# FDIC FIL-85-2004: International Banking

> Federal · Agency guidance · Superseded

URL: https://www.frixlaw.com/law-library/statutes/FDIC_FIL04085

## Section

- **Citation:** FDIC FIL-85-2004
- **Heading:** International Banking
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** Superseded
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** FDIC Financial Institution Letters / International Banking

## Text

Monday,
July 19, 2004
Part II
Federal Deposit
Insurance
Corporation
12 CFR Parts 303, 325, 327, and 347
International Banking; Proposed Rule
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43060
Federal Register / Vol. 69, No. 137 / Monday, July 19, 2004 / Proposed Rules
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 303, 325, 327, and 347
RIN 3064–AC85
International Banking
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Notice of proposed rulemaking
with request for comment.
SUMMARY: The FDIC is publishing for
notice and comment proposed
amendments to subpart J of part 303 on
international banking and revisions to
subpart A of part 347, relating to the
international activities and investments
of insured state nonmember banks, and
subpart B of part 347, relating
principally to insured and noninsured
U.S. branches of foreign banks. The
proposed amendments address the
relocation of grandfathered insured
branches. They also reorganize, clarify,
and revise subparts A and B of part 347,
and address various issues raised as part
of the FDIC’s ongoing effort under the
Economic Growth and Regulatory
Paperwork Reduction Act of 1996 (12
U.S.C. 3311) to address regulatory
burden issues. Included in the revisions
affecting grandfathered insured
branches are revisions to the FDIC’s
asset pledge requirement to establish a
risk-based system and revision of the
FDIC’s asset maintenance requirement
to calculate the asset maintenance
percentage based on the daily third-
party liabilities of the branch. In
addition, the FDIC is proposing to
strengthen FDIC’s supervisory processes
and make conforming amendments for
other FDIC rules as part of the proposal.
The FDIC is also requesting
comments, as part of this document, on
whether deposits in wholesale U.S.
branches of foreign banks should be
covered by deposit insurance and on the
accounting rules contained in subpart C
of part 347
nch. In
addition, the FDIC is proposing to
strengthen FDIC’s supervisory processes
and make conforming amendments for
other FDIC rules as part of the proposal.
The FDIC is also requesting
comments, as part of this document, on
whether deposits in wholesale U.S.
branches of foreign banks should be
covered by deposit insurance and on the
accounting rules contained in subpart C
of part 347.
DATES: Written comments must be
received on or before September 17,
2004.
ADDRESSES: You may submit comments,
identified by RIN number 3064–AC85,
by any of the following methods:
• Agency Web site: http://
www.FDIC.gov/regulations/laws/
federal/propose.html.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments/Legal
ESS, Federal Deposit Insurance
Corporation, 550 17th Street, NW.,
Washington, DC 20429.
• Hand Delivered/Courier: The guard
station at the rear of the 550 17th Street
Building (located on F Street), on
business days between 7 a.m. and 5 p.m.
• E-mail: comments@FDIC.gov.
Include RIN number 3064-AC85 in the
subject line of the message.
• Public Inspection: Comments may
be inspected and photocopied in the
FDIC Public Information Center, Room
100, 801 17th Street, NW, Washington,
DC, between 9 a.m. and 4:30 p.m. on
business days.
Instructions: Submissions received
must include the agency name and RIN
for this rulemaking. Comments received
will be posted without change to
http://www.FDIC.gov/regulations/laws/
federal/propose.html, including any
personal information provided.
FOR FURTHER INFORMATION CONTACT: John
Di Clemente, Chief, International
Section, Division of Supervision and
Consumer Protection, (202) 898–3540 or
jdiclemente@fdic.gov or Rodney D. Ray,
Counsel, Legal Division, (202) 898–3556
or rray@fdic.gov, Federal Deposit
Insurance Corporation, 550 17th Street,
NW., Washington, DC 20429
deral/propose.html, including any
personal information provided.
FOR FURTHER INFORMATION CONTACT: John
Di Clemente, Chief, International
Section, Division of Supervision and
Consumer Protection, (202) 898–3540 or
jdiclemente@fdic.gov or Rodney D. Ray,
Counsel, Legal Division, (202) 898–3556
or rray@fdic.gov, Federal Deposit
Insurance Corporation, 550 17th Street,
NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION: The FDIC
is proposing to amend and revise its
rules concerning international banking
activities of insured state nonmember
banks operating in foreign countries and
insured U.S. branches of foreign banks.
This is being done to implement the
‘‘plain language’’ requirement contained
in section 722 of the Gramm-Leach-
Bliley Act of 1999 (12 U.S.C. 4809).
Also, as part of the FDIC’s ongoing effort
under the Economic Growth and
Regulatory Paperwork Reduction Act of
1996 (12 U.S.C. 3311) (EGRPRA), the
FDIC is proposing amendments to its
existing rules to address certain
regulatory burden issues raised in
public comments. The FDIC is also
proposing revisions to existing rules and
new rules to update the FDIC’s
supervisory processes.
The proposed changes will be made to
subpart J of part 303 and to subparts A
and B of part 347 of title 12 of the Code
of Federal Regulations. As a result of the
proposed changes, conforming changes
also will be made to subpart B of part
325, relating to the FDIC’s Prompt
Corrective Action rules, and subpart A
of part 327, regarding the FDIC’s
assessment rules for insured U.S.
branches of foreign banks.
Subpart J of part 303 contains the
procedural rules that implement part
347. The rules in subpart A of part 347
address issues related to the
international activities and investments
of insured state nonmember banks. In
general, they implement the FDIC’s
statutory authority under section
18(d)(2) of the Federal Deposit
Insurance Act (FDI Act) (12 U.S.C
ed U.S.
branches of foreign banks.
Subpart J of part 303 contains the
procedural rules that implement part
347. The rules in subpart A of part 347
address issues related to the
international activities and investments
of insured state nonmember banks. In
general, they implement the FDIC’s
statutory authority under section
18(d)(2) of the Federal Deposit
Insurance Act (FDI Act) (12 U.S.C.
1828(d)(2)), regarding branches of
insured state nonmember banks in
foreign countries, and section 18(l) of
the FDI Act, regarding insured state
nonmember bank investments in foreign
entities. The rules in subpart B of part
347 principally address issues related to
insured and noninsured U.S. branches
of foreign banks under section 6 of the
International Banking Act (IBA) (12
U.S.C. 3104).
Although subpart C of part 347 also
contains rules regarding accounting and
reporting rules relating to international
lending activities of insured state
nonmember banks, the FDIC is not
proposing to revise subpart C at this
time. The Office of the Comptroller of
the Currency (‘‘OCC’’) and Board of
Governors of the Federal Reserve
System (‘‘FRB’’) have similar rules
implementing the same statutory
provisions for the institutions under
their supervision that were originally
issued in a joint rulemaking proceeding
with the FDIC. Therefore, proposed
revisions to the rules in subpart C may
require discussion and coordination
with the other agencies. Commenters
may still comment on the rules
contained in subpart C of part 347,
however, in order to bring particular
issues to the FDIC’s attention at this
time.
I. Background
Although the FDIC made significant
amendments and consolidated its
international banking rules in 1998,
various events that have transpired
since then have influenced the FDIC’s
decision to propose further revisions to
its international banking rules
ules
contained in subpart C of part 347,
however, in order to bring particular
issues to the FDIC’s attention at this
time.
I. Background
Although the FDIC made significant
amendments and consolidated its
international banking rules in 1998,
various events that have transpired
since then have influenced the FDIC’s
decision to propose further revisions to
its international banking rules. First,
when the FDIC finalized its
international banking rules, the FRB
was proposing amendments to
Regulation K (12 CFR part 211). The
FDIC noted in 63 FR 17056 (April 8,
1998) (1998 Final Rule) that subpart A
of part 347 maintained parity with the
existing version of Regulation K,
governing foreign branching and
investments by member banks, and that
the FDIC may need to make further
revisions to subpart A of part 347 once
the FRB finalized its revisions to
Regulation K. The revisions of
Regulation K that are relevant to this
rulemaking proceeding were finalized
on October 26, 2001, and the FDIC is
proposing certain revisions to the part
347 rules because of changes made to
Regulation K. Second, the FDIC has
received written comments from the
public suggesting that the language in
part 347 needs to be simplified and the
FDIC believes that some additional
reorganization and clarification of the
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ons to the part
347 rules because of changes made to
Regulation K. Second, the FDIC has
received written comments from the
public suggesting that the language in
part 347 needs to be simplified and the
FDIC believes that some additional
reorganization and clarification of the
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43061
Federal Register / Vol. 69, No. 137 / Monday, July 19, 2004 / Proposed Rules
FDIC’s rules may be beneficial. It is also
believed that strengthening the existing
supervisory structure in a few areas is
appropriate. In addition, Congress
enacted the ‘‘plain language’’
requirement for all proposed and final
rulemakings published in the Federal
Register after January 1, 2000, in section
722 of the Gramm-Leach-Bliley Act of
1999. Therefore, several revisions to
part 347 are included to address this
requirement. Finally, the FDIC and the
other Federal banking agencies solicited
and received public comments in 2003
as part of the ERGPRA regulatory
burden reduction process on three
categories of agency rules. Part 347 was
included in one of those categories, and
the comments relating to them have
been reviewed and are discussed in
greater detail in the section-by-section
discussion in this document.
In general, FDIC is proposing to revise
subpart J of part 303 to provide new
cross-references to the appropriate
revised rule(s) in subparts A and B of
part 347. Since many of the revisions to
the text in subpart J merely provide new
cross-references to the appropriate
sections in subparts A and B of part 347
or make stylistic changes in the text,
they will not be further addressed in the
subpart J section-by-section analysis.
The existing sections in subpart A of
part 347 are being reorganized in the
proposal by moving, consolidating, and
breaking particularly complex sections,
such as existing section 347.104, into
multiple sections based on the subject
matter addressed
A and B of part 347
or make stylistic changes in the text,
they will not be further addressed in the
subpart J section-by-section analysis.
The existing sections in subpart A of
part 347 are being reorganized in the
proposal by moving, consolidating, and
breaking particularly complex sections,
such as existing section 347.104, into
multiple sections based on the subject
matter addressed. The sections
addressing general consent, expedited
processing, and specific consent for
foreign branches and investments,
contained in existing sections 347.103
and 347.108, are also being reorganized
and consolidated into separate sections
addressing each type of approval. The
existing sections in subpart B are being
reorganized in the proposal by grouping
them with other sections that address
the same or similar subject matter. In
addition, several existing sections in
subpart B are being revised in the
proposal to update and clarify the
regulatory requirements. Finally, a few
additional sections are being added to
subparts A and B in the proposal to
address issues that are not addressed in
the existing rules.
The proposed amendments and
revisions are discussed below, by
subpart, in the section-by-section
description. The FDIC invites public
comments on all aspects of the proposal.
In addition, public comments are
specifically invited on the following
items:
• Providing for expedited processing
of proposed relocations of insured U.S.
branches of foreign banks (section
303.184);
• Revising existing sections that
address authorized activities for foreign
investments and foreign branches to
more closely track the sections of
Regulation K addressing those issues in
connection with member banks
s are
specifically invited on the following
items:
• Providing for expedited processing
of proposed relocations of insured U.S.
branches of foreign banks (section
303.184);
• Revising existing sections that
address authorized activities for foreign
investments and foreign branches to
more closely track the sections of
Regulation K addressing those issues in
connection with member banks. The
revisions also address approval of
activities requiring consideration under
parts 347 and 362 (sections 347.105 and
347.115);
• Providing that, except for certain
merger and acquisition transactions, the
grandfathered status of an insured
branch of a foreign bank may not be
transferred (section 347.206);
• Revising the FDIC’s asset pledge
requirement for insured branches of
foreign banks to a risk-based approach
(section 347.209);
• Revising the FDIC’s asset
maintenance rule for insured branches
of foreign banks to calculate the asset
maintenance percentage based on daily
third-party liabilities (section 347.210);
and
• Providing deposit insurance for
wholesale U.S. branches of foreign
banks (section V of the preamble).
II. Section-by-Section Analysis of
Proposed Amendments to Part 303,
Subpart J
1. Moving an Insured Branch of a
Foreign Bank (Revised § 303.184)
Section 303.184 contains the filing
procedures and approval criteria
applicable to the relocation of an
insured U.S. branch of a foreign bank.
As part of the EGRPRA process, an
industry trade association observed that
section 303.41(b), which addresses
branch relocations in the context of
domestic branches of insured state
nonmember banks, differentiates
between a branch closing or relocation
based upon whether the proposed move
is within the same immediate
neighborhood
e relocation of an
insured U.S. branch of a foreign bank.
As part of the EGRPRA process, an
industry trade association observed that
section 303.41(b), which addresses
branch relocations in the context of
domestic branches of insured state
nonmember banks, differentiates
between a branch closing or relocation
based upon whether the proposed move
is within the same immediate
neighborhood. The trade association
expressed concern that, if the FDIC
applied a similar geographic standard to
proposed relocations of grandfathered
insured branches, relocations of those
branches would effectively be precluded
because those branches could not close
and reopen as insured branches. This is
because of the statutory provision
contained in section 6(d) of the
International Banking Act (IBA) (12
U.S.C. 3104(d)) requiring foreign banks
engaging in domestic retail deposit
activities after December 19, 1991 that
require deposit insurance protection to
do so through one or more insured bank
subsidiaries. The FDIC does not believe
such a construction was intended by the
statute or existing rule but recognizes
that the existing rule does not address
the geographic proximity of the
proposed relocation. Section 303.184(b)
is being amended, to address this issue,
by making expedited processing
available for proposed relocations of
grandfathered insured branches within
the same state. The FDIC notes that 12
CFR 28.12(e)(1) provides for expeditious
processing of intrastate relocations of
federal branches regulated by the OCC.
Therefore, although the FDIC’s
processing requirements differ from
those utilized by the OCC, the approach
of providing expedited processing for
proposed relocations of insured
branches of foreign banks within the
same state is consistent with the OCC’s
overall approach of expediting proposed
relocations of federal branches within
the same state.
III. Section-by-Section Analysis of
Proposed Revisions to Part 347,
Subpart A
1
g requirements differ from
those utilized by the OCC, the approach
of providing expedited processing for
proposed relocations of insured
branches of foreign banks within the
same state is consistent with the OCC’s
overall approach of expediting proposed
relocations of federal branches within
the same state.
III. Section-by-Section Analysis of
Proposed Revisions to Part 347,
Subpart A
1. Authority, Purpose, and Scope
(Revised § 347.101)
The proposal amends section 347.101
to provide a more comprehensive list of
the major areas addressed by the rules
in the subpart. The order of the subjects
mentioned in the section is also revised
to correspond to the order in which
those subjects are addressed in the
revised subpart.
2. Definitions (Revised § 347.102)
Four additional definitions are added
to this section by the proposal. Proposed
revisions to the rules in the subpart use
the term ‘‘domestic’’ in sections 347.104
and 347.105, and that term is defined in
paragraph (c) of this section. Paragraph
(m) defining ‘‘insured state nonmember
bank’’ or ‘‘bank’’ is added to minimize
the repetitive use of the former term that
currently exists in the rules. Paragraphs
(o) and (r) are new definitions that
would adopt the same definition for
‘‘investment grade’’ and ‘‘NRSRO’’ that
the FRB adopted in 12 CFR 211.2(n) and
(r). The effect of the inclusion of the
latter two terms will be discussed in
greater detail in the description of
proposed section 347.115.
3. Effect of State Law on Actions Taken
Under This Subpart (Revised § 347.103)
Section 347.103 combines the
requirement contained in paragraph (a)
of existing sections 347.103 and 347.104
into a single section
the FRB adopted in 12 CFR 211.2(n) and
(r). The effect of the inclusion of the
latter two terms will be discussed in
greater detail in the description of
proposed section 347.115.
3. Effect of State Law on Actions Taken
Under This Subpart (Revised § 347.103)
Section 347.103 combines the
requirement contained in paragraph (a)
of existing sections 347.103 and 347.104
into a single section. The rule specifies
that an insured state nonmember bank
may acquire or retain equity interests in
foreign organizations or establish a
foreign branch, if authorized to do so by
the law of the state where the bank is
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43062
Federal Register / Vol. 69, No. 137 / Monday, July 19, 2004 / Proposed Rules
1 The omitted activities were: financing; acting as
a fiduciary; providing investment, financial or
economic advisory services; leasing real or personal
property or acting as agent, broker or advisor in
connection with such transactions if the lease
serves as the functional equivalent of an extension
of credit to the lessee; acting as a futures
commission merchant; and acting as principal or
agent in swap transactions.
2 The six activities being added to the list of
approved activities are being added, subject to the
attendant restrictions contained in section 225.28(b)
of Regulation Y, because those activities are
considered to be subject to the Regulation Y
restrictions by the cross-reference to that authority
in existing section 347.104(b)(10).
chartered, by complying with the
requirements of this subpart.
4. Insured State Nonmember Bank
Investments in Foreign Organizations
(Revised § 347.104)
Section 347.104(a) of the proposal is
derived from existing section 347.104(f).
The rationale for the requirement was
discussed in the preamble to the 1998
Final Rule. That rationale, which is
restated below, remains unchanged
104(b)(10).
chartered, by complying with the
requirements of this subpart.
4. Insured State Nonmember Bank
Investments in Foreign Organizations
(Revised § 347.104)
Section 347.104(a) of the proposal is
derived from existing section 347.104(f).
The rationale for the requirement was
discussed in the preamble to the 1998
Final Rule. That rationale, which is
restated below, remains unchanged.
Thus, the substance of paragraph (f) of
the existing rule is retained. It is placed
in a separate section, however, apart
from the section addressing authorized
activities of foreign organizations, and is
reworded and reorganized for clarity.
The FDIC recognizes that direct
investments in foreign organizations by
member banks (and thus national banks)
are only permitted for certain types of
investments specified in Regulation K,
such as investments in foreign banks,
because of language in section 25 of the
Federal Reserve Act (12 U.S.C. 601)
limiting direct foreign investments by
member banks. Other types of foreign
investments by member banks are
required to be made indirectly through
an Edge corporation subsidiary or a
foreign bank subsidiary of a member
bank. In contrast, section 18(l) of the
FDI Act (12 U.S.C. 1828(l)) permits state
nonmember banks, to the extent
authorized by state law, to invest in
foreign ‘‘banks and other entities.’’ As a
consequence, and because the
legislative history of section 18(l) shows
that Congress was aware of the FRB’s
parallel authority over member banks at
the time section 18(l) was enacted, the
difference in language between the two
statutes is significant and deliberate and
results in the type of foreign
organizations that state nonmember
banks may invest in directly not being
restricted by section 18(l)
and because the
legislative history of section 18(l) shows
that Congress was aware of the FRB’s
parallel authority over member banks at
the time section 18(l) was enacted, the
difference in language between the two
statutes is significant and deliberate and
results in the type of foreign
organizations that state nonmember
banks may invest in directly not being
restricted by section 18(l).
Because national banks are unable to
invest directly in nonbank foreign
organizations, however, the ability of
insured state nonmember banks to
invest in other types of foreign
organizations raises issues under section
24 of the FDI Act (12 U.S.C. 1831a) and
12 CFR part 362. Section 24 prohibits an
insured state nonmember bank from
acquiring an equity investment that a
national bank is not permitted to
acquire. Such an investment may be
made under section 24, however, if the
investment is made through a majority-
owned subsidiary of the bank. It may
also be made if a company becomes
majority-owned by the bank as a result
of the investment and the ‘‘as principal’’
activities of the company are ones in
which a subsidiary of a national bank
could engage. Ownership of more than
50 percent of the equity in a nonbank
foreign organization makes that
organization a majority-owned
subsidiary and, thus, no section 24
analysis is required because such a
subsidiary is authorized only to engage
in the same activities that the FRB has
authorized for subsidiaries of member
banks (and thus national banks) under
Regulation K. In addition, while it is not
necessary for insured state nonmember
bank investments of 50 percent or less
of the equity of a nonbank foreign
organization to be held through an
intermediate foreign bank subsidiary or
Edge subsidiary as required under
Regulation K, those investments are
required to be held through some form
of U.S. or foreign majority-owned
subsidiary in order to comply with the
requirements of section 24 and part 362.
5
d state nonmember
bank investments of 50 percent or less
of the equity of a nonbank foreign
organization to be held through an
intermediate foreign bank subsidiary or
Edge subsidiary as required under
Regulation K, those investments are
required to be held through some form
of U.S. or foreign majority-owned
subsidiary in order to comply with the
requirements of section 24 and part 362.
5. Permissible Financial Activities
Outside the United States (Revised
§ 347.105)
Section 347.105 (a) and (b) of the
proposal are derived from existing
section 347.104(b). As amended, the
language in existing section 347.104(b)
that limits the activities of certain types
of investments in foreign organizations
to those authorized by the section, is
restructured, reworded slightly, and
placed in section 347.105(a). Under
section 347.105(b) the same financial
activities will be authorized that are
presently authorized under section
347.104(b) of the existing rule.
The proposed rule also revises the
activities list contained in the existing
rule. As the FDIC noted in the preamble
to the 1998 Final Rule, the activities
contained in existing section 347.104(b)
were modeled after the FRB’s
corresponding provision in Regulation
K, but the list of authorized activities
was reordered. In addition, the FDIC
considered certain activities listed in
the FRB’s corresponding section of
Regulation K to be authorized under
Regulation Y and incorporated by the
cross-reference to Regulation Y
activities contained in section
347.104(b)(10) of the existing rule.
Therefore, those activities were not
separately listed in existing section
347.104(b). Time has shown this
approach to have made the interplay
between the FDIC and FRB lists of
permissible activities difficult in certain
circumstances to understand and apply
tion Y and incorporated by the
cross-reference to Regulation Y
activities contained in section
347.104(b)(10) of the existing rule.
Therefore, those activities were not
separately listed in existing section
347.104(b). Time has shown this
approach to have made the interplay
between the FDIC and FRB lists of
permissible activities difficult in certain
circumstances to understand and apply.
The FDIC recognizes that insured
state nonmember banks or their
subsidiaries may want to engage in
activities outside the United States that
are not listed by the FDIC as permissible
activities but that have been approved
for member banks or their subsidiaries
under Regulation K. Including those
items in the FDIC list of permissible
activities facilitates banks doing so. In
addition, as discussed in more detail
below, the banks or their subsidiaries
may want to engage in activities outside
the United States, as principal, that have
not been authorized for member banks
(and thus national banks) in Regulation
K. To do so, banks must comply with
section 24 of the FDI Act and the
requirements of part 362, as well as part
347.
Considering these issues, the FDIC is
proposing to revise the order of the
activities listed in section 347.105(b) to
more closely track the order of the
activities listed as permissible in 12 CFR
211.10, the corresponding provision in
Regulation K. The activities listed in the
proposal also include activities that the
FDIC did not specifically list as being
authorized in the 1998 Final Rule
because they were considered to overlap
with activities authorized by Regulation
Y.1 Including them makes the
comparison easier between activities
authorized under section 347.105(b) and
those authorized for member banks and
their subsidiaries.2
Paragraphs (c) and (d) of section
347.105 are being added for
clarification. Paragraph (c) is based on
language contained in the preamble to
the 1998 Final Rule but not included in
the text of the existing rule. Paragraph
on
Y.1 Including them makes the
comparison easier between activities
authorized under section 347.105(b) and
those authorized for member banks and
their subsidiaries.2
Paragraphs (c) and (d) of section
347.105 are being added for
clarification. Paragraph (c) is based on
language contained in the preamble to
the 1998 Final Rule but not included in
the text of the existing rule. Paragraph
(d) addresses an issue that was raised in
the preamble to the 1998 Final Rule, but
not addressed in the existing rule,
concerning the applicability in certain
instances of section 24 of the FDI Act
and part 362 to issues arising under
subpart A of part 347. Briefly stated, in
relevant part, section 24(a) of the FDI
Act and part 362 prohibit a state bank
from engaging, as principal, in any type
of activity that is not permissible for a
national bank, unless the FDIC
determines that the activity would not
pose a significant risk of loss to the
deposit insurance fund and the bank
meets its minimum capital
requirements. Likewise, section 24(d) of
the FDI Act and part 362 prohibit a
subsidiary of a state bank from engaging,
as principal, in any type of activity that
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Federal Register / Vol. 69, No. 137 / Monday, July 19, 2004 / Proposed Rules
3 Proposed paragraph (d) is, of necessity, a rule of
general applicability. For example, as the FDIC
noted in the preamble to the 1998 Final Rule, an
activity authorized under Regulation K concerning
a foreign investment entity’s ability to underwrite
life, annuity, pension fund-related, and other types
of insurance where the associated risks have been
previously determined to be actuarially predictable
(see, 12 CFR 211.10(a)(17)) was not included in
existing section 347.104
, as the FDIC
noted in the preamble to the 1998 Final Rule, an
activity authorized under Regulation K concerning
a foreign investment entity’s ability to underwrite
life, annuity, pension fund-related, and other types
of insurance where the associated risks have been
previously determined to be actuarially predictable
(see, 12 CFR 211.10(a)(17)) was not included in
existing section 347.104. Although Regulation K
included these activities on its list of permissible
activities abroad, the regulation required specific
consent before those activities could be conducted
by a subsidiary of an insured U.S. bank. Since no
general authorization had been given under
Regulation K for this activity to be conducted
directly or indirectly by a subsidiary of a member
bank, there was an issue under section 24 of the FDI
Act. Section 24(b) and 24(d)(2) of the FDI Act do
not permit the FDIC to give approval for a state
bank or its subsidiary to engage in insurance
underwriting if such underwriting is not
permissible for a national bank or its subsidiary
(unless that activity is expressly excepted by other
subsections of section 24 covering limited types of
insurance underwriting). Therefore, the FDIC
observed when adopting the 1998 Final Rule, that
it was foreclosed at that time from granting general
regulatory authorization for banks to indirectly
underwrite life, pension-fund related and other
types of insurance abroad. Insurance underwriting
represents an example of specific types of activities
that are listed in 12 CFR 211.10 that could not be
authorized under either part 347 or part 362.
In proposing paragraph (d) the FDIC desires to
lend a degree of clarity to this area but also wants
to provide banks with more notice that approval to
engage in certain foreign activities may require
compliance with requirements beyond those
contained in part 347
of specific types of activities
that are listed in 12 CFR 211.10 that could not be
authorized under either part 347 or part 362.
In proposing paragraph (d) the FDIC desires to
lend a degree of clarity to this area but also wants
to provide banks with more notice that approval to
engage in certain foreign activities may require
compliance with requirements beyond those
contained in part 347. In these situations, for the
FDIC to process such applications in a timely
manner, the applicants will need to provide
sufficiently detailed and relevant information
regarding proposed foreign activities for the FDIC
to properly evaluate the issues raised by the
application.
is not permissible for a subsidiary of a
national bank, unless the FDIC first
determines that it would not pose a
significant risk of loss to the deposit
insurance fund and the bank meets its
minimum capital requirements. Thus,
when a state nonmember bank wants to
engage in financial activities, as
principal, that are not specifically
authorized by part 347, the question
becomes whether authorization to
engage in those types of activities must
be obtained under part 347, part 362, or
both parts. The FDIC is proposing to add
paragraph (d) which would generally
address when authorization to engage in
activities through a subsidiary other
than those specified in paragraph (b)
may be authorized by specific consent
under part 347 and when authorization
for those activities must be obtained
under part 362 as well as subpart A of
part 347.3
6. Going Concerns (Revised § 347.106)
Section 347.106 of the proposal is
derived from the ‘‘going concern’’
provision contained in existing section
347.104(c). The text has been made a
separate section and reworded slightly
for ease of reference
y specific consent
under part 347 and when authorization
for those activities must be obtained
under part 362 as well as subpart A of
part 347.3
6. Going Concerns (Revised § 347.106)
Section 347.106 of the proposal is
derived from the ‘‘going concern’’
provision contained in existing section
347.104(c). The text has been made a
separate section and reworded slightly
for ease of reference.
As under the existing rule, a bank
subsidiary (as defined in proposed
section 347.102(t)) in a foreign country
will be limited to conducting activities
authorized under proposed section
347.105(b), unless the bank acquires its
subsidiary as a going concern. In this
case, under proposed section 347.106,
no more than 5 percent of the foreign
subsidiary’s assets or revenues may be
attributable to activities that are not on
the list of authorized activities. In
addition, any foreign organization
which is controlled (as defined in
proposed section 347.102(b)) by a bank
and its affiliates (as defined in proposed
section 347.102(a)), regardless of the
percent of voting stock owned by the
bank, is limited to conducting financial
activities authorized under proposed
section 347.105(b), subject to the same
5 percent exception for going concerns.
7. Joint Ventures (Revised § 347.107)
Section 347.107(a) of the proposal is
derived from the ‘‘joint venture’’
provision contained in existing section
347.104(d). The text has been made a
separate section and reworded slightly
for ease of reference. As is the case
under the existing rule, if a bank and its
affiliates hold 20 to 50 percent of the
voting equity securities of a foreign
organization and do not control the
organization, no more than 10 percent of
the foreign organization’s assets or
revenues may be attributable to
activities that are not on the section
347.105(b) list of authorized activities.
8
y
for ease of reference. As is the case
under the existing rule, if a bank and its
affiliates hold 20 to 50 percent of the
voting equity securities of a foreign
organization and do not control the
organization, no more than 10 percent of
the foreign organization’s assets or
revenues may be attributable to
activities that are not on the section
347.105(b) list of authorized activities.
8. Portfolio Investments (Revised
§ 347.108)
Section 347.108(a) of the proposal is
derived from the ‘‘portfolio investment’’
provision contained in existing section
347.104(e). The text has been made a
separate section and reworded slightly
for ease of reference. As is the case
under the existing rule, if a bank and its
affiliates’ holdings are less than 20
percent of the voting equity securities of
a foreign organization and the bank and
its affiliates do not control the
organization, no more than 10 percent of
the foreign organization’s assets or
revenues may be attributable to
activities that are not on the section
347.105(b) list of authorized activities.
In addition, the bank is prohibited from
making any loans or extensions of credit
to the organization that are not on the
same terms as those prevailing at the
time for comparable transactions with
nonaffiliated organizations.
9. Limitations on Indirect Investments in
Nonfinancial Foreign Organizations
(Revised § 347.109)
Section 347.109 of the proposal is
derived from existing section
347.104(g). The text of the paragraph is
retained but is reworded for
clarification, and the references to other
sections of subpart A are revised to
conform to the new section numbers
contained in the proposal. The
paragraph is also being made a separate
section for ease of reference
eign Organizations
(Revised § 347.109)
Section 347.109 of the proposal is
derived from existing section
347.104(g). The text of the paragraph is
retained but is reworded for
clarification, and the references to other
sections of subpart A are revised to
conform to the new section numbers
contained in the proposal. The
paragraph is also being made a separate
section for ease of reference.
Like paragraph (g) of the existing rule,
this section authorizes a bank to make
indirect portfolio investments in
nonfinancial foreign organizations
through a foreign subsidiary or an Edge
corporation subsidiary, to an amount
equal to 15 percent of the bank’s Tier 1
capital, without regard to whether the
activities of the foreign organization are
authorized under section 347.105(b). In
addition, the following requirements
must be met:
• The aggregate holdings of a
particular foreign organization’s equity
interests by the bank and its affiliates
must be less than 20 percent of the
foreign organization’s voting interests
and 40 percent of its total voting and
nonvoting equity interests;
• The bank and its affiliates are not
permitted to control the foreign
organization; and
• Any loan or extension of credit to
the foreign organization must be on
substantially the same terms as those
prevailing at the time for comparable
transactions with nonaffiliated
organizations.
10. Affiliate Holdings (Revised
§ 347.110)
Section 347.110 of the proposal is
derived from existing section
347.104(h). The text of the paragraph is
retained, and cross-references to subpart
A are added for ease of reference due to
other proposed revisions to the rules in
subpart A. The reference to section
337.4 in the existing rule is also
changed to reflect the removal and
replacement of section 337.4 with
section 362.8 or, for financial
subsidiaries, section 362.18. See, 66 FR
1018 (January 5, 2001). The paragraph
also is made a separate section for ease
of reference.
11
are added for ease of reference due to
other proposed revisions to the rules in
subpart A. The reference to section
337.4 in the existing rule is also
changed to reflect the removal and
replacement of section 337.4 with
section 362.8 or, for financial
subsidiaries, section 362.18. See, 66 FR
1018 (January 5, 2001). The paragraph
also is made a separate section for ease
of reference.
11. Underwriting and Dealing Limits
Applicable to Foreign Organizations
Held by Insured State Nonmember
Banks (Revised § 347.111)
Section 347.111 of the proposal is
derived from existing section 347.105.
Cross-references are being added, for
ease of reference, to other rules in
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4 The omitted activities relevant to this discussion
are: engaging in repurchase agreements that are the
functional equivalent of extensions of credit and
paying branch employees a greater rate of interest
on their deposits than the rate paid to other
depositors on similar deposits. A third activity,
concerning extending credit to an officer of the
branch in the foreign country in which the branch
is located to finance the officer’s living quarters, is
not included in the list of activities authorized by
the FDIC’s existing rule. Considering that this
activity was not among the list of permissible
activities for foreign branches of member banks in
the recent revisions to Regulation K and that the
FDIC previously concluded that the activity was
within the general banking powers of a foreign
branch, the inclusion of this additional activity in
the list of activities that are permissible under
proposed section 347.115 does not appear to be
necessary
as not among the list of permissible
activities for foreign branches of member banks in
the recent revisions to Regulation K and that the
FDIC previously concluded that the activity was
within the general banking powers of a foreign
branch, the inclusion of this additional activity in
the list of activities that are permissible under
proposed section 347.115 does not appear to be
necessary. It also does not appear to advance the
goal of making the comparison of activities
authorized under Regulation K and those
authorized by the FDIC’s corresponding provision
easier. Therefore, this particular activity is not
being included in the list of permissible activities
contained in the proposed rule.
subpart A that affect this rule because of
other revisions being made in this
proposal. Appropriate revisions to
section citations in Regulation K are
also being made.
Under the proposed rule, as with
existing section 347.105, a foreign
investment entity of a bank is permitted
to underwrite, distribute, and deal
equity securities outside the United
States, subject to the three main
limitations described generally below:
• Underwriting commitments for a
single issuer may not exceed an amount
equal to the lesser of $60 million or 25
percent of the bank’s Tier 1 capital. This
underwriting commitment limit may be
exceeded, however, to the extent the
commitment is covered by binding
commitments from sub-underwriters or
purchasers.
• Distribution and dealing shares of a
single entity may not exceed an amount
equal to the lesser of $30 million or 5
percent of the bank’s Tier 1 capital. This
limit is subject to two exceptions. First,
to facilitate underwritings, any equity
securities acquired pursuant to an
underwriting commitment extending up
to 90 days after the payment date of the
underwriting are not included in the
limit
ution and dealing shares of a
single entity may not exceed an amount
equal to the lesser of $30 million or 5
percent of the bank’s Tier 1 capital. This
limit is subject to two exceptions. First,
to facilitate underwritings, any equity
securities acquired pursuant to an
underwriting commitment extending up
to 90 days after the payment date of the
underwriting are not included in the
limit. Second, up to 75 percent of the
position in an equity security may be
reduced by netting long and short
positions in the identical equity
security, or by offsetting cash positions
against derivative instruments
referenced to the same security.
• The sum of underwriting
commitments, distribution and dealing
shares, and any portfolio investments in
nonfinancial organizations under
proposed section 347.109 may not
exceed an amount equal to 25 percent
of the bank’s Tier 1 capital.
12. Restrictions on Activities Applicable
to Foreign Organizations That Act as
Futures Commission Merchants
(Revised § 347.112)
Section 347.112 of the proposal is
derived from existing section 347.106.
As proposed, the title to the section is
revised, and the text of the existing rule
is reorganized and retained. Cross-
references are added, for ease of
reference, to subpart A that affect this
rule because of other revisions made in
this proposal.
As with existing section 347.106, the
proposed rule imposes an additional
restriction beyond those imposed by
section 225.28(b) of Regulation Y on
acting as a futures commission
merchant. Under section 347.112, a
foreign investment entity may not,
without the FDIC’s prior approval, have
potential liability to a mutual exchange
or clearing association of which the
foreign investment entity is a member
that exceeds 2 percent of the bank’s Tier
1 capital.
13. Restrictions Applicable to Activities
by a Foreign Organization in the United
States. (Revised § 347.113)
Section 347.113 of the proposal is
derived from existing section 347.107
ithout the FDIC’s prior approval, have
potential liability to a mutual exchange
or clearing association of which the
foreign investment entity is a member
that exceeds 2 percent of the bank’s Tier
1 capital.
13. Restrictions Applicable to Activities
by a Foreign Organization in the United
States. (Revised § 347.113)
Section 347.113 of the proposal is
derived from existing section 347.107.
The title to the section is revised, and
the text of the existing rule is
reorganized and retained.
As with the existing rule, the
proposed rule prohibits a state
nonmember bank from investing in any
foreign organization that engages in the
general business of buying or selling
goods, wares, merchandise, or
commodities in the U.S. It also prohibits
investments totaling over 5 percent of
equity interests in any foreign
organization if the organization engages
in any business activities in the U.S.
that are not incidental to its
international or foreign business. The
rule also provides that a foreign
organization will not be considered to
be engaged in business or activities in
the U.S. unless it maintains an office in
the U.S. other than a representative
office. Beyond these thresholds, foreign
organizations are authorized to conduct
activities that are permissible in the U.S.
for an Edge corporation, or such other
business activities as are approved by
the FDIC.
14. Extensions of Credit to Foreign
Organizations Held by Insured State
Nonmember Banks; Shares of Foreign
Organizations Held in Connection With
Debts Previously Contracted (Revised
§ 347.114)
Section 347.114 of the proposal is
derived from existing section 347.109.
The text of the existing rule is
reorganized and retained with only
minor revisions.
15. Activities Permissible for a Foreign
Branch of an Insured State Nonmember
Bank (Revised § 347.115)
Proposed section 347.115 is largely
derived from existing section
347.103(a)
Debts Previously Contracted (Revised
§ 347.114)
Section 347.114 of the proposal is
derived from existing section 347.109.
The text of the existing rule is
reorganized and retained with only
minor revisions.
15. Activities Permissible for a Foreign
Branch of an Insured State Nonmember
Bank (Revised § 347.115)
Proposed section 347.115 is largely
derived from existing section
347.103(a). Although most of the
existing text is not being changed
substantively, a few revisions are made
to incorporate changes made by the FRB
in section 211.4 of Regulation K. For
example, the reference to ‘‘development
bank’’ in existing section
347.103(a)(2)(i) has been changed to
‘‘government sponsored development
bank’’ in section 347.115(c)(1)(i). The
authorization for an insured state
nonmember bank to underwrite,
distribute and deal, invest in or trade
specified foreign government
obligations that are rated as investment
grade by at least two established
international rating agencies under
existing section 347.103(a)(3)(ii) is also
being changed. As amended, section
347.115(b)(2) would require only that
these obligations be rated as
‘‘investment grade.’’ As mentioned
earlier, because the FDIC is proposing to
adopt the same definition of
‘‘investment grade’’ that the FRB
adopted in its recent revisions to
Regulation K, an obligation would
qualify as ‘‘investment grade’’ under the
proposed rule if it received a rating in
one of the four highest investment
categories by two or more NRSROs
(nationally recognized statistical rating
organization, as designated by the
Securities and Exchange Commission).
If it had only been rated by one NRSRO
and received the appropriate rating, it
could be considered ‘‘investment grade’’
with only that one rating
ent grade’’ under the
proposed rule if it received a rating in
one of the four highest investment
categories by two or more NRSROs
(nationally recognized statistical rating
organization, as designated by the
Securities and Exchange Commission).
If it had only been rated by one NRSRO
and received the appropriate rating, it
could be considered ‘‘investment grade’’
with only that one rating.
In addition, as with section 347.105 of
this proposal, in the preamble to the
1998 Final Rule, the FDIC determined
that certain activities the FRB had
specifically listed as being authorized in
the corresponding section of Regulation
K for foreign branches of national banks
were within the general banking powers
of a national bank. Therefore, it was
considered unnecessary to separately
enumerate them for foreign branches of
insured state nonmember banks in
existing section 347.103(a). Because the
same issues that were previously
discussed in connection with the
revisions to section 347.105 of the
proposal would be applicable to this
section regarding the applicability of
section 24 of the FDI Act and part 362,
the FDIC is including the activities that
were previously omitted from the text of
the FDIC’s existing rule but which are
included in the corresponding provision
of Regulation K.4 The activities
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is
section regarding the applicability of
section 24 of the FDI Act and part 362,
the FDIC is including the activities that
were previously omitted from the text of
the FDIC’s existing rule but which are
included in the corresponding provision
of Regulation K.4 The activities
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Federal Register / Vol. 69, No. 137 / Monday, July 19, 2004 / Proposed Rules
5 As with proposed section 347.105(d), this
paragraph is considered a rule of general
applicability to provide guidance and notice to
banks with an interest in this area.
authorized under the proposed rule also
are reorganized to correspond more
closely to those activities authorized in
12 CFR 211.4 for foreign branches of
member banks. Finally, the paragraph
addressing ‘‘other activities’’ is revised
to indicate that the FDIC may authorize
foreign branches of state nonmember
banks to engage in activities that are not
specifically listed in the proposed rule,
and a new paragraph (h) is being added
to clarify when other activities may be
approved under this subpart or,
alternatively, when they also must be
authorized under section 24 of the FDI
Act and part 362.5
16. Recordkeeping and Supervision of
Foreign Activities of Insured State
Nonmember Banks Under This Subpart
(Revised § 347.116)
Section 347.116 of the proposal is
derived from existing section 347.110.
The language in section 347.110(b)(2) of
the existing rule is eliminated in the
proposed rule because it addresses
application processing and the
requirement for specific consent in
jurisdictions that limit access to
financial information. Those issues are
addressed in section 347.119 of the
proposal.
17
347.116)
Section 347.116 of the proposal is
derived from existing section 347.110.
The language in section 347.110(b)(2) of
the existing rule is eliminated in the
proposed rule because it addresses
application processing and the
requirement for specific consent in
jurisdictions that limit access to
financial information. Those issues are
addressed in section 347.119 of the
proposal.
17. General Consent (Revised § 347.117)
Section 347.117 of the proposal
consolidates the general consent
requirements related to foreign branches
that are presently contained in section
347.103(b) with the general consent
requirements for investments in foreign
organizations that are presently
contained in section 347.108(a) into a
single rule.
Under proposed section 347.117(a), as
in existing section 347.103(b), general
consent is provided for an eligible
insured state nonmember bank to
establish branches within a foreign
country in which it has a branch or a
foreign bank subsidiary and for
relocation of existing foreign branches
within a foreign country. As part of the
EGRPRA process, it was suggested that
U.S. banks that are well-managed, well-
capitalized, maintain at least a
satisfactory CRA rating, and have
experience operating overseas, such as
through one or two branches, should be
allowed to branch overseas using
procedures available to them for
domestic branching. After considering
this comment, the FDIC is concerned
that such broad authority may allow
branching into foreign countries without
adequate familiarity with the banking
system and regulatory requirements that
may exist in the host country.
Nonetheless, the proposal introduces
some additional flexibility in the
branching area, by allowing insured
state nonmember banks to branch into a
foreign country under general consent
in circumstances covered by (a)(1)(ii) or
ty may allow
branching into foreign countries without
adequate familiarity with the banking
system and regulatory requirements that
may exist in the host country.
Nonetheless, the proposal introduces
some additional flexibility in the
branching area, by allowing insured
state nonmember banks to branch into a
foreign country under general consent
in circumstances covered by (a)(1)(ii) or
(iii) of the proposed rule. This change
will allow an eligible state nonmember
bank to establish additional branches in
a country in which the bank’s holding
company operates a foreign bank
subsidiary, or in which an affiliated
bank or Edge or Agreement corporation
operates one or more foreign branches
or foreign bank subsidiaries. This will
allow for after-the-fact notification to
the FDIC in those circumstances, rather
than requiring prior approval under
expedited processing, as is presently
required under section 347.103(c)(1).
Under proposed section 347.117(b),
general consent for investments in
foreign organizations is provided in the
same circumstances covered by existing
section 347.108(a). In addition, the
proposal would grant general consent to
invest in a foreign organization, under
proposed section 347.117(b)(2), when at
least one insured state nonmember bank
operates a foreign branch in the relevant
foreign country where the organization
will be located because of the FDIC’s
familiarity with the banking laws and
practices of that country. This
amendment was suggested in a
comment on the 1998 Final Rule, but
the FDIC declined to adopt it because of
concerns that banks could operate
‘‘nameplate’’ branches in foreign
countries and, because they would lack
a physical presence in those countries,
more extensive analysis and
coordination with the host country
supervisors may be needed before the
FDIC authorized free-standing foreign
organizations
uggested in a
comment on the 1998 Final Rule, but
the FDIC declined to adopt it because of
concerns that banks could operate
‘‘nameplate’’ branches in foreign
countries and, because they would lack
a physical presence in those countries,
more extensive analysis and
coordination with the host country
supervisors may be needed before the
FDIC authorized free-standing foreign
organizations. Upon further
consideration of this issue, however, the
FDIC believes most nameplate branches
would be operated in jurisdictions
where authority to invest in foreign
organizations by general consent would
be inapplicable under section 347.119(a)
of the proposal. Therefore, if that issue
arises, specific consent would be
required to authorize such an
investment, and the previously stated
concern could be addressed at that time.
18. Expedited Processing (Revised
§ 347.118)
Section 347.118 of the proposal
consolidates the expedited processing
provisions for foreign branches in
existing section 347.103(c)(2) with the
expedited processing provisions for
investments in foreign organizations in
existing section 347.108(b) into a single
rule for ease of reference.
19. Specific Consent (Revised § 347.119)
Section 347.119 of the proposal
consolidates the specific consent
requirements for foreign branches in
existing section 347.103(d)–(e) with the
specific consent requirements for
investments in foreign organizations in
existing section 347.108(c)–(d) into a
single rule for ease of reference and
because the existing provisions are
largely duplicative.
20. Computation of Investment
Amounts (Revised § 347.120)
Section 347.120 of the proposal is
derived from existing section
347.108(e). It is placed in a separate
section in the proposal to indicate its
applicability to the general consent,
expedited processing, and specific
consent sections for foreign investments
because those subjects are addressed by
separate sections of the proposal.
21
Computation of Investment
Amounts (Revised § 347.120)
Section 347.120 of the proposal is
derived from existing section
347.108(e). It is placed in a separate
section in the proposal to indicate its
applicability to the general consent,
expedited processing, and specific
consent sections for foreign investments
because those subjects are addressed by
separate sections of the proposal.
21. Requirements for Insured State
Nonmember Bank to Close a Foreign
Branch. (Revised § 347.121)
Section 347.121 of the proposal is
derived from 347.103(f) and is placed in
a separate section for ease of reference
and because the approval provisions of
that section are separated from the
authorized activities section for foreign
branches in the proposal.
22. Limitations Applicable to the
Authority Provided in This Subpart
(New § 347.122)
The FDIC is proposing to add a new
section 347.122. This section recognizes
that the FDIC may, under section
18(d)(2) and 18(l) of the FDI Act,
condition the authority granted under
this subpart A as it considers
appropriate. The section also provides
for termination of activities or
divestiture of investments permitted
under the subpart, after giving the bank
notice and a reasonable opportunity to
be heard, if a bank is unable or fails to
comply with the requirements of the
subpart or any conditions imposed by
the FDIC regarding transactions under
the subpart.
IV. Section-by-Section Analysis of
Proposed Revisions to Part 347,
Subpart B
1. Authority, Purpose and Scope
(Revised § 347.201)
The FDIC is proposing to revise
existing section 347.201 to reflect the
authority and coverage of subpart B, as
amended. In addition, the scope of the
subpart is revised to reflect the grouping
of the sections therein based primarily
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ity, Purpose and Scope
(Revised § 347.201)
The FDIC is proposing to revise
existing section 347.201 to reflect the
authority and coverage of subpart B, as
amended. In addition, the scope of the
subpart is revised to reflect the grouping
of the sections therein based primarily
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6 Unlike the existing section, which requires the
foreign bank to provide information regarding the
affairs of the foreign bank and its affiliates outside
the U.S. and examination of the affairs of any office,
agency, branch or affiliate of the foreign bank
located in the United States, the proposed section
will require the foreign bank to permit examination
of itself and its affiliates for the purposes specified
in the statute, without regard to their location. This
requirement is based on the relevant underlying
statutory provisions in the FDI Act. See, sections
3(w)(6) and 10(b)(4) of the FDI Act (12 U.S.C.
1813(w)(6), 1820(b)(4)).
upon whether they apply to both
insured state and federal branches or
only to state branches. The section also
recognizes that section 347.204 applies
to foreign banks seeking deposit
insurance coverage for their state or
federal depository institution
subsidiaries.
2. Definitions (Revised § 347.202)
The definitions contained in existing
section 347.202 are revised by amending
an existing paragraph, moving an
existing paragraph, and adding three
new paragraphs. In the proposal, the
definition of ‘‘domestic retail deposit
activity’’ contained in paragraph (e) is
being amended to add ‘‘federal’’
branches because the prohibition
contained in section 347.206 of the
proposal, concerning taking domestic
retail deposits through U.S. bank
subsidiaries or certain grandfathered
branches, is applicable equally to state
or federal branches of foreign banks
In the proposal, the
definition of ‘‘domestic retail deposit
activity’’ contained in paragraph (e) is
being amended to add ‘‘federal’’
branches because the prohibition
contained in section 347.206 of the
proposal, concerning taking domestic
retail deposits through U.S. bank
subsidiaries or certain grandfathered
branches, is applicable equally to state
or federal branches of foreign banks.
The addition of ‘‘federal’’ branches to
section 347.202(e) is not intended,
however, to create a discrepancy
regarding the application of section
347.216 of the proposal, which also uses
the term ‘‘domestic retail deposit
activity,’’ because section 347.216, by its
own terms, applies specifically to state
branches. The corresponding rule for
federal branches is 12 CFR 28.16.
Paragraph (m) of the proposal revises
the definition of ‘‘initial deposit’’ that is
contained in paragraph (l) of the
existing rule to eliminate the need for
the separate definition of ‘‘first deposit’’
that is included at the end of the
paragraph in the existing rule. In
addition, paragraphs (j) and (s) are
added to the section and are consistent
with the definitions for the same terms
that are utilized in subpart A.
3. Deposit Insurance Required for All
Branches of Foreign Banks Engaged in
Domestic Retail Deposit Activity in the
Same State (Revised § 347.203)
Existing section 347.203 is retained in
the proposal, but the text is revised to
clarify the requirements of the section.
The title to the section also is revised to
make it more descriptive of the contents
of the section.
4. Commitment To Be Examined and
Provide Information (Revised § 347.204)
Section 347.204 of the proposal
substantially revises existing section
347.208 to update the rule and enhance
the FDIC’s supervisory authority. The
existing rule was initially issued in 1979
to implement section 10(b) of the FDI
Act (12 U.S.C. 1820(b)) with regard to
U.S. branches of foreign banks
s
of the section.
4. Commitment To Be Examined and
Provide Information (Revised § 347.204)
Section 347.204 of the proposal
substantially revises existing section
347.208 to update the rule and enhance
the FDIC’s supervisory authority. The
existing rule was initially issued in 1979
to implement section 10(b) of the FDI
Act (12 U.S.C. 1820(b)) with regard to
U.S. branches of foreign banks. Section
10(b) requires a foreign bank, in
connection with obtaining deposit
insurance for a branch or depository
institution subsidiary, to submit a
binding written commitment to the
FDIC to permit any examination of the
affairs of any affiliate of the branch or
depository institution subsidiary to the
extent necessary to determine: (1) The
relationship between the depository
institution and the affiliate and (2) the
effect of such relationship on such
depository institution.
Like the existing rule, the proposed
rule addresses a foreign bank seeking
deposit insurance for a U.S. branch.
However, the proposed rule, if adopted,
will apply whenever a foreign bank
seeks deposit insurance for a banking
subsidiary.
Accordingly, the rule, as revised, will
require a foreign bank applying for
deposit insurance for a U.S. branch or
depository institution subsidiary to
provide the FDIC with a written
commitment (including a consent to
U.S. court jurisdiction and designation
of agent for service of process,
acceptable to the FDIC) to:
1. Permit examination, for the reasons
specified in section 10(b)(4), of the
foreign bank and affiliates located
outside the U.S.; 6
2. Provide information, for the reasons
specified in section 10(b)(4), regarding
the foreign bank and affiliates located
outside the U.S.; and
3. Allow examination and provide
information, for the reasons specified in
section 10(b)(4), regarding the offices
and affiliates of the foreign bank that are
located in the U.S
b)(4), of the
foreign bank and affiliates located
outside the U.S.; 6
2. Provide information, for the reasons
specified in section 10(b)(4), regarding
the foreign bank and affiliates located
outside the U.S.; and
3. Allow examination and provide
information, for the reasons specified in
section 10(b)(4), regarding the offices
and affiliates of the foreign bank that are
located in the U.S.
The proposed rule also will allow the
foreign examination provision to be
waived in instances where the FRB has
already made a comprehensive
consolidated supervision determination
for the foreign bank at issue.
In addition, under the proposed rule,
if an equivalent commitment has been
made by a foreign bank to another
Federal banking agency that provides
the FDIC with the same rights and
privileges that the FDIC would have if
it obtained such commitment on its own
behalf, the FDIC may waive all or part
of the commitment requirements
imposed by this section in lieu of
requiring its own separate commitment
from the foreign bank. If such waiver is
granted, however, the foreign bank will
be required to provide the FDIC with the
commitments required by the section
before the foreign bank terminates any
commitments provided to any other
Federal banking agency which provide
a basis for such waiver.
The FDIC recognizes that there may
be situations when a foreign bank has
not been determined to be subject to
comprehensive consolidated
supervision; has not provided a
commitment to any other Federal
banking agency that the FDIC finds
acceptable; and cannot or will not
provide the written commitment to
permit examination required under
section 347.204(a)(1). In this
circumstance, it is envisioned that
under section 347.204(a)(3) the deposit
insurance application for the U.S.
branch or depository institution will not
be processed because the application
will not be considered substantially
complete without the required
commitment
and cannot or will not
provide the written commitment to
permit examination required under
section 347.204(a)(1). In this
circumstance, it is envisioned that
under section 347.204(a)(3) the deposit
insurance application for the U.S.
branch or depository institution will not
be processed because the application
will not be considered substantially
complete without the required
commitment. It is also recognized,
however, that the foreign bank may be
willing to provide the required
commitment, but obstacles to the FDIC’s
ability to utilize the commitment may
be posed by the laws or regulatory
regime governing the foreign bank. In
this situation, it is envisioned that the
foreign bank would be responsible for
addressing and resolving these issues in
consultation with the appropriate FDIC
staff. To the extent the issues cannot be
resolved acceptably, but the foreign
bank provides the required
commitment, the rule provides for
consideration of these issues, in section
347.204(b)(3), in determining whether
the deposit insurance application of the
foreign bank’s U.S. branch or depository
institution should be granted or denied.
5. Records Maintenance (Revised
§ 347.205)
Section 347.205 of the proposal
addresses record maintenance
requirements for insured U.S. branches
of foreign banks. The new section
reorders and combines the paragraphs of
existing section 347.209, which
addresses the same issues.
6. Conduct of Domestic Retail Deposit
Activity by U.S. Branch of a Foreign
Bank (Revised § 347.206)
Section 347.206 of the proposal
implements section 6(d) of the IBA (12
U.S.C. 3104(d)). Paragraphs (a)–(c) are
derived from existing section
347.204(a)–(c) but have been reworded
slightly for clarity. Paragraph (a)
requires any foreign bank intending to
conduct domestic retail deposit
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47.206 of the proposal
implements section 6(d) of the IBA (12
U.S.C. 3104(d)). Paragraphs (a)–(c) are
derived from existing section
347.204(a)–(c) but have been reworded
slightly for clarity. Paragraph (a)
requires any foreign bank intending to
conduct domestic retail deposit
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7 See e.g., FDIC Advisory Opinion 92–12, March
25, 1992, reprinted in [1991–1992 Transfer Binder]
Fed. Banking L. Rep. (CCH) P81,482 (The
grandfathered branch exception was intended only
to permit existing insured branches of foreign banks
to continue to operate after the enactment of
FDICIA without the requirement of being ‘‘rolled
up’’ into a newly chartered subsidiary bank. The
provision does not permit a foreign bank with a
grandfathered branch to subsequently open
additional insured branches which accept and
maintain deposit accounts having balances of less
than $100,000.)
8 Reading the statute as a whole, the proposed
broad reading of the exception also is contrary to
the direction provided in section 6(a) of the IBA
regarding implementation of the section because
purchasers of grandfathered branches could avoid
forming and capitalizing banking subsidiaries to
engage in domestic retail deposit activity in the
U.S., rather than following the same process
required for domestic banks of establishing and
capitalizing a distinct corporate entity and applying
for deposit insurance.
activities requiring deposit insurance in
any state after December 19, 1991, to
establish one or more insured U.S. bank
subsidiaries to conduct those deposit
activities. Paragraph (b) provides an
exception to this general rule, based on
section 6(d)(3) of the IBA, for any FDIC-
insured bank organized under the laws
of any territory of the United States,
Puerto Rico, Guam, American Samoa, or
the Virgin Islands
deposit insurance in
any state after December 19, 1991, to
establish one or more insured U.S. bank
subsidiaries to conduct those deposit
activities. Paragraph (b) provides an
exception to this general rule, based on
section 6(d)(3) of the IBA, for any FDIC-
insured bank organized under the laws
of any territory of the United States,
Puerto Rico, Guam, American Samoa, or
the Virgin Islands. This allows insured
banks organized under the laws of the
specified jurisdictions to conduct any
domestic retail deposit activities in the
United States through an insured
branch, rather than through insured
bank subsidiaries. Paragraph (c) is based
upon the ‘‘grandfathered branch’’
exception in the statute, which allows
any insured branches that were
accepting or maintaining domestic retail
deposit accounts on December 19, 1991,
to continue to operate as insured
branches conducting domestic retail
deposit activities. Existing section
347.204(d), which authorizes foreign
banks to operate noninsured state
branches meeting the criteria specified
therein, is made into proposed section
347.213 because it only applies to state
branches.
Paragraph (d) of the proposed rule is
added to address an issue raised with
the FDIC through the EGRPRA process.
In that process, an industry trade
association requested that the FDIC
clarify that the grandfathered status of
an insured branch survives the sale or
transfer of the branch from one foreign
bank to another foreign bank. The trade
association suggested that the
transferability of the grandfathered
status of a U.S. branch of a foreign bank
to a new owner was supported by
applying the ‘‘plain meaning’’ rule of
statutory construction to section 6(d) of
the IBA
clarify that the grandfathered status of
an insured branch survives the sale or
transfer of the branch from one foreign
bank to another foreign bank. The trade
association suggested that the
transferability of the grandfathered
status of a U.S. branch of a foreign bank
to a new owner was supported by
applying the ‘‘plain meaning’’ rule of
statutory construction to section 6(d) of
the IBA. The trade association’s view
was that because the availability of the
grandfather exception appears to be
conditioned upon a single exception
(that the branch was insured as of
December 19, 1991), it was inconsistent
with the plain meaning of the statute to
read into it an additional condition (that
the branch was not transferred after
December 19, 1991). The trade
association also observed that other
grandfather provisions enacted by
Congress in the same statute expressly
state that those grandfather rights
terminate upon a change in control.
Therefore, the absence of such a
provision in the grandfathered branch
exception, it was argued, indicates that
Congress did not intend that an insured
branch would lose its grandfathered
status upon its sale or transfer.
Additionally, the trade association
observed that permitting transfers of
grandfathered branches would provide
an option for other foreign banks that
would like to establish FDIC-insured
branches but are constrained from doing
so by the subsidiary requirement in
section 6(d). Finally, it was observed
that depositors would not lose the
protections of deposit insurance solely
as a result of the sale or transfer of an
insured branch.
The FDIC has considered these
observations and others presented by
the trade association. It appreciates the
arguments supporting a broad reading of
the grandfathered branch exception but
the exception has been construed more
narrowly in the past 7 and, at this time,
the FDIC is not persuaded that a change
in position is justified
as a result of the sale or transfer of an
insured branch.
The FDIC has considered these
observations and others presented by
the trade association. It appreciates the
arguments supporting a broad reading of
the grandfathered branch exception but
the exception has been construed more
narrowly in the past 7 and, at this time,
the FDIC is not persuaded that a change
in position is justified. The broad
reading of the grandfather exception
requested would be at odds with the
distinct preference Congress stated in
section 6(d) of the IBA of making foreign
banks desiring to engage in new
domestic retail deposit activities
requiring deposit insurance after
December 19, 1991 do so through
insured banking subsidiaries. Since it is
a well recognized rule of statutory
construction that in ascertaining the
plain meaning of a statute it is
appropriate to look to the particular
statutory language at issue, as well as
the language and design of the statute as
a whole, this construction of paragraph
(d) appears to be more appropriate than
the alternative construction of the
statute advanced by the trade
association.8 It also does not appear to
be appropriate, as a matter of policy, to
adopt an interpretation that will make
the grandfathered status the object of
bargain among foreign banks and allow
entry to and departure from the insured
domestic retail deposit market based on
the highest bid for the privilege.
The FDIC recognizes that the existing
rule does not address this issue. It also
recognizes, however, that there may be
other situations, such as certain merger
and acquisition transactions, that are
not designed or motivated by the desire
to obtain access to the domestic retail
deposit market and avoid compliance
with the subsidiary requirement in
section 6(d) of the IBA, where the
grandfathered status of an insured
branch should remain intact. Therefore,
the FDIC is addressing the issue in
paragraph (d) of the proposed rule and
inviting public comments.
7
on transactions, that are
not designed or motivated by the desire
to obtain access to the domestic retail
deposit market and avoid compliance
with the subsidiary requirement in
section 6(d) of the IBA, where the
grandfathered status of an insured
branch should remain intact. Therefore,
the FDIC is addressing the issue in
paragraph (d) of the proposed rule and
inviting public comments.
7. Disclosure of Supervisory Information
to Foreign Supervisors (New § 347.207)
Section 347.207 is proposed to
facilitate cross-border supervision of
insured branches of foreign banks and
insured bank subsidiaries by providing
for the sharing of supervisory
information between the FDIC and
foreign bank regulatory or supervisory
authorities. It is patterned after section
15 of the IBA (12 U.S.C. 3109) and 12
CFR 211.27. The section also addresses
the confidentiality of such information,
based upon the FDIC’s interpretation of
section 8(v) of the FDI Act (12 U.S.C.
1818(v)), by providing that the
disclosure or transfer of such
information to a foreign bank regulatory
or supervisory authority does not waive
any privilege applicable to such
information.
8. Assessment Base Deductions by
Insured Branch (Revised § 347.208)
Section 347.208 is revised text of
existing section 347.212.
9. Pledge of Assets (Revised § 347.209)
The asset pledge requirement
contained in existing section 347.210 is
revised in proposed section 347.209 by
imposing a risk-based asset pledge
requirement. The existing 5 percent
asset pledge requirement has been in
place since 1984. As part of the
EGRPRA process, an industry trade
association observed that the existing
asset pledge requirement fails to take
into account the specific circumstances
of each insured branch and advances in
risk-based bank supervision that have
taken place in recent years. The trade
association also observed that the asset
pledge requirements do not apply to
U.S
been in
place since 1984. As part of the
EGRPRA process, an industry trade
association observed that the existing
asset pledge requirement fails to take
into account the specific circumstances
of each insured branch and advances in
risk-based bank supervision that have
taken place in recent years. The trade
association also observed that the asset
pledge requirements do not apply to
U.S. banks and asserted that the existing
asset pledge requirement adversely
affects the earnings and liquidity of
insured U.S. branches by making them
maintain and pledge specific amounts of
generally lower yielding assets.
The FDIC recognizes that the asset
pledge requirement may have
competitive implications for foreign
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9 The ROCA system represents the rating of risk
management, operational controls, compliance, and
asset quality of a Foreign Banking Organization’s
U.S. operations.
banks with regard to their insured
branches operating in the United States,
but does not believe elimination of the
asset pledge requirement is appropriate.
Unlike their domestic counterparts, the
activities, assets, and personnel of
foreign banks operating insured
branches in the United States are, in
large part, outside the jurisdiction of the
United States. While the parent bank
may, in theory, add financial support to
the branch structure, the FDIC is
concerned that indications of financial
weakness that become apparent in an
insured branch may also be indicative of
financial weakness at the parent level
that may result in less financial support
from the parent of the insured branch in
times of financial stress
iction of the
United States. While the parent bank
may, in theory, add financial support to
the branch structure, the FDIC is
concerned that indications of financial
weakness that become apparent in an
insured branch may also be indicative of
financial weakness at the parent level
that may result in less financial support
from the parent of the insured branch in
times of financial stress. This could
result either from voluntary decisions of
the parent or regulatory restrictions
imposed by the home country regulator,
and may precipitate significant deposit
outflows from the insured branch.
Therefore, to mitigate this risk and the
potential risks associated with
providing deposit insurance for deposits
in an insured branch, the FDIC
continues to believe that an asset pledge
requirement in some amount is
appropriate.
The FDIC recognizes that it may be
appropriate, however, to revise the asset
pledge requirement to make it more
risk-focused and to take into
consideration characteristics that may
be unique to each insured branch. As
revised in the proposal, the asset pledge
requirement will be determined in a
manner similar to the approach the
FDIC has taken with its risk-based
deposit insurance assessment system.
Under the proposal, any newly insured
branch will be subject to a 5 percent
asset pledge requirement until the end
of the first three years of its operation
as an insured branch. This differs from
the one-year requirement in paragraph
sset pledge
requirement will be determined in a
manner similar to the approach the
FDIC has taken with its risk-based
deposit insurance assessment system.
Under the proposal, any newly insured
branch will be subject to a 5 percent
asset pledge requirement until the end
of the first three years of its operation
as an insured branch. This differs from
the one-year requirement in paragraph
(b)(2) of the existing rule, but the FDIC
believes that the standard in the existing
rule is outdated and that it is prudent
to impose more stringent requirements
on newly insured institutions during the
first three years of their operations to
compensate for potential risks
associated with the commencement of
insured operations. Three years will
also allow a newly insured branch to
experience at least one examination
cycle, which will result in supervisory
information that the FDIC can utilize to
adjust the asset pledge requirement for
the branch. After the first three years of
operation as an insured branch, the rule
envisions that the asset pledge amount
will be adjusted by taking into
consideration the percentage of assets
maintained by the insured branch,
pursuant to section 347.210, and the
supervisory information relative to the
branch at issue. It is envisioned that the
most recent ROCA rating 9 for the
insured branch will be a focal point of
such supervisory information but, as
with the risk-based premium system,
the FDIC could also consider other
supervisory information that it believes
is appropriate to fully evaluate the
potential risk posed by the insured
branch in determining the supervisory
subgroup assignment for the branch.
The appropriate percentage of assets
required to be pledged will then be
determined based on the supervisory
risk subgroup assigned and the asset
maintenance level applicable to the
branch
nsider other
supervisory information that it believes
is appropriate to fully evaluate the
potential risk posed by the insured
branch in determining the supervisory
subgroup assignment for the branch.
The appropriate percentage of assets
required to be pledged will then be
determined based on the supervisory
risk subgroup assigned and the asset
maintenance level applicable to the
branch. The proposal will generally
permit the asset pledge to be lowered to
not less than 2 percent of third-party
liabilities for insured branches that are
perceived to pose a lower potential risk
and up to 8 percent of liabilities for
insured branches that are perceived to
pose a higher potential risk to the
deposit insurance fund. In addition the
FDIC’s ability to require a higher
percentage of pledged assets in
appropriate circumstances will remain
unchanged in the proposed rule.
Although the proposed rule could
potentially increase the asset pledge
requirement above the existing 5
percent requirement for some insured
branches, most of the existing insured
branches traditionally exceed the
minimum asset maintenance
requirements imposed by existing
section 347.210, and most of their
supervisory ratings are also favorable.
Therefore, if the rule is adopted as
proposed, the FDIC’s asset pledge
requirement for most of the existing
insured branches will be reduced from
its current level. Moreover, the risk-
based proposal is designed to increase
the degree of protection provided to the
FDIC deposit insurance fund as the risk
profile for the insured branch
deteriorates.
The proposed rule also makes
amendments and deletions to the
existing rule. Paragraph (d)(1) of the
existing rule specifies that certificates of
deposit may be pledged as collateral
from
its current level. Moreover, the risk-
based proposal is designed to increase
the degree of protection provided to the
FDIC deposit insurance fund as the risk
profile for the insured branch
deteriorates.
The proposed rule also makes
amendments and deletions to the
existing rule. Paragraph (d)(1) of the
existing rule specifies that certificates of
deposit may be pledged as collateral.
The additional term ‘‘negotiable’’ is
being added to the corresponding
portion of the proposed rule to clarify
this requirement because negotiable
certificates of deposit are marketable,
while other types of certificates of
deposit may exist that could provide
less protection to the FDIC in the event
they had to be liquidated quickly. Thus,
certificates of deposit that are not
negotiable will not qualify as acceptable
collateral for purposes of the asset
pledge requirement. In addition, the
FDIC is proposing to amend paragraph
(d)(2) to add U.S. Treasury bills as an
additional form of eligible collateral.
Finally, paragraph (f) of the existing rule
is removed in the proposed rule because
it is essentially a delegation of authority.
Over the past several years the FDIC has
removed its delegations of authority for
supervisory matters from its rules and
now generally addresses these matters
by internal delegations of authority from
the FDIC’s Board of Directors.
10. Asset Maintenance (Revised
§ 347.210)
Proposed section 347.210 contains
revisions to existing section 347.211
that are largely related to the asset
maintenance calculation for insured
branches. As revised, the proposed rule
will require insured branches to
maintain eligible assets on a daily basis
in an amount not less than 106 percent
of the insured branch’s daily third-party
liabilities, rather than based upon the
preceding quarter’s average book value
of the insured branch’s liabilities
7.211
that are largely related to the asset
maintenance calculation for insured
branches. As revised, the proposed rule
will require insured branches to
maintain eligible assets on a daily basis
in an amount not less than 106 percent
of the insured branch’s daily third-party
liabilities, rather than based upon the
preceding quarter’s average book value
of the insured branch’s liabilities.
Although the existing calculation
method has been in place for a number
of years, there have been some instances
where insured branches were winding
down their operations and needed to be
allowed to calculate their asset
maintenance on a daily basis to
maintain compliance with the asset
maintenance requirement. The FDIC
believes that requiring that the
calculation be made based on the daily
third-party liabilities of the branch will
avoid these and other potential
anomalies that can be caused by using
liability information from the preceding
quarter.
In addition, although requiring the
asset maintenance ratio to be calculated
based on the daily assets and liabilities
of a branch may require some
adjustment of existing processes, the
FDIC does not believe it will require
much additional preparation by insured
branches. The FDIC also believes this
formula’s application will be more
straightforward and the asset
maintenance calculation will be easier
for the insured branches to determine.
Nevertheless, the FDIC is soliciting
public comment regarding this proposal.
Other revisions to paragraph (a) of the
existing rule include elimination of the
alternative calculation for newly-
established branches and the reference
to the ‘‘Board of Directors.’’ Paragraph
l be more
straightforward and the asset
maintenance calculation will be easier
for the insured branches to determine.
Nevertheless, the FDIC is soliciting
public comment regarding this proposal.
Other revisions to paragraph (a) of the
existing rule include elimination of the
alternative calculation for newly-
established branches and the reference
to the ‘‘Board of Directors.’’ Paragraph
(d) of the existing rule is revised to
require that the asset maintenance
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Federal Register / Vol. 69, No. 137 / Monday, July 19, 2004 / Proposed Rules
10 For example, Senator Donald W. Riegle, who
introduced the amendment adding the subsidiary
requirement to section 6 of the IBA, explained the
rationale for the amendment, at 137 Cong. Rec.
S18617, S18623 (daily ed. November 27, 1991), as
follows:
‘‘Another section of the conference report foreign
bank subtitle ensures that foreign banks, that wish
to accept or maintain insured deposit accounts, do
Continued
calculations for the branch be retained
until the next Federal examination.
11. Examination of Branches of Foreign
Banks (Revised § 347.211)
Section 347.211 of the proposal
contains the text of existing section
347.214.
12. FDIC Approval to Conduct Activities
That Are Not Permissible for Federal
Branches (Revised § 347.212)
Section 347.212 revises the text of
existing section 347.213. In addition, a
specific citation is added to the
appropriate section in subpart J that
applies to this section for ease of
reference.
13. Establishment and Operation of
Noninsured Branch (Revised § 347.213)
Section 347.213 of the proposal
contains the revised text of existing
section 347.204(d)
l
Branches (Revised § 347.212)
Section 347.212 revises the text of
existing section 347.213. In addition, a
specific citation is added to the
appropriate section in subpart J that
applies to this section for ease of
reference.
13. Establishment and Operation of
Noninsured Branch (Revised § 347.213)
Section 347.213 of the proposal
contains the revised text of existing
section 347.204(d). As in the existing
rule, the section authorizes foreign
banks to operate noninsured branches if
any such branch:
• Is conducting only a wholesale
deposit taking operation;
• Is accepting only deposits that are
permissible for an Edge Act corporation
pursuant to proposed rule 347.214; or
• Meets the requirements for an
exemption from the definition of
‘‘domestic retail deposit activity’’
pursuant to proposed rule 347.215.
The paragraph is separated from the
other paragraphs in existing section
347.204 because paragraphs (a)–(c) are
equally applicable to state and federal
branches that are insured. As indicated
earlier, paragraphs (a)–(c) of section
347.204 are contained in proposed
section 347.206. Because this paragraph
addresses only noninsured state
branches, it is placed in its own section
and grouped with other sections of the
subpart that relate only to noninsured
state branches.
14. Branch Established Under Section 5
of the International Banking Act
(Revised § 347.214)
Section 347.214 of the proposal
contains the revised text of existing
section 347.205.
15. Exemption From Deposit Insurance
Requirement (Revised § 347.215)
Section 347.215 of the proposal
contains revised text of existing section
347.206. Paragraph (c)(2) has been
revised to delete the exception for non-
time deposits because the timeframe
stated in the existing rule has expired.
Other revisions to the text are not
substantive, and a specific citation has
been added to the section of subpart J
of part 303 that applies to this section.
16
5)
Section 347.215 of the proposal
contains revised text of existing section
347.206. Paragraph (c)(2) has been
revised to delete the exception for non-
time deposits because the timeframe
stated in the existing rule has expired.
Other revisions to the text are not
substantive, and a specific citation has
been added to the section of subpart J
of part 303 that applies to this section.
16. Depositor Notification (Revised
§ 347.216)
Section 347.216 of the proposal
contains the text of existing section
347.207.
V. Request for Comments on Deposit
Insurance for Wholesale U.S. Branches
of Foreign Banks
As part of the EGRPRA process, an
industry trade association indicated that
some foreign banks with U.S. wholesale
branches (i.e., branches that are not
engaged in domestic retail deposit
activities that require FDIC insurance)
may be interested in obtaining deposit
insurance and recommended that the
FDIC should no longer discourage
international banks from applying for
‘‘optional’’ deposit insurance.
To place this observation in context,
prior to 1998, the FDIC had a rule
authorizing ‘‘optional insurance’’ for
U.S. branches of foreign banks. In 1998
the optional insurance rule was
eliminated as part of the revision and
consolidation of various parts of the
FDIC rules into part 347. At that time,
to summarize the discussion contained
in the 1998 Final Rule, the FDIC
observed that the subsidiary
requirement imposed by section 6(d) of
the IBA appeared to reach only
domestic retail deposit taking activities
of foreign banks. Because section 5(b) of
the FDI Act (12 U.S.C. 1815(b)),
addressing deposit insurance
applications for U.S. branches of foreign
banks, had not been repealed, it
arguably may be possible for a U.S.
branch of a foreign bank that does not
engage in domestic retail deposit
activity to seek deposit insurance from
the FDIC
reach only
domestic retail deposit taking activities
of foreign banks. Because section 5(b) of
the FDI Act (12 U.S.C. 1815(b)),
addressing deposit insurance
applications for U.S. branches of foreign
banks, had not been repealed, it
arguably may be possible for a U.S.
branch of a foreign bank that does not
engage in domestic retail deposit
activity to seek deposit insurance from
the FDIC. The FDIC further observed,
however, that as a practical matter, it
did not foresee many circumstances in
which it could be appropriate for the
FDIC’s Board of Directors to approve
such an application, but that the
elimination of the optional insurance
rule would not affect a foreign bank’s
ability to argue that it may make such
an application under section 5(b) of the
FDI Act.
Finally, the FDIC observed that the
FDIC Board of Directors would have to
determine whether to actually accept
and approve such an application, based
on its review of the facts and
circumstances involved, in addition to
the pertinent legal and policy
considerations.
Among the arguments advanced to
support an expanded view of the
availability of deposit insurance for
wholesale branches was that:
• A ‘‘plain meaning’’ construction of
section 5(b) permits ‘‘any branch’’—
including a wholesale branch—to
become insured;
• Congress expressly prohibited
foreign banks from obtaining FDIC
insurance for branches ‘‘engaged in
domestic retail deposit activities’’ but
did not remove the statutory provisions
authorizing foreign banks to apply for
deposit insurance for wholesale
branches;
• The FDIC’s approach ignores
significant changes in regulatory
practices and structures that have
occurred since 1991 with regard to
foreign banks; broader acceptance of the
principle of ‘‘investor choice;’’ and
rejection of a broader policy to force
foreign banks to operate in the U.S
statutory provisions
authorizing foreign banks to apply for
deposit insurance for wholesale
branches;
• The FDIC’s approach ignores
significant changes in regulatory
practices and structures that have
occurred since 1991 with regard to
foreign banks; broader acceptance of the
principle of ‘‘investor choice;’’ and
rejection of a broader policy to force
foreign banks to operate in the U.S. only
through subsidiaries;
• Wholesale depositors often seek the
benefits of FDIC insurance—even
though the full amount of their deposits
may not be insured. The ability to offer
these benefits through a U.S. branch
would provide a benefit to customers
and increase a foreign bank’s funding
options;
• Optional FDIC insurance is likely to
be attractive primarily to foreign banks
already operating FDIC-insured
branches and subsidiaries in the U.S.
and to a relatively small number of
other foreign banks, especially those
seeking to serve particular ethnic
markets. As a result, a more liberal
policy likely would have a minimal
effect on the deposit insurance fund;
and
• Permitting wholesale branches to
obtain deposit insurance is consistent
with the business model that has been
followed by some major U.S. banks that
have retained insurance while focusing
on wholesale markets.
While the FDIC recognizes the
arguments advanced by the trade
association and appreciates that some
foreign banks may be reluctant to file
deposit insurance applications, the
FDIC believes that it is difficult to
reconcile the concept that Congress
imposed the subsidiary requirement
with regard to domestic retail deposit
activity requiring deposit insurance for
the protection of the FDIC with the
implicit assumption that Congress did
not believe such protection was needed
with regard to wholesale branches of
foreign banks.10 In this respect, it
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quirement
with regard to domestic retail deposit
activity requiring deposit insurance for
the protection of the FDIC with the
implicit assumption that Congress did
not believe such protection was needed
with regard to wholesale branches of
foreign banks.10 In this respect, it
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Federal Register / Vol. 69, No. 137 / Monday, July 19, 2004 / Proposed Rules
so only in subsidiary banks incorporated in the
United States. Although the taking of retail deposits
in insured branches is not presently a widespread
practice by foreign banks, I pushed for enactment
of this provision as a safeguard against any future
expansion of this practice in order to better
safeguard the bank insurance fund from losses by
branches of banks whose full operations we do not
oversee or control. In the past the FDIC has
expressed concerns that in the event of insolvency
of a foreign bank, assets could easily be shifted from
the U.S. branch and out of U.S. jurisdiction while
deposits could be shifted to the U.S. branch. Such
practices, of course, would create new risks for the
bank insurance fund and taxpayers who stand
behind it. During his September 24, 1991
confirmation hearing William Taylor, Chairman of
the FDIC, endorsed this provision.’’
should be noted that even though the
deposits of such branches may be
characterized as ‘‘wholesale,’’ the
branch deposits would be insured to the
same extent as any other deposits
maintained in an insured depository
institution and that it is possible to
obtain more than $100,000 in deposit
insurance coverage if the customer
accounts are structured correctly.
In addition, many of the reasons
offered in the past against insuring retail
branches apply equally to wholesale
branches
esale,’’ the
branch deposits would be insured to the
same extent as any other deposits
maintained in an insured depository
institution and that it is possible to
obtain more than $100,000 in deposit
insurance coverage if the customer
accounts are structured correctly.
In addition, many of the reasons
offered in the past against insuring retail
branches apply equally to wholesale
branches. For example, various legal
issues arise in the branch context that
are more difficult to predict and address
than those involving banking
subsidiaries and, thus, potentially pose
additional risks to the deposit insurance
fund. As the FDIC noted even prior to
the 1991 statutory amendments
regarding insured domestic retail
deposit activities by U.S. branches of
foreign banks, directors of a foreign
bank are not usually subject to the U.S.
jurisdiction, and domestic branch
personnel essential to explaining certain
transactions could be transferred
beyond the reach of U.S. authorities.
Essential records could also be difficult
to reach if they are kept at the head
office or at branches in other countries.
The FDIC also has recognized in the
past that a U.S. branch could be
subjected to requirements under foreign
laws or to political or economic
decisions of a foreign government which
conflict with domestic bank regulatory
policies. In addition, a recognized
advantage of operating through a
branch, as opposed to subsidiary
structure, is the ability to engage in
transactions with the home office
without significant operational
restrictions that might otherwise be
applied to transactions with affiliates of
insured U.S. banks. Finally, insolvency
of a foreign bank with a multinational
branch structure may pose complicated
and time-consuming issues regarding
the resolution of the branch that could
more likely be avoided in situations
involving banking subsidiaries.
The proposed expansive approach to
deposit insurance for wholesale U.S
t otherwise be
applied to transactions with affiliates of
insured U.S. banks. Finally, insolvency
of a foreign bank with a multinational
branch structure may pose complicated
and time-consuming issues regarding
the resolution of the branch that could
more likely be avoided in situations
involving banking subsidiaries.
The proposed expansive approach to
deposit insurance for wholesale U.S.
branches also appears to raise additional
concerns, including the following:
• The size and legal structure of
cross-border wholesale branch
operations, as opposed to similar
operations through domestic banking
subsidiaries, may pose additional risks
to the deposit insurance fund. Regarding
the size of the operations, for example,
the trade association indicated that
foreign banks hold over $3 trillion in
assets through their U.S. operations,
including over $1 trillion in assets in
nearly 300 U.S. branches and agencies
of foreign banks. Although it has been
represented that only a small number of
these branches and U.S. subsidiaries
would be interested in obtaining deposit
insurance, the potential for a larger
number of branches seeking the benefit
of FDIC deposit insurance could present
a considerable and imprudent
expansion of the deposit insurance
safety net. Regarding the legal structure
of cross-border wholesale branches,
while the branch structure theoretically
can provide more economic support
from the foreign bank than a subsidiary
structure, the livelihood of a branch is
highly dependent on the continued
economic viability of the foreign bank.
Unlike a subsidiary bank, which is
separately capitalized and can continue
to operate independently of the foreign
bank, if the foreign bank becomes
insolvent, in all likelihood the bank’s
branches will also be rendered insolvent
or require intervention
ank than a subsidiary
structure, the livelihood of a branch is
highly dependent on the continued
economic viability of the foreign bank.
Unlike a subsidiary bank, which is
separately capitalized and can continue
to operate independently of the foreign
bank, if the foreign bank becomes
insolvent, in all likelihood the bank’s
branches will also be rendered insolvent
or require intervention.
• The potential benefit to the
wholesale branch depositors of the
liberalized approach may not be as
significant for the branch’s depositors as
the potential benefits that may accrue to
the foreign bank, through potentially
reduced funding costs as a result of
obtaining FDIC deposit insurance. This
raises concerns, from a policy
perspective, about whether this should
be considered a proper use of the
deposit insurance funds and about the
FDIC’s reputation as a deposit insurer.
It also raises concerns about the
potential for foreign citizens being
confused or misled by foreign bank
marketing of FDIC deposit insurance
coverage for wholesale branch deposits.
• It may also be difficult to ensure
that deposit insurance for wholesale
branches would not be utilized as a
mechanism to circumvent or weaken the
subsidiary requirement imposed by
section 6(d) of the IBA. For example, an
argument might be made that an initial
deposit for a nominal amount in excess
of $100,000 qualifies as a ‘‘wholesale
deposit,’’ even thought the balance in
the account immediately falls below
$100,000 and, even with subsequent
deposits, the balance in the account
never again exceeds the $100,000.
Based on the foregoing discussion, the
FDIC continues to believe the
statements made in the 1998 Final Rule
are appropriate with regard to deposit
insurance for wholesale U.S. branches
of foreign banks, but welcomes public
comments on this issue. The FDIC
expects to take appropriate action after
consideration of the comments received.
VI
in the account
never again exceeds the $100,000.
Based on the foregoing discussion, the
FDIC continues to believe the
statements made in the 1998 Final Rule
are appropriate with regard to deposit
insurance for wholesale U.S. branches
of foreign banks, but welcomes public
comments on this issue. The FDIC
expects to take appropriate action after
consideration of the comments received.
VI. Regulatory Flexibility Act Analysis
The FDIC is required by section 3(a)
of the Regulatory Flexibility Act (5
U.S.C. 603(a)) to publish an initial
regulatory flexibility analysis with this
rulemaking or certify that the proposed
rule, if adopted, will not have a
significant economic impact on a
substantial number of small entities. For
purposes of the analysis or certification,
financial institutions with assets of $150
million or less are considered ‘‘small
entities.’’ For the reasons stated below,
the FDIC certifies, pursuant to 5 U.S.C.
605(b), that the amendments and
revisions contained in this proposed
rule will not, if promulgated through a
final rule, have a significant economic
impact on a substantial number of small
entities.
The proposed rule makes primarily
technical revisions to update,
reorganize, and clarify the existing rules
in subpart A of part 347 and subpart J
of part 303. Subpart J of part 303
contains the procedural rules that
implement part 347. The rules in
subpart A of part 347 address issues
related to the international activities
and investments of insured state
nonmember banks. In general, they
implement the FDIC’s statutory
authority under section 18(d)(2) of the
Federal Deposit Insurance Act (FDI Act)
(12 U.S.C. 1828(d)(2)), regarding
branches of insured state nonmember
banks in foreign countries, and section
18(l) of the FDI Act, regarding insured
state nonmember bank investments in
foreign entities
tivities
and investments of insured state
nonmember banks. In general, they
implement the FDIC’s statutory
authority under section 18(d)(2) of the
Federal Deposit Insurance Act (FDI Act)
(12 U.S.C. 1828(d)(2)), regarding
branches of insured state nonmember
banks in foreign countries, and section
18(l) of the FDI Act, regarding insured
state nonmember bank investments in
foreign entities. As of December 31,
2003, there were approximately 4,833
state nonmember banks, but fewer than
50 of those institutions had foreign
investments or foreign branches.
Available information indicates that
state nonmember banks with foreign
investments or foreign branches are not
small entities. For example, none of the
state nonmember banks with foreign
branches is a small entity, and none of
the foreign investment applications
processed in 2003 involved small
entities.
The proposed rule also makes
revisions to update, reorganize, and
clarify the existing rules in subpart B of
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Federal Register / Vol. 69, No. 137 / Monday, July 19, 2004 / Proposed Rules
347, as well as additional revisions and
amendments that address supervisory
issues. The rules in subpart B of part
347 principally address issues related to
insured and noninsured U.S. branches
of foreign banks under section 6 of the
International Banking Act (IBA)(12
U.S.C. 3104). As of December 31, 2003,
there were approximately 237 U.S.
branches of foreign banks, including 12
insured branches. Of this number, there
were approximately 71 U.S. branches of
foreign banks that appear to qualify as
small entities, including 6 insured
branches. The 12 insured branches are
presently subject to the FDIC’s asset
pledge and asset maintenance
requirements, which are revised in
sections 347.209 and 347.210 of the
proposed rule
U.S.
branches of foreign banks, including 12
insured branches. Of this number, there
were approximately 71 U.S. branches of
foreign banks that appear to qualify as
small entities, including 6 insured
branches. The 12 insured branches are
presently subject to the FDIC’s asset
pledge and asset maintenance
requirements, which are revised in
sections 347.209 and 347.210 of the
proposed rule. Although the revision of
the asset pledge requirement to
implement a risk-based approach may
result in an increase in the amount of
assets pledged for insured branches
with low supervisory ratings, the FDIC
does not believe this will affect the
insured branches that qualify as small
entities. The FDIC also is simplifying
the asset maintenance calculation in
section 347.210. The formula will
require that third-party liabilities be
calculated on a daily basis, rather than
based upon the preceding quarter’s
average book value of the insured
branch’s liabilities (as required in
existing section 347.211). This revision
will apply to all insured branches,
including the small entities, but the
FDIC believes this calculation method
will make compliance with the
regulatory requirement less difficult for
the affected institutions. Although the
change may require some modifications
to existing computer programs, these
should not be significant because there
should already be a daily reconcilement
of assets and liabilities occurring in the
branches. The requirement that the asset
maintenance calculations be retained
until the next Federal examination also
should not result in a significant
economic impact on the small entities
because retention of each branch’s
liability calculations until the next
Federal examination is already required
under the existing asset maintenance
rule. Other revisions being proposed to
the rules affecting noninsured branches
are not substantive and, thus, should
have no significant economic impact on
noninsured branches that qualify as
small entities
mic impact on the small entities
because retention of each branch’s
liability calculations until the next
Federal examination is already required
under the existing asset maintenance
rule. Other revisions being proposed to
the rules affecting noninsured branches
are not substantive and, thus, should
have no significant economic impact on
noninsured branches that qualify as
small entities.
Finally, no amendments are being
proposed to the rules in subpart C. The
public merely is being given an
opportunity, in this rulemaking
proceeding, to comment on the
accounting and reporting rules related
to international lending that are
contained in subpart C of part 347.
VII. Paperwork Reduction Act
In accordance with the requirements
of the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the FDIC may
not conduct or sponsor, and the
respondent is not required to respond
to, an information collection unless it
displays a currently valid Office of
Management and Budget (OMB) control
number. The FDIC has two OMB-
approved information collections
(3064–0125, Foreign Branching and
Investment by Insured State
Nonmember Banks, and 3064–0114,
Foreign Banks) which cover the
paperwork burden associated with
Subparts A and B of Part 347. The
information collections in 3064–0125
consist of applications related to
establishing and closing a foreign
branch; applications related to acquiring
stock of a foreign organization; and
records and reports which a nonmember
bank must maintain once it has
established a foreign branch or foreign
organization. The information
collections in 3064–0114 consist of
applications to operate as a noninsured
state-licensed branch of a foreign bank;
applications from an insured state-
licensed branch of a foreign bank to
conduct activities which are not
permissible for a federally-licensed
branch; internal recordkeeping by
insured branches of foreign banks; and
reporting requirements related to an
insured branch’s pledge of assets to the
FDIC
consist of
applications to operate as a noninsured
state-licensed branch of a foreign bank;
applications from an insured state-
licensed branch of a foreign bank to
conduct activities which are not
permissible for a federally-licensed
branch; internal recordkeeping by
insured branches of foreign banks; and
reporting requirements related to an
insured branch’s pledge of assets to the
FDIC. This proposal to amend Part 347,
Subparts A and B will not result in any
change in the current estimated
paperwork burden associated with the
regulation, therefore no submission has
been made to OMB under the
Paperwork Reduction Act.
VIII. Plain Language Requirement
Section 722 of the Gramm-Leach-
Bliley Act of 1999 requires the federal
banking agencies to use ‘‘plain
language’’ in all proposed and final
rules published after January 1, 2000.
We invite your comments on how to
make this proposal easier to understand.
For example:
(1) Have we organized the material to
suit your needs?
(2) Are the requirements in the rule
clearly stated?
(3) Does the rule contain technical
language or jargon that isn’t clear?
(4) What else could we do to make the
rule easier to understand?
IX. Assessment of Impact of Federal
Regulation on Families
The FDIC has determined that the
proposed rule will not affect family
well-being within the meaning of
section 654 of the Treasury and General
Government Appropriations Act, 1999,
enacted as part of the Omnibus
Consolidated and Emergency
Supplemental Appropriations Act, 1999
(Public Law 105–277, 112 Stat. 2681).
List of Subjects
12 CFR Part 303
Administrative practice and
procedure, Authority delegations
(Government agencies), Bank deposit
insurance, Banks, banking, Reporting
and recordkeeping requirements,
Savings associations.
12 CFR Part 325
Banks, banking, Reporting and
recordkeeping requirements.
12 CFR Part 327
Bank deposit insurance, Banks,
banking, Savings associations
12 Stat. 2681).
List of Subjects
12 CFR Part 303
Administrative practice and
procedure, Authority delegations
(Government agencies), Bank deposit
insurance, Banks, banking, Reporting
and recordkeeping requirements,
Savings associations.
12 CFR Part 325
Banks, banking, Reporting and
recordkeeping requirements.
12 CFR Part 327
Bank deposit insurance, Banks,
banking, Savings associations.
12 CFR Part 347
Authority delegations (Government
agencies), Bank deposit insurance,
Banks, banking, Credit, Foreign banking,
Investments, Reporting and
recordkeeping requirements, United
States investments abroad.
For the reasons set forth above and
under the authority of 12 U.S.C.
1819(a)(Tenth), the FDIC Board of
Directors hereby proposes to amend 12
CFR chapter III as follows:
PART 303—FILING PROCEDURES
Subpart J—International Banking
1. The authority citation for part 303
continues to read as follows:
Authority: 12 U.S.C. 378, 1813, 1815, 1817,
1818, 1819 (Seventh and Tenth), 1820, 1823,
1828, 1831a, 1831e, 1831o, 1831p-1, 1831w,
1835a, 1843(l), 3104, 3105, 3108, 3207; 15
U.S.C. 1601–1607.
2. Revise § 303.182 to read as follows:
§ 303.182
Establishing, moving or closing
a foreign branch of an insured state
nonmember bank.
(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 § 347.117(a) of this
chapter must be provided to the
appropriate FDIC office no later than 30
days after taking such action. The notice
must include the location of the foreign
branch, including a street address, and
a statement that the foreign branch has
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branch pursuant to § 347.117(a) of this
chapter must be provided to the
appropriate FDIC office no later than 30
days after taking such action. The notice
must include the location of the foreign
branch, including a street address, and
a statement that the foreign branch has
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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 FDIC will provide written
acknowledgment of receipt of the
notice.
(b) Filing procedures for other branch
establishments—(1) Where to file. An
applicant seeking to establish a foreign
branch other than under § 347.117(a) of
this chapter shall submit an application
to the appropriate FDIC office.
(2) Content of filing. A complete letter
application must 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
§ 303.2(u) of this part, 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
2 of the NHPA Amendments
Act;
(ii) Details concerning any
involvement in the proposal by an
insider of the applicant, as defined in
§ 303.2(u) of this part, 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
proposed activities of the branch and, to
the extent any of the proposed activities
are not authorized by § 347.115 of this
chapter, the applicant’s reasons why
they should be approved.
(3) Additional information. The FDIC
may request additional information to
complete processing.
(c) Processing—(1) Expedited
processing for eligible depository
institutions. An application filed under
§ 347.118(a) of this chapter by an
eligible depository institution as defined
in § 303.2(r) of this part 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
§ 303.11(c)(2) of this part. 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 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.
ted processing is deemed
approved 45 days after receipt of a
substantially complete application by
the FDIC, or on

[Text truncated at 120,000 characters. The full text is on the page linked above.]

## Nearby sections

- [FDIC FIL-1-2002 FOREIGN ASSETS CONTROL ACT](https://www.frixlaw.com/law-library/statutes/FDIC_FIL02001.md)
- [FDIC FIL-1-2010 Employee Compensation Advance Notice of Proposed Rulemaking](https://www.frixlaw.com/law-library/statutes/FDIC_FIL10001.md)
- [FDIC FIL-1-2015 DEPOSITORY INSTITUTION REPORTS](https://www.frixlaw.com/law-library/statutes/FDIC_FIL15001.md)
- [FDIC FIL-1-2018 DEPOSITORY INSTITUTION REPORTS](https://www.frixlaw.com/law-library/statutes/FDIC_FIL18001.md)
- [FDIC FIL-1-2024 Consolidated Reports of Condition and Income for Fourth Quarter 2023](https://www.frixlaw.com/law-library/statutes/FDIC_FIL24001.md)
- [FDIC FIL-2-2019 DEPOSITORY INSTITUTION REPORTS](https://www.frixlaw.com/law-library/statutes/FDIC_FIL19002.md)
- [FDIC FIL-2-2020 Consolidated Reports of Condition and Income for Fourth Quarter 2019](https://www.frixlaw.com/law-library/statutes/FDIC_FIL20002.md)
- [FDIC FIL-3-2017 Community Banking Conference 2016 Highlights](https://www.frixlaw.com/law-library/statutes/FDIC_FIL17003.md)
- [FDIC FIL-4-2015 The FDIC Launches Web Page to Support Marketing of Failing Financial Institutions](https://www.frixlaw.com/law-library/statutes/FDIC_FIL15004.md)
- [FDIC FIL-4-2018 Revisions to the Consolidated Reports of Condition and Income (Call Report) for March and June 2018](https://www.frixlaw.com/law-library/statutes/FDIC_FIL18004.md)
- [FDIC FIL-4-2019 Banker Webinar: Update on the Standardized Export of Imaged Loan Documents Initiative](https://www.frixlaw.com/law-library/statutes/FDIC_FIL19004.md)
- [FDIC FIL-4-2021 Revised Guidelines for Appeals of Material Supervisory Determinations](https://www.frixlaw.com/law-library/statutes/FDIC_FIL21004.md)
- [FDIC FIL-4-2023 Guidance to Help Financial Institutions and Facilitate Recovery in Areas of California Affected by Severe Winter Storms, Flooding, Landslides and Mudslides](https://www.frixlaw.com/law-library/statutes/FDIC_FIL23004.md)
- [FDIC FIL-4-2025 FDIC Statement of Policy on Bank Merger Transactions](https://www.frixlaw.com/law-library/statutes/FDIC_FIL25004.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FDIC_FIL04085. Check the current official text before relying on it. Not legal advice.