insured status.
Within the time specified by the Board of Directors and prior to the
date of termination of its insured status, the depository institution
shall mail a notification of termination of insured status to each
depositor at the depositor's last address of record on the books of the
depository institution. The depository institution shall also publish
the notification in two issues of a local newspaper of general
circulation and shall furnish the FDIC with proof of such publications.
The notification to depositors shall include information provided in
substantially the following form:
Notice
(Date)__________.
The status of the __________, as an (insured depository institution)
(insured branch) under the Federal Deposit Insurance Act, will terminate
on the ________ day of____________, 19____, and its deposits will
thereupon cease to be insured.
_______________________________________________________________________
(Name of depository institution or branch)
_______________________________________________________________________
(Address)
The notification may include any additional information the depository
institution deems advisable, provided that the information required by
this section shall be set forth in a conspicuous manner on the first
page of the notification.
Sec. 308.125 Temporary suspension of deposit insurance.
(a) If, while an action is pending under section 8(a)(2) of the FDIA
(12 U.S.C. 1818(a)(2)), the Board of Directors, after consultation with
the appropriate Federal banking agency, finds that an insured depository
institution (other than a special supervisory association to which
Sec. 308.126 of this subpart applies) has no tangible capital under the
capital guidelines or regulations of the appropriate Federal banking
agency, the Board of Directors may issue a Temporary Order Suspending
Deposit Insurance, pending completion of the proceedings under section
8(a)(2) of the FDIA (12 U.S.C. 1818(a)(2)).
(b) The temporary order shall be served upon the insured institution
and a copy sent to the appropriate Federal banking agency and to the
appropriate State banking supervisor.
(c) The temporary order shall become effective ten days from the
date of service upon the insured depository institution. Unless set
aside, limited, or suspended in proceedings under section 8(a)(8)(D) of
the FDIA (12 U.S.C. 1818 (a)(8)(D)), the temporary order shall remain
effective and enforceable until an order terminating the insured status
of the institution is entered by the Board of Directors and becomes
final, or the Board of Directors dismisses the proceedings.
(d) Notification to depositors of suspension of insured status.
Within the time specified by the Board of Directors and prior to the
suspension of insured status, the depository institution shall mail a
notification of suspension of insured status to each depositor at the
depositor's last address of record on the books of the depository
institution. The depository institution shall also publish the
notification in two issues of a local newspaper of general circulation
and shall furnish the FDIC with proof of such publications. The
notification to depositors shall include information provided in
substantially the following form:
Notice
(Date)____________.
1. The status of the __________, as an (insured depository
institution) (insured branch) under the provisions of the Federal
Deposit Insurance Act, will be suspended as of the close of business on
the ________ day of ____________, 19____, pending the completion of
administrative proceedings under section 8(a) of the Federal Deposit
Insurance Act.
2. Any deposits made by you after that date, either new deposits or
additions to existing deposits, will not be insured by the Federal
Deposit Insurance Corporation.
3. Insured deposits in the (depository institution) (branch) on the
________ day of ____________, 19____, will continue to be insured for
____________ after the close of business on the__________ day of
__________, 19____. Provided, however, that any withdrawals after the
close of business on the ________ day of____________, 19____, will
reduce the insurance coverage by the amount of such withdrawals.
[[Page 104]]
_______________________________________________________________________
(Name of depository institution or branch)
_______________________________________________________________________
(Address)
The notification may include any additional information the depository
institution deems advisable, provided that the information required by
this section shall be set forth in a conspicuous manner on the first
page of the notification.
Sec. 308.126 Special supervisory associations.
If the Board of Directors finds that a savings association is a
special supervisory association under the provisions of section
8(a)(8)(B) of the FDIA (12 U.S.C. 1818(a)(8)(B)) for purposes of
temporary suspension of insured status, the Board of Directors shall
serve upon the association its findings with regard to the determination
that the capital of the association, as computed using applicable
accounting standards, has suffered a material decline; that such
association or its directors or officers, is engaging in an unsafe or
unsound practice in conducting the business of the association; that
such association is in an unsafe or unsound condition to continue
operating as an insured association; or that such association or its
directors or officers, has violated any law, rule, regulation, order,
condition imposed in writing by any Federal banking agency, or any
written agreement, or that the association failed to enter into a
capital improvement plan acceptable to the Corporation prior to January,
1990.
Subpart G--Rules and Procedures Applicable to Proceedings Relating to
Cease-and-Desist Orders
Sec. 308.127 Scope.
(a) Cease-and-desist proceedings under section 8 of the FDIA. The
rules and procedures of this subpart, subpart B of the Local Rules and
the Uniform Rules shall apply to proceedings to order an insured
nonmember bank or an institution-affiliated party to cease and desist
from practices and violations described in section 8(b) of the FDIA, 12
U.S.C. 1818(b); provided that the provisions of the Uniform Rules and
subpart B of the Local Rules shall not apply to the issuance of
temporary cease-and-desist orders pursuant to section 8(c) of the FDIA
(12 U.S.C. 1818(c)).
(b) Proceedings under the Securities Exchange Act of 1934. (1) The
rules and procedures of this subpart, subpart B of the Local Rules and
the Uniform Rules shall apply to proceedings by the Board of Directors
to order a municipal securities dealer to cease and desist from any
violation of law or regulation specified in section 15B(c)(5) of the
Securities Exchange Act, as amended (15 U.S.C. 78o-4(c)(5)) where the
municipal securities dealer is an insured nonmember bank or a subsidiary
thereof.
(2) The rules and procedures of this subpart, subpart B of the Local
Rules and the Uniform Rules shall apply to proceedings by the Board of
Directors to order a clearing agency or transfer agent to cease and
desist from failure to comply with the applicable provisions of section
17, 17A and 19 of the Securities Exchange Act of 1934, as amended (15
U.S.C. 78q, 78q-l, 78s), and the applicable rules and regulations
thereunder, where the clearing agency or transfer agent is an insured
nonmember bank or a subsidiary thereof.
Sec. 308.128 Grounds for cease-and-desist orders.
(a) General rule. The Board of Directors or its designee may issue
and have served upon any insured nonmember bank or an institution-
affiliated party a notice, as set forth in Sec. 308.18 of the Uniform
Rules for practices and violations as described in Sec. 308.127.
(b) Extraterritorial acts of foreign banks. An act, violation or
practice committed outside the United States by a foreign bank or an
institution-affiliated party that would otherwise be a ground for
issuing a cease-and-desist order under paragraph (a) of this section or
a temporary cease-and-desist order under Sec. 308.131 of this subpart,
shall be a ground for an order if the Board of Directors or its designee
finds that:
(1) The act, violation or practice has been, is, or is likely to be
a cause of, or
[[Page 105]]
carried on in connection with or in furtherance of, an act, violation or
practice committed within any state, territory, or possession of the
United States or the District of Columbia which act, violation or
practice, in and of itself, would be an appropriate basis for action by
the FDIC; or
(2) The act, violation or practice, if proven, would adversely
affect the insurance risk of the FDIC.
Sec. 308.129 Notice to state supervisory authority.
The Board of Directors or its designee shall give the appropriate
state supervisory authority notification of its intent to institute a
proceeding pursuant to subpart G of this part, and the grounds thereof.
Any proceedings shall be conducted according to subpart G of this part,
unless, within the time period specified in such notification, the state
supervisory authority has effected satisfactory corrective action. No
insured institution or other party who is the subject of any notice or
order issued by the FDIC under this section shall have standing to raise
the requirements of this subpart as grounds for attacking the validity
of any such notice or order.
Sec. 308.130 Effective date of order and service on bank.
(a) Effective date. A cease-and-desist order issued by the Board of
Directors after a hearing, and a cease-and-desist order issued based
upon a default, shall become effective at the expiration of 30 days
after the service of the order upon the bank or its official. A cease-
and-desist order issued upon consent shall become effective at the time
specified therein. All cease-and-desist orders shall remain effective
and enforceable, except to the extent they are stayed, modified,
terminated, or set aside by the Board of Directors or its designee or by
a reviewing court.
(b) Service on banks. In cases where the bank is not the respondent,
the cease-and-desist order shall also be served upon the bank.
Sec. 308.131 Temporary cease-and-desist order.
(a) Issuance. (1) When the Board of Directors or its designee
determines that the violation, or the unsafe or unsound practice, as
specified in the notice, or the continuation thereof, is likely to cause
insolvency or significant dissipation of assets or earnings of the bank,
or is likely to weaken the condition of the bank or otherwise prejudice
the interests of its depositors prior to the completion of the
proceedings under section 8(b) of the FDIA (12 U.S.C. 1818(b)) and
Sec. 308.128 of this subpart, the Board of Directors or its designee may
issue a temporary order requiring the bank or an institution-affiliated
party to immediately cease and desist from any such violation, practice
or to take affirmative action to prevent such insolvency, dissipation,
condition or prejudice pending completion of the proceedings under
section 8(b) of the FDIA (12 U.S.C. 1818(b)).
(2) When the Board of Directors or its designee issues a Notice of
charges pursuant to 12 U.S.C. 1818(b)(1) which specifies on the basis of
particular facts and circumstances that a bank's books and records are
so incomplete or inaccurate that the FDIC is unable, through the normal
supervisory process, to determine the financial condition of the bank or
the details or purpose of any transaction or transactions that may have
a material effect on the financial condition of the bank, then the Board
of Directors or its designee may issue a temporary order requiring:
(i) The cessation of any activity or practice which gave rise,
whether in whole or in part, to the incomplete or inaccurate state of
the books or records; or
(ii) Affirmative action to restore such books or records to a
complete and accurate state, until the completion of the proceedings
under section 8(b) of the FDIA (12 U.S.C. 1818(b)).
(3) The temporary order shall be served upon the bank or the
institution-affiliated party named therein and shall also be served upon
the bank in the case where the temporary order applies only to an
institution-affiliated party.
(b) Effective date. A temporary order shall become effective when
served upon the bank or the institution-affiliated party. Unless the
temporary order is set aside, limited, or suspended by a court in
proceedings authorized under
[[Page 106]]
section 8(c)(2) of the FDIA (12 U.S.C. 1818(c)(2)), the temporary order
shall remain effective and enforceable pending completion of
administrative proceedings pursuant to section 8(b) of the FDIA (12
U.S.C. 1818(b)) and entry of an order which has become final, or with
respect to paragraph (a)(2) of this section the FDIC determines by
examination or otherwise that the bank's books and records are accurate
and reflect the financial condition of the bank.
(c) Uniform Rules do not apply. The Uniform Rules and subpart B of
the Local Rules shall not apply to the issuance of temporary orders
under this section.
Subpart H--Rules and Procedures Applicable to Proceedings Relating
to Assessment and Collection of Civil Money Penalties for Violation
of Cease-and-Desist Orders and of Certain Federal Statutes, Including
Call Report Penalties
Sec. 308.132 Assessment of penalties.
(a) Scope. The rules and procedures of this subpart, subpart B of
the Local Rules, and the Uniform Rules shall apply to proceedings to
assess and collect civil money penalties, including civil money
penalties for violation of section 7(a) of the FDIA (12 U.S.C. 1817(a)).
(b) Relevant considerations. In determining the amount of the civil
penalty to be assessed, the Board of Directors or its designee shall
consider the financial resources and good faith of the bank or official,
the gravity of the violation, the history of previous violations, and
any such other matters as justice may require.
(c) Amount. (1) The Board of Directors or its designee may assess
civil money penalties pursuant to section 8(i) of the FDIA (12 U.S.C.
1818(i)), and Sec. 308.01(e)(1) of the Uniform Rules.
(2) The Board of Directors or its designee may assess civil money
penalties pursuant to section 7(a) of the FDIA (12 U.S.C. 1817(a)) as
follows:
(i) Late filing--Tier One penalties. In cases in which a bank fails
to make or publish its Report of Condition and Income (Call Report)
within the appropriate time periods, a civil money penalty of not more
than $2,000 per day may be assessed where the bank maintains procedures
in place reasonably adapted to avoid inadvertent error and the late
filing occurred unintentionally and as a result of such error; or the
bank inadvertently transmitted a Call Report which is minimally late.
(A) First offense. Generally, in such cases, the amount assessed
shall be $300 per day for each of the first 15 days for which the
failure continues, and $600 per day for each subsequent day the failure
continues, beginning on the sixteenth day. For banks with less than
$25,000,000 in assets, the amount assessed shall be the greater of $100
per day or \1/1000\th of the bank's total assets (\1/10\th of a basis
point) for each of the first 15 days for which the failure continues,
and $200 or \1/500\th of the bank's total assets, \1/5\ of a basis
point) for each subsequent day the failure continues, beginning on the
sixteenth day.
(B) Second offense. Where the bank has been delinquent in making or
publishing its Call Report within the preceding five quarters, the
amount assessed for the most current failure shall generally be $500 per
day for each of the first 15 days for which the failure continues, and
$1,000 per day for each subsequent day the failure continues, beginning
on the sixteenth day. For banks with less than $25,000,000 in assets,
those amounts, respectively, shall be \1/500\th of the bank's total
assets and \1/250\th of the bank's total assets.
(C) Mitigating factors. The amounts set forth in paragraph
(c)(2)(i)(A) of this section may be reduced based upon the factors set
forth in paragraph (b) of this section.
(D) Lengthy or repeated violations. The amounts set forth in this
paragraph (c)(2)(i) will be assessed on a case-by-case basis where the
amount of time of the bank's delinquency is lengthy or the bank has been
delinquent repeatedly in making or publishing its Call Reports.
(E) Waiver. Absent extraordinary circumstances outside the control
of the bank, penalties assessed for late filing shall not be waived.
(ii) Late filing--Tier Two penalties. Where a bank fails to make or
publish its Call Report within the appropriate
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time period, the Board of Directors or its designee may assess a civil
money penalty of not more than $20,000 per day for each day the failure
continues. Pursuant to the Debt Collection Improvement Act of 1996, for
violations which occur after November 12, 1996, the maximum Tier Two
penalty amount will increase to $22,000 per day for each day the failure
continues.
(iii) False or misleading reports or information--(A) Tier One
penalties. In cases in which a bank submits or publishes any false or
misleading Call Report or information, the Board of Directors or its
designee may assess a civil money penalty of not more than $2,000 per
day for each day the information is not corrected, where the bank
maintains procedures in place reasonably adapted to avoid inadvertent
error and the violation occurred unintentionally and as a result of such
error; or the bank inadvertently transmits a Call Report or information
which is false or misleading.
(B) Tier Two penalties. Where a bank submits or publishes any false
or misleading Call Report or other information, the Board of Directors
or its designee may assess a civil money penalty of not more than
$20,000 per day for each day the information is not corrected. Pursuant
to the Debt Collection Improvement Act of 1996, for violations which
occur after November 12, 1996, the maximum Tier Two penalty amount will
increase to $22,000 per day for each day the information is not
corrected.
(C) Tier Three penalties. Where a bank knowingly or with reckless
disregard for the accuracy of any Call Report or information submits or
publishes any false or misleading Call Report or other information, the
Board of Directors or its designee may assess a civil money penalty of
not more than the lesser of $1,000,000 or 1 percent of the bank's total
assets per day for each day the information is not corrected. Pursuant
to the Debt Collection Improvement Act of 1996, for violations which
occur after November 12, 1996, the maximum Tier Three penalty amount
will increase to the lesser of $1,100,000 per day or 1 percent of the
bank's total assets per day for each day the information is not
corrected.
(D) Mitigating factors. The amounts set forth in this paragraph
(c)(2) may be reduced based upon the factors set forth in paragraph (b)
of this section.
(3) Adjustment of civil money penalties by the rate of inflation
pursuant to section 31001(s) of the Debt Collection Act. Pursuant to
section 31001(s) of the Debt Collection Act, for violations which occur
after November 12, 1996, the Board of Directors or its designee may
assess civil money penalties in the maximum amounts as follows:
(i) Civil money penalties assessed pursuant to section 8(i)(2) of
the FDIA. Tier One civil money penalties may be assessed pursuant to
section 8(i)(2)(A) of the FDIA (12 U.S.C. 1818(i)(2)(A)) in an amount
not to exceed $5,500 for each day during which the violation continues.
Tier Two civil money penalties may be assessed pursuant to section
8(i)(2)(B) of the FDIA (12 U.S.C. 1818(i)(2)(B)) in an amount not to
exceed $27,500 for each day during which the violation, practice or
breach continues. Tier Three civil money penalties may be assessed
pursuant to section 8(i)(2)(C)(12 U.S.C. 1818(i)(2)(C)) in an amount not
to exceed, in the case of any person other than an insured depository
institution $1,100,000 or, in the case of any insured depository
institution, an amount not to exceed the lesser of $1,100,000 or 1
percent of the total assets of such institution for each day during
which the violation, practice, or breach continues.
(A) Civil money penalties may be assessed pursuant to section
8(i)(2) of the FDIA in the amounts set forth in this paragraph (c)(3)(i)
for violations of various consumer laws, including, the Home Mortgage
Disclosure Act (12 U.S.C. 2804 et seq. and 12 CFR 203.6), the Expedited
Funds Availability Act (12 U.S.C. 4001 et seq.), the Truth in Savings
Act (12 U.S.C. 4301 et seq.), the Real Estate Settlement Procedures Act
(12 U.S.C. 2601 et seq. and 12 CFR part 3500), the Truth in Lending Act
(15 U.S.C. 1601 et seq.), the Fair Credit Reporting Act (15 U.S.C. 1681
et seq.), the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) the
Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.), the
Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) and the Fair
Housing Act (42 U.S.C. 3601 et seq.) in
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the amounts set forth in paragraphs (c)(3)(i) through (c)(3)(iii) of
this section.
(ii) Civil money penalties assessed pursuant to section 7(c) of the
FDIA for late filing or the submission false or misleading certified
statements. Tier One civil money penalties may be assessed pursuant to
section 7(c)(4)(A) of the FDIA (12 U.S.C. 1817(c)(4)(A)) in an amount
not to exceed $2,000 for each day during which the failure to file
continues or the false or misleading information is not corrected. Tier
Two civil money penalties may be assessed pursuant to section 7(c)(4)(B)
of the FDIA (12 U.S.C. 1817(c)(4)(B)) in an amount not to exceed $22,000
for each day during which the failure to file continues or the false or
misleading information is not corrected. Tier Three civil money
penalties may be assessed pursuant to section 7(c)(4)(C) in an amount
not to exceed the lesser of $1,100,000 or 1 percent of the total assets
of the institution for each day during which the failure to file
continues or the false or misleading information is not corrected.
(iii) Civil money penalties assessed pursuant to section 10(e)(4) of
the FDIA for refusal to allow examination or to provide required
information during an examination. Pursuant to section 10(e)(4) of the
FDIA (12 U.S.C. 1820(e)(4)), civil money penalties may be assessed
against any affiliate of an insured depository institution which refuses
to permit a duly-appointed examiner to conduct an examination or to
provide information during the course of an examination as set forth in
section 20(b) of the FDIA (12 U.S.C. 1820(b)), in an amount not to
exceed $5,500 for each day the refusal continues.
(iv) Civil money penalties assessed pursuant to section 18(a)(3) of
the FDIA for incorrect display of insurance logo. Pursuant to section
18(a)(3) of the FDIA (12 U.S.C. 1828(a)(3)), civil money penalties may
be assessed against an insured depository institution which fails to
correctly display its insurance logo pursuant to that section, in an
amount not to exceed $110 for each day the violation continues.
(v) Civil money penalties assessed pursuant to section 18(h) of the
FDIA for failure to file a certified statement or to pay assessment.
Pursuant to section 18(h) of the FDIA (12 U.S.C. 1828(h)), a civil money
penalty may be assessed against an insured depository institution which
wilfully fails or refuses to file a certified statement or pay any
assessment required under the FDIA in an amount not to exceed $110 for
each day the violation continues.
(vi) Civil money penalties assessed pursuant to section 19b(j) of
the FDIA for recordkeeping violations. Pursuant to section 19b(j) of the
FDIA (12 U.S.C. 1829b(j)), civil money penalties may be assessed against
an insured depository institution and any director, officer or employee
thereof who wilfully or through gross negligence violates or causes a
violation of the recordkeeping requirements of that section or its
implementing regulations in an amount not to exceed $11,000 per
violation.
(vii) Civil fine pursuant to 12 U.S.C. 1832(c) for violation of
provisions forbidding interest-bearing demand deposit accounts. Pursuant
to 12 U.S.C. 1832(c), any depository institution which violates the
prohibition on deposit or withdrawal from interest-bearing accounts via
negotiable or transferable instruments payable to third parties shall be
subject to a fine of $1,100 per violation.
(viii) Civil penalties for violations of security measure
requirements under 12 U.S.C. 1884. Pursuant to 12 U.S.C. 1884, an
institution which violates a rule establishing minimum security
requirements as set forth in 12 U.S.C. 1882, shall be subject to a civil
penalty not to exceed $110 for each day of the violation.
(ix) Civil money penalties assessed pursuant to the Bank Holding
Company Act of 1970 for prohibited tying arrangements. Pursuant to the
Bank Holding Company Act of 1970, Tier One civil money penalties may be
assessed pursuant to 12 U.S.C. 1972(2)(F)(i) in an amount not to exceed
$5,500 for each day during which the violation continues. Tier Two civil
money penalties may be assessed pursuant to 12 U.S.C. 1972(2)(F)(ii) in
an amount not to exceed $27,500 for each day during which the violation,
practice or breach continues. Tier Three civil money penalties may be
assessed pursuant to 12 U.S.C. 1972(2)(F)(iii) in an amount not to
exceed, in the case of any person
[[Page 109]]
other than an insured depository institution $1,100,000 for each day
during which the violation, practice, or breach continues or, in the
case of any insured depository institution, an amount not to exceed the
lesser of $1,100,000 or 1 percent of the total assets of such
institution for each day during which the violation, practice, or breach
continues.
(x) Civil money penalties assessed pursuant to the International
Banking Act of 1978. Pursuant to the International Banking Act of 1978
(IBA) (12 U.S.C. 3108(b)), civil money penalties may be assessed for
failure to comply with the requirements of the IBA pursuant to section
8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)), in the amounts set forth in
paragraph (c)(3)(i) of this section.
(xi) Civil money penalties assessed for appraisal violations.
Pursuant to 12 U.S.C. 3349(b), where a financial institution seeks,
obtains, or gives any other thing of value in exchange for the
performance of an appraisal by a person that the institution knows is
not a state certified or licensed appraiser in connection with a
federally related transaction, a civil money penalty may be assessed
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)) in the
amounts set forth in paragraph (c)(3)(i) of this section.
(xii) Civil money penalties assessed pursuant to International
Lending Supervision Act. Pursuant to the International Lending
Supervision Act (ILSA) (12 U.S.C. 3909(d)), the CMP that may be assessed
against any banking institution or any officer, director, employee,
agent or other person participating in the conduct of the affairs of
such banking institution is amount not to exceed $1,100 for each day a
violation of the ILSA or any rule, regulation or order issued pursuant
to ILSA continues.
(xiii) Civil money penalties assessed for violations of the
Community Development Banking and Financial Institution Act. Pursuant to
the Community Development Banking and Financial Institution Act
(Community Development Banking Act) (12 U.S.C. 4717(b)) a civil money
penalty may be assessed for violations of the Community Development
Banking Act pursuant to section 8(i)(2) of the FDIA (12 U.S.C.
1818(i)(2)), in the amounts set forth in paragraph (c)(3)(i) of this
section.
(xiv) Civil money penalties assessed for violations of the
Securities Exchange Act of 1934. Pursuant to section 21B of the
Securities Exchange Act of 1934 (Exchange Act) (15 U.S.C. 78u-2), civil
money penalties may be assessed for violations of certain provisions of
the Exchange Act, where such penalties are in the public interest. Tier
One civil money penalties may be assessed pursuant to 15 U.S.C. 78u-
2(b)(1) in an amount not to exceed $5,500 for a natural person or
$55,000 for any other person for violations set forth in 15 U.S.C. 78u-
2(a). Tier Two civil money penalties may be assessed pursuant to 15
U.S.C. 78u-2(b)(2) in an amount not to exceed--for each violation set
forth in 15 U.S.C. 78u-2(a)--$55,000 for a natural person or $275,000
for any other person if the act or omission involved fraud, deceit,
manipulation, or deliberate or reckless disregard of a regulatory
requirement. Tier Three civil money penalties may be assessed pursuant
to 15 U.S.C. 78u-2(b)(3) for each violation set forth in 15 U.S.C. 78u-
2(a), in an amount not to exceed $110,000 for a natural person or
$550,000 for any other person, if the act or omission involved fraud,
deceit, manipulation, or deliberate or reckless disregard of a
regulatory requirement; and such act or omission directly or indirectly
resulted in substantial losses, or created a significant risk of
substantial losses to other persons or resulted in substantial pecuniary
gain to the person who committed the act or omission.
(xv) Civil money penalties assessed for false claims and statements
pursuant to the Program Fraud Civil Remedies Act. Pursuant to the
Program Fraud Civil Remedies Act (31 U.S.C. 3802), civil money penalties
of not more than $5,500 per day may be assessed for violations involving
false claims and statements.
(xvi) Civil money penalties assessed for violations of the Flood
Disaster Protection Act. Pursuant to the Flood Disaster Protection Act
(FDPA)(42 U.S.C. 4012a(f)), civil money penalties may be assessed
against any regulated lending institution that engages in a pattern or
practice of violations of the FDPA in
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an amount not to exceed $350 per violation, and not to exceed a total of
$105,000 annually.
[56 FR 37975, Aug. 9, 1991, as amended at 61 FR 57991, Nov. 12, 1996]
Sec. 308.133 Effective date of, and payment under, an order to pay.
(a) Effective date. (1) Unless otherwise provided in the Notice,
except in situations covered by paragraph (a)(2) of this section, civil
penalties assessed pursuant to this subpart are due and payable 60 days
after the Notice is served upon the respondent.
(2) If the respondent both requests a hearing and serves an answer,
civil penalties assessed pursuant to this subpart are due and payable 60
days after an order to pay, issued after the hearing or upon default, is
served upon the respondent, unless the order provides for a different
period of payment. Civil penalties assessed pursuant to an order to pay
issued upon consent are due and payable within the time specified
therein.
(b) Payment. All penalties collected under this section shall be
paid over to the Treasury of the United States.
Subpart I--Rules and Procedures for Imposition of Sanctions Upon
Municipal Securities Dealers or Persons Associated With Them and
Clearing Agencies or Transfer Agents
Sec. 308.134 Scope.
The rules and procedures in this subpart, subpart B of the Local
Rules and the Uniform Rules shall apply to proceedings by the Board of
Directors or its designee:
(a) To censure, limit the activities of, suspend, or revoke the
registration of, any municipal securities dealer for which the FDIC is
the appropriate regulatory agency;
(b) To censure, suspend, or bar from being associated with such a
municipal securities dealer, any person associated with such a municipal
securities dealer; and
(c) To deny registration, to censure limit the activities of,
suspend, or revoke the registration of, any transfer agent or clearing
agency for which the FDIC is the appropriate regulatory agency. This
subpart and the Uniform Rules shall not apply to proceedings to postpone
or suspend registration of a transfer agent or clearing agency pending
final determination of denial or revocation of registration.
Sec. 308.135 Grounds for imposition of sanctions.
(a) Action under section 15(b)(4) of the Exchange Act. The Board of
Directors or its designee may issue and have served upon any municipal
securities dealer for which the FDIC is the appropriate regulatory
agency, or any person associated or seeking to become associated with a
municipal securities dealer for which the FDIC is the appropriate
regulatory agency, a written notice of its intention to censure, limit
the activities or functions or operations of, suspend, or revoke the
registration of, such municipal securities dealer, or to censure,
suspend, or bar the person from being associated with the municipal
securities dealer, when the Board of Directors or its designee
determines:
(1) That such municipal securities dealer or such person
(i) Has committed any prohibited act or omitted any required act
specified in subparagraph (A), (D), or (E) of section 15(b)(4) of the
Exchange Act, as amended (15 U.S.C. 78o);
(ii) Has been convicted of any offense specified in section
15(b)(4)(B) of the Exchange Act within ten years of commencement of
proceedings under this subpart; or
(iii) Is enjoined from any act, conduct, or practice specified in
section 15(b)(4)(C) of the Exchange Act; and
(2) That it is in the public interest to impose any of the sanctions
set forth in paragraph (a) of this section.
(b) Action under sections 17 and 17A of the Exchange Act. The Board
of Directors or its designee may issue, and have served upon any
transfer agent or clearing agency for which the FDIC is the appropriate
regulatory agency, a written Notice of its intention to deny
registration to, censure, place limitations on the activities or
function or operations of, suspend, or revoke the registration of, the
transfer agent or
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clearing agency, when the Board of Directors or its designee determines:
(1) That the transfer agent or clearing agency has willfully
violated, or is unable to comply with, any applicable provision of
section 17 or 17A of the Exchange Act, as amended, or any applicable
rule or regulation issued pursuant thereto; and
(2) That it is in the public interest to impose any of the sanctions
set forth in paragraph (b) of this section.
Sec. 308.136 Notice to and consultation with the Securities and Exchange Commission.
Before initiating any proceedings under Sec. 308.135, the FDIC
shall:
(a) Notify the Securities and Exchange Commission of the identity of
the municipal securities dealer or associated person against whom
proceedings are to be initiated, and the nature of and basis for the
proposed action; and
(b) Consult with the Commission concerning the effect of the
proposed action on the protection of investors and the possibility of
coordinating the action with any proceeding by the Commission against
the municipal securities dealer or associated person.
Sec. 308.137 Effective date of order imposing sanctions.
An order issued by the Board of Directors after a hearing or an
order issued upon default shall become effective at the expiration of 30
days after the service of the order, except that an order of censure,
denial, or revocation of registration is effective when served. An order
issued upon consent shall become effective at the time specified
therein. All orders shall remain effective and enforceable except to the
extent they are stayed, modified, terminated, or set aside by the Board
of Directors, its designee, or a reviewing court, provided that orders
of suspension shall continue in effect no longer than 12 months.
Subpart J--Rules and Procedures Relating to Exemption Proceedings Under
Section 12(h) of the Securities Exchange Act of 1934
Sec. 308.138 Scope.
The rules and procedures of this subpart J shall apply to
proceedings by the Board of Directors or its designee to exempt, in
whole or in part, an issuer of securities from the provisions of
sections 12(g), 13, 14(a), 14(c), 14(d), or 14(f) of the Exchange Act,
as amended (15 U.S.C. 781, 78m, 78n (a), (c) (d) or (f)), or to exempt
an officer or a director or beneficial owner of securities of such an
issuer from the provisions of section 16 of the Exchange Act (15 U.S.C.
78p).
Sec. 308.139 Application for exemption.
Any interested person may file a written application for an
exemption under this subpart with the Executive Secretary, Federal
Deposit Insurance Corporation, 550 17th Street NW., Washington, DC
20429. The application shall specify the exemption sought and the reason
therefor, and shall include a statement indicating why the exemption
would be consistent with the public interest or the protection of
investors.
Sec. 308.140 Newspaper notice.
(a) General rule. If the Board of Directors or its designee, in its
sole discretion, decides to further consider an application for
exemption, there shall be served upon the applicant instructions to
publish one notification in a newspaper of general circulation in the
community where the main office of the issuer is located. The applicant
shall furnish proof of such publication to the Executive Secretary or
such other person as may be directed in the instructions.
(b) Contents. The notification shall contain the name and address of
the issuer and the name and title of the applicant, the exemption
sought, a statement that a hearing will be held, and a
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statement that within 30 days of publication of the newspaper notice,
interested persons may submit to the FDIC written comments on the
application for exemption and a written request for an opportunity to be
heard. The address of the FDIC must appear in the notice.
Sec. 308.141 Notice of hearing.
Within ten days after expiration of the period for receipt of
comments pursuant to Sec. 308.140, the Executive Secretary shall serve
upon the applicant and any person who has requested an opportunity to be
heard written notification indicating the place and time of the hearing.
The hearing shall be held not later than 30 days after service of the
notification of hearing. The notification shall contain the name and
address of the presiding officer designated by the Executive Secretary
and a statement of the matters to be considered.
Sec. 308.142 Hearing.
(a) Proceedings are informal. Formal rules of evidence, the
adjudicative procedures of the APA (5 U.S.C. 554-557), the Uniform Rules
and Sec. 308.108 of subpart B of the Local Rules shall not apply to
hearings under this subpart.
(b) Hearing Procedure. (1) Parties to the hearing may appear
personally or through counsel and shall have the right to introduce
relevant and material documents and to make an oral statement.
(2) There shall be no discovery in proceeding under this subpart J.
(3) The presiding officer shall have discretion to permit
presentation of witnesses within specified time limits, provided that a
list of witnesses is furnished to the presiding officer prior to the
hearing. Witnesses shall be sworn, unless otherwise directed by the
presiding officer. The presiding officer may ask questions of any
witness and each party may cross-examine any witness presented by an
opposing party.
(4) The proceedings shall be on the record and the transcript shall
be promptly submitted to the Board of Directors. The presiding officer
shall make recommendations to the Board of Directors, unless the Board
of Directors, in its sole discretion, directs otherwise.
Sec. 308.143 Decision of Board of Directors.
Following submission of the hearing transcript to the Board of
Directors, the Board of Directors may grant the exemption where it
determines, by reason of the number of public investors, the amount of
trading interest in the securities, the nature and extent of the
issuer's activities, the issuer's income or assets, or otherwise, that
the exemption is consistent with the public interest or the protection
of investors. Any exemption shall be set forth in an order specifying
the terms of the exemption, the person to whom it is granted, and the
period for which it is granted. A copy of the order shall be served upon
each party to the proceeding.