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2000 - Rules and Regulations
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PART 369PROHIBITION AGAINST USE OF INTERSTATE BRANCHES PRIMARILY
FOR DEPOSIT PRODUCTION
Sec. 369.1
Purpose and scope.
369.2
Definitions.
369.3
Loan-to-deposit ratio screen.
369.4
Credit needs determination.
369.5
Sanctions.
Authority: 12 U.S.C. 1819 (Tenth) and 1835a.
SOURCE: The provisions of this Part 369 appear at 62 Fed. Reg.
47737, September 10, 1997, effective October 10, 1997, except as
otherwise noted.
§ 369.1 Purpose and scope.
(a) Purpose. The purpose of this part is to implement
section 109 (12 U.S.C. 1835a)
of the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (Interstate Act).
(b) Scope--(1) This part applies to any state nonmember
bank that has operated a covered interstate branch for a period of at
least one year.
(2) This part describes the requirements imposed under 12 U.S.C.
1835a, which requires the appropriate federal banking agencies (the
FDIC, the Office of the Comptroller of the Currency, and the Board of
Governors of the Federal Reserve System) to prescribe uniform rules
that prohibit a bank from using any authority to engage in interstate
branching pursuant to the Interstate Act, or any amendment made by the
Interstate Act to any other provision of law, primarily for the purpose
of deposit production.
[Codified to 12 C.F.R.
§ 369.1]
§ 369.2 Definitions.
For purposes of this part, the following definitions apply:
(a) Bank means, unless the context indicates otherwise:
(1) A state nonmember bank; and
(2) A foreign bank as that term is defined in
12 U.S.C. 3101(7) and
12 CFR 346.1(a).
(b) Covered interstate branch means:
(1) Any branch of a state nonmember bank, and any insured branch
of a foreign bank licensed by a state, that:
(i) Is established or acquired outside the bank's home state
pursuant to the interstate branching authority granted by the
Interstate Act or by any amendment made by the Interstate Act to any
other provision of law; or
(ii) Could not have been established or acquired outside of the
bank's home state but for the establishment or acquisition of a branch
described in paragraph (b)(1)(i) of this section; and
(2) Any bank or branch of a bank controlled by an out-of-state
bank holding company.
(c) Home state means:
(1) With respect to a state bank, the state that chartered the
bank;
(2) With respect to a national bank, the state in which the main
office of the bank is located;
(3) With respect to a bank holding company, the state in which
the total deposits of all banking subsidiaries of such company are the
largest on the later of:
(i) July 1, 1966; or
(ii) The date on which the company becomes a bank holding company
under the Bank Holding Company Act;
(4) With respect to a foreign bank:
(i) For purposes of determining whether a U.S. branch of a
foreign bank is a covered interstate branch, the home state of the
foreign bank as determined in accordance with 12 U.S.C. 3103(c) and 12
CFR 347.202(j); and
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(ii) For purposes of determining whether a branch of a U.S. bank
controlled by a foreign bank is a covered interstate branch, the state
in which the total deposits of all banking subsidiaries of such foreign
bank are the largest on the later of:
(A) July 1, 1966; or
(B) The date on which the foreign bank becomes a bank holding
company under the Bank Holding Company Act.
(d) Host state means a state in which a covered
interstate branch is established or acquired.
(e) Host state loan-to-deposit ratio generally means,
with respect to a particular host state, the ratio of total loans in
the host state relative to total deposits from the host state for all
banks (including institutions covered under the definition of
"bank" in 12 U.S.C.
1813(a)(1)) that have that state as their home state, as
determined and updated periodically by the appropriate Federal banking
agencies and made available to the public.
(f) Out-of-state bank holding company means, with
respect to any state, a bank holding company whose home state is
another state.
(g) State means state as that term is defined in 12
U.S.C. 1813(a)(3).
(h) Statewide loan-to-deposit ratio means, with respect
to a bank, the ratio of the bank's loans to its deposits in a state in
which the bank has one or more covered interstate branches, as
determined by the FDIC.
[Codified to 12 C.F.R. § 369.2]
[Section 369.2 amended at 67 Fed. Reg. 38848, June 6, 2002,
effective October 1, 2002]
§ 369.3 Loan-to-deposit ratio screen.
(a) Application of screen. Beginning no earlier than one
year after a covered interstate branch is acquired or established, the
FDIC will consider whether the bank's statewide loan-to-deposit ratio
is less than 50 percent of the relevant host state loan-to-deposit
ratio.
(b) Results of screen. (1) If the FDIC determines that
the bank's statewide loan-to-deposit ratio is 50 percent or more of the
host state loan-to-deposit ratio, no further consideration under this
part is required.
(2) If the FDIC determines that the bank's statewide
loan-to-deposit ratio is less than 50 percent of the host state
loan-to-deposit ratio, or if reasonably available data are insufficient
to calculate the bank's statewide loan-to-deposit ratio, the FDIC will
make a credit needs determination for the bank as provided in
§ 369.4.
[Codified to 12 C.F.R. § 369.3]
[Section 369.3 amended at 67 Fed. Reg. 38849, June 6, 2002,
effective October 1,
2002]
§ 369.4 Credit needs determination.
(a) In general. The FDIC will review the loan portfolio
of the bank and determine whether the bank is reasonably helping to
meet the credit needs of the communities in the host state that are
served by the bank.
(b) Guidelines. The FDIC will use the following
considerations as guidelines when making the determination pursuant to
paragraph (a) of this section:
(1) Whether covered interstate branches were formerly part of a
failed or failing depository institution;
(2) Whether covered interstate branches were acquired under
circumstances where there was a low loan-to-deposit ratio because of
the nature of the acquired institution's business or loan portfolio;
(3) Whether covered interstate branches have a high concentration
of commercial or credit card lending, trust services, or other
specialized activities, including the extent to which the covered
interstate branches accept deposits in the host state;
(4) The Community Reinvestment Act (CRA) ratings received by the
bank, if any, under 12 U.S.C.
2901 et seq.;
{{10-31-08 p.3237}}
(5) Economic conditions, including the level of loan demand,
within the communities served by the covered interstate branches;
(6) The safe and sound operation and condition of the bank; and
(7) The FDIC's Community Reinvestment regulations
(12 CFR part 345) and
interpretations of those regulation.
[Codified to 12 C.F.R.
§ 369.4]
§ 369.5 Sanctions.
(a) In general. If the FDIC determines that a bank is
not reasonably helping to meet the credit needs of the communities
served by the bank in the host state, and that the bank's statewide
loan-to-deposit ratio is less than 50 percent of the host state
loan-to-deposit ratio, the FDIC:
(1) May order that a bank's covered interstate branch or branches
be closed unless the bank provides reasonable assurances to the
satisfaction of the FDIC, after an opportunity for public comment, that
the bank has an acceptable plan under which the bank will reasonably
help to meet the credit needs of the communities served by the bank in
the host state; and
(2) Will not permit the bank to open a new branch in the host
state that would be considered to be a covered interstate branch
unless the bank provides reasonable assurances to the satisfaction of
the FDIC, after an opportunity for public comment, that the bank will
reasonably help to meet the credit needs of the community that the new
branch will serve.
(b) Notice prior to closure of a covered interstate branch.
Before exercising the FDIC's authority to order the bank to close
a covered interstate branch, the FDIC will issue to the bank a notice
of the FDIC's intent to order the closure and will schedule a hearing
within 60 days of issuing the notice.
(c) Hearing. The FDIC will conduct a hearing scheduled
under paragraph (b) of this section in accordance with the provisions
of 12 U.S.C. 1818(h) and
12 CFR part 308.
[Codified to 12 C.F.R. 369.5]
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