§ 36. — Branch banks.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC36]
TITLE 12--BANKS AND BANKING
CHAPTER 2--NATIONAL BANKS
SUBCHAPTER I--ORGANIZATION AND GENERAL PROVISIONS
Sec. 36. Branch banks
The conditions upon which a national banking association may retain
or establish and operate a branch or branches are the following:
(a) Lawful and continuous operation
A national banking association may retain and operate such branch or
branches as it may have had in lawful operation on February 25, 1927,
and any national banking association which continuously maintained and
operated not more than one branch for a period of more than twenty-five
years immediately preceding February 25, 1927, may continue to maintain
and operate such branch.
(b) Converted State banks
(1) A national bank resulting from the conversion of a State bank
may retain and operate as a branch any office which was a branch of the
State bank immediately prior to conversion if such office--
(A) might be established under subsection (c) of this section as
a new branch of the resulting national bank, and is approved by the
Comptroller of the Currency for continued operation as a branch of
the resulting national bank;
(B) was a branch of any bank on February 25, 1927; or
(C) is approved by the Comptroller of the Currency for continued
operation as a branch of the resulting national bank.
The Comptroller of the Currency may not grant approval under clause (C)
of this paragraph if a State bank (in a situation identical to that of
the national bank) resulting from the conversion of a national bank
would be prohibited by the law of such State from retaining and
operating as a branch an identically situated office which was a branch
of the national bank immediately prior to conversion.
(2) A national bank (referred to in this paragraph as the
``resulting bank''), resulting from the consolidation of a national bank
(referred to in this paragraph as the ``national bank'') under whose
charter the consolidation is effected with another bank or banks, may
retain and operate as a branch any office which, immediately prior to
such consolidation, was in operation as--
(A) a main office or branch office of any bank (other than the
national bank) participating in the consolidation if, under
subsection (c) of this section, it might be established as a new
branch of the resulting bank, and if the Comptroller of the Currency
approves of its continued operation after the consolidation;
(B) a branch of any bank participating in the consolidation, and
which, on February 25, 1927, was in operation as a branch of any
bank; or
(C) a branch of the national bank and which, on February 25,
1927, was not in operation as a branch of any bank, if the
Comptroller of the Currency approves of its continued operation
after the consolidation.
The Comptroller of the Currency may not grant approval under clause (C)
of this paragraph if a State bank (in a situation identical to that of
the resulting national bank) resulting from the consolidation into a
State bank of another bank or banks would be prohibited by the law of
such State from retaining and operating as a branch an identically
situated office which was a branch of the State bank immediately prior
to consolidation.
(3) As used in this subsection, the term ``consolidation'' includes
a merger.
(c) New branches
A national banking association may, with the approval of the
Comptroller of the Currency, establish and operate new branches: (1)
Within the limits of the city, town or village in which said association
is situated, if such establishment and operation are at the time
expressly authorized to State banks by the law of the State in question;
and (2) at any point within the State in which said association is
situated, if such establishment and operation are at the time authorized
to State banks by the statute law of the State in question by language
specifically granting such authority affirmatively and not merely by
implication or recognition, and subject to the restrictions as to
location imposed by the law of the State on State banks. In any State in
which State banks are permitted by statute law to maintain branches
within county or greater limits, if no bank is located and doing
business in the place where the proposed agency is to be located, any
national banking association situated in such State may, with the
approval of the Comptroller of the Currency, establish and operate,
without regard to the capital requirements of this section, a seasonal
agency in any resort community within the limits of the county in which
the main office of such association is located, for the purpose of
receiving and paying out deposits, issuing and cashing checks and
drafts, and doing business incident thereto: Provided, That any permit
issued under this sentence shall be revoked upon the opening of a State
or national bank in such community. Except as provided in the
immediately preceding sentence, no such association shall establish a
branch outside of the city, town, or village in which it is situated
unless it has a combined capital stock and surplus equal to the combined
amount of capital stock and surplus, if any, required by the law of the
State in which such association is situated for the establishment of
such branches by State banks, or, if the law of such State requires only
a minimum capital stock for the establishment of such branches by State
banks, unless such association has not less than an equal amount of
capital stock.
(d) Branches resulting from interstate merger transactions
A national bank resulting from an interstate merger transaction (as
defined in section 1831u(f)(6) \1\ of this title) may maintain and
operate a branch in a State other than the home State (as defined in
subsection (g)(3)(B) of this section) of such bank in accordance with
section 1831u of this title.
---------------------------------------------------------------------------
\1\ See References in Text note below.
---------------------------------------------------------------------------
(e) Exclusive authority for additional branches
(1) In general
Effective June 1, 1997, a national bank may not acquire,
establish, or operate a branch in any State other than the bank's
home State (as defined in subsection (g)(3)(B) of this section) or a
State in which the bank already has a branch unless the acquisition,
establishment, or operation of such branch in such State by such
national bank is authorized under this section or section 1823(f),
1823(k), or 1831u of this title.
(2) Retention of branches
In the case of a national bank which relocates the main office
of such bank from 1 State to another State after May 31, 1997, the
bank may retain and operate branches within the State which was the
bank's home State (as defined in subsection (g)(3)(B) of this
section) before the relocation of such office only to the extent the
bank would be authorized, under this section or any other provision
of law referred to in paragraph (1), to acquire, establish, or
commence to operate a branch in such State if--
(A) the bank had no branches in such State; or
(B) the branch resulted from--
(i) an interstate merger transaction approved pursuant
to section 1831u of this title; or
(ii) a transaction after May 31, 1997, pursuant to which
the bank received assistance from the Federal Deposit
Insurance Corporation under section 1823(c) of this title.
(f) Law applicable to interstate branching operations
(1) Law applicable to national bank branches
(A) In general
The laws of the host State regarding community reinvestment,
consumer protection, fair lending, and establishment of
intrastate branches shall apply to any branch in the host State
of an out-of-State national bank to the same extent as such
State laws apply to a branch of a bank chartered by that State,
except--
(i) when Federal law preempts the application of such
State laws to a national bank; or
(ii) when the Comptroller of the Currency determines
that the application of such State laws would have a
discriminatory effect on the branch in comparison with the
effect the application of such State laws would have with
respect to branches of a bank chartered by the host State.
(B) Enforcement of applicable State laws
The provisions of any State law to which a branch of a
national bank is subject under this paragraph shall be enforced,
with respect to such branch, by the Comptroller of the Currency.
(C) Review and report on actions by Comptroller
The Comptroller of the Currency shall conduct an annual
review of the actions it has taken with regard to the
applicability of State law to national banks (or their branches)
during the preceding year, and shall include in its annual
report required under section 14 of this title the results of
the review and the reasons for each such action. The first such
review and report after July 3, 1997, shall encompass all such
actions taken on or after January 1, 1992.
(2) Treatment of branch as bank
All laws of a host State, other than the laws regarding
community reinvestment, consumer protection, fair lending,
establishment of intrastate branches, and the application or
administration of any tax or method of taxation, shall apply to a
branch (in such State) of an out-of-State national bank to the same
extent as such laws would apply if the branch were a national bank
the main office of which is in such State.
(3) Rule of construction
No provision of this subsection may be construed as affecting
the legal standards for preemption of the application of State law
to national banks.
(g) State ``opt-in'' election to permit interstate branching through de
novo branches
(1) In general
Subject to paragraph (2), the Comptroller of the Currency may
approve an application by a national bank to establish and operate a
de novo branch in a State (other than the bank's home State) in
which the bank does not maintain a branch if--
(A) there is in effect in the host State a law that--
(i) applies equally to all banks; and
(ii) expressly permits all out-of-State banks to
establish de novo branches in such State; and
(B) the conditions established in, or made applicable to
this paragraph by, paragraph (2) are met.
(2) Conditions on establishment and operation of interstate
branch
(A) Establishment
An application by a national bank to establish and operate a
de novo branch in a host State shall be subject to the same
requirements and conditions to which an application for an
interstate merger transaction is subject under paragraphs (1),
(3), and (4) of section 1831u(b) of this title.
(B) Operation
Subsections (c) and (d)(2) of section 1831u of this title
shall apply with respect to each branch of a national bank which
is established and operated pursuant to an application approved
under this subsection in the same manner and to the same extent
such provisions of such section 1831u of this title apply to a
branch of a national bank which resulted from an interstate
merger transaction approved pursuant to such section 1831u of
this title.
(3) Definitions
The following definitions shall apply for purposes of this
section:
(A) De novo branch
The term ``de novo branch'' means a branch of a national
bank which--
(i) is originally established by the national bank as a
branch; and
(ii) does not become a branch of such bank as a result
of--
(I) the acquisition by the bank of an insured
depository institution or a branch of an insured
depository institution; or
(II) the conversion, merger, or consolidation of any
such institution or branch.
(B) Home State
The term ``home State'' means the State in which the main
office of a national bank is located.
(C) Host State
The term ``host State'' means, with respect to a bank, a
State, other than the home State of the bank, in which the bank
maintains, or seeks to establish and maintain, a branch.
(h) Repealed. Pub. L. 104-208, div. A, title II, Sec. 2204, Sept. 30,
1996, 110 Stat. 3009-405
(i) Prior approval of branch locations
No branch of any national banking association shall be established
or moved from one location to another without first obtaining the
consent and approval of the Comptroller of the Currency.
(j) ``Branch'' defined
The term ``branch'' as used in this section shall be held to include
any branch bank, branch office, branch agency, additional office, or any
branch place of business located in any State or Territory of the United
States or in the District of Columbia at which deposits are received, or
checks paid, or money lent. The term ``branch'', as used in this
section, does not include an automated teller machine or a remote
service unit.
(k) Branches in foreign countries, dependencies, or insular possessions
This section shall not be construed to amend or repeal section 25 of
the Federal Reserve Act, as amended [12 U.S.C. 601 et seq.], authorizing
the establishment by national banking associations of branches in
foreign countries, or dependencies, or insular possessions of the United
States.
(l) ``State bank'' and ``bank'' defined
The words ``State bank,'' ``State banks,'' ``bank,'' or ``banks,''
as used in this section, shall be held to include trust companies,
savings banks, or other such corporations or institutions carrying on
the banking business under the authority of State laws.
(R.S. Sec. 5155; Feb. 25, 1927, ch. 191, Sec. 7, 44 Stat. 1228; June 16,
1933, ch. 89, Sec. 23, 48 Stat. 189; Aug. 23, 1935, ch. 614, title III,
Sec. 305, 49 Stat. 708; July 15, 1952, ch. 753, Sec. 2(b), 66 Stat. 633;
Pub. L. 87-721, Sept. 28, 1962, 76 Stat. 667; Pub. L. 103-328, title I,
Secs. 102(b)(1), 103(a), Sept. 29, 1994, 108 Stat. 2349, 2352; Pub. L.
104-208, div. A, title II, Secs. 2204, 2205(a), Sept. 30, 1996, 110
Stat. 3009-405; Pub. L. 105-24, Sec. 2(b), July 3, 1997, 111 Stat. 239.)
References in Text
Section 1831u of this title, referred to in subsec. (d), was
subsequently amended, and subsec. (f)(6) of section 1831u no longer
defines the term ``interstate merger transaction''. However, such term
is defined elsewhere in that section.
Section 25 of the Federal Reserve Act, as amended, referred to in
subsec. (k), is classified to subchapter I (Sec. 601 et seq.) of chapter
6 of this title.
Codification
R.S. Sec. 5155 derived from act Mar. 3, 1865, ch. 78, Sec. 7, 13
Stat. 484.
Amendments
1997--Subsec. (f)(1)(C). Pub. L. 105-24 added subpar. (C).
1996--Subsec. (h). Pub. L. 104-208, Sec. 2204, struck out subsec.
(h) which read as follows: ``The aggregate capital of every national
banking association and its branches shall at no time be less than the
aggregate minimum capital required by law for the establishment of an
equal number of national banking associations situated in the various
places where such association and its branches are situated.''
Subsec. (j). Pub. L. 104-208, Sec. 2205(a), inserted at end ``The
term `branch', as used in this section, does not include an automated
teller machine or a remote service unit.''
1994--Subsecs. (d) to (f). Pub. L. 103-328, Sec. 102(b)(1)(B), added
subsecs. (d) to (f). Former subsecs. (d) to (f) redesignated (h) to (j),
respectively.
Subsec. (g). Pub. L. 103-328, Sec. 103(a), added subsec. (g).
Pub. L. 103-328, Sec. 102(b)(1)(A), redesignated subsec. (g) as (k).
Subsecs. (h) to (l). Pub. L. 103-328, Sec. 102(b)(1)(A),
redesignated subsecs. (d) to (h) as (h) to (l), respectively.
1962--Subsec. (b). Pub. L. 87-721 substituted provisions permitting
a national bank resulting from the conversion of a State bank to retain
and operate as a branch any office which was a branch of the State bank
immediately prior to conversion if such office might be established as a
new branch of the resulting national bank, and is approved by the
Comptroller for continued operation as a branch of the resulting bank,
or any office which was a branch of any bank on Feb. 25, 1927, or any
office which is approved by the Comptroller for continued operation as a
branch, and a national bank resulting from consolidation of a national
bank under whose charter the consolidation is effected with another bank
or banks to retain and operate any office which, immediately prior to
consolidation, was in operation as a main office or branch office of any
bank (other than the national bank) participating in the consolidation
if it might be established as a new branch of the resulting bank, and if
the Comptroller approves of its continued operation, or was in operation
as a branch of any bank participating in the consolidation and which, on
Feb. 25, 1927, was in operation as a branch of any bank, or was in
operation as a branch of the national bank and which, on Feb. 25, 1927,
was not in operation as a branch of any bank, if the Comptroller
approves of its continued operation, for provisions which permitted
State banks converted into or consolidated with national banking
associations after Feb. 25, 1927, or two or more national banking
associations which are consolidated, to retain and operate only those
branches which may have been in lawful operation on Feb. 25, 1927, and
inserted provisions prohibiting the Comptroller from granting approval
under clauses (1)(C) and (2)(C) if a State bank resulting from the
conversion or consolidation would be prohibited by law of the State from
retaining and operating as a branch an identically situated office which
was a branch of the national bank or State bank immediately prior to the
conversion or consolidation.
1952--Subsec. (c). Act July 15, 1952, struck out the minimum capital
requirement for the establishment of branches by national banks.
1935--Subsec. (c). Act Aug. 23, 1935, inserted second sentence and
substituted ``Except as provided in the immediately preceding sentence,
no'' for ``No'' in last sentence.
1933--Subsecs. (c), (d). Act June 16, 1963, amended subsecs. (c) and
(d).
1927--Act Feb. 25, 1927, amended section generally.
Exception as to Transfer of Functions
Functions vested by any provision of law in Comptroller of the
Currency, referred to in this section, not included in transfer of
functions to Secretary of the Treasury, see note set out under section 1
of this title.
Right of State To Opt Out
Nothing in Pub. L. 105-24 to alter right of States under section 525
of Pub. L. 96-221, see section 3 of Pub. L. 105-24, set out as a note
under section 1831a of this title.
Applicability of McFadden Act to Present Financial Environment; Report
and Recommendations by President to Congress
Pub. L. 95-369, Sec. 14, Sept. 17, 1978, 92 Stat. 625, provided for
a report to Congress by the President, not later than one year after
Sept. 17, 1978, containing recommendations concerning the applicability
of the McFadden Act [Feb. 25, 1927, ch. 191, 44 Stat. 1224] to the then
current financial, banking, and economic environment.
Section Referred to in Other Sections
This section is referred to in sections 30, 43, 81, 93a, 1820, 3103
of this title.
