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Federal R eser v e

bank

OF DALLAS
WILLIAM H. WALLACE
F IR S T V IC E P R E S ID E N T

December 2, 1986

DALLAS, TEXAS 7 5 2 2 2

Circular 86-101

TO:

The Chief Executive Officer of all
member banks, bank holding companies,
Edge corporations, and others concerned
in the Eleventh Federal Reserve District
SUBJECT

Proposal to charge fe es fo r processing certa in ap p lication s and for
supervision o f Edge corporations
DETAILS

The Board of Governors of the Federal Reserve System has issued for
public comment a proposal to charge fees for the processing of applications
and for the supervision and general oversight of Edge corporations.
Under the Board's proposal, fixed fees would be imposed to
the costs for the processing of bank holding company, international
and other applications. The proposal also calls for a schedule of
assessments for the supervision of Edge corporations based on their
assets.

recover
banking,
annual
total

The Board is seeking public comment on whether such a system of fees
should be imposed, whether the proposed fee schedules are equitable and
appropriate, and whether the Board should consider charging for bank holding
company inspections.
Comments on the proposal should be addressed to Mr. William W. Wiles,
Secretary, Board of Governors of the Federal Reserve System, 20th Street and
Constitution Avenue, N.W., Washington, D.C. 20551. All correspondence should
refer to Docket No. R-0584, and must be received on or before January 5, 1987.

ATTACH ENTS
M

The material as published in the Federal Register is attached.

For additional copies of any circular please contact the Public Affairs Department at (214) 651-6289. Banks and others are
encouraged to use the following incoming WATS numbers in contacting this Bank (800) 442-7140 (intrastate) and (800)
527-9200 (interstate).

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

- 2 -

MORE INFORMATION
Questions pertaining to this proposal should be directed to David W.
Dixon of this Bank's Legal Department at (214) 651-6228 or to the following
Supervision and Regulation Department personnel:
Applications:

Gayle Teague (214) 651-6481

Supervision of Edge Corporations:

Linda M. Myers (214) 651-6670
Uzziah Anderson (214) 651-6275
Sincerely yours,

Federal Register / Vol. 51, No. 223 / Wednesday, November 19, 1986 / Proposed Rules
FEDERAL RESERVE SYSTEM
12CFR Parts 211 and 262
[D ocket No. R -0584]

Rules of Procedure; Assessment of
Fees for Supervision of Edge
Corporations and for Processing
Applications
Board of Governors of the
Federal Reserve System.
a c tio n : Proposed rulemaking.

agency:

The Board of Governors of
the Federal Reserve System, as p art of
an ongoing program of budgetary
restraint, has decided to seek public
com ment on a limited proposal to assess
fees for certain of its supervisory
services. The Board is advancing this
proposal as a possible revenue
enhancing m easure to supplem ent prior
Board actions to stream line operations
and eliminate unnecessary functions.
This proposal is designed to recover part
of the identifiable costs for certain
supervisory functions. The Board is
seeking com ment on w hether such a
system of fees should be im posed and, if
so, w hether the proposed fee schedules
are equitable an d appropriate.
The Board has proposed th at fees be
assessed for supervision of Edge
corporations and for a variety of final
applications that are filed by bank
holding com panies, state m em ber banks,
and com panies or individuals seeking to
acquire control of such banking
organizations. The Board h as proposed
to assess fees for general supervision
an d inspection o n ly in the case of Edge
corporations in an effort to avoid
duplicating assessm ents by other bank
regulatory agencies. In addition, the
Board h as proposed fixed fee schedules
that are limited to recovering costs for
the supervisory activities and the
processing of applications on an average
basis rather than a variable fee schedule
b ased upon costs in an individual case.
DATE: Comments m ust be received by
January 5,1987.
a d d r e s s : All comments, w hich should
refer to D ocket No. R-0584, should be
m ailed to W illiam W. Wiles, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street an d
Constitution Avenue, NW., W ashington,
DC 20551, or should be delivered to the
Office of the Secretary, Room 2223,
Eccles Building, 20th Street and
Constitution Avenue, NW, betw een the
hours of 8:45 a.m. an d 5:15 p.m.
w eekdays. Comments m ay be inspected
in Room 1122, Eccles Building betw een
8:45 a.m. and 5:15 p.m. w eekdays.
s u m m a ry :

41801

FOR FURTHER INFORMATION CONTACT:

Frederick M. Struble, A ssociate
Director, (202) 452-3794, Don E. Kline,
A ssociate Director, (202) 452-3421,
Kevin M. Raymond, Supervisory
Financial A nalyst (202) 452-2573, or
James V. Houpt, Supervisory Financial
A nalyst, (202) 452-3358; Division of
Banking Supervision an d Regulation: or
for users of Telecom m unications
Devices for the Deaf, E am estine Hill or
D orothea Thompson, (202) 452-3244,
Board of Governors of the Federal
Reserve System, W ashington, DC 20551.
SUPPLEMENTARY INFORMATION:

Background
Federal and state supervision and
regulation of banking organizations is
designed to achieve a variety of public
policy objectives, including: (1)
Promoting the stability of the banking
system and, more generally, the stability
of financial m arkets and the economy at
large, (2) protecting depositors and the
viability of the federal deposit insurance
fund, (3) preserving com petition in local
an d regional banking m arkets, and (4)
limiting dislocations in local
communities resulting from bank
failures. Individual banking
organizations benefit from the system of
government supervision and regulation
designed to further these public policy
objectives. Indirectly, they benefit from
the stability of the system as a whole,
from the public confidence that such
stability engenders, and from efforts to
limit or contain problem s encountered
by individual banking organizations.
M ore directly, they benefit from
regulations, off-site review, and on-site
inspections an d exam inations designed
to prevent problem s from developing
and to assist in identifying and
correcting problem s that m ay develop.
Individual organizations submitting
applications to the Board of Governors
of the Federal Reserve System (“Board”)
also benefit directly. The process of
review som etim es detects existing
problem s of applicant organizations or
organizations to be acquired. Such
review may also identify potential
problem s th at might arise as a result of
the transaction that is the subject of the
application. In addition to such
screening, it is through the application
process that individual organizations
are able to expand and increase profit
opportunities in a m anner consistent
w ith established public policy
objectives.
Individual banking organizations, as
direct beneficiaries, have been asked to
b ear a significant portion of the costs of
bank supervision and regulation. Statechartered banking organizations, in

41802

Federal Register / Vol. 51, No. 223 / Wednesday, November 19, 1986 / Proposed Rules

general, pay assessm en ts an d fees that
cover the operating costs of the ban k
supervisory agencies of their state. In
one-half of the states, the assessm ents
and fees paid b y state ch artered banks
go into the general funds of the state,
and the agency operates on an annual
appropriation by the legislature; in
another 22 sta te s the revenues are
deposited in a special fund to be used
only to cover the expenses of the
banking agency, an d the agency’s
budget is subject to approval by the
legislature. In the three other states, all
revenues are deposited w ith an d
controlled by the banking departm ent,
subject to the review of either the
legislature or a state finance
departm ent. The extent to w hich
operating budgets coincide w ith
revenues collected varies from sta te to
state. In cases w here a m isalignment
exists, it appears that revenues
generally exceed costs.
A t the federal level, the supervisory
costs incurred by individual b an k
supervisory agencies are paid in a
variety of w ays, including general
assessm ents, hourly charges for
exam inations, fees assessed for
processing applications and deposit
insurance premiums. In part, such costs
are also m et from returns on
investm ents or by m eans other than a
direct charge to individual banking
organizations.
The Board currently does not levy
charges for any of its supervisory or
regulatory activities. Prior to 1930, the
Federal Reserve System w as required
by law to charge for its exam ination of
mem ber banks, but in that y ear
Congress, at the recom m endation of the
Board, an d b ecause of concerns about
double assessm en t by the Board and
state supervisors, am ended section 9 of
the Federal Reserve A ct to eliminate
m andatory assessm ent of Federal
Reserve m em ber banks for exam ination
expenses. The Board w a s given explicit
authority to decide w hether to assess
state m em ber b ank s for the cost of their
exam inations or to absorb these costs.
(See 12 U.S.C. 326, as am ended June 26,
1930 (46 S tat 814).) The Board h as not
charged state m em ber b anks for
supervision since 1935. It has never
charged for supervision of bank holding
com panies or of foreign branches of U.S.
banks. Prior to 1958 the Board a t times
levied charges to cover p art of its costs
incurred in conducting exam inations of
Edge corporations. The B oard h as not
levied such charges since 1958.

Purpose of the Proposed Rulemaking
The Board is seeking com ment on this
proposal to depart from p ast practice
and begin to charge fees to banking

organizations for supervisory and
regulatory oversight. The Board will
evaluate w hether the budgetary benefits
of such a proposal in the form of
additional revenue w ould be
outw eighed by possible adverse effects.
This proposal is ad vanced as a
budgetary m atter, to explore possible
sources of additional revenue to
com plem ent actions already taken to
stream line operations and eliminate
unnecessary functions. The Board
believes th at in light of its expanded
supervisory responsibilities since the
passage of the Bank H olding Company
A ct in 1956, an d in light of the fact th a t
certain of these supervisory
responsibilities w ould not result in the
sort of double assessm ents th at
provided the b asis for its efforts to
eliminate fees and assessm ents in the
past, it m ay b e appropriate to request
the individual organizations that benefit
m ost directly from Board supervisory
activities to assum e a portion of the
costs of th at supervision.
The proposal, therefore, is designed to
recover the costs of certain supervisory
activities—to shift a portion of the costs
of such supervision to those entities
w hich receive the greatest direct benefit
of such supervision—but to do so in a
m anner that, in the Board’s view, will
not be so burdensom e as to alter
business decisions. It should be stressed
that the Board is m aking this proposal in
the context of ongoing budgetary
review, an d it seeks com m ents upon the
scope of services for w hich fees might
be charged, the appropriate levels of
such fees, an d any adverse effects upon
either the activities of banking
institutions or the supervisory process
that m ay resu lt from the im position of
such fees.
T here are tw o basic areas of Board
responsibility for w hich the Board may
impose fees: (1) G eneral supervision,
including inspection, exam ination,
review of various types of reports of
condition, and such oversight of
corrective m easures as m ay be
necessary, an d (2) applications,
including those for acquisition of a bank,
for geographic expansion or expansion
into a n ew type of business activity, for
change in business structure, an d for
acquisition of or change in control of a
banking organization. The Board h as
considered assessm ent of fees in the
first of these tw o are as an d h as
proposed a very limited fee schedule in
the supervisory area relating only to
Edge corporations (as defined in section
25(a) of the F ederal R eserve Act, 12
U.S.C. 611 e t seq). In the applications
area, how ever, the B oard h as proposed
a b ro ad er range of fee schedules

covering virtually all types of
applications that come before the Board
except those for Federal Reserve System
m embership.

Fees for Supervision of Edge
Corporations
A s noted above, the Board b ased its
recom m endation that Congress free it
from the requirem ent to charge for its
supervision of state m em ber banks on
the argum ent that banking organizations
should n ot b e required to pay a double
assessm ent for governm ent supervision.
The Board also cited this consideration
in deciding not to charge for the
supervision of Edge corporations, noting
that m any of them are subsidiaries of
com mercial banks, w hich are assessed
on the b asis of their consolidated assets
(including those of the Edge
corporations) to cover costs of
supervising and regulating the entire
organization.
In recent years, however, significant
num bers of Edge corporations have been
established by foreign b anks and by
nonbanking firms, which are not subject
to assessm ent by other U.S. banking
agencies. Double assessm ent is not an
issue in these cases. Moreover, while
m ost Edge corporations continue to be
ow ned by institutions that do pay
assessm ents or fees to other banking
agencies for their general supervision,
only the B oard specifically exam ines
an d supervises these Edge corporations.
Section 25(a) of the Federal Reserve Act
perm its the Board to assess fees for
supervision of Edge corporations (12
U.S.C. 611).
The Board considered two approaches
to recover the costs of supervising Edge
corporations— charging on the b asis of
exam iner time devoted to exam inations
or charging annual assessm ents on the
basis of an organization’s size. W hile
each approach has certain advantages,
the Board h as proposed to adopt a
schedule of annual assessm ents b ased
on the total assets of the Edge
corporations. A significant proportion of
the costs of supervising Edge
corporations are incurred for various
off-premises activities—collection and
review of reports and other data,
formulation of regulations, an d
monitoring of activities for compliance.
Because on-site exam inations are only
part o f a com prehensive supervisory
system, the Board believes a n annual
general assessm ent b ased on an
institution’s size is a more suitable
approach.
A general assessm ent w ould also be
easier to adm inister an d of greater
benefit to the Board’s budgeting process
since the am ounts assessed annually

Federal Register / Vol. 51, No. 223 / Wednesday, November 19, 1986 / Proposed Rules
w ould be more predictable. This
approach w ould avoid potential
disputes with Edge corporations about
the accuracy of exam iners’ time records
and the efficiency of their work. It also
w ould avoid an additional
recordkeeping burden for exam iners.
Moreover, a general assessm ent w ould
assist the exam ined institutions to
budget for this cost and w ould allow
corporations experiencing serious
difficulties to correct their problem s
w ithout additional adm inistrative fees
for more frequent and longer
exam inations.
T able 1 contains a proposed schedule
of annual assessm ents for Edge
corporations. The proposed schedule is
on a sliding scale b ased on the size and
type of institution to be supervised. In
Table 1, the Board distinguished
betw een banking Edge corporations,
w hich conduct banking activities in the
United States relating to foreign or
international transactions, and
Investment Edge corporations, w hich are
essentially holding com panies for
foreign investm ents. The m easure of size
used for banking Edge corporations is
their total assets, plus the volume of
their outstanding standby letters of
credit. Account has not been taken of
other off-balance sheet items—either
because of a lack of d ata or because the
available d ata m easure the volume of
trading rather than the risk to an Edge
corporation, as in the case of foreign
exchange activities. The sam e m easure
would be used for investm ent Edge
corporations, in their case consolidating
the assets an d standby letters of credit
of their subsidiaries. It should be
em phasized that the proposed schedule
is tentative and subject to change based
upon review of public comments.
T able 2 contains the general structure
and size of Edge corporations and
indicates revenues that would have
been collected from these corporations
in 1985. The size of banking Edges
am ounts to less than half that of
investm ent Edges, while the estim ated
revenue in 1985 from these two types of
Edge corporations would have been
about equal. The estim ated revenue to
be derived from each type of Edge
corporation is generally consistent with
the relative am ount of time the Board
devotes to supervising th at type of
corporation. Less time is spent in
supervising investm ent Edge
corporations per dollars of assets, in
part because their overseas subsidiaries
(which account for virtually all of their
assets) are exam ined only every tw o or
three years. During the other y ears their
assets and activities are review ed using
information available at the parent Edge

corporation. In addition, since certain
U.S. law s and regulations are directed
only tow ard a corporation’s domestic
business, the exam inations of foreign
activities can be narrow er in scope than
those of banking Edge corporations.
The Board has not proposed to charge
for supervision of organizations other
than Edge corporations. However, the
Board requests comment on the concept
of expanding such supervisory fees or
assessm ents to cover b ank holding
com pany inspection and supervision.

Fees for Processing Bank Holding
Company, International Banking, and
Other Applications
The analysis perform ed by the Board
on the various types of applications that
it processes is, as a general rule, not
duplicated by other banking agencies.
Board fees for processing such
applications generally w ould not
duplicate assessm ents by other b ank
supervisors. Similarly, authority sought
in applications before the Board is not
granted by any other federal banking
agency, although in some cases
organizations applying for authority to
form a bank holding com pany or to
acquire a national or state bank may be
required to submit concurrent
applications to other federal or state
agencies. The Board h as traditionally
attributed both direct an d support costs
to the processing of applications. The
total of such direct and support costs
incurred by the Board in processing
applications w ere estim ated to be $18.0
million in 1985.
A s in the case of Edge corporation
supervision fees, the Board com pared
the advantages of basing a proposed fee
schedule on staff time involved in
processing an application w ith the
alternative of establishing a stand ard
schedule of fees that w ould be paid in
filing specific types of applications.
Although the hourly rate approach
would provide a more exact method for
charging applicants for the costs
involved in processing specific
applications, the Board believes that this
approach w ould have significant
adm inistrative problems. T here are a
variety of Reserve Bank an d Board
functions involved in the applications
process, and these functions involve
personnel w ith a w ide range of salary
levels. Since applications staff m em bers
w ork on several applications at the
sam e time, accounting for the hours
spent on any given application and,
therefore, the resulting billing w ould be
quite complicated. Even more important,
however, is the fact that issues raised by
specific applications often have policy
implications that go well beyond the
acceptance or rejection of that

41803

application. Thus the costs incurred in
addressing those issues should properly
be spread over subsequent applications
w hich raise the sam e issues.
Under a stan d ard fee approach, on the
other hand, a fee schedule could be
established for each type of application
or for a group of applications, with the
fees set to reflect the relative am ount of
staff time generally spent on the various
types of applications (or groups of
applications). U nder this approach,
applicants w ould know in advance of
the costs o f processing an application.
Those applicants raising significant
issues of first impression, resolution of
which would expedite processing of
future applications, w ould not b ear a
disproportionate p art of the costs of
resolving such questions. There appear
to be few er adm inistrative problem s
associated with this type of approach,
since staff w ould not have to compile
complex records of time spent on
individual applications.
The proposed Table 3 w ould group the
types of applications processed by four
general categories and w ould establish a
fee schedule necessary to permit
recovery of 1985 processing costs. The
Board recognizes that the volume of
applications subm itted varies from year
to year, and that revenues w ould vary
with the volume of applications.
The proposed fee schedule contained
in Table 3, does not vary according to
the size of the applicant or organization
to be acquired. A s a general rule—to
w hich there are m any exceptions—the
applications of larger organizations
w ithin a given category are more
complex than those of smaller
organizations and require more
processing time. Accordingly, the Board
h as also proposed, and seeks comment
upon T able 4, a flexible rate schedule
for different types of applications based
upon the size of the applicant. Table 4
contains the sam e four groupings or
categories of applications as Table 3.
There is a maximum level of fees
proposed on the theory that processing
costs do not continue to increase in
direct proportion to the size of a banking
organization applicant. Moreover, there
is no sliding scale for applications to
install autom ated teller m achines since
the costs of processing these
applications do not vary w ith size. The
size of the applicant in T able 4 is to be
com puted on a pro forma consolidated
assets basis, that is after including the
assets of any acquisition that may be
the subject of the application for w hich
the fee is assessed. T able 4 presents an
alternative to Table 3 that w ould
recover the sam e level of 1985 costs.

41804

Federal Register / Vol. 51, No. 223 / Wednesday, November 19, 1986 / Proposed Rules

Both T able 3 an d T able 4 are b ased on
a system of fees for all applications filed
w ith the Board except for those
involving membership in the Federal
Reserve System. The Board believes
that a fee for mem bership w ould in all
cases constitute a double charge against
state banks that m ust pay certain fees or
assessm ents to state supervisory
agencies. Moreover, such banks already
b ea r additional costs in the form of the
requirem ent to purchase stock in a
Federal Reserve Bank.
This proposal also contem plates a fee
only for final applications and notices
filed with and accepted by the Federal
Reserve System, including notices for
change in control of a bank holding
com pany or state m em ber bank,
applications by U.S. banking
organizations to engage in activities in
other countries, and applications for
merger, acquisitions, branches and
autom ated teller facilities. T here will be
no assessm ent for review of draft
applications.
Specific Issues for Com ment
The Board requests com ment on the
following issues raised by the proposed
rulemaking.
1. The board seeks comment initially,
and most im portantly, on the
advisability of charging fees for any of
its supervisory or regulatory services.
The Board requests com ment on
w hether the assessm ent of fees w ould
adversely affect the exam ination or
inspection process or diminish
cooperation and communication
betw een the Board and supervised
institutions to a significant degree. The
board also seeks suggestions on how
this proposal m ay be modified to
minimize any such potential problems.
2. The Board seeks comment as a
general m atter on the scope of
supervisory and application activities
for w hich fees should be assessed. More
particularly, the Board seeks comment
on w hether it should assess fees for the
general supervision an d inspection of
bank holding com panies. Such fees
w ould not ap p ear to duplicate charges
by other regulatory agencies and some
of the arguments in favor of fees for the
supervision of Edge corporations would
apply equally to bank holding
com panies.
3. In view of the tentative nature of
the proposed fee schedules, the Board
seeks com ment on the following issues
with respect to fees for supervision of
Edge corporations:
(a) the distinction b etw een banking &
investm ent Edges,
(b) the use of an annual assessm ent as
the basis for the fee schedules,

(c) the use of a sliding scale b ased on
size,
(d) how the size of Edge corporations
should be determ ined, including the use
of some off balanced sheet items in
determ ining size, and
(e) w hether the proposed fee levels
are equitable an d appropriate.
4. The Board seeks com m ent on the
following issues w ith respect to the fee
schedules for applications:
(a) the grouping of applications in
categories an d appropriate placem ent of
each type of application,
(b) w hether to choose the fee schedule
model or T able 3 or T able 4, and
(c) w hether the proposed fees are
appropriate and equitable.
5. The Board requests com ment upon
a variety of issues involved in
adm inistering the proposed fee
schedules for applications should they
be adopted, including:
(a) W hen fees should be paid,
(b) W hether fees should be charged
for draft applications,
(c) W hether fees should be refunded
upon w ith draw al of the application,
(d) W hether fees should be assessed
for em ergency applications,
(e) W hether fees should be adjusted
for dual applications for the sam e
transaction,
(f) W hether fees should attach to
notices as w ell as applications, and
(g) W hether fees should b e charged
for applications for m em bership in the
Federal R eserve System.
(h) W hether the B oard should
separately recover the cost of publishing
notice of applications in the Federal
Register

T a b l e 2.— E s t im a t e d R e v e n u e C o l l e c t a b l e
F r o m E d g e C o r p o r a t io n s B a s e d o n A s ­
s e s s m e n t S c h e d u l e s S h o w n in T a b l e 1
Number
of
corpora­
tions

Aggregate
assets + standby
L /C ($000,000)

Estim at­
ed
revenue
($000)

Banking Edges:
Less than $10
m illion................
10 to 2 5 ........ .......
25 to 1 0 0 ..............
100 to 1 ,0 0 0 .......
O ver 5 00 ...............

19
12
27
20
11

$94
194
1,509
4,800
14,095

$ 73
69
254
709
1,204

Subtotal............

89

20,692

2,309

Investm ent Edges:
Less than $ 10
million................
10 to 100............
100 to 1 ,0 0 0 .......
1 ,000 to 5,000 ...
Over 5 ,0 0 0 ..........

16
15
5
9
2

50
622
2,584

10
58
152
1,163
839

Size category 1

25,280
21,421

Subtotal............

47

49,957

2,2 2 2

Total.™ .......... ..

135

$70,649

$4,531

1 The size categories for banking corporations refer to their
estim ated assets, based on data these corporations submit
on FR 2886b reports. The size categories for investment
Edges refer to the estim ated consolidated assets of these
corporations and their m ajority-owned (or otherwise con­
trolled) subsidiaries, since these corporations are principally
holding com panies for foreign investments.

T a b l e 3.— P r o p o s e d F e e S c h e d u l e f o r
P r o c e s s in g A p p l ic a t io n s S u b m it t e d t o
th e Federal Reserve System

1985

Banking Edges: 1
SO to 10 m illion...................
10 to 2 5 ..................................
25 to 1 0 0 ..............................
100 to 5 0 0 ............................
Over 5 0 0 ...............................
Investm ent E d g e s :1
$0 to 10 m illion...................
10 to 1 0 0 ..............................
100 to 1 ,0 0 0 .........................
1,000 to 5 ,0 0 0 .....................
Over 5 ,0 0 0 ............................

Assess
this
amount

Plus

$2,000
4,000
6,000
15,000
55,000

0.0 0 02 00
0.000130
0.000120
0.000100
0.000078

$0
10
25
100
500

1,000
2,000
7,500
5 7,000
237,000

0.000100
0.000060
0.000055
0.0 0 00 40
0.000032

0
10
100
1,000
5,000

1 Banking Edge corporations conduct banking activities in
the United States related to foreign o ' international
transactions, while investment Edges are essentially hold­
ing companies lor foreign investments. The size categories
for banking Edges refer to their estim ated assets, based on
data they submit on FR 2866b reports. The size categories
for investment Edges refer to the estim ated consolidated
assets of these corporations and their majority-owned (of
otherwise controlled subsidiaries.

Total
revenue
dollars in
Thou­
sands)

1,958

$ 15,664

5 ,000

130

650

2,500

Total assets plus standby
letters of credit (dollars in
millions)

Of
ex­
cess
over
(dol­
lars in
mil­
lions)

Appli­
cations
volume

$ 8,000

T a b l e 1.— P r o p o s e d A s s e s s m e n t S c h e d u l e
f o r E d g e C o r p o r a t io n s

Type of application

628

1,570

1,000

64

64

2,780

$17,946

Proposed
fee

Category A: Bank holding
company formations, ac­
quisition of banks and
acquisition o f nonbanks
(going concerns); bank
holding company stock
redem ptions
and
changes in control; inter­
national investm ent apCategory B: Initial foreign
branches, Edge Act and
other international appli­
cations, domestic bank
mergers, and changes in
control for state member
banks............................... ......
Category C: Bank holding
company nonbank ac­
quisitions (de novo) and
export trading company
notifications;
state
member bank branches,
bank service corpora­
tions,
investments
in
bank premises and issu­
ance of capital notes by
state
m ember banks;
additional foreign branch
and investm ent notifiedCategory

D:

ATM

Federal Register / Vol. 51, No. 223 / Wednesday, November 19, 1986 / Proposed Rules
T a b l e 4.— P r o p o s e d F e e S c h e d u l e f o r
P r o c e s s in g A p p l ic a t io n s S u b m it t e d t o
t h e Fe d e r a l R e s e r v e S y s t e m
A s se ts 1
30ver

Proposed fee
But not
over

This
amount

Pius

Of
excess

Category A 1
$ 0 ..........................
1 50M ....................
IB ...........................
SB..........................
1 0 B ......................

$150M
IB
5B
10B
-

$5,000
5,000
10,000
15,000
20,000

_

0
0000058
.0000012
.0000009

S150M
IB
5B

Category B *
$ 0 ..........................
150 M ....................
IB ...........................
5B
1 0 3 ......................

............

$150M
IB
58
10B
-

$2,500
2,500
5,000
7,500
10,000

_

0
.0000029
.0000006
.0000005
-

$150M
IB
58
-

Category C 1
SO ........................
150M ....................
IB ...........................
5B ..........................
1 0 B ......................

S150M
IB
5B
10B
Category D

$1,250
1,250
2,500
3,750
5,000
-

0
.0000014
.0000003
.0000002

$150M
IB
5B
-

$ 1.000

1 Total assets are to be measured on a pro form a basis—
that is, the applicant's total assets if its application is
approved.
4
For types of applications and notifications inlcuded in
each category, see Table. 3

Fee

PART 211—INTERNATIONAL
BANKING OPERATIONS

serve

It is proposed to am end 12 CFR Part
211 as follows:
1. The authority citation for Part 211
continues to read as follows:
Authority: Federal Reserve Act (12 U.S.C.
211 et seq.); Bank Holding Company Act of
1956, as amended (12 U.S.C. 1841 et seq.); the
International Banking Act of 1978 (Pub. L. 95369; 92 Stat. 607; 12 U.S.C. 3101 et seq.); the
Bank Export Services Act (Title II, Pub. 97290, 96 Stat. 1235); and the International
Lending Supervision Act (Title IX, Pub. L. 98181, 97 Stat. 1153).
2. Section 211.4 is am ended by adding
paragraph (a)(7) to read as follows:
§ 211.4 Edge and Agreem ent
Corporations.

PART 262—RULES OF PROCEDURE
It is proposed to am end 12 CFR Part
262 as follows:
3. The authority citation for Part 262 is
revised to rea d as follows:
Authority: Administrative Procedure Act (5
U.S.C. 552); Bank Holding Company Act (12
U.S.C. 1841 et seq.); Federal Reserve Act (12
U.S.C. 211 et seq.); International Banking Act
of 1978 (12 U.S.C. 3101 et seq.) and the
International Lending Supervision Act (12
U.S.C. 3901 et seq.).
§ 262.3

List of Subjects

§ 262.3

12 CFR P art 211

(d) (1) The Board shall assess fees for
the filing of all applications (except
applications for m em bership in the
Federal Reserve System) according to
the following schedule.

Banks, banking, Federal Reserve
System, Foreign banking, Reporting and
recordkeeping requirem ents, Export
trading com panies, A llocated transfer
risk reserve, Reporting an d disclosure of
international assets, Accounting for fees
on international loans.

Applications.

*

*

*

*

Fee

S c h e d u l e f o r P r o c e s s in g A p p l ic a ­
S u b m it t e d t o t h e F e d e r a l R e ­
serve System

t io n s

12 CFR P art 262
A dm inistrative practice an d
procedure. Banks, banking. Federal
Reserve System, Holding com panies.
For the reasons set forth above, the
Board proposes to am end 12 CFR Parts
211 and 262 as follows:

Processing fee

Assets 1
Over

Bui not
over

This
am ount

Plus

Of
excess

Category A 1

............

$0
150 M ....................

$150M
1B

$5,000
5,000

P r o c e s s in g
to

the

A p p l ic a ­

Federal

Re­

S y s t e m — C ontinued
Processing fee

Over

But not
over

1B.........................
5 8 ..........................

5B
10B

$ 0 ..........................
150M ....................
1B .........................
5B ..........................
1 0 B ......................

S150M
1B
5B
10B

SO................... ....
150M ....................
1B.........................
5B ..........................
1 0 3 ......................

$150M
IB
5B
10B

This
amount

Plus

Of
excess

.0000012
.0000009

1B
5B

.0000029
.0000006
.0000005

10,000
15.000
20,000

$150M
1B
58

.0000014
.0000003
.0000002

$150M
1B
5B

Category B *
$2,500
2,500
5 ,000
7,500
10,000

0

Category C ‘
$1,250
1,250
2,500
3,750
5,000

0

'T o ta l assets are to be measured on a pro forma basis—
that is, the applicant's total assets if its application is
approved.
2Category A applications include: bank holding company
formations, acquisition of banks and acquisition of nonbanks,
(going concerns); bank holding company stock redemptions,
and changes in control; international investment applications.
3 Category B applications include; initial foreign branches.
Edge Act and other international applications, domestic bank
mergers, and changes in control for state member banks.
4Category C applications include: Bank holding company
nonbank acquistions (de novo) and export trading company
notifications; state m em ber bank branches, bank service
corporations, investments in bank premises and issuance of
capital notes by state member banks; additional foreign
branch and investment notifications.
5Category D includes ATM branches. All ATM branches
pay the sam e processing fee

(2) The Board shall assess annual fees
for the supervision and inspection of
Edge corporations (as defined in section
25(a) of the Federal Reserve Act, 12
U.S.C. 611 e t seq.) ^according to the
following schedule.
As s e s s m e n t S ch e d u le for Edge
C o r p o r a t io n s

[Am ended]

4. Paragraphs 262.3 (d) through (1) are
redesignated as paragraphs 262.3 (e)
through (m).
5. A new paragraph (d) is added to
§ 262.3 to read as follows:
★

for

S u b m it t e d

Category D 5 $1,000

(a) * * *
(7) Fees. Edge corporations shall be
assessed an annual fee by the Board for
supervision and inspection. The
schedule of such fees is provided in
§ 262.3(d) of the Board’s Rules of
Procedure, 12 CFR 262.3(d).

Regulatory Flexibility Act
The Board is sensitive to the im pact of
the proposed rule on small entities.
Consequently, the Board is considering
the imposition of fees for supervision of
Edge corporations and for applications
on a sliding scale b ased upon the size of
the regulated organization. It has
proposed com paratively limited fee
assessm ents for sm aller organizations.
Moreover, the proposed schedules are
designed only to recover partially those
costs associated w ith a particular
supervisory activity. The Board believes
the fees payable will be sufficiently
small as to have no significant im pact
on the financial stability of a reasonably
profitable institution.
The proposed regulation im poses no
additional inform ation collection
requirem ents.

Schedule

t io n s

41805

0
.0000058

$150M

Total assets plus standby
letters of credit (dollars in
millions)

Assess
this
amount

Plus

Of
excess
over
(dollars
in
mil­
lions)

Banking E d g e s:1
10 to 2 5 .............................
25 to 1 0 0 ...........................
100 to 5 0 0 ........................
Over 5 0 0 ............................
Investment E d g e s:1
10 to 1 0 0 ...........................
100 to 1 ,000.....................
1 000 to 5 ,0 0 0 ..................

$2,000
4,000
6,000
15,000
55,000

0.000200
0.000130
0.000120
0.000100
0.000078

$0
10
25
100
500

1,000
2,000
7,500
57,000
237,000

0.000100
0.000060
0.000055
0.000040
0.000032

0
10
100
1,000
5.000

1 Banking Edge corporations conduct banking activities in
the United States related to foreign or international transac­
tions, while investment Edges are essentially holding com pa­
nies for foreign investments. The size categories for banking
Edges refer to their estimated assets, based on data they
submit on FR 2886b reports. The size categories for invest­
ment Edges refer to the estimated consolidated assets of
these corporations and their ma|onty-owned (or otherwise
controlled) subsidiaries.

Board of Governors of the Federal Reserve
System, November 12,1986.
William W. Wiles,
Secretary of the Board.
[FR Doc. 86-25926 Filed 11-18-86; 8:45 am]
BILLING CODE 6210-01-M


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102