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F ederal
reserve
Ba n k
DALLAS, TEXAS
of
Dallas
75222
Circular No. 81-120
June 16, 1981
RULES REGARDING DELEGATION OF AUTHORITY
TO ALL DEPOSITORY INSTITUTIONS,
BANK HOLDING COMPANIES,
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
The Board of Governors of the Federal Reserve System has issued
an amendment to its Rules Regarding Delegation of Authority. The amend
ment permits the Board's General Counsel to expedite certain exceptions to
the rules against interlocking managements of depository institutions. This
delegation of authority to the General Counsel is meant to speed up the grant
ing of exceptions where the Board is not the primary supervisor.
Printed on the following pages are a copy of the Board's press re
lease issued May 21, 1981, and a copy of the m aterial which was submitted
for publication in the Federal Register.
Sincerely yours,
William H. Wallace
First Vice President
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)
FEDERALRESERVEpressrelease
For immediate release
May 21, 1981
The Federal Reserve Board announced today that it is amending
its rules of delegation of authority to permit the Board's General Counsel
to expedite certain exceptions to the rules against interlocking manage
ments of depository institutions.
Such exceptions are provided for under the Depository Institution
Management Interlocks Act, when one of the institutions —
nonmember institution —
usually a small
is in particular need of management expertise.
In such cases, the Board relies on the advice of the primary supervisor
of the institution in need of assistance in determining if an exception
should be made to allow management from a member bank or a bank holding
company to lend such assistance.
The delegation of authority to the General Counsel is meant to
speed up the granting of exceptions where the Board is not the primary
supervisor.
The Board will consider other requests for exceptions.
The Board's order is attached.
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TITLE 12— BANKS AND BANKING
CHAPTER II— FEDERAL RESERVE SYSTEM
SUBCHAPTER A— BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
[Docket No. R-0359]
PART 265— RULES REGARDING DELEGATION OF AUTHORITY
General Counsel Authority to Approve
Exceptions Under Regulation L
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Final rule.
SUMMARY: The Board is amending its Rules Regarding Delegation of Authority
in order to delegate to its General Counsel authority to grant certain
exceptions to the prohibitions against management interlocks among depository
institutions contained in the Depository Institution Management Interlocks
Act (12 U.S.C. § 3201 et seg.). The delegation authorizes the Board's
General Counsel to grant the exceptions when the primary federal supervisory
agency of the depository organization in need of management service
has granted the exception. This action is intended to expedite reviews
of requests for exceptions provided in Regulation L (12 C.F.R. § 212.3(b)).
EFFECTIVE DATE: May 20, 1981.
FOR FURTHER INFORMATION CONTACT: Bronwen Mason, Senior Counsel (202/452
3564), or Melanie Fein, Attorney (202/452-3594), Legal Division, Board
of Governors of the Federal Reserve System, Washington, D.C. 20551.
SUPPLEMENTAL INFORMATION: The Depository Institution Management Inter
locks Act ("Interlocks Act"), which generally prohibits management
interlocks among certain depository institutions, authorizes the Board
of Governors to permit interlocking relationships involving bank holding
companies and state member banks that would otherwise be prohibited
under the Act.
12 U.S.C. § 3206.
In section 212.3(b) of its Regulation L
(12 C.F.R. § 212.3(b)), the Board has provided for such exceptions.
If the relationship involves a depository organization subject to the
supervision of another Federal supervisory agency, section 212.3(b)
provides that the management official involved must also obtain the
prior approval of that other agency.
The exceptions in section 212.3(b) are generally designed
to allow interlocking service when one of the institutions involved
in the interlock is in particular need of management expertise.
In
administering these provisions, it has been the Board's experience that
the exceptions available under Regulation L most often relate to the
managerial needs of depository institutions for which the Board is not
-
2-
the primary federal supervisor, i.e. institutions other than State
member banks or bank holding companies.
In such cases, section 212.3(b)
of Regulation L requires the Board to rely on the assessment of the
depository institution's primary Federal supervisor in determining
whether to grant an exception.
In order to expedite review of exception
requests when the primary Federal supervisor of the affected institution
has approved the exception, the Board is delegating to its General
Counsel the authority to grant such exceptions. Under this delegation,
exceptions for institutions in need of management expertise for which
the Board is the primary supervisor will continue to be considered by
the Board.
The provisions of section 553 of Title 5, United States Code,
relating to notice, public participation, and deferred effective date
have not been followed in connection with the adoption of this amendment
because the change to be effected is procedural in nature and does not
constitute a substantive rule subject to the requirements of that section.
The Board's extended rulemaking procedures (44 Federal Register 3,957
(1979)) have not been followed because the amendment is a technical
one and because it relieves a burden that could obstruct necessary and
prompt action that would be in the public interest.
In order to implement this delegation, section 265.2(b) of
the Board's Rules Regarding Delegation of Authority is amended by adding
paragraph (9) to read as follows:
Section 265.2— Specific Functions Delegated to Board
Employees and to Federal Reserve Banks.
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*
*
*
*
*
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(b)
*
*
*
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*
(9) Under the provisions of section 2.12.3(b) of this chapter
(Regulation L relating to interlocking relationships permitted by Board
order), to grant exceptions from the prohibitions of Regulation L when
the primary Federal supervisor of the depository institution in need
of management assistance has approved the exception.
Board of Governors of the Federal Reserve System, May 20, 1981.
James McAfee
Assistant Secretary of the Board
@FedFRASER