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6000 - Bank Holding Company Act
Subpart EChange in Bank Control
§ 225.41 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 Board 60 days' written notice, as specified in § 225.43 of
this subpart, before acquiring control of a state member bank or bank
holding company, unless the acquisition is exempt under § 225.42.
(b) Definitions. For purposes of this subpart:
(1) Acquisition includes a purchase, assignment,
transfer, or pledge of voting securities, or an increase in percentage
ownership of a state member bank or a bank holding company resulting
from a redemption of voting securities.
(2) Acting in concert includes knowing participation
in a joint activity or parallel action towards a common goal of
acquiring control of a state member bank or bank holding company
whether or not pursuant to an express agreement.
(3) Immediate family includes a person's father,
mother, stepfather, stepmother, brother, sister, stepbrother,
stepsister, son, daughter, stepson, stepdaughter, grandparent,
grandson, granddaughter, father-in-law, mother-in-law, brother-in-law,
sister-in-law, son-in-law, daughter-in-law, the spouse of any of the
foregoing, and the person's spouse.
(c) Acquisitions requiring prior
notice--(1) Acquisition of control. The acquisition of
voting securities of a state member bank or bank holding company
constitutes the acquisition of control under the Bank Control Act,
requiring prior notice to the Board, if, immediately after the
transaction, the acquiring person (or persons acting in concert) will
own, control, or hold with power to vote 25 percent or more of any
class of voting securities of the institution.
(2) Rebuttable presumption of control. The Board
presumes that an acquisition of voting securities of a state member
bank or bank holding company constitutes the acquisition of control
under the Bank Control Act, requiring prior notice to the Board, 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 securities of the institution,
and if:
(i) The institution has registered securities 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 securities immediately
after the transaction. 1
(d) Rebuttable presumption of concerted action. The
following persons shall be presumed to be acting in concert for
purposes of this subpart:
(1) A company and any controlling shareholder, partner, trustee,
or management official of the company, if both the company and the
person own voting securities of the state member bank or bank holding
company;
(2) An individual and the individual's immediate family;
(3) Companies under common control;
(4) Persons that are parties to any agreement, contract,
understanding, relationship, or other arrangement, whether written or
otherwise, regarding the acquisition, voting, or transfer of control of
voting securities of a state member bank or bank holding company, other
than through a revocable proxy as described in § 225.42(a)(5) of this
subpart;
(5) Persons that have made, or propose to make, a joint filing
under sections 13 or 14 of the Securities Exchange Act of 1934
(15 U.S.C. 78m or
78n), and the rules promulgated
thereunder by the Securities and Exchange Commission; and
{{2-28-97 p.6110.12}}
(6) A person and any trust for which the person serves as
trustee.
(e) Acquisitions of loans in default. The Board presumes
an acquisition of a loan in default that is secured by voting
securities of a state member bank or bank holding company to be an
acquisition of the underlying securities for purposes of this section.
(f) Other transactions. Transactions other than those
set forth in paragraph (c) of this section resulting in a person's
control of less than 25 percent of a class of voting securities of a
state member bank or bank holding company are not deemed by the Board
to constitute control for purposes of the Bank Control Act.
(g) Rebuttal of presumptions. Prior notice to the Board
is not required for any acquisition of voting securities under the
presumption of control set forth in this section, if the Board finds
that the acquisition will not result in control. The Board shall 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 conference.
[Codified to 12 C.F.R. § 225.41]
[Section 225.41 amended at 62 Fed. Reg. 9338, February 28, 1997,
effective April 21, 1997]
§ 225.42 Transactions not requiring prior notice.
(a) Exempt transactions. The following transactions do
not require notice to the Board under this subpart:
(1) Existing control relationships. The acquisition of
additional voting securities of a state member bank or bank holding
company by a person who:
(i) Continuously since March 9, 1979 (or since the institution
commenced business, if later), held power to vote 25 percent or more of
any class of voting securities of the institution; or
(ii) Is presumed, under § 225.41(c)(2) of this subpart, to have
controlled the institution continuously since March 9, 1979, if the
aggregate amount of voting securities held does not exceed 25 percent
or more of any class of voting securities of the institution or, in
other cases, where the Board determines that the person has controlled
the bank continuously since March 9, 1979;
(2) Increase of previously authorized acquisitions.
Unless the Board or the Reserve Bank otherwise provides in
writing, the acquisition of additional shares of a class of voting
securities of a state member bank or bank holding company by any person
(or persons acting in concert) who has lawfully acquired and maintained
control of the institution (for purposes of § 225.41(c) of this
subpart), after complying with the procedures and receiving approval to
acquire voting securities of the institution under this subpart, or in
connection with an application approved under section 3 of the BHC Act
(12 U.S.C. 1842; § 225.11 of subpart B of this part) or section 18(c)
of the Federal Deposit Insurance Act (Bank Merger Act, 12 U.S.C.
1828(c));
(3) Acquisitions subject to approval under BHC Act or Bank
Merger Act. Any acquisition of voting securities subject to
approval under section 3 of the BHC Act
(12 U.S.C. 1842;
§ 225.11 of subpart B of
this part), or section 18(c) of the Federal Deposit Insurance Act (Bank
Merger Act, 12 U.S.C.
1828(c));
(4) Transactions exempt under BHC Act. Any transaction
described in sections 2(a)(5), 3(a)(A), or 3(a)(B) of the BHC Act
(12 U.S.C. 1841(a)(5),
1842(a)(A), and 1842(a)(B)), by
a person described in those provisions;
(5) Proxy solicitation. The acquisition of the power
to vote securities of a state member bank or bank holding company
through receipt of a revocable proxy in connection with a proxy
solicitation for the purposes of conducting business at a regular or
special meeting of the institution, if the proxy terminates within a
reasonable period after the meeting;
(6) Stock dividends. The receipt of voting securities
of a state member bank or bank holding company through a stock dividend
or stock split if the proportional interest of the recipient in the
institution remains substantially the same; and
{{2-28-97 p.6110.13}}
(7) Acquisition of foreign banking organization. The
acquisition of voting securities of a qualifying foreign banking
organization. (This exemption does not extend to the reports and
information required under paragraphs 9, 10, and 12 of the Bank Control
Act (12 U.S.C. 1817(j)(9),
(10), and (12)) and § 225.44 of this subpart.)
(b) Prior notice exemption. (1) The following
acquisitions of voting securities of a state member bank or bank
holding company, which would otherwise require prior notice under this
subpart, are not subject to the prior notice requirements if the
acquiring person notifies the appropriate Reserve Bank within 90
calendar days after the acquisition and provides any relevant
information requested by the Reserve Bank:
(i) Acquisition of voting securities through inheritance;
(ii) Acquisition of voting securities as a bona fide
gift; and
(iii) Acquisition of voting securities in satisfaction of a debt
previously contracted (DPC) in good faith.
(2) The following acquisitions of voting securities of a state
member bank or bank holding company, which would otherwise require
prior notice under this subpart, are not subject to the prior notice
requirements if the acquiring person does not reasonably have advance
knowledge of the transaction, and provides the written notice required
under section 225.43 to the appropriate Reserve Bank within 90 calendar
days after the transaction occurs:
(i) Acquisition of voting securities resulting from a redemption
of voting securities by the issuing bank or bank holding company; and
(ii) Acquisition of voting securities as a result of actions
(including the sale of securities) by any third party that is not
within the control of the acquiror.
(3) Nothing in paragraphs (b)(1) or (b)(2) of this section limits
the authority of the Board to disapprove a notice pursuant to
§ 225.43(h) of this subpart.
[Codified to 12 C.F.R.§ 225.42]
[Source: Section 225.42 amended at 55 Fed. Reg. 47845, November 16,
1990, effective November 9, 1990; 62 Fed. Reg. 9339, February 28, 1997,
effective April 21, 1997]
§ 225.43 Procedures for filing, processing, publishing, and
acting on notices.
(a) Filing notice. (1) A notice required under this
subpart shall be filed with the appropriate Reserve Bank and shall
contain all the information required by paragraph 6 of the Bank Control
Act (12 U.S.C. 1817(j)(6)), or
prescribed in the designated Board form.
(2) The Board may waive any of the informational requirements of
the notice if the Board determines that it is in the public interest.
(3) A notificant shall notify the appropriate Reserve Bank or the
Board immediately of any material changes in a notice submitted to the
Reserve Bank, 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 Board
form, together with a statement of any material changes since the date
of the statement or summary. The Reserve Bank or the Board,
nevertheless, may request additional information, if appropriate.
(b) Acceptance of notice. The 60-day notice period
specified in § 225.41 of this subpart begins on the date of receipt
of a complete notice. The Reserve Bank shall notify the person or
persons submitting a notice under this subpart in writing of the date
the notice is or was complete and thereby accepted for processing. The
Reserve Bank or the Board may request additional relevant information
at any time after the date of acceptance.
(c) Publication--(1) Newspaper Announcement.
Any person(s) filing a notice under this subpart shall publish, in
a form prescribed by the Board, 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 head office of the state member bank to be acquired is
located or, in the case of a proposed acquisition of a
bank
{{2-28-97 p.6110.14}}holding company, in the community in
which its head office is located and in the community in which the head
office of each of its subsidiary banks is located. The announcement
shall be published no earlier than 15 calendar days before the filing
of the notice with the appropriate Reserve Bank and no later than 10
calendar days after the filing date; and the publisher's affidavit of a
publication shall be provided to the appropriate Reserve Bank.
(2) Contents of newspaper announcement. The newspaper
announcement shall state:
(i) The name of each person identified in the notice as a
proposed acquiror of the bank or bank holding company;
(ii) The name of the bank or bank holding company to be acquired,
including the name of each of the bank holding company's subsidiary
banks; and
(iii) A statement that interested persons may submit comments on
the notice to the Board or the appropriate Reserve Bank for a period of
20 days, or such shorter period as may be provided, pursuant to
paragraph (c)(5) of this section.
(3) Federal Register announcement. The
Board shall, upon filing of a notice under this subpart, publish
announcement in the Federal Register of receipt of the
notice. The Federal Register announcement shall contain the
information required under paragraphs (c)(2)(i) and (c)(2)(ii) of this
section and a statement that interested persons may submit comments on
the proposed acquisition for a period of 15 calendar days, or such
shorter period as may be provided, pursuant to paragraph (c)(5) of this
section. The Board may waive publication in the Federal Register,
if the Board determines that such action is appropriate.
(4) Delay of publication. The Board may permit delay
in the publication required under paragraphs (c)(1) and (c)(3) of this
section if the Board determines, for good cause shown, that it is in
the public interest to grant such delay. Requests for delay of
publication may be submitted to the appropriate Reserve Bank.
(5) Shortening or waiving notice. The Board may
shorten 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 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 or bank
holding company to be acquired.
(6) Consideration of public comments. In acting upon a
notice filed under this subpart, the Board shall consider all public
comments received in writing within the period specified in the
newspaper or Federal Register announcement, whichever is
later. At the Board's option, comments received after this period may,
but need not, be considered.
(7) Standing. No person (other than the acquiring
person) who submits comments or information on a notice filed under
this subpart shall thereby become a party to the proceeding or acquire
any standing or right to participate in the Board's consideration of
the notice or to appeal or otherwise contest the notice or the Board's
action regarding the notice.
(d) Time period for Board
action--(1) Consummation of acquisition--(i) The
notificant(s) may consummate the proposed acquisition 60 days after
submission to the Reserve Bank of a complete notice under paragraph (a)
of this section, unless within that period the Board disapproves the
proposed acquisition or extends the 60-day period, as provided under
paragraph (d)(2) of this section.
(ii) The notificant(s) may consummate the proposed transaction
before the expiration of the 60-day period if the Board notifies the
notificant(s) in writing of the Board's intention not to disapprove the
acquisition.
(2) Extensions of time period. (i) The Board may
extend the 60-day period in paragraph (d)(1) of this section for an
additional 30 days by notifying the acquiring person(s).
(ii) The Board may further extend the period during which it may
disapprove a notice for two additional periods of not more than 45 days
each, if the Board determines that:
{{2-28-97 p.6110.15}}
(A) Any acquiring person has not furnished all the information
required under paragraph (a) of this section;
(B) Any material information submitted is substantially
inaccurate;
(C) The Board is unable to complete the investigation of an
acquiring person because of inadequate cooperation or delay by that
person; or
(D) Additional time is needed to investigate and determine that
no acquiring person has a record of failing to comply with the
requirements of the Bank Secrecy Act, subchapter II of Chapter 53 of
Title 31, United States Code.
(iii) If the Board extends the time period under this paragraph,
it shall notify the acquiring person(s) of the reasons therefor and
shall include a statement of the information, if any, deemed incomplete
or inaccurate.
(e) Advice to bank supervisory agencies. (1) Upon
accepting a notice relating to acquisition of securities of a state
member bank, the Reserve Bank shall send a copy of the notice to the
appropriate state bank supervisor, which shall have 30 calendar days
from the date the notice is sent in which to submit its views and
recommendations to the Board. The Reserve Bank also shall send a copy
of any notice to the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, and the Office of Thrift Supervision.
(2) If the Board finds that it must act immediately in order to
prevent the probable failure of the bank or bank holding company
involved, the Board may dispense with or modify the requirements for
notice to the state supervisor.
(f) Investigation and report. (1) After receiving a
notice under this subpart, the Board or the appropriate Reserve Bank
shall conduct an investigation of the competence, experience,
integrity, and financial ability of each person by and for whom an
acquisition is to be made. The Board shall also make an independent
determination of the accuracy and completeness of any information
required to be contained in a notice under paragraph (a) of this
section. In investigating any notice accepted under this subpart, the
Board or Reserve Bank may solicit information or views from any person,
including any bank or bank holding company involved in the notice, and
any appropriate state, federal, or foreign governmental authority.
(2) The Board or the appropriate Reserve Bank shall prepare a
written report of its investigation, which shall contain, at a minimum,
a summary of the results of the investigation.
(g) Factors considered in acting on notices. In
reviewing a notice filed under this subpart, the Board shall consider
the information in the record, the views and recommendations of the
appropriate bank supervisor, and any other relevant information
obtained during any investigation of the notice.
(h) Disapproval and hearing--(1) Disapproval of
notice. The Board may disapprove an acquisition if it finds
adverse effects with respect to any of the factors set forth in
paragraph 7 of the Bank Control Act (12 U.S.C. 1817(j)(7)) (i.e.,
competitive, financial, managerial, banking, or incompleteness of
information).
(2) Disapproval notification. Within three days after
its decision to issue a notice of intent to disapprove any proposed
acquisition, the Board shall notify the acquiring person in writing of
the reasons for the action.
(3) Hearing. Within 10 calendar days of receipt of the
notice of the Board's intent to disapprove, the acquiring person may
submit a written request for a hearing. Any hearing conducted under
this paragraph shall be in accordance with the Rules of Practice for
Formal Hearings (12 CFR part 263). At the conclusion of the hearing,
the Board shall, by order, approve or disapprove the proposed
acquisition on the basis of the record of the hearing. If the acquiring
person does not request a hearing, the notice of intent to disapprove
becomes final and unappealable.
[Codified to 12 C.F.R. § 225.43]
[Source: Section 225.43 amended at 52 Fed. Reg. 23023,
June 17, 1987, effective June 12, 1987; 62 Fed. Reg. 9339, February 28,
1997, effective April 21, 1997]
{{2-28-97 p.6110.16}}
§ 225.44 Reporting of stock loans.
(a) Requirements. (1) Any foreign bank or affiliate of
a foreign bank that has credit outstanding to any person or group of
persons, in the aggregate, which is secured, directly or indirectly, by
25 percent or more of any class of voting securities of a state member
bank, shall file a consolidated report with the appropriate Reserve
Bank for the state member bank.
(2) The foreign bank or its affiliate also shall file a copy of
the report with its appropriate Federal banking agency.
(3) Any shares of the state member bank held by the foreign bank
or any affiliate of the foreign bank as principal must be included in
the calculation of the number of shares in which the foreign bank or
its affiliate has a security interest for purposes of paragraph (a) of
this section.
(b) Definitions. For purposes of paragraph (a) of this
section:
(1) Foreign bank shall have the same meaning as in
section 1(b) of the International Banking Act of 1978
(12 U.S.C. 3101).
(2) Credit outstanding includes any loan or extension
of credit; the issuance of a guarantee, acceptance, or letter of
credit, including an endorsement or standby letter of credit; and any
other type of transaction that extends credit or financing to the
person or group of persons.
(3) Group of persons includes any number of persons
that the foreign bank or any affiliate of a foreign bank has reason to
believe:
(i) Are acting together, in concert, or with one another to
acquire or control shares of the same insured depository institution,
including an acquisition of shares of the same depository institution
at approximately the same time under substantially the same terms; or
(ii) Have made, or propose to make, a joint filing under section
13 or 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78n),
and the rules promulgated thereunder by the Securities and Exchange
Commission regarding ownership of the shares of the same insured
depository institution.
(c) Exceptions. Compliance with paragraph (a) of this
section is not required if:
(1) The person or group of persons referred to in that paragraph
has disclosed the amount borrowed and the security interest therein to
the Board or appropriate Reserve Bank in connection with a notice filed
under § 225.41 of this subpart, or another application filed with the
Board or Reserve Bank as a substitute for a notice under § 225.41 of
this subpart, including an application filed under section 3 of the BHC
Act (12 U.S.C. 1842) or section
18(c) of the Federal Deposit Insurance Act (Bank Merger Act,
12 U.S.C. 1828(c)), or an
application for membership in the Federal Reserve System; or
(2) The transaction involves a person or group of persons that
has been the owner or owners of record of the stock for a period of one
year or more; or, if the transaction involves stock issued by a newly
chartered bank, before the bank is opened for business.
(d) Report requirements. (1) The consolidated report
shall indicate the number and percentage of shares securing each
applicable extension of credit, the identity of the borrower, and the
number of shares held as principal by the foreign bank and any
affiliate thereof.
(2) A foreign bank, or any affiliate of a foreign bank, shall
file the consolidated report in writing within 30 days of the date on
which the foreign bank or affiliate first believes that the security
for any outstanding credit consists of 25 percent or more of any class
of voting securities of a state member bank.
(e) Other reporting requirements. A foreign bank, or any
affiliate thereof, that is supervised by the System and is required to
report credit outstanding that is secured by the shares of an insured
depository institution to another Federal banking agency also shall
file a copy of the report with the appropriate Reserve Bank.
[Codified to 12 C.F.R. § 225.44]
[Section 225.44 added at 62 Fed. Reg. 9341, February 28,
1997, effective April 21, 1997]
1If 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 securities of the state member bank or bank holding
company, each person must file prior notice to the Board. Go Back to Text
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