Full text of District Notices (Federal Reserve Bank of Dallas) : Amendment to Regulation H, Circular No. 80-20

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federal

R e se r v e Ba n k

DALLAS, TEXAS

of

Dallas

75222

C ircu lar No. 80-20
F e b ru a ry 4, 1980

AMENDMENT TO REGULATION H

TO ALL MEMBER BANKS
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
In our Circular No. 80-5, dated January 15, 1980, you were
furnished the text of an amendment to Regulation H, effective January 1,
1980. Enclosed is a copy of all amendments to Regulation H which have
been consolidated into one set of amendments. Member banks and others
who maintain Regulations Binders should file the enclosed amendments
in your binders. All other amendments should be removed from the
binders and destroyed.
Additional copies of the amendment will be furnished upon
request to the Secretary's Office of this Bank, Ext. 6267.
Sincerely yours,
Robert H. Boykin
First Vice President

Enclosure

Banks and others are encouraged to use the following incoming W A T S numbers in contacting this Bank:
1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the
extension referred to above.

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

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE
FEDERAL RESERVE SYSTEM
AMENDMENTS TO REGULATION Ht

1
.
Effective December 21, 1973, sections
208.10* ( ) and ( ) are amended t read as fo lo :
b
c
o
l ws
SECTION 208.10*— PUBLICATION OF
REPORTS OF M E M B E R BANKS
A N D THEIR AFFILIATES
* * * * 9
|
C
( ) Report of a f l a e .0 ( ) I r p r s of a f l ­
b
fiits1 1 f eot
fii
a e a e requested by the Board of Governors of t e
ts r
h
Federal Reserve System, each r
eport of an a f l a e
fiit
of a member S at bank, including a holding com­
t e
pany a f l a e s a l be published a the same time
fiit, h l
t
and i t e same newspaper as t a f l a e bank's
n h
he f i i t d
own condition r
eport submitted t t Federal Re­
o he
s
erve Bank, unless an extension of time f r submis­
o
s of the report of the a f l a e has been granted
ion
fiit
under a t or ty of t e Board of Governors of t e
uh i
h
h
Federal Reserve System. When such extension of
time has been granted, the report of t a f l a e
he f i i t
must be submitted and published before t expira­
he
t o of such extended period i t same newspaper
in
n he
a t condition re rt of the bank was published.
s he
po
( ) The copy of the r or f t use of t e
2
ep t or he
h
p i t r f r publication should be prepared on Form
rne o
F.R. 220a. The published information s a l agree i
hl
n
every re
spect with t a shown on the f
ht
ace of t e
h
r or of t e a f l a e furnished t the Federal Re­
ep t
h fiit
o
serve Bank by the a f l a e member bank, except
fiitd
t a any item appearing under the caption “Finan­
ht
c a r l t o s with bank” ag
il e a i n
ainst which t e word
h
♦ r v o s y S c i n 2 8 9 renumbered March 2 1 7 .
Peiul eto 0.;
. 94
'S c i n 2 o t e F d r l Reserve A t among o h r
“eto 1 f h eea
c,
te
t i g , p o i e a f l o s “Whenever member banks
hns r v d s s o l w :
a e r q i e t o t i r p r s from aflae, o whenever
r eurd o ban eot
fiits r
aflae of member banks a e r q i e t submit t ex­
fiits
r eurd o
o
a i a i n t e Board of Governors of t e F d r l Reserve
mnto, h
h eea
System o t e C ptroller of t e C
r h om
h urrency, a t e c s
s h ae
may b , may waive such re i e e t w t r s e t t any
e
qu r m n s i h e p c o

“none” appears on the r
eport furnished t th Fed­
o e
e a Reserve Bank may be omitted i t published
rl
n he
statement of the a f l a e Provided, That i the
fiit:
f
word “none” i shown against al of the items
s
l
appearing under such caption i t re or furnished
n he p t
t th Federal Reserve Bank the caption "Financial
o e
r l t o s with bank” s a l appear i t e published
eain
hl
n h
statement followed by the word “none.” All signa­
t r s s a l be the same i the published statement
u e hl
n
a i t e o i i a re r submitted t the Federal
s n h r g n l po t
o
Reserve Bank, but the signatures may be typewrit­
ten or otherwise copied on t e r o f r publica­
h ep rt o
to.
in
( ) A copy of t printed r
3
he
eport s a l be submit­
hl
t d t the Federal Reserve Bank attached t the cer­
e o
o
t f c t on Form F.R. 220a.
iiae
( ) Waiver of reports of a f l a e . Pursuant t
c
fiits
o
se io 21 of the Federal Reserve Act (12 U.S.C.
ct n
486), t Board of Governors of the Federal Re­
he
serve System waives the requirement f the sub­
or
mission of r
eports of a f l a e of S a e bank mem­
fiits
tt
bers of the Federal Reserve System, unless such re­
ports are s ec i ll requested by t Board of
p if ca y
he
Governors. The Board of Governors of t e Federal
h
Reserve System may require t submission of r ­
he
e
p r s which a e necessary t disclose f l y r l t o s
ot
r
o
ul eain
between member banks and t e r a f l a e and the
h i fiits
e f c thereof upon the a f i s of member banks.
fet
far
*

*

*

*

*

s r p r o e amination of any a flae i i t e judg­
uch e o t r x
fiit f n h
ment o t e s i Board o C m t o l r r s e t v l , s c
f h ad
r o p r l e , epciey u h
rpr o e
e o t r xamination i n t n c s a y t d s l s f l y
s o e e s r o i c o e ul
t e r l t o s between such aflae and such bank and t e
h eain
fiit
h
e f c t e e f upon t e a f i s of s bank.” I any c s
fet h r o
h far
uch
n
ae
where t e Board h s waived t e f l n of a r p r of an
h
a
h iig
eot
a f l a e no p b i a i n of a r p r of an a f l a e i
fiit,
ulcto
eot
fiit s
rqie.
eurd

+ For t i R g l t o t be complete a amended e f c
hs e u a i n o
s
fe­
t v Ja u r 1 1 8 , r t i :
i e n a y , 9 0 ean
1 P i t d R g l t o pamphlet a amended e f c i e
) rne e u a i n
s
fetv
March 1 , 1 6 .
8 99
2 T s i s e t ( e t o A r l 1978 and December
) his l p h e . D s r y p i
1978 s i s e t .
lp h e s )
J A N U A R Y 1980

2 E
. ffective March 2 1974. Regulation H (12
,
CFR 208) w l be amended by adding a new sec­
il
t o . 208.8, Banking P a ic , and renumbering
in
r ct es
t e succeeding s c i n . The Table of Contents of
h
etos
P rt 208 w l be changed t read as fol ws
a
il
o
lo :
SEC.
208.1
Definitions
208.2
E i i i i y Requirements
lgblt
208.3
Insurance of Deposits
208.4
Application f Membership
or
208.5
Approval of Application
208.6
P
rivileges and Requirements of M e m ­
bership
208.7
Conditions of Membership
208.8
Banking P a t c s
rcie
208.9
Establishment or Maintenance of
Branches
208.10 Publication of Reports of Member
Banks and Their A f l a e
fiits
208.11 Voluntary Withdrawal from Federal
Reserve System
208.12 Board Forms
As an incident t these amendments, §§ 208.8.
o
208.9, 208.10, and 208.11 w l be redesignated §§
il
208.9, 208.10, 208.11, and 208.12 r s e t v l .
epciey
3
.
Effective March 2 1974, a new section,
,
208.8 i added as fol ow
s
l s:
SECTION 208.8— BANKING PRACTICES
( ) Scope. No S a e member bank s a l engage
a
tt
hl
i p a t c s which are unsafe or unsound or which
n rcie
r s l i a v o a i n of law, r l , or r gu t o , or
eut n
ilto
ue
e la i n
which v o a e any condition imposed by or agree­
ilt
ments entered i t with t e Board. This section
no
h
outlines c
ertain of the practices i which S
n
tate
member banks should not engage.
( ) Waiver. A S a e member bank has t e r g t
b
tt
h ih
t p t t o t e Board t waive the conditions of sec­
o eiin h
o
t o 208.8. A waiver may be granted upon a show­
in
ing of good cause. The Board i is d sc e i n may
n t i rto
choose t l m t among other items, the scope,
o ii,
d
uration, and timing of t e waiver.
h
( ) Reserved.
c
( ) Reserved.
d
( ) Loans by State member banks in id
e
entified
flood hazard areas.
(1) Property securing loan must be insured
ag n f o d No S a member bank s a l make,
ai st l o .
t te
hl
i r a e extend or renew any loan secured by im­
nc e s ,
proved r a e t t or a mobile home located or t
el sae
o
be located i an area t a has been i e t f e by t e
n
ht
dniid
h
Secretary of Housing and Urban Development as an
area having special flood hazards and i which
n
flood insurance has been made avai bl under th
la e
e
National Flood Insurance Act of 1968. unless t e
h

building or mobile home and any personal property
securing such loan i covered f r t e term of t e
s
o h
h
loan by flood insurance i an amount a l a t equal
n
t es
t th outstanding p i c p l balance of th loan or
o e
rnia
e
t t e maximum l m t of coverage made a a la e
o h
ii
v i bl
with re ec t th p r i u a type of property under
sp t o e a t c l r
t Act, whichever i l s . Notwithstanding t e
he
s es
h
foregoing provision, flood insurance s a l not be r
hl
e­
quired on any State-owned property t a i covered
ht s
under an adequate policy of s lf nsurance s t s a ­
e -i
aifc
t r t t e Secretary of Housing and Urban De­
oy o h
velopment who s a l publish and pe o ca ly r v s
hl
ri di l e i e
t e ls of s a e f l i g within th exemption pro­
h it
tts aln
e
vided i t i paragraph.
n hs
t ( ) Pr
2 ohibition a t loans i nonparticipating
s o
n
communities. On or a t r July 1 1975, no S a e
fe
,
tt
member bank s a l make, in r a e extend, or re­
hl
ces,
new any loan secured by improved r a e t t or a
el sae
mobile home l
ocated or t be located i an area
o
n
t a has been i e t f e by t Secretary of Housing
ht
dniid
he
and Urban Development a an area having s e i l
s
pca
flood hazards, unless t community i which such
he
n
i s t a e i then p r i i a i g i the n t o a flood
s iutd s
atcptn n
ainl
insurance program.
tt ( ) Records of compliance. Each S a e mem­
3
tt
ber bank s a l maintain, i connection with al
hl
n
l
loans secured by improved r a e t t or a mobile
el s ae
home, s f ci t records t indicate the method
u fi en
o
used by t e bank t determine whether or not such
h
o
loans f l within the provisions of t i section
al
hs
2
08.8(e).
4
.
Effective September 1 , 1974, sec io 208.8
6
t n
i amended a f l ow
s
s o l s:
SECTION 208.8— BANKING PRACTICES
*

*

*

*

*

( ) Effective on other banking practices
c
Nothing i t i se t o s a l be construed a res­
n hs c i n h l
s
t i t n i any manner th Board’ a th ri t d l
rcig n
e
s u o ty o ea
with any banking p a t c which i deemed t be
rcie
s
o
unsafe or unsound or otherwise not i accordance
n
with law, r l , or r gulation or which v o a e any
ue
e
ilts
condition imposed i writing by th Board i con­
n
e
n
nection with the granting of any application or
other request by a S a e member bank, or any writ­
tt
ten agreement entered i t by such bank with t e
no
h
Board. Compliance with the provisions of t i sec­
hs
t o s a l ne h r l e e a S a e member bank of is
i n h l it er e i v
tt
t
duty t conduct al operations i a s fe and sound
o
l
n
a
manner nor prevent the Board from taking whatever
action i deems necessary and d
t
esirable t deal with
o
general or s e i i a t or p a ic s which, although
pcfc cs
r ct e
tRevoked A r l 2 . 1 7 . See page 9
pi 0 9 8
.
ttRenumbered A r l 2 . 1 7 . See page 9
pi 0 98
.

perhaps not v o a i g the provisions of t i s c i n
iltn
hs e t o ,
a e considered nevertheless t be an unsafe or un­
r
o
sound banking p a t c .
rcie
( ) Letters of credit and acceptances
d
1 Definitions
.
For the purpose of t i paragraph, “standby l t
hs
e­
t r of c di ” include every l t e of cr d t ( r
es
re t
etr
ei o
s i a arrangement however named or designated)
im l r
which r
epresents an obligation t the beneficiary on
o
t e p r of t e i s e ( ) t repay money borrowed
h at
h sur 1 o
by or advanced t or for t e account of t account
o
h
he
p
arty or ( ) t make payment on account of any
2 o
evidence of indebtedness undertaken by t e account
h
p r y or ( ) t make payment on account of any
at,
3 o
d a l by t e account party i the performance of
ef u t
h
n
an obligation.6 An “i e i i l acceptance” i a
2
nlgbe
s
time d a t accepted by a bank, which does not meet
rf
t e requirements f discount with a Federal Re­
h
or
serve Bank.
. Restrictions
A. A s a e member bank s a l not i s e renew,
tt
hl
su,
extend, or amend a standby l t e of c e i ( r other
etr
rdt o
s m l r arrangement, however, named or described)
iia
o make an i e i i l acceptance o g a t any o h r
r
nlgbe
r rn
te
extension of c e i i, i the aggregate, t e amount
rdt f n
h
of a l standby l t e s of c e i and i e i i l accept­
l
etr
rdt
nlgbe
ances i su d renewed, extended, or amended on or
s e,
a t r th e f c i e date of t i amendment, when
fe e fe t v
hs
combined with other extensions of c e i issued by
rdt
the bank would exceed the l g l limit i s on
ea
at on
loans imposed by the S te (including l m t t o s t
ta
iiain o
any one customer or on aggregate extensions of
c e i ) or exceed l g l l m t pertaining t loans t
rdt
ea iis
o
o
a f l a e under f d r l law (12 U.S.C. 3 1 c) pro­
fiits
eea
7 ( ):
vided t a , i any S a has a separate l m t t o on
ht f
t te
iiain
the issuance of l t e s of credit or acceptances
etr
which apply t a standby l t e of c e i or t i e i i
o
etr
rdt
o nlg­
ble acceptances res ct ve , then t separate l
pe i ly
he
imi­
t t o s a l apply i l e of the standard loan li i a
a i n hl
n iu
mt­
to.
in
B. No S a e member bank s a l i su a standby
tt
hl s e
l t e of c e i or i e i i l acceptance unless th
etr
rdt
nlgbe
e
c e i standing of th account party under any l t e
rdt
e
etr
of c e i , and the customer of an i e i i l accept­
rdt
nlgbe
ance, i the subject of c e i analysis equivalent t
s
rdt
o
t a applicable t a p t n i l borrower i an ordin­
ht
o oeta
n
a loan s t a i n
ry
iuto.
C. I se
f veral banks p r i i a e i t issuance of
a t c p t n he
2

“ As d f n d “st d y lte of c e i ” would
eie,
an b etr
rdt
n t i c u e ( ) commercial lte s of c e i and
o nld 1
et r
rdt
s m l r i s r m n s where t e i s i g bank ex­
iia n t u e t
h sun
p c s t e b n f c a y t draw upon t e i s e and
et h eeiir o
h sur
which do n t “gu
o
aranty” payment of a money
o l g t o o () a g a n o s m l r o l g t o
biain r 2
u ra ty r i i a b i a i n
i s e by a f r i n branch i accordance w t and
sud
oeg
n
ih
s b e t t t e l m t t o s o R g l t o M.
uj c o h iiain f e u a i n

a standby l t e of c e i or i e i i l acceptance
etr
rdt
nlgbe
under a bona fide binding agreement which pro­
vides t a , regardless of any event, each p r i i a t
ht
atcpn
s a l be l a l only up t a c r a n percentage or
hl
ibe
o
eti
c r a n amount of the t t l amount of t standby
eti
oa
he
l t e of c e i or i e i i l acceptance is ue a
etr
rdt
nlgbe
s d,
S a e member bank need only include the amount
tt
of i s pa ticipation for purposes of t i s c i n
t r
hs eto;
otherwise, the e t r amount of the l t e of c e i
nie
etr
rdt
or acceptance must be included.
3 Disclosure; Recordkeeping
.
The amount of a l outstanding standby l t e s of
l
etr
credit and ineligible acceptances, regardless of
when i u d s a l be adequately disclosed i th
ss e , h l
n e
bank’ published f n n i l statements.
s
iaca
Each S at member bank s a l maintain adequate
t e
hl
co ro and subsidiary records of is standby l t e s
nt l
t
etr
of c e i comparable t the records maintained i
rdt
o
n
connection with t bank’ d r c loans so t a a
he
s iet
ht t
a l times the bank’ p e t a l a i i y thereunder
l
s ot n i l i b l t
and the bank’ compliance with t i section ( )
s
hs
d
may be re i determined.
ad ly
4 Exceptions
.
A standby l t e of c e i i not sub c t t e
etr
rdt s
je t o h
r s r c i n s t f r above i the following s t a
e t i t o s e o th
n
iu­
tos
in:
A. p i r t or a the time of issuance of the cre­
ro o
t
d t the issuing bank i paid an amount equal to th
i,
s
e
bank’ maximum l a i i y under the standby l t e
s
iblt
etr
of c e i or
rdt
B. p i r t or a the time of issuance, the bank
ro o
t
has s t aside s f i i n funds i a segregated, c e r
e
ufcet
n
la­
l earmarked deposit account t cover t bank’
y
o
he
s
maximum l a i i y under the standby l t e of
iblt
etr
cei.
rdt
*

*

*

*

*

5 Effective September 22, 1974, section 208.8
.
( ) i amended t add a new subparagraph t read
e s
o
o
a fol ow
s l s:
SECTION 208.8— BANKING PRACTICES
*

*

*

*

*

( ) Loans by State member banks in identified
e
flood hazard areas. * * *
t( ) Notice t borrower of s e i l flood h z r .
4
o
pca
aad
After September 21, 1974, each S a e member bank
tt
s a l as a condition of making, i
hl
ncreasing, extend­
i g or renewing any loan secured by improved r a
n,
el
e t t or a mobile home located or t be located i
sae
o
n
an area t a has been i e t f e by the Secretary of
ht
dniid
Housing and Urban Development as an area having
tRenumbered 3 and amended, e f c i e A r l 2 . 1 7 .
fetv pi 0 9 8
See page 9

s e i l flood hazards, mail or deliver as soon a
pca
s
f a i l but not l s than 10 days i advance of
esbe
es
n
closing of the transaction (or not l t r than t e
ae
h
bank's commitment, i any, i the period between
f
f
commitment and closing i l s than 10 days) a
s es
written notice to the borrower t a the property
ht
securing the loan i i an area so i e t f e . In l e
s n
dniid
iu
of the n t f c t o required i t i s c i n a bank
oiiain
n hs e t o ,
may obtain s t s a t r written assurances from a
aifcoy
s l e or l s o t a such s l e or l s o has n t f e
elr
esr ht
elr
esr
oiid
t borrower, p i r t t execution of any agree­
he
r o o he
ment f r s l or l a e t a th property securing
o ae
es, ht e
t loan i i an area so i e t f e . A bank s a l
he
s n
dniid
hl
require t borrower, p i r t cl in , to provide
he
r o o os g
t e bank with a wri en acknowledgment t a t e
h
tt
ht h
borrower r a i e t a the property, securing t e
elzs ht
h
loan or upon which a mobile home i or w l be
s
il
l c t d i i a s e i l flood hazard a e .
oae, s n pca
ra
6
.
Effective December 1 1975, s t o 208.8 ( )
,
ec i n
f
i added t read as fol w
s
o
lo s:
SECTION 208.8— BANKING PRACTICES
*

*

*

*

*

(0 State member banks as transfer agents.
( ) On or a t r December 1 1975, no State
1
fe
,
member bank or any of is s b i i r e s a l a t as
t us d a i s hl c
t a s e agent, as defined i Section 3(a)(25) of t e
rnfr
n
h
S c r t e Exchange Act of 1934 (
euiis
“Act”) with re­
,
s
pect t any s c r t r i t r d under Section 12 of
o
e u i y eg s e e
t Act or which would be required t be re i t r d
he
o
gsee
except f r t exemption from r g s r t o provided
o he
eitain
by subsection (g)(2)(B) or (g)(2)(G) of t a Section,
ht
unless i s a l have f l d a r g s r t o statement
t hl
ie
eitain
with t e Board i conformity with th requirements
h
n
e
of Form TA-1, which r g s r t o statement s a l
eitain
hl
have become e f c i e a herei af r provided. Any
fetv s
n te
r g s r t o statement f l d by a S a e member bank
eitain
ie
tt
or is subsidiary s a l become e f c i e on the t i ­
t
hl
fetv
hr
t e h day a t r f l n with the Board unless t e
it
fe iig
h
Board takes a irmative a
ff
ction t a c l r t , deny
o ceeae
or postpone such r g s r t o i accordance with th
eitain n
e
provisions of Section 17A(c) of the Act. Such
f l n s with the Board w l c n t t t f l n s with
iig
il o s i u e iig
the S c r t e and Exchange Commission f r pur­
euiis
o
poses of Section 1 ( ) 1 of th Act.
7c()
e
( ) I t e information contained i Items 1- of
2 f h
n
6
Form TA-1 becomes i cc a , misleading or i ­
na ur te
n
complete fo any reason, th bank or is subsidiary
r
e
t
s a l within twenty-one calendar days t e e f e
hl,
hratr
f l an amendment t Form TA-1 correcting the i ­
ie
o
n
accurate, misleading or incomplete information.
Within t i t calendar days following t close of
hry
he
any calendar year (beginning with the period from
the date a of which the r g s r t o statement i
s
eitain
s
prepared t December 31, 1976) during which th
o
e
information required by Item 7 of Form TA-1 be­

comes inaccurate, misleading or incomplete, t e
h
bank or is subsidiary s a l f l an amendment t
t
h l ie
o
Form TA-1 correcting t e i a ur te misleading or
h n cc a ,
incomplete information.
( ) Each r g s r t o statement on Form TA-1 or
3
eitain
amendment t
hereto s a l c n t t t a “report" or
hl o s i ue
“application” within t meaning of se io 1 ,
he
ct n 7
17A(c) and 32(a) of the Act.
7
.
Effective September 1 1977, se
,
ction 208.8 i
s
amended by adding a new paragraph () t read a
j o
s
f l ow :
ol s
SECTION 208.8— BANKING PRACTICES
*

*

*

*

*

( ) [Reserved]
g
( ) [Reserved]
h
() [Reserved]
i
() State member banks, and subsidiaries, de­
j
partments, and divisions thereof, which are
municipal se
curities dealers.
( ) For purposes of t i paragraph, t terms
1
hs
he
herein have the meanings given them i sec io
n
t n
3 a of th S c r t e Exchange Act of 1934 (15
()
e euiis
U.S.C. § 78c(a)) and t e r l s of the Municipal
h ue
Securities Rulemaking Board. The term “Act"
s a l mean t S c r t e Exchange Act of 1934 (15
hl
he e u i i s
U.S.C. § 78a etseq.).
( ) On and a t r October 31, 1977, a S t mem­
2
fe
ta e
ber bank of the Federal Reserve System, or a sub­
s d a y or a department of a di si n t e e f t a i
iir
vi o h r o , h t s
a municipal s c r t e dealer s a l not permit a per­
euiis
hl
son t be associated with i as a municipal secur­
o
t
i i s p i c p l or municipal s c r t e re re nt ti
te r n i a
e u i i s p se a ve
unless i has f l d with t e Board an o i i a and
t
ie
h
rgnl
two copies of Form MSD-4, “Uniform Application
for Municipal Securities Principal or Municipal
Secu ti Representative Associated with a Bank
ri es
Municipal Se u i i s Dealer.” completed i accord­
crte
n
ance with t i s r c i n contained t e e n fo t a
he n t u t o s
hri, r ht
person. Form MSD-4 i prescribed by the Board f r
s
o
purposes of paragraph ( ) of Municipal S c r t e
b
euiis
Rulemaking Board Rule G-7, “Information Con­
cerning Associated Persons.”
( ) Whenever a municipal s c r t e dealer re­
3
euiis
ceives a statement pursuant t paragraph ( ) of
o
c
Municipal Se r t e Rulemaking Board Rule G-7.
cu i i s
“Information Concerning Associated Persons,"
from a person f r whom i has f l d a Form MSD-4
o
t
ie
with the Board pursuant t subparagraph ( ) of t i
o
2
hs
paragraph, such dealer s a l within ten days t
hl,
here­
a t r f l three copies of t a statement with th
f e, ie
ht
e
Board accompanied by an o i i a and two copies
rgnl
of a t a s i t l l t e which includes the name of
r n m t a etr
the dealer and a reference to the material transmit­
t ident yi g the person involved and i signed by
ed
if n
s
a municipal s c r t e p i ip associated with t e
e u i i s r nc al
h
dae.
elr

( ) Within t i t days a t r the termination of t e
4
hry
fe
h
association of a municipal s c r t e pri c p l or
euiis
nia
municipal s c r t e representative with a municipal
euiis
dealer t a has f l d a Form MSD-4 with the Board
ht
ie
f r t a person pursuant t subparagraph ( ) of t i
o ht
o
2
hs
paragraph, such dealer s a l f l an o i i a and two
h l ie
rgnl
copies of a notification of termination with th
e
Board under t i paragraph s a l be th date of
hs
hl
e
f l n . Such a Form MSD-4. Form MSD-5. o s a e
iig
r ttc p l Securities Representative Associated with a
ia
Bank Municipal S c r t e Dealer,” completed i
euiis
n
accordance with i s r c i n contained t e e n
ntutos
hri.
( ) A municipal s
5
ecurities dealer t at f l s a
h
ie
Form MSD-4, Form MSD-5, or statement with t e
h
Board under t i paragraph s a l r t i a copy of
hs
hl ean
each such Form MSD-4. Form MSD-5. or statement
utl a latt
n i t e s hree years a t r the termination of th
fe
e
employment or other association with such dealer
of th municipal s c r t e pri c p l or municipal
e
euiis
nia
s c r t e representative t whom th form or s a e
euiis
o
e
tt­
ment r l t s
eae.
( ) The date t a the Board receives a Form
6
ht
MSD-4, Form MSD-5, or statement f l d with t e
ie
h
Board under t i paragraph s a l be the date of
hs
hl
f l n . Such a Form MSD-4, Form MSD-5, o s a e
iig
r tt­
ment which i not prepared and executed i accord­
s
n
ance with the applicable requirements may be re­
turned a unacceptable for f l n . Acceptance f r
s
iig
o
f l n s a l not co s i u e any finding t a a Form
iig hl
nttt
ht
MSD-4, Form MSD-5, or statement has been com­
pleted i accordance with the applicable require­
n
ments or t a any information reported ther i i
ht
en s
t u , c r e t complete, or not misleading. Every
re u r n ,
Form MSD-4, Form MSD-5, or statement f l d
ie
with the Board under t i paragraph s a l c n t t t
hs
hl o s i u e
a f l n with the S c r t e and Exchange Commis­
iig
euiis
sion fo purposes of section 17 c
r
( )(1) of the Act (15
U.S.C. § 79q(c)( 1 ) and a “report,” “applica­
)
t o , or “document” within the meaning of sec­
in”
t o 32(a) of the Act (15 U.S.C. § 7 f ( ) . (15
in
8fa)
U.S.C. §§ 78o-4(c)(5), 78q, and 78w and 122
U.S.C. 248
(a)).
8.
Effective October 3 1977, section 208.8 i
,
s
amended by adding the following new paragraphs
( ) ( ) and () as follows:
g, h,
i

SECTION 208.8— BANKING PRACTICES
*

*

*

*

*

( ) State member banks as registered clearing
g
agencies.
( ) Requirement of notice
1
Any S ate member bank or any of is s b i i r e
t
t usdais
t a i a r gist
h t s e ered clearing agency pursuant t Sec­
o
t o 17A(b) of the S curities Exchange Act of 1934
in
e
( h “Act”) which imposes any f n l d s i l n r
te
,
ia i c p i a y

sanction on any pa t c p n t e e n denies p r i i
riiat hri,
atc­
pation t any applicant or p o
o
r hibits or l m t any
iis
person i respect t access t services offered by
n
o
o
such regi t r d clearing agency, s a l f l with the
see
h l ie
Board and the appropriate regulatory agency ( f
i
other than the Board) fo a p r i i a t or applicant
r atcpn
notice thereof i the manner prescribed h r i .
n
een
( ) Notice offinal disciplinary action
2
Any registered clearing agency for which the
Board i the appropriate regulatory agency t a
s
ht
takes any f n l dis i l n r action with respect t
ia
cpiay
o
any p r i i a t s a l promptly f l a notice thereof
atcpn hl
ie
with the Board i accordance with subparagraph ( )
n
3
of t i paragraph. For t e purposes of t i para­
hs
h
hs
graph “f n l disciplinary action” s a l mean t e
ia
hl
h
imposition of any d s i l n r sanction pursuant t
icpiay
o
§ 17A(b)(3)(G) of the Act or other action of a reg­
istered clearing agency which, a t r notice and
fe
opportunity f r hearing, r s l s i any f n l disposi­
o
eut n
ia
t o of charges o :
in
f
(A) one or more v o a i n of the r l s of
iltos
ue
such r g s e e clearing agency; or
eitrd
(B) a t or p a t c s c n t t t n a s a u o y
cs
rcie osiuig
tttr
d s u l f c t o of a type defined i sub­
iqaiiain
n
paragraph (D) or (E) (except p
rior con­
v c i n ) of Section 3(a)(39) of the Act.
itos
However, i a regis e e clearing agency fee sche­
f
trd
dule s e i i s c r a n charges f r e r r made by is
pcfe eti
o ros
t
p r i i a t i giving i s r c i n t th r g s e e
atcpns n
ntutos o e eitrd
clearing agency which a e de minimis on a per e r r
r
ro
basis and whose purpose i i part t provide
s n
o
revenues t t e r g s e e c e r n agency t compen­
o h eitrd laig
o
s t i f r e f r expended i beginning to process
ae t o fot
n
an erroneous i s r c i n such e
ntuto,
rror charges s a l
hl
not be considered a “f n l dis i l n r action” f r
ia
cpiay
o
purposes of t i paragraph.
hs
( ) Content of notice required by subparagraph (2)
3
Any notice f l d pursuant t subparagraph ( ) of
ie
o
2
t i paragraph s a l consist of the following, a
hs
hl
s
aporae
prpit:
(A) the name of the respondent concerned
together with the respondent’ l
s ast
known address as re
flected on the re­
cords of the r gistered clearing agency
e
and the name of the person, committee,
or other organizational u i t a brought
nt ht
th charges involved; except t a , as t
e
ht
o
any respondent who has been found not
t have violated a provision covered by a
o
charge, i
dentifying information with re­
spect t such person may be deleted i ­
o
n
s
ofar a the notice reports the d
s
isposition
of t a charge and, p
ht
rior t the f l n of
o
iig
the n t c , the respondent does not re­
oie
quest t a i
h t dentifying information be i ­
n
cluded i the n t c .
n
oie
(B) a statement describing the invest g t v
iaie

or other origin of the a t o ;
cin
(C) as charged i the proceeding, the speci­
n
f c provision or provisions of t r l s of
i
he u e
the registered clearing agency violated
by such person or the s a u o y disqual­
tttr
if
ication referred to i clause (B) of
n
subparagraph ( ) of t i paragraph and a
2
hs
statement describing t e answer of t e
h
h
respondent t th charges;
o e
(D) a statement s t i g f r h findings of f c
etn ot
at
with respect t any ac or practice i
o
t
n
which such respondent was charged with
having engaged i or omitted; the con­
n
clusion of the r i t r d c
eg s e e learing agency
a t whether such respondent v o a d
s o
i l te
any r l or was sub ct t a s a u o y dis­
ue
je o t t t r
q a i i a i n as charged: and a statement
ulfcto
of t r is er clearing agency i sup­
he eg t ed
n
port of i s resolution of the principal
t
i us r
ss e aised i t e proceedings:
n h
(E) a statement describing any sanction im­
posed, the reasons t e e o , and t date
hrfr
he
upon which such sanction has or w l be­
il
come e f c i e and
fetv;
( ) such other matters as the registered
F
c
learing agency may deem r l v n .
eeat

cluding a hearing, or otherwise exhausted h s admi­
i
n s r t v remedies within the re
itaie
gistered clearing
agency with r
espect t such a m tt .
o
a er

( ) Notice off n l d n a , p o i i i n t r i a i n
4
ia eil rhbto, emnto,
or l m t t o based on q a i i a i n or administra­
iiain
ulfcto
tv r l s
ie u e

( ) Notice off n l ac i n based upon prior adjudi­
6
ia to
cated s a u o y d s u l f c t o s
tttr iqaiiain

( ) Content of n t c required by subparagraph ( )
5
oie
4
Any notice pursuant t subparagraph ( ) of t i
o
4
hs
paragraph s a l con is of the following, as approp­
hl
s t
rae
it:
(A) th name of each person concerned together
e
with each such person’ l s known address as re­
s at
flected i the records of the registered clearing
n
agency;
(B) t s e i i grounds upon which t a t o
he p c f c
he c i n
of the r gi te d cl
e s re earing agency was based, and a
statement describing the answer of the person
concerned;
(C) a statement s t i g f r h findings of f c and
etn ot
at
conclusions as t each alleged f i u e of the person
o
alr
t comply with q a i i a i n standards, or comply
o
ulfcto
with administrative ob ig io s, and a statement of
l at n
the r is e e clearing agency i support of t re­
eg t r d
n
he
s l io of the p in ip is u s ra s d i t e pro­
o ut n
r c al s e
ie n h
ceeding;
(D) the data upon which such a
ction has or w l
il
become e f c i e and
fetv;
( such other matters as the r i t r d cle in
E)
eg s e e
ar g
agency deems r l v n .
eeat

Any registered clearing agency f which the
or
Board i the appropriate regulatory agency t a
s
ht
t
akes any f n l action with respect to any person
ia
ta:
ht
(A) denies or conditions p r i i a i n t any
atcpto o
person or prohibits or l m t access t
iis
o
s
ervices offered by such re is e e c e r
g trd la­
ing agency; and
(B) i based upon a s a u o y d s u l f c t o
s
tttr iqaiiain
of a type defined i subparagraph ( ),
n
A
(B) or (C) of Section 3 a (39) of t e
()
h
Act or consisting of a p i conviction a
r or
s
described i subparagraph (E) of s i
n
ad
Section 3 a ( 9)
() 3
s a l promptly f l notice thereof with the Board
hl
ie
and the appropriate regulatory agency ( f other than
i
the Board) f t affected person i accordance
or he
n
with subparagraph ( ) of t i paragraph; provided,
7
hs
however, t a no such action s a l be considered
ht
hl
“f n l pursuant t t i subparagraph which r s l s
ia”
o hs
eut
merely from a notice of such f i u e t the person
alr o
a f c e , i such person has not sought an adjudica­
fetd f
t o of the matter, including a hearing, or otherwise
in
exhausted h s administrative remedies within the
i
r g s e e cl
e i t r d earing agency with respect t such a
o
mte.
atr

Any registered clearing agency for which the
Board i the appropriate regulatory agency t a
s
ht
takes any f n l a
i a ction which denies p r i i a i n t ,
atcpto o
or conditions the par ci at n o , any person or
ti p io f
p o ib ts or l m t any person with respect t access
rh i
iis
o
t ser ce offered by the clearing agency based on
o vi s
an alleged f i u e of such person t :
alr
o
(A) comply with t e q a i i a i n standards
h ulfcto
prescribed by the r l s of such r g st e
ue
e i er d
clearing agency pursuant to Section
17A(b)(4)(B) of the Act; or
(B) comply with any administrative require­
ments of such r i t r d c
eg s e e learing agency
(including f i u e t pay entry or other
alr o
dues or f e or t f l prescribed forms
es
o ie
or reports) not involving charges of
v la i n which may lead t a d s i l n
io t o s
o icpi­
ary sanction
s a l not be considered a “f n l discipl na ac­
hl
ia
i ry
t o ' f r purposes of subparagraph ( ) but notice
in' o
2,
thereof s a l be promptly f l d with the Board and
hl
ie
the appropriate regulatory agency ( f other than t e
i
h
Board) fo t a
r he ffected person i accordance with
n
subparagraph ( ) provided, however, t a no such
5;
ht
action s a l be considered “f n l pursuant t t i
hl
ia”
o hs
subparagraph t a r s l s merely from a n
ht eut
otice of
such f i u e t the persons a f c e , i such person
alr o
fetd f
has not sought an adjudication of t m t e , i ­
he a t r , n

( ) Content of n t c required by subparagraph ( )
7
oie
6
Any notice pursuant t subparagraph ( ) of t i
o
6
hs

6

paragraph s a l co s s of t following, as approp­
hl n it
he
rae
it:
(A) t e name of t person concerned, together
h
he
with each such person’ l s known address a r ­
s at
s e
flected i the records of the registered clearing
n
agency;
(B) a statement s t i g f r h th pr n i a i s e
etn ot e icpl sus
r i e , the answer of any person concerned, and a
asd
statement of the re is e e clearing agency i sup­
g trd
n
p rt of is r s ut n of the p i c p l i s e r i e
o
t e ol io
rnia sus asd
i t e proceeding;
n h
(C) any d scription furnished by or on behalf of
e
t e person concerned of the a t v t e engaged i by
h
ciiis
n
th person s nc the adjudication upon which t e
e
i e
h
d s u l f c t o i based;
iqaiiain s
(D) a copy of t e order or decision of the c u t
h
or,
the appropriate regulatory agency or the s l ef
r
egulatory organization which adjudicated the mat­
t r giving r s t such s a u o y d s u l f c t o ;
e
ie o
tttr iqaiiain
(E) the nature of the a
ction taken and the date
upon which such a io i t be made e f c i e and
ct n s o
fetv;
( ) such other matters a the r gi t r d c
F
s
e s e e learing
agency deems r l v n .
eeat
( ) Notice ofsummary suspension ofp r i i a i n
8
atcpto
Any registered clearing agency for which t
he
Board i the appropriate regulatory agency t a
s
ht
summarily suspends or closes the accounts of a par­
ticipant pursuant t the provisions of Section
o
17A(b)(5)(C) of the Act, s a l within one business
hl
day a t r t e ef
f e h fectiveness of such a
ction f l notice
ie
thereof with the Board and t appropriate regula­
he
t y agency f r the p r i i a t ( f other than t e
or
o
atcpn i
h
Board) of such a
ction i accordance with subpara­
n
graph ( ) of t i paragraph.
9
hs
( ) Content of no i e of summary suspension of
9
tc

priiain
atcpto
Any n ti pursuant t subparagraph ( ) of t i
o ce
o
8
hs
paragraph s a l contain a l a t the following i f r
hl
t es
no­
mation, as a p o i e:
p r pr at
(A) the name of the participant concerned
together with the p r ci n s l s known address
a ti pa t’ a t
a r f e t d i the records of the re i t r d cle in
s elce n
gsee
ar g
agency;
(B) the d
ate upon which such summary a i
ct on
has or w l become e f c i e
il
fetv;
(C) I such summary action i based upon t e
f
s
h
provisions of Section 17A(b)(5)(C)(i) of t Act, a
he
copy of the relevant order or decision of the s l ef
r
egulatory organization i avai bl t the r g s e e
f
la e o
eitrd
c e r ng agency;
lai
(D) i such summary action i based upon th
f
s
e
provisions of Section 17A(b)(5)(C)(ii) of t e Act, a
h
statement describing t d
he efault of any d l v r ’ of
eie)
funds or s c r t e t the re is e e clearing agency;
euiis o
g trd
(E) i such summary a
f
ction i based upon th
s
e
provisions of S c i n 17A(b)(5)( )( i of the Act, a
eto"
C ii )
statement describing t f n n i l or operating d f i
he i a c a
if­

c l y of t p r i i a t based upon which t e reg­
ut
he a t c p n
h
i t r d clearing agency determined t a such sus­
see
ht
pension and closing of accounts was necessary f r
o
t e prote io of th clearing agency, is p r i i
h
ct n
e
t atc­
p n s c e i o s or i v s o s
at, rdtr
netr;
( ) t e nature and e f c i e date of th suspen­
F h
fetv
e
s o ; and
in
(G) such other matters as the r gi t r d c e ri g
e see la n
agency deems r l v n .
eeat
( ) Applications for stays of disciplinary sane*
h
tions or summary suspensions by a registered
clearing agency.
I a registered clearing agency for which the
f
Se
curities and Exchange Commission i not t e
s
h
appropriate regulatory agency imposes any f n l
ia
disciplinary sanction pursuant to Section
17A(b)(3)(G) of the Act, or summarily suspends or
limits or prohibits access pursuant to Section
17A(b)(5)(C) of t e Act, any p r i i a t aggrieved
h
atcpn
thereby f r which the Board i the appropriate reg­
o
s
u a o y agency may f l with the Board, by t l ­
ltr
ie
ee
gram or otherwise, a request f r a s a of imposi­
o
ty
t o of such a t o . Such request s a l be i writing
in
cin
hl
n
and s a l include a statement as t why such s a
hl
o
ty
should be g a ed
r nt .
() Application for review of f n l disciplinary
i
ia
sanctions, denials of participation or prohibitions
or limitations of access to services imposed by
registered clearing agencies.
( ) Scope
1
Proceedings on an a
pplication t the Board under
o
Section 19(d 2 of th Act by a person t a i sub­
)( )
e
ht s
j c t the Board’ j r s i t o f review of any
et o
s u i d c i n or
a
ction by a r gi e d clearing agency for which t e
e st re
h
Securities and Exchange Commission i not the
s
appropriate regulatory agency s a l be governed by
hl
t i paragraph.
hs
( ) Procedure
2
(A) An appli at n f r review pursuant t Sec­
c io o
o
t o 19(d)(2) of the Act s a l be f l d with the
in
hl
ie
Board within 30 days a t r notice i f l d by t e
fe
s ie
h
registered clearing agency pursuant to Section
1 ( )( ) of t e Act and received by t e aggrieved
9d 1
h
h
person applying f r review, or within such longer
o
period a the Board may determine. The Secretary
s
of t Board s a l serve a copy of the a li a i n
he
hl
pp c t o
on the registered clearing agency, which s a l
hl,
within t days a t r r c i t of t a l c t o , cer­
en
fe e e p
he pp i a i n
t f and f l with the Board one copy of t e record
iy
ie
h
upon which the action complained was taken,
together with t e copies of an index t such r
hr e
o
e­
cord. The Secretary s a l serve upon the p r i s
hl
ate
copies of such index and any papers subsequently
fld
ie.
(B) Within 20 days a t r r e p of a copy of t e
f e ec i t
h
index, the applicant s a l f l a b i f or other s a e
h l ie r e
tt­
ment i support of h s appli t n which s a l s a e
n
i
ca io
hl tt

t s e i i grounds on which t application i
he p c f c
he
s
based, the particular findings of the registered
c ar g agency t which objection i taken, the r ­
le in
o
s
e
l e sought. Any ap
if
plication not perfected by such
timely b i f or statement may be dismissed as aban­
re
doned.
(C) Within 20 days a t r r ce p of the appli­
fe e it
cant’ brief or statement the registered clearing
s
agency may f l an answer t e e o and within 10
ie
hrt,
days of r c i t of any such answer the a
eep
pplicant
may f l a r p y Any such papers not f l d within
ie e l .
ie
t e time provided by items (A), ( , or (C) w l not
h
B)
il
be received except upon s e i l permission of t e
pca
h
Board.
(D) On is own motion, t e Board may d r c
t
h
iet
t a t record under review be supplemented with
h t he
such a d i al evidence as i may deem r l v n .
d it on
t
eeat
Nevertheless, the registered clearing agency and
persons who may be aggrieved by such cl ri g
ea n
agency’ a
s ction s a l not be e t t e t adduce evi­
hl
nild o
dence not presented i t e proceedings before t e
n h
h
re s e e c earing agency unless i i shown t t e
gi t r d l
t s
o h
s t s a t o of th Board t a such a i i n l evi­
aifcin
e
ht
dd t o a
dence i material and t a t
s
h t here were reasonable
grounds fo f i u e t present such evidence i t e
r alr o
n h
proceedings before the r gi er d c
e st e learing agency.
Any request for leave t adduce addi io l evidence
o
t na
s a l be f l d promptly so a not t delay th dis­
hl
ie
s
o
e
po ti n of t proceeding.
si o
he
(E) Oral argument before th Board may be r
e
e­
quested by the applicant or t e regis re c e r g
h
te d l a in
agency as f
ollows:
() by the applicant with h s b i f or s a e
i
i re
tt­
ment or within 10 days a t r r c i t of
fe eep
the r g s e e c
e i t r d learing agency’ answer,
s
or
(i by the r i t r d c
i)
eg s e e learing agency with is
t
answer.
The Board, i is d s r t o , may g
n t icein
rant or deny any
request f r o a argument and, where i deems i
o rl
t
t
appropriate t do s , the Board w l consider an
o
o
il
application on t b s s of the papers f l d by t
he a i
ie
he
p r i s without o a argument.
ate,
rl
(F) The Board’ Rules of Practice for Formal
s
Hearings s a l apply t review proceedings under
hl
o
t i r l t the extent t a they a not i c n s nt
hs u e o
ht
re
n o si te
with t i r l . Attention i directed p r i u a l t
hs ue
s
atclry o
Section 263.21 of the Rules of Practice r l t n t
eaig o
formal requirements a t the papers f l d
s o
ie.
9.
Effective December 31, 1977, Section
208.8(f) i amended by adding a new paragraph ( )
s
4
t read a fol w
o
s lo s:
SECTION 208.8— BANKING PRACTICES
*

*

*

*

*

( ) State member banks as transfer agents.
f

*

*

*

*

*

( ) Every S a e member bank or any of is sub­
4
tt
t
s d a i s t a i re s e e with t Board a a t an ­
i i r e h t s gi t r d
he
s r s
f r agent i exempted u t l April 3 1978, from t a
e
s
ni
,
ht
p r of the provision of Section 208.8(f)(2) t a
at
ht
s a e t a “[ j t i t i t calendar days following
tts ht w i h n hry
t e close of any calendar year . . . during which
h
t e information required by Item 7 of Form TA-1
h
becomes i cc ra , misleading, or incomplete, th
na u te
e
bank or is subsidiary s a l f l an amendment t
t
h l ie
o
Form TA-1 correcting the i cc ra , misleading,
na u te
or incomplete information.”
1. E
0
ffective April 20, 1978, section 208.8(e) i
s
amended as fol w
lo s:
SECTION 208.8— BANKING PRACTICES
( ) Loans by State member banks in special
e
flood-hazardous areas.— ( ) Property securing
1
loan must be insured a
gainst. l o . * * *
fod
( ) Records of compliance. * * *
2
( ) ( ) Notice of special flood hazards and
3 i
a a l b l t of Federal d
viaiiy
isaster r l e a si an e.
e i f s st c
Each S a e member bank s a l as a condition of
tt
hl,
making, incre in , extending or renewing any loan
as g
secured by improved r a e t t or a mobile home
el sae
l at or t be located i an area t a has been
oc ed
o
n
ht
i e t f e by the Secretary of Housing and Urban
dniid
Development as an area having special flood
hazards, mail o deliver a soon a f a i l but not
r
s
s esbe
l s than 10 days i advance of closing of the t
es
n
rans­
a t o ( r not l t r than the bank’ commitment, i
cin o
ae
s
f
any, i t period between commitment and closing
f he
i l s than 10 days) a w
s es
ritten n
otice t the borrow­
o
e s a i g ( ) That the property securing t e loan i
r ttn: a
h
s
or w l be located i an area so i e t f e , or i l e
il
n
dniid
n iu
of such notification a State member bank may
obtain s t s a t r written assurances from a s l e
aifcoy
elr
or l s o s a i g t a such s l o or l s o has n t f e
esr ttn ht
elr
esr
oiid
t borrower, p i r t the execution of any agreement
he
ro o
f r s l or l a e t a t e property securing t e loan i
o ae
es, ht h
h
s
or w l be located i an area so i e t f e : and ( )
il
n
dniid
b
whether, i the event of damage t t e property
n
o h
caused by flooding i a federally-declared d s s e .
n
iatr
Federal d s s e r l e assi an e w l be a a l le f r
i a t r eif
st c i l
v i ab o
such pr
operty. Each S a e member bank s a l r qu r
tt
hl e i e
th borrower, p o t clo ng t provide t e bank
e
ri r o si , o
h
with a written acknowledgment t a t e property
ht h
securing the loan i or w l be l
s
il
ocated i an a so
n
rea
i e t f e and t a the borrower has received th
dniid
ht
e
above-required notice regarding Federal d s s e r ­
iatr e
le a s s a c .
if s i t n e
(i
i) Sample n t c s A S a e member bank pro­
oie.
tt
viding written notice containing the language pre­
sented i appendix A within t time l m t pre­
n
he
iis
sc b i paragraph ( ) of t i sec on w l be con­
ri ed n
a
h s ti i l
si r t be i compliance with the notice require­
de ed o
n

ments of paragraph ( ) of t i s c i n
a
hs e to.
A

p p e n d ix

t provision of notice to borrowers of the availa­
he
b l t of Federal r l e a s s a c .
iiy
eif si t n e

A — S a m p l e N o t ic e s

( ) Notice t Borrower of Special Flood-Hazards
1
o
— Notice i hereby given to______ t a th im­
s
ht e
proved r a e t t or mobile home described i th
el sae
n e
attached instrument i or w l be located i an a
s
il
n
rea
designated by t Secretary of the Department of
he
Housing and Urban Development as an area having
sp ia flood hazards. This area i delineated on
ec l
s
______ ’ Flood Insurance Rate Map (
s
“FIRM”)
o , i t e FIRM i unavailable, on the community’
r f h
s
s
Flood Hazard Boundary Map (“F H B M ” ) This
.
area has a 1 per cent chance of being flooded with­
i any given y a . The r s of exceeding the 1 per
n
er
ik
cent chance increases with time periods longer than
1 y a . For example, during t e l f of a 30-year
er
h ie
mortgage, a s r c u e located i a sp i l fl o tutr
n
ec a
od
hazardous area has a 26 per cent chance of being
f
looded.
( ) Notice t Borrower about Federal Disaster
2
o
Relief Assistance— ( ) Notice i p r i i a i g com­
a
n atcptn
mu
nities. The improved r a e t t or mobile home
el sae
securing your loan i or w l be located i a com­
s
il
n
munity t a i now pa ic a ng i the National
ht s
rt ip ti
n
Flood Insurance program. In t e event such proper­
h
t i damaged by flooding i a federally-declared
y s
n
d s s e , Federal d s s e r l e assis an may be
iatr
i a t r eif
t ce
av l b e However, such assistance w l be un­
ai a l .
il
a a l b e i your community has been i e t f e a
vial f
dniid s
a special flood-hazardous area f r one year or
o
longer and i n t p r i i a i g i t e Nat on Flood
s o atcptn n h
i al
Insurance program a the time a s t ce would be
t
s is an
approved. This a s s a c , usually i t form of a
sitne
n he
loan with a favorable i t r s r t , may be a a l b e
n e e t ae
vial
f r damages incurred i excess of your flood i su ­
o
n
n r
a
nce.
( ) Notice i non-participating communities. The
b
n
improved r a e t t or mobile home securing your
el sae
loan i or w l be located i a community t a i n t
s
il
n
ht s o
p r i i a i g i t e National Flood Insurance Pro­
atcptn n h
gram. This means t a such property i not e i i l
ht
s
lgbe
f r Federal flood insurance. I t event such prop­
o
n he
e t i damaged by flooding i a federally-declared
ry s
n
d s s e . Federal d s s e r l e a s ta ce w l be
iatr
i a t r e i f s is n
il
unavailable i your community has been i e t f e
f
dniid
as a special flood-hazardous area for 1 year or
l g r Such a si a e may be avai ab only i a
on e .
s st nc
l le
f t
t e time as s a c would be approved your com­
h
si t n e
munity i p r i i a i g i t e National Flood Insur­
s atcptn n h
ance program or has been i e t f e a a s e i l
dniid s
pca
flood-hazardous area for l s than 1 y a .
es
er

As an in de t t i amendment. §§208.8 ( )
ci nt o h s
e
( ) and ( ) a e revoked. S
2
5 r
ection 208.8 ( ) ( ) i r ­
e 3 s e
numbered §208.8 ( ) ( ) Section 208.8 ( ) ( ) i
e 2.
e 4 s
renumbered §208.8 ( ) ( ) and amended to include
e 3

1.
1
Effective January 1 1980. se
.
ction 208.8 i
s
amended by adding paragraph (k) to read as
fo ow :
ll s
SECTION 208.8— BANKING PRACTICES
*

*

*

*

*

( ) Recordkeeping and confirmation of certain
k
securi
ties transactions effected by State member
banks.
( ) D f n t o s For purposes oft i paragraph ( )
1 eiiin.
hs
k:
( ) “ customer” shall mean any person or
i
account, including any agency, t u t e t t , guard­
rs, s a e
i n h p committee or other f d ci y account, f r
asi,
i u ar
o
which a S a e member bank e f c s or p r i i a e
tt
fet
atcpts
i e f c i g the purchase or s l of s c r t e , but
n fetn
ae
euiis
s a l not include a broker, d a e , dealer bank or
hl
elr
i s e of t e s c r t e which a e the sub c of t e
sur
h euiis
r
je t
h
tascin:
rnatos
(i “co le t v investment fund” means funds
i)
l cie
held by a S a e member bank a f d ci y and. con­
tt
s i u ar
s s e t with l c l law. invested c l e t v l (A) i a
itn
oa
olciey
n
common t u t fund maintained by such bank exclu­
rs
s v l f r the c le t v investment and rei ve ­
iey o
ol c i e
n st
ment of monies contributed th e by t bank i
er to
he
n
is capacity a t u t e executor, administrator,
t
s rse,
guardian, or custodian under the Uniform Gi s t
ft o
Minors Act. or (B) i a fund co
n
nsisting s l l of
oey
a s t of r ir e , pension, p o i sha in s o
ses
et em nt
rft
r g, l ck
bonus or sim a t u t which are exempt from Fed­
il r r s s
e a income taxation under the I t r a Revenue
rl
nenl
Code;
(i) a bank s a l be deemed t exercise “i ­
ii
hl
o
n
vestment discretion” with res ec t an account i.
p t o
f
d r c l or i d r c l , t e bank (A) i authorized t
iety
niety h
s
o
determine what s c r t e or other property s a l be
euiis
hl
purchased or s
old by or f r th account, or (Bl
o
e
makes decisions a t what s c r t e or other prop­
s o
euiis
erty s a l be purchased or sold by or for the
hl
account even though some other person may have
r s o s b l t fo such investment d i i n .
epniiiy r
ec s o s
( v “periodic plan” (including dividend rein­
i)
vestment pl n , automatic investment plans and em­
as
ployee stock purchase plans) means any wr t au­
it en
t o i a i n f r a S a e member bank ac
hrzto o
tt
ting a agent
s
t purchase or s l f r a customer a s e i i secur­
o
el o
pcfc
i y or s c r t e , i s e i i amounts ( a c l t d i
t
euiis n p c f c
cluae n
s c r t u i s or d l a s or t t extent of div­
euiy nt
olr)
o he
idends and funds a a l b e a s e i i time i t r
vial, t pcfc
ne­
v l and s t i g f r h t e commission or charges t
as
etn ot h
o
be paid by the customer i connection therewith or
n
t e manner of calcul in them:
h
at g
( ) “security” means any i t r s or instrument
v
neet
commonly known as a “security”, whether i t e
n h

nature of debt or eq
uity, including any st c , bond,
ok
n t , debenture, evidence of indebtedness or any
oe
p r i i a i n i or r g t t subscribe t or purchase
atcpto n
ih o
o
any of the foregoing. The term “secu it ’does n t
r y'
o
include (A) a deposit or share account i a f d r l y
n eeal
or s a e insured depository i s i u i n (B) a l
tt
nttto.
oan
p r i i a i n (C) a l t e of c e i or other form of
atcpto,
etr
rdt
bank indebtedness incurred i the ordinary course
n
of business, (D) currency, (E) any n e, d a t bl
ot r f , il
of exchange, or bankers acceptance which has a
maturity a t e time of issuance of not exceeding
t h
nine months, exclusive of days of gr
ace, or any re­
newal thereof the maturity of which i likewise lim­
s
i e , (F) u
td
nits of a collective investment fund.
(G) i t r s s i a va
neet n
riable amount (master) note of a
borrower of prime c e i , or (H) U.S. Savings
rdt
Bonds.
( ) Recordkeeping
2
Every State member bank effecting s c r t e
euiis
transactions for customers s a l maintain t e f l
hl
h o­
lowing records with respect t such t a sa i s f r
o
r n ct on o
a latt r e y a s
t es h e e r :
() chronological records of o i i a entry con­
i
rgnl
ta
ining an itemized daily record of al purchases
l
and s l s of s c r t e . The records of o i i a e ry
ae
euiis
r g n l nt
s a l show the account or customer f r which each
hl
o
such transa i was e f c e , the d
ct on
fetd
escription of t e
h
s c r t e , the u i and aggregate purchase or s l
euiis
nt
ae
p c ( f any), t t de date and t name or other
ri e i
he ra
he
designation of the broker/dealer or other person
from whom purchased or t whom s l ;
o
od
(i account records for each customer which
i)
s a l r f e t al purchases and s l s of s c r t e , al
hl elc l
ae
euiis l
r c i t and d l v r e of s c r t e , and a l r c i t
eeps
eieis
euiis
l eeps
and disbursements of cash with respect t transac­
o
t o s i s c r t e f such account and al other
i n n e u i i s or
l
debits and credits pertaining t transactions i
o
n
scrte.
euiis
(i) a separate memorandum (order t c e ) of
ii
ikt
each order t purchase or s l s c r t e (whether
o
el e u i i s
executed or c
ancelled), which s a l i c u e
hl n l d :
( ) t account(s) for which th t a s c on was
a he
e r n a ti
efce:
fetd
( ) whether the trans ti was a market o d r
b
ac on
re,
l m t o de or subject t s e i l i s r c i n :
i i r r,
o pca ntutos
( ) the time the order was received by t t a e
c
he r d r
or other bank employee responsible f e f c i g
or f e t n
the t a s c i n
rnato;
( ) the time the order was placed with the broker
d
/ e l r or i there was no broker/dealer, th time
dae,
f
e
the order was executed or c
ancelled;
( ) the p ic a which the order was executed:
e
r e t
and
( ) t broker/dealer u i i e ;
f he
tlzd
( v a record of al broker/dealers se c d by t e
i)
l
le te
h
bank to effect securities transactions and the
amount of commissions paid or a l ca d t each
l o te o
such broker during t calendar y a .
he
er

Nothing contained i t i subparagraph s a l re­
n hs
hl
quire a bank t maintain the records required by
o
t i r l i any given manner, provided t a t e i ­
hs u e n
ht h n
formation required t be shown i c e r y and accu­
o
s lal
r t l r f e t d and provides an adequate b s s f r
aey elce
ai o
t e a i of such information.
h ud t
( ) Form ofN t f c t o
3
oiiain
Every S a e member bank e fe in a s c r t e
tt
f ct g
euiis
t a s ct n f r a customer s a l maintain f r a l a t
r n a io o
hl
o t es
t r e years and, except a provided i subparagraph
he
s
n
( ) s a l mail or otherwise fu ni t such custom­
4. h l
r sh o
e e t e of th following types of n t f c t o s
r ihr
e
oiiain:
() ( ) a copy of th confirmation of a broker
i a
e
/ e l r r l t n t t e s c r t e t a s c i n and ( )
dae eaig o h euiis rnato;
b
i t e bank i t receive remuneration from t e cus­
f h
s o
h
tomer or any other source i connection with t e
n
h
t a s c i n and t e remuneration i not determined
rnato,
h
s
pursuant t a p i r wr tt agreement between t e
o
r o i en
h
bank and t e customer, a statement of t e source
h
h
and t e amount of any remuneration t be re
h
o
ceived:
or
(i a wr tt n t f c t o d
i)
i en o i i a i n isclosing
( ) t e name of t e bank:
a h
h
( ) t e name of the customer:
b h
( ) whether t e bank i acting as agent f r such
c
h
s
o
customer, as agent for both such customer and
some other person, a p i c p l fo is own account,
s rnia r t
or i any other c p i :
n
a ac ty
( ) t e date of execution and a statement t a t e
d h
ht h
time of execution w l be furnished within a reason­
il
able time upon w it e request of such customer,
r tn
and t e i e t t , p i e and number of shares or un­
h dniy r c
is (o p i ip amount i t e case of debt secur­
t r r nc al
n h
i i s of such s c r t purchased or sold by such a
te)
euiy
customer;
( ) t e amount of any remuneration received or
e h
t be received, d r c l or i d r c l , by any broker
o
iety
niety
/ e l r from such customer i connection with t e
dae
n
h
tascin
rnato:
() t e amount of any remuneration received or
f h
t be received by t e bank from t e customer and
o
h
h
t e source and amount of any other remuneration t
h
o
be received by t e bank i connection with t e
h
n
h
tascin u
r n a t o , nless remuneration i determined pur­
s
suant t a wr t n agreement between t e bank and
o
it e
h
t e customer, provided, however, i the case of
h
n
U.S. Government s c r t e , f d r l agency obliga­
euiis e e a
t o s and municipal o i a i n , t i subparagraph
in
bl g t o s h s
() s a l apply only with r
f hl
espect t remuneration re­
o
ceived by t e bank i an agency t a s c i n and
h
n
rnato:
( ) the name of t broker/dealer u i i e ; o .
g
he
tlzd r
where t er i no broker/dealer, t e name of t e
h e s
h
h
person from whom t e s c r t was purchased or t
h euiy
o
whom i was s l , or th f c t a such information
t
od
e at ht
w l be furnished within a reasonable time upon
il
wr t n r q e t
it e e u s .
( ) Time ofN t f c t o
4
oiiain
The time f r mailing or otherwise furnishing t e
o
h

wr
itten n t f c t o described i subparagraph ( )
oiiain
n
3
s a l be 5 business days from t d of t e t a s
hl
he ate
h rn­
a t o . or i a broker/dealer i u i i e , within 5
cin
f
s tlzd
business days from t e r c i t by t e bank of t e
h eep
h
h
broker/dealer's confirmation, but the bank may
e e t t use t e following a t r a i e procedures i
lc o
h
lentv
f
t e tr n a t o i e f ct f r
h a s c i n s f e ed o :
() accounts (except periodic plans) where t e
i
h
bank does n t e ercise investment d s r t o and
o x
icein
t e bank and t e customer agree i writing t a
h
h
n
o
d f e e t arrangement a t th time and content of
ifrn
s o e
the notification: provided, however, t at such
h
agreement makes c e r t e customer's r g t t r ­
la h
ih o e
ceive t e wr t n n t f c t o within th above pre­
h it e o i i a i n
e
scribed time period a no a d t o a c s t t e cus­
t
diinl ot o h
tomer:
(i accounts (except c l e t v investment funds)
i)
olcie
where t e bank exercises investment d s r t o i
h
icein n
other than an agency capa ty i which ins an
ci , n
t ce
t e bank s a l upon request of t e person having
h
hl,
h
t e power t terminate t e account o . i t e e i no
h
o
h
r f hr s
such person, upon t e request of any person hold­
h
i g a vested b e i i l i t r s i such account,
n
en f c a n e e t n
mail or otherwise f r i h t such person t e w t e
uns o
h ri t n
notific io within a reasonable time. The bank
at n
may charge such person a reasonable f e f r pro­
e o
viding t i information.
hs
(i) accounts, where t e bank exercises in es
ii
h
v t­
ment d s r t o i an agency capa it i which i ­
icein n
c y, n
n
s
tance ( ) t e bank s a l mail or otherwise f n s
a h
hl
ur i h
t each customer not l s f
o
e s requently than once ev­
ery t r e months an itemized statement which s a l
he
hl
s
pecify t e funds and s c r t e i t e custody or
h
euiis n h
possession of t e bank a t end of such period
h
t he
and al d b t , c e i s and t a s c on i the cus­
l eis rdt
r n a ti s n
tomer's accounts during such pe io and ( ) i r
r d,
b f e­
quested by th customer, t e bank s a l mail or
e
h
hl
otherwise fu is t each such customer within a
rn h o
reasonable time t e wr t n n t f c t o described i
h it e o i i a i n
n
subparagraph ( ) The bank may charge a reason­
3.
able f e f r providing t e information described i
e o
h
n
subparagraph ( )
3.
( v a c l e t v investment fund, i which i ­
i)
olcie
n
n
s a c t e bank s a l a l a t annually f r i h a copy
tne h
hl t es
uns
of a f n n i l r p r of t e fund, or provide n t c
iaca eot
h
oie
t a a copy of such r p r i a a ab e and w l be
ht
e o t s v il l
il
furnished upon r q e , t each person t whom a
e u st o
o
regular p
eriodic accounting would o i a i y be ren­
rd n r l
dered with respect t each p ti i a i g account.
o
ar c p t n
This r p r s a l be based upon an a d t made by
e o t hl
ui
independent public accountants or i t r a a d t r
nenl uio s
responsible only t the board of d r c o s of t e
o
ietr
h
bank.
( ) a periodic p an i which instance t bank
v
l , n
he
s a l mail or otherwise f
hl
urnish t th customer a
o e
s
promptly a possible a t r each t ns t n a w t e
s
fe
ra ac io
ri t n
statement showing the funds and s c r t e i t e
euiis n h

custody or possession of the bank, a l service
l
charges and commissions paid by th customer i
e
n
connection with th t a s c i n and al other d b t
e rnato,
l
eis
and c e i s of t e customer's account involved i
rdt
h
n
t t a s c i n provided t a upon t e wri te re­
he r n a t o ;
ht
h
t n
quest of t customer the bank s a l fumish t e i ­
he
hl
h n
formation described i subparagraph ( ) except
n
3.
t a any such information r l t n t remuneration
ht
eaig o
paid i connection with t e t a s ct n need n be
n
h r n a io
ot
provided t the customer when paid by a source
o
other than the customer. The bank may charge a
reasonable fee f r providing the information de­
o
scribed i subparagraph ( )
n
3.
( ) S c r t e Trading P l c e and Procedures
5 euiis
oiis
Every State member bank effecting s c r t e
euiis
transactions f r customers s a l e ta li wr tt
o
h l s b sh i en
p l c e and procedures providing:
oiis
() assignment of r s o s b l t f r supervision of
i
epniiiy o
a l o f c r or employees who ( ) t
l fies
a ransmit orders t
o
or place orders with broker/dealers, or ( ) execute
b
t a s ct ns i s c r t e f r customers:
r n a io n e u i i s o
(i f t e f i and equitable a l c t o of secur­
i) or h a r
loain
i i s and prices t accounts when orders f r t e
te
o
o h
same security are received a approximately t
t
he
same time and a e placed f r execution e t e i d ­
r
o
ihr ni
v
idually or i combination;
n
(i ) where applicable and where permissible
ii
under l c l law. fo t crossing of buy and s l
oa
r he
el
orders on a f i and equitable b s t the p r i s t
ar
a is o
ate o
t e t a s c i n and
h rnato:
( v t a bank o f c r and employees who make
i) h t
fies
investment recommendations or decisions f r t e
o h
accounts of customers, who p r i i a e i th d
a t c p t n e eter­
mination of such recommendations or d is n o
ec io s, r
who, i connection with t e r d t e , obtain i f r
n
hi uis
no­
mation concerning which s c r t e a e being pur­
euiis r
chased or s l o recommended f r such a t o , must
od r
o
cin
r p r t t e bank, within t n days a t r th end of
eot o h
e
fe e
t calendar q a t r al transa ti s i s c r t e
he
ure, l
c on n e u i i s
made by them or on t e r b a f e t e a t e bank
h i eh l , i h r t h
or elsewhere i which they have a b n f c a i ­
n
eeiil n
t r s . The r o s a l i e t f t e s c r t e pur­
eet
ep rt h l d n i y h e u i i s
chased o s l and i d c t t e d t s of t e t a s c
r od
niae h ae
h rna­
t o s and whether t t ns ct ns were purchases
in
he ra a io
or s l s Excluded from t i requirement a e t a s
ae.
hs
r rn­
ac o for t e b e t of the o f c r or employee
ti ns
h en fi
fie
over which t e o f c r or employee has no d r c or
h fie
iet
i d r c influence or c n r l t a s ti s i mutual
niet
o t o , r n ac on n
fund s a e , and al trans ti s involving i t e
hrs
l
ac on
n h
aggregate $10,000 or l s during the calendar quar­
es
t r For purposes of t i subparagraph ( ) i ) t e
e.
hs
k(v, h
term “s c r t e ” does not include U.S. govern­
euiis
ment or f d r l agency o l g t o s
eea
biain.
( ) Exceptions
6
The following exceptions t subparagraph ( )
o
k
sala
h l pply:
() the requirements of subparagraph ( ) 2 ( i
i
k()i)

through (k)(2)(iv) and subparagraph (k)(5)(i
)
through ( ) 5 ( i ) s a l not apply t banks having
k()ii h l
o
an average of l s than 200 s c r t e t n a t o s
es
e u i i s ra s c i n
per year f r customers over th p i r t
o
e r o hree calendar
year period, exclusive of transa i s i U.S. gov­
ct on n
ernment and f e a agency o l g t o s
ed r l
biain:
(i a t v t e of a S a e member bank t a a e
i) c i i i s
tt
ht r

s j c t regulations promulgated by t Municipal
ub e t o
he
S c r t e Rulemaking Board s a l not be subject t
euiis
hl
o
t e requirements of t i paragraph ( ) and
h
hs
k:
(i) a t v t e of foreign branches of a S
ii
ciiis
tate
member bank s a l not be s
hl
ubject t t require­
o he
ments of t i paragraph ( )
hs
k.

12