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F ederal R eserve Bank
OF DALLAS
ROBERT
D. M C T E E R , J R .
P R E S ID E N T
A N D C H IE F E X E C U T I V E O F F I C E R
July 23, 1992
DALLAS, TEXAS 7 5 2 2 2
Notice 92-61
TO:
The Chief Executive Officer of each
member bank and others concerned in
the Eleventh Federal Reserve District
SUBJECT
Request for Comments on Proposed Changes to Regulation Y
(Bank Holding Companies and Change in Bank Control)
DETAILS
The Federal Reserve Board has requested public comment on proposed
changes to the Board’s regulations and procedures affecting the applications
process in order to reduce regulatory burden.
The proposed amendments to the Board’s Rules of Procedures and to
Regulation Y (Bank Holding Companies and Change in Bank Control) would:
•
Require a single newspaper notice in connection with certain
state member bank and bank holding company applications; and,
•
Exempt mergers of affiliated banks and affiliated thrift
institutions from the requirements of Section 23A of the
Federal Reserve Act (12 U.S.C. 371(c)) if the merger is to be
acted on by the primary regulator of the resulting institution
pursuant to the Bank Merger Act (12 U.S.C. 1828(c)).
The Board must receive comments by July 29, 1992. Comments should
be addressed to William W. Wiles, Secretary, Board of Governors of the Federal
Reserve System, 20th Street and Constitution Avenue, N.W., Washington, D.C.
20551. All comments should refer to Docket No. R-0760.
ATTACHMENT
Attached is a copy of the Board’s notice as it appears on pages
28807-10, Vol. 57, No. 125, of the Federal Register dated June 29, 1992.
For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas:
Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162,
Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
- 2 -
MORE INFORMATION
For more information, please contact Michael Johnson at (214)
744-7306. For additional copies of this Bank’s notice, please contact the
Public Affairs Department at (214) 922-5254.
Sincerely yours,
Federal Register / Vol. 57, No. 125 / Monday, June 29, 1992 / Proposed Rules________ 28807
newspaper of general circulation of the
filing of an application with the Board.
The amendments would have no effect
on public comment periods, which
currently start when the first notice is
published. Alternative sources of notice
will continue to be available, such as the
weekly list of pending applications
prepared by the Board and the Reserve
Banks and, in the case of Bank Holding
Company Act applications, notices
published in the Federal Register.
d a t e s : Comments on the revised
proposed amendments should be
submitted no later than July 29,1992.
ADDRESSES: Comments should refer to
Docket No. R-0760 and may be mailed to
the Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW„ Washington,
DC 20551, to the attention of Mr.
William W. Wiles, Secretary; or
delivered to the Board’s Mail Room
betw een 8:45 a.m. and 5:15 p.m., or to the
Board’s Security Control Room outside
of those hours. Both the Mail Room and
the Security Control Room are
accessible from the courtyard entrance
on 20th Street betw een Constitution
Avenue and C Street, NW. Comments
may be inspected in room B-1122
between 9 a.m. and 5 p.m. weekdays,
except as provided in § 261.8 of the
Board’s Rules Regarding Availability of
Information, 12 CFR 261.8.
FOR FURTHER INFORMATION CONTACT:
FEDERAL RESERVE SYSTEM
12 CFR P arts 225 and 262
[Regulation Y; Docket No. R-0760]
Bank Holding C om panies and Change
in Bank Control; Rules of P rocedure
AGENCY: Board of Governors of the
Federal Reserve System.
a c tio n : Proposed rule.
sum m ary : Pursuant to the
Administrative Procedure Act, the Board
is requesting public comment on
proposed amendments to the provisions
of its Rules of Procedure (Rules) and the
Board’s Regulation Y, Bank Holding
Companies and Change in Bank Control.
Section 262.3(b) of these Rules require
two new spaper publications of notice of
applications filed with the Federal
Reserve under section 9 of the Federal
Reserve Act (for membership or to
establish branches), the Bank Merger
Act (if a state member bank is involved),
and the Bank Holding Company A c t
The proposed amendments would
reduce from twice to once the number of
times notice must be published in a
John Harry Jorgenson, Senior Attorney
(202/452-3778), or Deborah M. Awai,
Attorney (202/452-3594), Legal Division;
Sidney M. Sussan, A ssistant Director
(202/452-2638), or Gary P. Knoblach,
Senior Financial Analyst (202/452-3270),
Division of Banking Supervision and
Regulation, Board of Governors of the
Federal Reserve System, For the hearing
impaired o nly, Telecommunication
Device for the Deaf (TDD), Dorothea
Thompson (202/452-3544); Board of
Governors of the Federal Reserve
System, 20th and C Streets, NW.,
Washington, DC 20551.
SUPPLEMENTARY INFORMATION: The
Administrative Procedure Act (5 U.S.C.
552(a)(1)) requires each agency to
publish in the Federal Register
statements that include requirements of
all formal and informal procedures
available and its rules of procedure. In
order to fulfill this requirement, the
Board has adopted Rules of Procedure
(12 CFR part 262) (Rules).
Currently, § 262.3(b)(1) of these Rules
requires an applicant to publish notice
of the following types of applications
"on the same day of each of two
consecutive weeks” in a new spaper of
general circulation:
(i) Application by a state bank for
membership in the Federal Reserve
System;
(ii) Application by a State member
bank to establish a domestic branch;
(iii) Application by a State member
bank for the relocation of a domestic
branch office;
(iv) Application by a bank for merger,
consolidation, or acquisition of assets or
assumption of liabilities, if the acquiring,
assuming, or resulting bank is to be a
State member bank;
(v) Application by a company to
become a bank holding company; and
(vi) Application by a bank holding
company to acquire ownership or
control of shares or assets of a bank, or
to merge or consolidate with any other
bank holding company.
The Board proposes to amend §
262.3(b)(1) of its Rules and a related
policy statem ent regarding notice of
applications (12 CFR 262.25) to reduce
the new spaper publication requirement
from twice to once. These amendments
would reduce a regulatory burden
associated with the filing of applications
by reducing the new spaper publication
costs and paperwork burden associated
with applications that are subject to the
publication requirement. As part of this
action, the Board would amend
instructions for its application forms to
conform to the notice requirements in
the Rules. The Board also proposes to
make parallel amendments to § |
225.14(b) and 225 23.(d) of its Regulation
Y (12 CFR part 225) to conform with the
revised notice requirements. This
proposal would not affect the length of
the public comment period for any
application.
Before adopting these amendments,
the Board will consider whether the
action would have a serious adverse
effect on actual notice of applications.
N ewspaper notices are only one of
several means by which notice is
provided to interested parties that the
Board is reviewing a proposed
transaction. For example, the notice
required by § 262.3(b)(1) is in addition to
weekly lists issued by the Board and the
Reserve Banks identifying applications
filed and acted upon under sections 3
and 4 of the Bank Holding Company Act
(12 U.S.C. 1842 & 1843) and the Bank
Merger Act (section 18(c) of the Federal
Deposit Insurance Act; 12 U.S.C.
1828(c)). This list is provided to any
interested party upon request, including
requests for regular notice of all filings
of applications.1 The Board also
1 See § 282.3{i) of the Rules and the policy
statem ent at 12 CFR 262.25 for a more detailed
description of these alternate sources of information
on these applications.
28808________ Federal Register / Vol. 57, No. 125 / Monday, June 29, 1992 / Proposed Rules
■
publishes notice of all Bank Holding
Company Act applications in the
Federal Register. In addition, depository
institutions and their holding companies
may provide actual notice of upcoming
corporate reorganizations to customers
and to persons in their service areas in
the form of press releases, new s stories,
and direct mail or lobby notices. In
order to assist the Board in addressing
this consideration, the Board specifically
requests comment on the benefits that
reducing the publication burden would
have compared to the reduction in
required new spaper notice.
Before adopting these amendments,
the Board also will consider w hether the
amendments would have a serious
adverse effect on the opportunity for
public comment. Currently, 5 262.3(b)(1)
of the Rules provides that the first notice
may appear no more than ninety
calendar days prior to acceptance of the
application by the applicant’s Reserve
Bank and that the notices must provide
an opportunity for the public to give
w ritten comment on the application to
the appropriate Federal Reserve Bank
for at least thirty days after the date of
publication of the first notice. The
amendments would retain the
requirements that new spaper notice
must appear in a new spaper of general
circulation no more than ninety calendar
days prior to acceptance of an
application as well as the requirement
that the notice provide for a thirty day
comment period. The Board invites
comment on the possible affects on
public notice that reducing the
publication requirement can be
expected to have.
Regulatory Flexibility Act Analysis
Pursuant to section 605(b) of the
Regulatory Flexibility Act (Pub. L. 96354, 5 U.S.C. 601 et seq.), the Board does
not believe that the proposed
amendments would have a significant
adverse economic impact on a
substantial number of small entities. The
proposed amendments would reduce
certain regulatory burdens for all
depository institutions, reduce certain
burdens for small depository
institutions, and have no particular
adverse effect on other small entities.
lis t of Subjects
12 CFR Part 225
Administrative practice and
procedure. Banks, banking, Federal
Reserve System, Holding companies,
Reporting and recordkeeping
requirements, Securities.
12 CFR Part 262
PART 262—RULES OF PROCEDURE
Administrative practice and
procedure, Federal Reserve System.
1. The authority citation for part 262
would continue to read as follows:
Authority: 5 U.S.C. 552.
For the reasons set forth in the
preamble, the Board proposes to amend
title 12 of the Code of Federal
Regulations, parts 225 and 282, as
follows:
PART 225—BANK HOLDING
COMPANIES AND CHANGE IN BANK
CONTROL
1. The authority citation for part 225
would continue to read as follows:
Authority: 12 U.S.C. 1817(j)(13), 1818,
1831{i), 1843(C)(8), 1844(b), 3106, 3108, 3907,
3909, 3310, and 3331-3351, and sec. 306 o f the
Federal Deposit Insurance Corporation
Improvement Act o f 1991 (Pub. L. No. 102-242,
105 Stat. 2236 (1991)).
Subpart B—Acquisition of Bank Securities
o r A ssets
2. Section 225.14 is amended by
adding a new paragraph (b)(3) to read as
follows:
§ 225.14 Procedures for applications,
notices, and hearings.
*
*
*
*
*
(b) * * *
(3) N ew spaper notice. The applicant
shall cause to be published in a
newspaper of general circulation in the
affected community, in the form
prescribed by the Board in 12 CFR
262.3(b), at least one notice soliciting
public comment on the proposed
acquisition.
* * * * *
Subpart C~Nonbanking Activities and
Acquisitions by Bank Holding Companies
3. Section 225.23 is amended by
removing the heading to paragraph (d),
by revising the headings to paragraphs
(d)(1) and (d)(2) and by adding a new
paragraph (d)(3) to read as follows:
§ 225.23 Procedures for applications,
notices, and hearings.
*
*
*
*
*
(d)(1) Federal R egister notice for
liste d activities. * * *
(2) Federal R egister notice fo r unlisted
activities. * * *
(3) N ew spaper notice. The applicant
shall cause to be published in a
new spaper of general circulation in the
affected community, in the form
prescribed by the Board in 12 CFR
262.3(b), at least one notice soliciting
public comment on the proposed
acquisition.
*
*
*
*
*
2. In § 262.3, by redesignating
paragraphs (b)(1) introductory text,
(b)(l)(i) through (vi), and the flush text
beginning “the applicant” and ending
with “the Board” a s paragraphs (b)(l)(i)
introductory text, (b)(l)(i)(A) through
(F), and (b)(l)(i) concluding text,
respectively; by removing the words "on
the same day of each of two consecutive
w eeks” from the newly designated
paragraph (b)(l)(i) concluding text; by
designating the text, following newly
designated paragraph (b)(l)(i)
concluding text, which begins with the
sentence ‘T h e notice shall be placed in
the classified” as paragraph (b)(l)(ii);
and by revising the first, second and
third sentences of newly designated
paragraph (b)(l)(ii) to read as follows:
§ 262.3 Applications.
*
*
*
*
*
*
(b) * * * (l)(i) * * *
* * * *
(ii) The notice shall be placed in the
classified advertising legal notices
section of the newspaper, and must
provide an opportunity for the public to
give written comment on the application
to the appropriate Federal Reserve Bank
for at least thirty days after the date of
publication. Within 7 days of
publication, the applicant shall submit
its application to the appropriate
Reserve Bank for acceptance along with
a copy of the notice. If the Reserve Bank
has not accepted the application as
complete within ninety days of the date
of publication of the notice, the
applicant may be required to republish
notice of the application. * * *
* * * * *
§ 262.3 [Amended]
3. In § 262.3, paragraph (b)(2) would
be amended by removing the word
“first” in the second sentence.
§262.25 [Amended]
4. In § 262.25, paragraph (a)(1) would
be amended by removing the word
“first” in the first sentence.
By order of the Board of Governors of the
Federal Reserve System, June 23,1992.
William W. W iles,
Secretary of the Board.
[FR Doc. 92-15135 Filed 6-26-92; 8:45 am]
BILLING CODE 8210-01-F
Federal Register / Vol. 57, No. 125 / Monday, June 29, 1992 / Proposed Rules
12 CFR Part 250
[Docket No. R-0762]
T ransactio n s with Affiliates
AGENCY: Board of Governors of the
Federal Reserve System.
a c tio n : Notice of proposed rulemaking.
SUMMARY: The Board is proposing to
exempt from the limitations of section
23A of the Federal Reserve Act the
transfer of assets and liabilities between
affiliated insured depository institutions
when the transfer is part of the merger
or consolidation of the affiliated
institutions. The proposed exemption
would be available only for transactions
that must be approved by the resulting
insured depository institution’s primary
regulator under the Bank Merger Act.
The exemption would be available by
regulation, and transactions that meet
the proposed criteria will not require
additional Board review under section
23A.
d a t e s : Comments must be submitted on
or before July 29,1992.
a d d r e s s e s : Comments, which should
refer to Docket No. R-0762 may be
mailed to the Board of Governors of the
Federal Reserve System, 20th Street and
Constitution Avenue, N W , Washington,
DC 20551, to the attention of Mr.
William W. Wiles, Secretary. Comments
addressed to the attention of Mr. Wiles
may be delivered to the Board's mail
room between 8:40 a.m. and 5:15 p.m.,
and to the security control room outside
of those hours. Both the mail room and
the security control room are accessible
from the courtyard entrance on 20th
Street between Constitution Avenue and
C Street, NW. Comments may be
inspected in room B-1122 between 9 a.m.
and 5 p.m., except as provided in § 261.8
of the Board’s Rules Regarding the
Availability of Information, 12 CFR
261.8.
FOR FURTHER INFORMATION CONTACT:
Pamela G. Nardolilli, Senior Attorney
(202/452-3289), or Christopher Bellini,
Attorney (202/452-3269), Legal Division,
Board of Governors of the Federal
Reserve System. For the hearing
impaired only, Telecommunications
Device for the Deaf (TDD), Dorothea
Thompson (202/452-3544), Board of
Governors of the Federal Reserve
System, 20th and C Streets, NW.,
Washington, DC 20551.
SUPPLEMENTARY INFORMATION: Section
23A of the Federal Reserve Act, 12
U.S.C. 371c, regulates certain
transactions between depository
institutions and their affiliates, including
transactions between affiliated
depository institutions. Section 23A is
designed to protect insured depository
28809
includes review of the financial impact
institutions from abuses that may result
of the transaction and the quality and
from lending and asset purchase
soundness of the assets transferred in
transactions w ith their affiliates. In
general, section 23A prohibits an
the transaction. By its terms, the
insured depository institution from
restrictions imposed by section 23A do
engaging in covered transactions (which not apply to mergers involving
unaffiliated depository institutions.
include extensions of credit and
purchases of assets) with any single
The Board proposes to act by
regulation to grant an exemption from
affiliate in excess of 10 percent of the
the section 23A limits for transactions
institution’s capital and surplus. A 20
involving the merger of affiliated insured
percent aggregate limit is imposed on
the total amount of covered transactions depository institutions where the
by a bank with all affiliates. Under
transaction is approved under the Bank
section 23A, all extensions of credit
Merger Act. *The Board requests public
comment on this proposal.
betw een a bank and its affiliate must
meet certain collateral requirements.
Regulatory Flexibility Act Analysis
Section 23A also prohibits an insured
Pursuant to section 605(b) of the
depository institution from purchasing
Regulatory Flexibility Act (Pub. L. 96any low-quality assets from an affiliate,
354, 5 U.S.C. 601 etseq.}, the Board does
and requires that all transactions with
not believe that the interpretation would
an affiliate must be conducted on terms
have a significant adverse economic
that are consistent with safe and sound
impact on a substantial number of small
banking practices.
entities. The interpretation would
Section 23A provides an exemption
reduce regulatory burdens imposed by
for several types of transactions. In
addition, section 23A provides the Board section 23A and have no particular
w ith general authority to act by order or adverse effect on other entities.
regulation to grant exemptions from the
List of Subjects in 12 CFR Part 250
provisions of section 23A for any
Federal Reserve System.
transaction where the Board determines
that an exemption is consistent with the
For the reasons set forth in the
purposes of the section.
preamble, the Board proposes to amend
Savings associations became subject
title 12 of the Code of Federal
to section 23A in 1989 as part of the
Regulations, part 250, as follows:
Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (FIRREA),
PART 250—MISCELLANEOUS
and thus, transactions between
INTERPRETATIONS
affiliated savings associations are
1. The authority citation for part 250
subject to the quantitative, collateral
would
continue to read as follows:
and qualitative restrictions of section
Authority: 12 U.S.C. 248(i).
23A.1 The legislative history of FIRREA
indicates that Congress intended the
2.12 CFR 250.241 is added to read as
Board’s general exemptive authority to
follows:
extend to transactions involving savings
§ 250.241 Exemption from section 23A of
associations where an exemption is
the Federal Reserve Act for merger
consistent with the purposes of section
transactions between certain affiliated
23A and w ith prior Board exemptions.®
insured depository institutions.
A number of insured depository
(a) Grant o f exem ption. An exemption
institutions recently have sought advice
from the provisions of section 23A of the
from the Board regarding w hether the
Federal Reserve Act is granted for the
provisions of section 23A apply to
purchase by one insured depository
transactions in which one institution
institution of the assets of another
acquires the assets of an affiliated
insured depository institution if—
institution through a merger or
(1) The transaction represents the
consolidation of the two institutions.
purchase by the insured depository
Merger transactions involving affiliated
banks generally have not been subjected institution of all or substantially all of
the assets of the other institution or the
to the provisions of section 23A where
merger or consolidation of the insured
these transactions have been approved
by a federal banking agency pursuant to depository institution with the other
institution, in a transaction in which
the Bank Merger Act. Review of the
only one of the insured depository
transaction under the Bank Merger Act
institutions continues to operate; and
■ 12 U.S.C. 1468.
* See 135 Cong. Rec. S10200 (daily ed. August 4,
1989) (statem ents of Senators Gam. Riegle and
Sanford), and 135 Cong. R ea H4997 (daily ed.
August 3,1989) (statem ents of Representatives
Gonzalez and Carper).
1 Under the Bank Merger Act, before an insured
institution merges with, or acquires the branches of,
another institution, it is required to file an
application with its primary regulator, even if the
institutions already are commonly owned.
28810
Federal Register / Vol. 57, No. 125 / Monday, June 29, 1992 / Proposed Rules
(2) The transaction has been approved
by the appropriate federal banking
agency for the surviving insured
depository institution pursuant to the
Bank Merger Act.
(b] D efinitions. For purposes of this
section, the terms "appropriate federal
banking agency” and “insured
depository institution” are defined as
those terms are defined in section 3 of
the Federal Deposit Insurance Act.
By order of the Board of Governors o f the
Federal Reserve System, June 23,1992.
William W. W iles,
Secretary of the Board.
[FR Doc. 92-15136 Filed 6-28-92; 8:45 am]
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@FedFRASER