12 C.F.R. Subpart J—International Banking
Title 12 - Banks and Banking
This subpart sets forth procedures for complying with application requirements relating to the foreign activities of insured state nonmember banks, U.S. activities of insured branches of foreign banks, and certain foreign mergers of insured depository institutions. For the purposes of this subpart, the following additional definitions apply: (a) Board of Governors means the Board of Governors of the Federal Reserve System. (b) Comptroller means the Office of the Comptroller of the Currency. (c) Eligible insured branch. An insured branch will be treated as an eligible depository institution within the meaning of §303.2(r) if the insured branch: (1) Received an FDIC-assigned composite ROCA supervisory rating (which rates risk management, operational controls, compliance, and asset quality) of 1 or 2 as a result of its most recent federal or state examination, and the FDIC, Comptroller, or Board of Governors have not expressed concern about the condition or operations of the foreign banking organization or the support it offers the branch; (2) Received a satisfactory or better Community Reinvestment Act (CRA) rating from its primary federal regulator at its most recent examination, if the depository institution is subject to examination under part 345 of this chapter; (3) Received a compliance rating of 1 or 2 from its primary federal regulator at its most recent examination; (4) Is well-capitalized as defined in subpart B of part 325 of this chapter; and (5) Is not subject to a cease and desist order, consent order, prompt corrective action directive, written agreement, memorandum of understanding, or other administrative agreement with any U.S. bank regulatory authority. (d) Federal branch means a federal branch of a foreign bank as defined by §347.202 of this chapter. (e) Foreign bank means a foreign bank as defined by §347.202 of this chapter. (f) Foreign branch means a foreign branch of an insured state nonmember bank as defined by §347.102 of this chapter. (g) Foreign organization means a foreign organization as defined by §347.102 of this chapter. (h) Insured branch means an insured branch of a foreign bank as defined by §347.202 of this chapter. (i) Noninsured branch means a noninsured branch of a foreign bank as defined by §347.202 of this chapter. (j) State branch means a state branch of a foreign bank as defined by §347.202 of this chapter. (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 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 (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. (d) Closing. Notices of branch closing under §347.121 of this chapter, in the form of a letter including the name, location, and date of closing of the closed branch, shall be filed with the appropriate FDIC office no later than 30 days after the branch is closed. [70 FR 17558, Apr. 6, 2005] (a) Notice procedures for general consent. Notice in the form of a letter from an eligible depository institution making direct or indirect investments in a foreign organization pursuant to §347.117(b) of this chapter shall be provided to the appropriate FDIC office no later than 30 days after taking such action. The FDIC will provide written acknowledgment of receipt of the notice. (b) Filing procedures for other investments—(1) Where to file. An applicant seeking to make a foreign investment other than under §347.117(b) of this chapter shall submit an application to the appropriate FDIC office. (2) Content of filing. A complete application shall include the following information: (i) Basic information about the terms of the proposed transaction, the amount of the investment in the foreign organization and the proportion of its ownership to be acquired; (ii) Basic information about the foreign organization, its financial position and income, including any available balance sheet and income statement for the prior year, or financial projections for a new foreign organization; (iii) A listing of all shareholders known to hold ten percent or more of any class of the foreign organization's stock or other evidence of ownership, and the amount held by each; (iv) A brief description of the applicant's business plan with respect to the foreign organization; (v) A brief description of any business or activities which the foreign organization will conduct directly or indirectly in the United States, and to the extent such activities are not authorized by subpart A of part 347, the applicant's reasons why they should be approved; (vi) A brief description of the foreign organization's activities, and to the extent such activities are not authorized by subpart A of part 347, the applicant's reasons why they should be approved; and (vii) If the applicant seeks approval to engage in underwriting or dealing activities, a description of the applicant's plans and procedures to address all relevant risks. (3) Additional information. The FDIC may request additional information to complete processing. (c) Processing—(1) Expedited processing for eligible depository institutions. An application filed under §347.118(b) of this chapter by an eligible depository institution as defined in §303.2(r) of this part seeking to make direct or indirect investments in a foreign organization 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 which are not processed pursuant to the expedited procedures, the FDIC will provide the applicant with written notification of the final action when the decision is rendered. (d) Divestiture. If an insured state nonmember bank holding 50 percent or more of the voting equity interests of a foreign organization or otherwise controlling the foreign organization divests itself of such ownership or control, the insured state nonmember bank shall file a notice in the form of a letter, including the name, location, and date of divestiture of the foreign organization, with the appropriate FDIC office no later than 30 days after the divestiture. [67 FR 79247, Dec. 27, 2002, as amended at 70 FR 17558, Apr. 6, 2005] (a) Filing procedures—(1) Where and when to file. An application by an insured branch of a foreign bank seeking the FDIC's consent to move from one location to another, as required by section 18(d)(1) of the FDI Act (12 U.S.C. 1828(d)(1)), shall be submitted in writing to the appropriate FDIC office on the date the notice required by paragraph (c) of this section is published, or within 5 days after the date of the last required publication. (2) Content of filing. A complete letter application shall include the following information: (i) The exact location of the proposed site, including the street address; (ii) Details concerning any involvement in the proposal by an insider of the applicant, as defined in §303.2(u), including any financial arrangements relating to fees, the acquisition of property, leasing of property, and construction contracts; (iii) A statement of the impact of the proposal on the human environment, including information on compliance with local zoning laws and regulations and the effect on traffic patterns, for purposes of complying with the applicable provisions of the NEPA, and the FDIC “Statement of Policy on NEPA” (1 FDIC Law, Regulations, Related Acts 5185; see §309.4(a) and (b) of this chapter for availability). (iv) A statement as to whether or not the site is eligible for inclusion in the National Register of Historic Places for purposes of complying with the applicable provisions of the NHPA, and the FDIC AStatement of Policy on NHPA” (1 FDIC Law, Regulations, Related Acts 5175; see §309.4(a) and (b) of this chapter for availability), including documentation of consultation with the State Historic Preservation Officer, as appropriate. (v) Comments on any changes in services to be offered, the community to be served, or any other effect the proposal may have on the applicant's compliance with the CRA; and (vi) A copy of the newspaper publication required by paragraph (c) of this section, as well as the name and address of the newspaper and the date of the publication. (3) Comptroller's application. If the applicant is filing an application with the Comptroller which contains the information required by paragraph (a)(2) of this section, the applicant may submit a copy to the FDIC in lieu of a separate application. (4) Additional information. The FDIC may request additional information to complete processing. (b) Processing—(1) Expedited processing for eligible insured branches. An application filed by an eligible insured branch as defined in §303.181(c) of this part will be acknowledged in writing by the FDIC and will receive expedited processing if the applicant is proposing to move within the same state, unless the applicant is notified to the contrary and provided with the basis for that decision. The FDIC may remove an application from expedited processing for any of the reasons set forth in §303.11(c)(2) of this part. Absent such removal, an application processed under expedited processing will be deemed approved on the latest of the following: (i) The 21st day after the FDIC's receipt of a substantially complete application; or (ii) The 5th day after expiration of the comment period described in paragraph (c) of this section. (2) Standard processing. For those applications that are not processed pursuant to the expedited procedures, the FDIC will provide the applicant with written notification of the final action as soon as the decision is rendered. (c) Publication requirement and comment period—(1) Newspaper publications. The applicant shall publish a notice of its proposal to move from one location to another, as described in §303.7(b), in a newspaper of general circulation in the community in which the insured branch is located prior to its being moved and in the community to which it is to be moved. The notice shall include the insured branch's current and proposed addresses. (2) Public comments. All public comments must be received by the appropriate regional director within 15 days after the date of the last newspaper publication required by paragraph (c)(1) of this section, unless the comment period has been extended or reopened in accordance with §303.9(b)(2). (3) Lobby notices. If the insured branch has a public lobby, a copy of the newspaper publication shall be posted in the public lobby for at least 15 days beginning on the date of the publication required by paragraph (c)(1) of this section. (d) Other approval criteria. (1) The FDIC may approve an application under this section if the criteria in paragraphs (d)(1)(i) through (d)(1)(vi) of this section is satisfied. (i) The factors set forth in section 6 of the FDI Act (12 U.S.C. 1816) have been considered and favorably resolved; (ii) The applicant is at least adequately capitalized as defined in subpart B of part 325 of this chapter; (iii) Any financial arrangements which have been made in connection with the proposed relocation and which involve the applicant's directors, officers, major shareholders, or their interests are fair and reasonable in comparison to similar arrangements that could have been made with independent third parties; (iv) Compliance with the CRA, the NEPA, the NHPA and any applicable related regulations, including 12 CFR part 345, has been considered and favorably resolved; (v) No CRA protest as defined in §303.2(l) has been filed which remains unresolved or, where such a protest has been filed and remains unresolved, the Director or designee concurs that approval is consistent with the purposes of the CRA and the applicant agrees in writing to any conditions imposed regarding the CRA; and (vi) The applicant agrees in writing to comply with any conditions imposed by the FDIC, other than the standard conditions defined in §303.2(dd) which may be imposed without the applicant's written consent. (e) Relocation of insured branch from one state to another. If the foreign bank proposes to relocate an insured state branch to a state that is outside the state where the branch is presently located, in addition to meeting the approval criteria contained in paragraph (d) of this section, the foreign bank must: (i) Comply with any applicable state laws or regulations of the states affected by the proposed relocation; and (ii) Obtain any required regulatory approvals from the appropriate state licensing authority of the state to which the insured branch proposes to relocate before relocating the existing branch operations and surrendering its existing license to the appropriate state licensing authority of the state from which the branch is relocating. [67 FR 79247, Dec. 27, 2002, as amended at 70 FR 17559, Apr. 6, 2005] (a) Merger transactions involving an insured branch of a foreign bank. Merger transactions requiring the FDIC's prior approval as set forth in §303.62 include any merger transaction in which the resulting institution is an insured branch of a foreign bank which is not a federal branch, or any merger transaction which involves any insured branch and any uninsured institution. In such cases: (1) References to an eligible depository institution in subpart D of this part include an eligible insured branch as defined in §303.181; (2) The definition of a corporate reorganization in §303.61(b) includes a merger transaction between an insured branch and other branches, agencies, or subsidiaries in the United States of the same foreign bank; and (3) For the purposes of §303.62(b)(1) on interstate mergers, a merger transaction involving an insured branch is one involving the acquisition of a branch of an insured bank without the acquisition of the bank for purposes of section 44 of the FDI Act (12 U.S.C. 1831u) only when the merger transaction involves fewer than all the insured branches of the same foreign bank in the same state. (b) Certain merger transactions with foreign organizations outside any State. Merger transactions requiring the FDIC's prior approval as set forth in §303.62 include any merger transaction in which an insured depository institution becomes directly liable for obligations which will, after the merger transaction, be treated as deposits under section 3(l)(5)(A)(i)–(ii) of the FDI Act (12 U.S.C. 1813(l)(5)(A)(i)–(ii)), as a result of a merger or consolidation with a foreign organization or an assumption of liabilities of a foreign organization. (a) Filing procedures—(1) Where to file. An application by a foreign bank for consent to operate as a noninsured state branch, as permitted by §347.215(b) of this chapter, shall be submitted in writing to the appropriate FDIC office. (2) Content of filing. A complete letter application shall include the following information: (i) The kinds of deposit activities in which the state branch proposes to engage; (ii) The expected source of deposits; (iii) The manner in which deposits will be solicited; (iv) How the activity will maintain or improve the availability of credit to all sectors of the United States economy, including the international trade finance sector; (v) That the activity will not give the foreign bank an unfair competitive advantage over United States banking organizations; and (vi) A resolution by the applicant's board of directors, or evidence of approval by senior management if a resolution is not required pursuant to the applicant's organizational documents, authorizing the filing of the application. (3) Additional information. The FDIC may request additional information to complete processing. (4) Processing. The FDIC will provide the applicant with written notification of the final action taken. [67 FR 79247, Dec. 27, 2002, as amended at 70 FR 17559, Apr. 6, 2005] (a) Filing procedures—(1) Where to file. An application by an insured state branch seeking approval to conduct activities not permissible for a federal branch, as required by §347.212(a) of this chapter, shall be submitted in writing to the appropriate FDIC office. (2) Content of filing. A complete letter application shall include the following information: (i) A brief description of the activity, including the manner in which it will be conducted and an estimate of the expected dollar volume associated with the activity; (ii) An analysis of the impact of the proposed activity on the condition of the United States operations of the foreign bank in general and of the branch in particular, including a copy of the feasibility study, management plan, financial projections, business plan, or similar document concerning the conduct of the activity; (iii) A resolution by the applicant's board of directors, or evidence of approval by senior management if a resolution is not required pursuant to the applicant's organizational documents, authorizing the filing of the application; (iv) A statement by the applicant of whether it is in compliance with sections 347.209 and 347.210 of this chapter; (v) A statement by the applicant that it has complied with all requirements of the Board of Governors concerning applications to conduct the activity in question and the status of each such application, including a copy of the Board of Governors' disposition of such application, if applicable; and (vi) A statement of why the activity will pose no significant risk to the Deposit Insurance Fund. (3) Board of Governors application. If the application to the Board of Governors contains the information required by paragraph (a) of this section, the applicant may submit a copy to the FDIC in lieu of a separate letter application. (4) Additional information. The FDIC may request additional information to complete processing. (b) Divestiture or cessation—(1) Where To file. Divestiture plans necessitated by a change in law or other authority, as required by §347.212(e) of this chapter, shall be submitted in writing to the appropriate FDIC office. (2) Content of filing. A complete letter application shall include the following information: (i) A detailed description of the manner in which the applicant proposes to divest itself of or cease the activity in question; and (ii) A projected timetable describing how long the divestiture or cessation is expected to take. (3) Additional information. The FDIC may request additional information to complete processing. [67 FR 79247, Dec. 27, 2002, as amended at 70 FR 17559, Apr. 6, 2005; 71 FR 20526, Apr. 21, 2006]
Title 12: Banks and Banking
PART 303—FILING PROCEDURES
Subpart J—International Banking
§ 303.180 Scope.
§ 303.181 Definitions.
§ 303.182 Establishing, moving or closing a foreign branch of an insured state nonmember bank.
§ 303.183 Investment by insured state nonmember banks in foreign organization.
§ 303.184 Moving an insured branch of a foreign bank.
§ 303.185 Merger transactions involving foreign banks or foreign organizations.
§ 303.186 Exemptions from insurance requirements for a state branch of a foreign bank.
§ 303.187 Approval for an insured state branch of a foreign bank to conduct activities not permissible for federal branches.
§§ 303.188-303.199 [Reserved]
