[Federal Register Volume 61, Number 31 (Wednesday, February 14, 1996)]
[Rules and Regulations]
[Pages 5671-5675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3274]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 61, No. 31 / Wednesday, February 14, 1996 /
Rules and Regulations
[[Page 5671]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 346
RIN 3064-AB62
Foreign Banks
AGENCY: Federal Deposit Insurance Corporation (FDIC or Corporation).
ACTION: Final rule.
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SUMMARY: Section 107 of the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (Riegle-Neal Act) amended section 6 of
the International Banking Act of 1978 (IBA) to provide that the FDIC
shall amend its regulation concerning domestic retail deposit
activities by state-licensed branches of foreign banks. The final rule
amends the FDIC's regulations to restrict the amount and types of
initial deposits of less than $100,000 which can be accepted by an
uninsured state-licensed branch of a foreign bank. The final rule is
intended to afford equal competitive opportunities to foreign and
domestic banks.
EFFECTIVE DATE: The final rule is effective on April 1, 1996.
FOR FURTHER INFORMATION CONTACT: Charles V. Collier, Assistant
Director, Division of Supervision, (202) 898-6850; Jeffrey M. Kopchik,
Counsel, Legal Division, (202) 898-3872, Federal Deposit Insurance
Corporation, 550 17th Street, N.W., Washington, D.C., 20429.
SUPPLEMENTARY INFORMATION:
Background
Section 107 of the Riegle-Neal Act (Pub. L. 103-328, 108 Stat.
2358) amended section 6 of the IBA (12 U.S.C. 3104) to provide that the
FDIC shall amend its regulation concerning domestic retail deposit
activity by state-licensed branches of foreign banks (state-licensed
branches).1 Section 6 of the IBA, 12 U.S.C. 3104, concerns the
insurance of deposits maintained at domestic branches and subsidiaries
of foreign banks. Generally, section 6 provides that United States
branches of foreign banks may not accept domestic retail deposits
unless the branch is insured by the FDIC. Section 6 goes on to state
that, after December 19, 1991, foreign banks may not establish any de
novo insured branches in the United States. Section 107 of the Riegle-
Neal Act added a new subsection (a) to section 6 of the IBA. This new
subsection provides that:
\1\ The Riegle-Neal Act requires the FDIC to consult with the
Office of the Comptroller of the Currency (OCC) in the process of
making these amendments in order to assure uniformity. The FDIC has
worked in close consultation with the OCC in order to achieve
substantive uniformity.
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In implementing this section, the Comptroller and the Federal
Deposit Insurance Corporation shall each, by affording equal
competitive opportunities to foreign and United States banking
organizations in their United States operations, ensure that foreign
banking organizations do not receive an unfair competitive advantage
over United States banking organizations.
12 U.S.C. 3104(a).
In revising section 6 of the IBA, Congress made it clear that
foreign banks operating in the United States should not have an unfair
competitive advantage over domestically chartered banks. Thus, Congress
directed the FDIC and the OCC to revise their respective regulations
implementing IBA section 6 to ensure that foreign banks do not receive
an unfair competitive advantage over United States banks by affording
equal competitive opportunities to both.
The Current Regulatory Scheme
Section 346.4 of the FDIC's regulations (12 CFR 346.4) requires
that any state-licensed branch which is engaged in ``domestic retail
deposit activity'' shall be an insured branch. Section 346.6 provides
that a state-licensed branch will not be deemed to be engaged in
domestic retail deposit activity which requires the branch to be
insured if initial deposits of less than $100,000 are derived solely
from certain enumerated sources. The acceptance of initial deposits of
$100,000 or more is not considered to be retail deposit activity and,
thus, deposit insurance is not required for a state-licensed branch
which accepts only these types of initial deposits.
Section 346.6 delineates five categories of depositors from which a
state-licensed branch may accept initial deposits of less than $100,000
without triggering the insurance requirement. The five categories of
depositors are:
(1) Any business entity, including any corporation, partnership,
sole proprietorship, association or trust, which engages in commercial
activity for profit;
(2) Any governmental unit, including the United States government,
any state government, any foreign government and any political
subdivision or agency of the foregoing;
(3) Any international organization which is comprised of two or
more nations;
(4) Funds received in connection with any draft, check, or similar
instrument issued by the branch for the transmission of funds; and
(5) Any depositor who is not a citizen of the United States and who
is not a resident of the United States at the time of the initial
deposit.
This section of the regulation also includes a general exception
(commonly referred to as the ``de minimis exception'') which provides
that an uninsured state-licensed branch may accept initial deposits of
less than $100,000 from any depositor if the amount of such deposits
does not exceed on an average daily basis five percent of the average
of the branch's deposits for the last 30 days of the most recent
calendar quarter.
The Riegle-Neal Act
In directing the FDIC to amend its regulation to ensure that
foreign banking organizations do not have an unfair competitive
advantage over United States banking organizations, Congress directed
the FDIC to ``consider whether to permit'' an uninsured state-licensed
branch of a foreign bank to accept initial deposits of less than
$100,000 from a smaller class of depositors than is currently
delineated in Sec. 346.6. This suggested smaller class is limited to:
(1) Individuals who are not citizens or residents of the United
States at the time of the initial deposit;
(2) Individuals who:
(i) Are not citizens of the United States;
(ii) Are residents of the United States; and
[[Page 5672]]
(iii) Are employed by a foreign bank, foreign business, foreign
government, or recognized international organization;
(3) Persons to whom the branch or foreign bank has extended credit
or provided other nondeposit banking services;
(4) Foreign businesses and large United States businesses;
(5) Foreign governmental units and recognized international
organizations; and
(6) Persons who are depositing funds in connection with the
issuance of a financial instrument by the branch for the transmission
of funds.
Moreover, section 107(b)(3) of the Riegle-Neal Act provides that
any de minimis exception shall not exceed one percent of the average
deposits at the branch, as opposed to the current five percent. The
FDIC may establish a reasonable transition rule to facilitate any
termination of deposit taking activities. See section 107(b)(5)(B) of
the Riegle-Neal Act.
As pointed out in the preamble to the proposed regulation, if
Congress had intended the FDIC to adopt these suggested criteria
verbatim, it could have so required. See 60 FR 36075. However, the
statute explicitly provides that the FDIC ``shall consider whether to
permit'' an uninsured state-licensed branch to accept initial deposits
of less than $100,000 from the enumerated sources. By requiring only
that the FDIC consider the statutory criteria, Congress explicitly
recognized that the ultimate decision should be made by the FDIC,
consistent with the statutory objective set forth in IBA section 6(a),
in the exercise of its regulatory discretion and expertise.
The Proposal
On July 13, 1995, the FDIC published for public comment a notice of
proposed rulemaking seeking to implement section 107 of the Riegle-Neal
Act. 60 FR 36074 (July 13, 1995).2 The proposal provided that
uninsured state-licensed branches of foreign banks would be permitted
to accept initial deposits of less than $100,000 from the six
categories of depositors specified in sections 107(b)(2) (A) through
(F) of the Riegle-Neal Act. In addition, the proposal expanded and
added certain exceptions, consistent with Congressional intent. The
comment period closed on September 11, 1995. In response to the notice,
the FDIC received a total of four comment letters, three from industry
trade associations and one from an association representing state bank
regulators. One commenter fully supported the FDIC's proposal with no
suggested revisions. The remaining three commenters supported the
proposal, but suggested certain revisions. Of the three commenters who
suggested revisions, two urged the FDIC to expand the Sec. 346.6
exceptions to permit uninsured state-licensed branches to accept more
types of initial deposits of less than $100,000. Conversely, one
commenter urged the FDIC to restrict one of the proposed exceptions in
order to lessen the number of initial deposits of less than $100,000
that may be accepted by an uninsured branch. The commenters' specific
suggestions and the FDIC's responses thereto are discussed in detail
below.
\2\ The OCC's notice of proposed rulemaking was published at 60
FR 34907 (July 5, 1995).
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Deposit Taking Activities of Uninsured Foreign Branches
The objective set forth by Congress in section 6(a) of the IBA is
to afford equal competitive opportunities to foreign and United States
banking organizations by ensuring that foreign banks do not receive an
unfair competitive advantage. The preamble to the proposed regulation
set forth in great detail the information and data which the FDIC
reviewed in considering this question. 60 FR 36075. The FDIC concluded
that ``uninsured state-licensed branches of foreign banks do not have
an overall unfair competitive advantage over domestic banking
organizations.'' Id. All of the comment letters agreed with this
conclusion.
The Comments and Final Rule
Two commenters suggested that the proposed Sec. 346.6(a)(3)
exception, the so-called ``nondeposit banking services exception'', be
expanded to include affiliates of the person to whom the branch or
foreign bank has extended credit or provided some other nondeposit
banking service as well as persons who have received such services from
an affiliate of the branch or foreign bank. The commenters urged this
change by pointing out that, in today's complex business world,
depositors often operate through affiliates. Similarly, foreign banks
which operate uninsured branches in the United States often offer
certain financial services through affiliates of the bank. The
commenters urged the FDIC to recognize this characteristic of the
contemporary business environment in the final regulation.
Significantly, one commenter pointed out that since the definition of
``foreign bank'' in the IBA, 12 U.S.C. 3101(7), explicitly includes any
affiliate of the foreign bank, Sec. 346.6(a)(3) of the final regulation
should include these affiliates as well.
The FDIC has carefully considered this comment and agrees that the
Sec. 346.6(a)(3) exception should be expanded to include persons who
have received a loan or other nondeposit banking service from an
affiliate of the branch or foreign bank. This revision recognizes that
the IBA definition of ``foreign bank'' includes affiliates. However,
this exception does not include a person who has dealt with any
affiliate of a foreign bank in any capacity. In crafting this
regulation, the FDIC is required to interpret and harmonize section 107
of the Riegle-Neal Act, the IBA and the Federal Deposit Insurance Act
(FDI Act). Despite the fact that the IBA definition of ``foreign bank''
includes any subsidiary or affiliate, the Sec. 346.1(a) definition of
``foreign bank'' includes only the bank itself. This difference
recognizes that Sec. 346 of the FDIC's rules regulates the deposit
taking activities of foreign banks operating branches in the United
States. It is not intended to regulate or somehow sanction the
activities of affiliates or subsidiaries of the foreign bank which may
desire to operate in this country. Section 107(b)(2)(C) of the Riegle-
Neal Act is limited to ``persons to whom the branch or foreign bank has
extended credit or provided other nondeposit banking services.''
[Emphasis added]. It does not cover persons who have dealt with any
affiliate of the foreign bank in any capacity. The FDIC interprets this
qualifying phrase to indicate Congress' intent that, despite the broad
definition of ``foreign bank'' contained in the IBA, the only
affiliates of a foreign bank which should be included in the
Sec. 346.6(a)(3) exception are those which are capable of extending
credit or providing some other nondeposit banking service to a
prospective depositor. For example, if a depositor desiring to make an
initial deposit of less than $100,000 in an uninsured branch has leased
a safe deposit box from an affiliate of the foreign bank within the
past twelve months, that deposit would qualify under the
Sec. 346.6(a)(3) exception since the prospective depositor would be the
recipient of a nondeposit banking service. Any state-licensed branch
that is unsure whether a deposit of less than $100,000 could be
accepted pursuant to the Sec. 346.6(a)(3) exception should contact the
FDIC for guidance.
With regard to affiliates of the depositor, the arguments are not
as compelling. First, and most persuasively, the IBA does not define
the term ``depositor'', ``customer'' or
[[Page 5673]]
``person''. Thus, there is no indication that Congress intended to
include affiliates of persons to whom the branch or foreign bank has
extended credit or provided some other nondeposit banking service.
Second, while depositors may operate through affiliates in a fashion
similar to the foreign branch or bank, the inclusion of affiliates in
this context may very well conflict with the section 107(b)(2)(D)
exception which limits retail deposit taking to ``large United States
businesses''. That is, the inclusion of affiliates of a depositor who
has received some nondeposit banking service could very well include
small subsidiaries of the depositor. Thus, the FDIC has decided not to
expand this exception to include affiliates of the depositor.
It was also suggested that the proposed Sec. 346.6(a)(3) nondeposit
banking service exception be expanded to apply to situations where the
affiliate has provided depository services to the customer or its
affiliate. The FDIC is of the opinion that this further expansion of
the exception is unwarranted. The key to section 107(b)(2)(C) of the
Riegle-Neal Act is its limitation to ``nondeposit'' banking services.
It would be inappropriate for the FDIC to disregard this limitation
even while recognizing that, except for the mandatory change to the de
minimis rule, Congress provided the Corporation with only suggested
parameters for the types of deposits of less than $100,000 that
uninsured state-licensed branches should be permitted to accept.
One commenter recommended that the FDIC modify the proposal to
permit uninsured state-licensed branches to accept initial deposits of
less than $100,000 from all businesses, including foundations and other
entities which are not engaged in commercial activity for profit.
Section 346.6(a)(1) of the current regulation exempts initial deposits
of less than $100,000 from ``any business entity * * * engaged in
commercial activity for profit''. It is the FDIC's understanding that,
after the de minimis exception, this exception is the one most often
utilized by state-licensed branches. The commenter argued that adopting
this suggestion would make the regulation less burdensome and easier to
administer, as well as promote international trade finance.
The FDIC remains unconvinced that the final regulation should
permit uninsured branches to accept deposits of less than $100,000 from
any business entity, including those not engaged in a commercial
activity for profit, such as foundations. Section 107 of the Riegle-
Neal Act expresses Congress' expectation that the overall scope of
Sec. 346.6 would be reduced. While the ultimate decision concerning
what exceptions should be included in the final regulation is to be
made by the FDIC in the exercise of its regulatory discretion and
expertise, the FDIC cannot ignore Congressional intent.
In the alternative, the commenter who suggested an exception for
all business deposits also suggested that the proposed Sec. 346.6(a)(4)
exception for large United States' businesses should be expanded by
revising the definition of ``large United States business'' that
appears in Sec. 346.1(t) of the proposal. The commenter proposed that
alternate criteria be added to the definition so that any business with
total assets of more than $1 million or 50 or more employees would also
be considered a ``large United States business''. However, the
commenter did not include any support for its use of the $1 million of
assets or 50 or more employees criteria. Another commenter expressed
the opposite concern, that the FDIC's suggested $1 million in gross
revenue figure should be increased to $25 million or possibly $100
million, in order to narrow the exception. In view of these
contradictory suggestions and the absence of data supporting them, the
FDIC has decided not to make any changes to the definition of ``large
United States business'' as set forth in the proposed regulation.
One comment letter requested clarification of the application of
the proposed transition rule which is set forth in Sec. 346.6(c) of the
proposed regulation. That commenter pointed out that, with regard to
time deposits, the proposal could require state-licensed branches to
reclassify or divest some time deposits very shortly after the
effective date of the final regulation if the deposit matures during
this period. This commenter suggested that the proposal be modified to
give state-licensed branches a reasonable period of time to reclassify
or divest time deposits that mature very shortly after the final
regulation's effective date. The FDIC agrees with this suggestion and
has amended Sec. 346.6(c)(2) of the proposal to provide that state-
licensed branches will have at least 90 days after the effective date
of the final regulation to reclassify or divest such time deposits.
This comment letter also recommended that branches should be
required to reclassify or divest only those deposits which were
accepted under the five percent de minimis exception, as opposed to
deposits accepted pursuant to any of the Sec. 346.6(a) exceptions. The
FDIC considered this option at great length, but in order to achieve
the uniformity required by the statute, the agency is adhering to the
transition rule as described in the proposal which requires the
reclassification or divestiture of all deposit accounts which were
originally accepted pursuant to any of the Sec. 346.6(a) exceptions.
This same comment letter expressed some confusion concerning other
aspects of how the FDIC will apply the transition rule. In an effort to
avoid confusion, the FDIC would like to clarify that a deposit
(including a time deposit) may be reclassified at any time during the
transition period. If a time deposit matures prior to the end of the
five year transition period, it must be reclassified or divested at
that time. However, no time deposit need be reclassified or divested
sooner than 90 days after the effective date of the final regulation.
In the preamble to the proposed regulation, 60 FR 36077, the FDIC
noted that it was considering adding a new exception that would permit
an uninsured state-licensed branch to accept initial deposits of less
than $100,000 from immediate family members of individuals who qualify
for any of the exceptions listed in proposed Secs. 346.6(a) (1) through
(6). The one commenter who mentioned this issue supported the idea of
including such an additional exception in the final rule and stated
that such an exception would not create any unfair competitive
advantage for foreign banks. The FDIC has considered this issue at
length and has concluded that such an exception would be overly broad
and inconsistent with Congressional intent. However, the FDIC has
decided to revise Sec. 346.6(a)(3) of the proposal to include immediate
family members of natural persons to whom the branch or foreign bank
(including any affiliate thereof) has extended credit or provided other
nondeposit banking services within the past twelve months or has
entered into a written agreement to provide such services within the
next twelve months.
With regard to Sec. 346.6(b), ``Application for an exemption'', it
was suggested that the FDIC should permit the request to be submitted
by the bank's senior management rather than requiring authorization by
the foreign bank's board of directors. The FDIC agrees that this change
would make the regulation less burdensome. Moreover, in a somewhat
different context, Sec. 346.101(d) of the FDIC's regulations permits an
application evidencing approval by senior management if a board
resolution is not required by the foreign bank's organizational
[[Page 5674]]
documents. Thus, the FDIC has decided to amend Sec. 346.6(b) in the
same fashion.
One commenter requested confirmation of its interpretation of the
preamble to the proposed rule that existing deposits which were not
originally subject to the Sec. 346.6 exceptions, because the initial
deposit establishing the account was $100,000 or more, would not be
subject to the revised regulation even if the first deposit in the
account after the effective date of final regulation is less than
$100,000. This interpretation is correct. The only deposits which must
be reclassified or divested after this final rule becomes effective are
those which were established with less than $100,000 pursuant to one of
the exceptions set forth in current Secs. 346.6(a) (1) through (6).
Calculation of the De Minimis
One commenter expressed some confusion concerning how the de
minimis amount should be calculated and whether this amendment changes
the calculation method currently being used under the existing
regulation. This final amendment to Sec. 346 is not intended to change
how the de minimis amount is calculated. The de minimis amount is
computed as a fraction, the numerator of which consists of the total
amount of deposits which have been accepted pursuant to the de minimis
exception. The FDIC wishes to make it clear that the numerator is
comprised of the total amount of deposits accepted under the de minimis
exception, not just the amount of the initial deposits of less than
$100,000 which were accepted to open the accounts. The denominator of
the fraction consists of the average amount of third party deposits
maintained by the branch during the last thirty calendar days of the
most recent calendar quarter. See 44 FR 40057, 40061 (July 9, 1979);
FDIC Legal Division Staff Advisory Opinion (unpublished) dated December
16, 1985 from Katharine H. Haygood, Esq.
Effective Date
Section 302(b) of the Riegle Community Development and Regulatory
Improvement Act of 1994 (Pub. L. 103-325, September 29, 1994) provides
that new regulations and amendments to regulations prescribed by the
federal banking agencies shall take effect on the first day of a
calendar quarter which begins on or after the date on which the
regulation is published in final form, unless the agency determines for
good cause that the regulation should become effective at an earlier
date or the regulation is required to become effective at some other
date determined by law. The Administrative Procedure Act (5 U.S.C. 551
et seq.) provides that regulations shall become effective thirty days
after their publication in the Federal Register. 5 U.S.C. 553. Thus,
this amendment to Part 346 of its regulations shall become effective on
April 1, 1996.
List of Subjects in 12 CFR Part 346
Bank deposit insurance, Foreign banking, Reporting and
recordkeeping requirements.
For the reasons set out in the preamble, the FDIC Board of
Directors hereby amends 12 CFR part 346 to read as follows:
PART 346--FOREIGN BANKS
1. The authority citation for part 346 continues to read as
follows:
Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820, 3103, 3104,
3105, 3108.
2. Section 346.1 is amended by adding a sentence to the end of
paragraph (a), revising paragraph (o), and adding paragraphs (s)
through (v) to read as follows:
Sec. 346.1 Definitions.
(a) * * * For purposes of Sec. 346.6, the term foreign bank does
not include any bank organized under the laws of any territory of the
United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands
the deposits of which are insured by the Corporation pursuant to the
Federal Deposit Insurance Act.
* * * * *
(o) Affiliate means any entity that controls, is controlled by, or
is under common control with another entity. An entity shall be deemed
to ``control'' another entity if the entity directly or indirectly
owns, controls, or has the power to vote 25 percent or more of any
class of voting securities of the other entity or controls in any
manner the election of a majority of the directors or trustees of the
other entity.
* * * * *
(s) Foreign business means any entity, including but not limited to
a corporation, partnership, sole proprietorship, association,
foundation or trust, which is organized under the laws of a country
other than the United States or any United States entity which is owned
or controlled by an entity which is organized under the laws of a
country other than the United States or a foreign national.
(t) Large United States business means any entity including but not
limited to a corporation, partnership, sole proprietorship,
association, foundation or trust which is organized under the laws of
the United States or any state thereof, and:
(1) Whose securities are registered on a national securities
exchange or quoted on the National Association of Securities Dealers
Automated Quotation System; or
(2) Has annual gross revenues in excess of $1,000,000 for the
fiscal year immediately preceding the initial deposit.
(u) Person means an individual, bank, corporation, partnership,
trust, association, foundation, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization, or any other form of
entity.
(v) Immediate family member of a natural person means the spouse,
father, mother, brother, sister, son or daughter of that natural
person.
3. Section 346.6 is revised to read as follows:
Sec. 346.6 Exemptions from the insurance requirement.
(a) Deposit activities not requiring insurance. A state branch will
not be deemed to be engaged in a domestic retail deposit activity which
requires the branch to be an insured branch under Sec. 346.4 if initial
deposits in an amount of less than $100,000 are derived solely from the
following:
(1) Individuals who are not citizens or residents of the United
States at the time of the initial deposit;
(2) Individuals who:
(i) Are not citizens of the United States;
(ii) Are residents of the United States; and
(iii) Are employed by a foreign bank, foreign business, foreign
government, or recognized international organization;
(3) Persons (including immediate family members of natural persons)
to whom the branch or foreign bank (including any affiliate thereof)
has extended credit or provided other nondeposit banking services
within the past twelve months or has entered into a written agreement
to provide such services within the next twelve months;
(4) Foreign businesses, large United States businesses, and persons
from whom an Edge Corporation may accept deposits under
Sec. 211.4(e)(1) of Regulation K of the Board of Governors of the
Federal Reserve System, 12 CFR 211.4(e)(1);
(5) Any governmental unit, including the United States government,
any state government, any foreign government and any political
subdivision or agency of any of the foregoing, and recognized
international organizations;
(6) Persons who are depositing funds in connection with the
issuance of a
[[Page 5675]]
financial instrument by the branch for the transmission of funds or the
transmission of such funds by any electronic means; and
(7) Any other depositor but only if the amount of deposits under
this paragraph (a)(7) does not exceed on an average daily basis one
percent of the average of the branch's deposits for the last 30 days of
the most recent calendar quarter, excluding deposits in the branch of
other offices, branches, agencies or wholly owned subsidiaries of the
bank and the branch does not solicit deposits from the general public
by advertising, display of signs, or similar activity designed to
attract the attention of the general public. A foreign bank which has
more than one state branch in the same state may aggregate deposits in
such branches (excluding deposits of other branches, agencies or wholly
owned subsidiaries of the bank) for the purpose of this paragraph
(a)(7). The average shall be computed by using the sum of the close of
business figures for the last 30 calendar days ending with and
including the last day of the calendar quarter divided by 30. For days
on which the branch is closed, balances from the last previous business
day are to be used.
(b) Application for an exemption. (1) Whenever a foreign bank
proposes to accept at a state branch initial deposits of less than
$100,000 and such deposits are not otherwise excepted under paragraph
(a) of this section, the foreign bank may apply to the FDIC for consent
to operate the branch as a noninsured branch. The Board of Directors
may exempt the branch from the insurance requirement if the branch is
not engaged in domestic retail deposit activities requiring insurance
protection. The Board of Directors will consider the size and nature of
depositors and deposit accounts, the importance of maintaining and
improving the availability of credit to all sectors of the United
States economy, including the international trade finance sector of the
United State economy, whether the exemption would give the foreign bank
an unfair competitive advantage over United States banking
organizations, and any other relevant factors in making this
determination.
(2) Any request for an exemption under this paragraph should be in
writing and authorized by the board of directors of the foreign bank.
If a resolution is not required pursuant to the applicant's
organizational documents, the request shall include evidence of
approval by the bank's senior management. The request should be filed
with the Regional Director of the Division of Supervision for the
region where the state branch is located.
(3) The request should detail the kinds of deposit activities in
which the branch proposes to engage, the expected source of deposits,
the manner in which deposits will be solicited, how this activity will
maintain or improve the availability of credit to all sectors of the
United States economy, including the international trade finance
sector, that the activity will not give the foreign bank an unfair
competitive advantage over United States banking organizations and any
other relevant information.
(c) Transition period. An uninsured state branch may maintain a
retail deposit lawfully accepted pursuant to this section prior to
April 1, 1996:
(1) If the deposit qualifies pursuant to paragraph (a) or (b) of
this section; or
(2) If the deposit does not qualify pursuant to paragraph (a) or
(b) of this section, no later than:
(i) In the case of a non-time deposit, five years from April 1,
1996; or
(ii) In the case of a time deposit, the first maturity date of the
time deposit after April 1, 1996 or the date that is 90 days after
April 1, 1996, whichever is later.
By order of the Board of Directors, dated at Washington, D.C.,
this 6th day of February, 1996.
Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
[FR Doc. 96-3274 Filed 2-13-96; 8:45 am]
BILLING CODE 6714-01-P
