The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F ederal R eserve Ba n k o f Dallas DALLAS. TEXAS 75222 Circular No. 72-l6 January 26, 1972 AMENDMENT TO RULES REGARDING DELEGATION OF AUTHORITY To All Member Banks in the Eleventh Federal Reserve District: Effective January 21, 1972, the Board of Governors has expanded the authority of the Federal Reserve Banks to approve applications by bank holding companies to acquire control of a newly-formed bank. In addition, the Board has also delegated to the Reserve Banks authority to approve acquisition by a holding company of additional shares in a subsidiary bank to the extent the shares are acquired through the exercise of rights received as a bank shareholder. The Board has clarified that the Reserve Banks' authority to approve the formation of a one-bank holding company includes the authority to approve merger and/or membership applications that are incidental to such formation. A copy of the amendment is enclosed for insertion in the ring binder containing the Regulations of the Board of Governors and the Bulle tins of this Bank. Also enclosed is a copy of the Board's press release. Yours very truly, P. E. Coldwell President Enclosures (2) This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) FEDERAL r press RESERVE release For immediate release January 19, 1972 The Board of Governors of the Federal Reserve System today announced further steps--in the form of expanded authority to the Federal Reserve Banks--to expedite the handling of applications received under the Bank Holding Company Act. Under the expanded authority, which is effective for appli cations received after January 21, the Federal Reserve Banks may approve: 1. shares in The acquisition by a bank holding company of additional a subsidiary bank that are to be acquired through the exer cise of rights received by the bank's shareholders. 2. are incident Merger and Federal Reserve membership applications that to one-bank holding company formations. The authority to approve the formation of one-bank holding companies was delegated to the Federal Reserve Banks last August. 3. The acquisition by a registered bank holding company of a controlling interest in a new (de novo) bank if no objection to the proposed acquisition is made by the bank's supervisory authority, no new significant policy issue is raised by the proposal and the Reserve Bank determines that: (a) the general condition of the holding company and its bank subsidiaries is satisfactory; 5: - 2 - (b) the holding company has either a proven record of furnishing needed special services, management, capital funds and general guidance to its sub sidiary banks, or has the potential to provide these services in thecase of a relatively new holding company. (c) bank subsidiaries of the holding company do not hold more than 20 per cent of the total commercial bank deposits in the relevant market area and the holding company is not one ofthe dominant banking organi zations in the State. - 0 - BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM RULES REGARDING DELEGATION OF AUTHORITY Amendments Regarding Bank Acquisitions by Holding Companies Effective with respect to applications received by the Federal Reserve Banks after January 21, 1972, § 265.2(f) (22) is amended, and § 265.2(f) (23) and (24) are added, to read as follows: SECTION 265.2 — SPECIFIC FUNCTIONS DELEG A TED TO BOARD EMPLOYEES A N D FEDERAL RESERVE BANKS. % :}c % * (f) Each Federal Reserve Bank is authorized, as to member banks or other indicated organizations headquartered in its district: * * * * * (22) Under the provisions of section 3(a)(1) of the Bank Holding Company Act (12 U.S.C. 1842), to approve the acquisition by a company of a con trolling interest in the voting shares of one bank, if (i) no objection to the proposed acquisition has been made by the bank’s supervisory authority, (ii) no significant policy issue is raised by the proposal as to which the Board has not expressed its views, and (iii) neither the holding company nor any of its subsidiaries or affiliates is engaged in any ac tivities other than those specifically permissible for bank holding companies by either the Act or Part 225 of this chapter (Regulation Y).2 2 This delegation includes authority to approve (a) a merger transaction under the provisions of section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)) and (b) an appli cation, under section 9 of the Federal Reserve Act (12 U.S.C. 321), for membership in the Federal Reserve System that are incidental t o an application to become a one-bank holding company. (23) Under the provisions of section 3(a)(3) of the Bank Holding Company Act (12 U.S.C. 1842), to approve the acquisition by a bank holding com pany of additional shares in a subsidiary bank that are to be acquired through exercise of rights received, on a pro rata basis, by the bank’s share holders. (24) Under the provisions o f section 3(a)(3) of the Bank Holding Company A ct (12 U.S.C. 1842), to approve the acquisition of a controlling interest in the shares of a newly-formed bank, if (i) no objection to the proposed acquisition has been made by the bank’s supervisory authority, (ii) no significant policy issue is raised by the proposal as to which the Board has not expressed its views, and (iii) the Reserve Bank determines that: (a) the general condition of the holding com pany and its bank subsidiaries is satisfactory; (b) the holding company has either (1) a proven record of furnishing to its subsidiary banks, when needed, special services, management, capital funds, or general guidance, or (2) in the case of a relatively new holding company, the Reserve Bank is satisfied that the company has the poten tial to provide such services; (c) (1) bank subsidiaries of the holding com pany do not hold in the aggregate more than 20 per cent of the commercial bank deposits in the relevant market area and (2) the holding company is not one of the dominant banking organizations in the State.
@FedFRASER