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FEDERAL RESERVE BANK
OF NEW YORK
[
Circular No. 10527 ~
|
March 30, 1992
BANK HOLDING COMPANIES
Rescission of 1985 Regulation Y Ruling Regarding
Interstate Relocations of Subsidiary National Banks
To All Bank Holding Companies, and Others
Concerned, in the Second Federal Reserve District :
Following is the text of a statement issued by the Board of G overnors o f the
Federal Reserve System:
The Federal Reserve Board has issued an interpretation rescinding its policy
statement requiring applications for relocations of a subsidiary bank to another state.
Accordingly, the Board has determined not to require the filing of an application for
Board approval under the Bank Holding Company Act (“BHC Act”) for national bank
relocations except in situations in which the Board has found an evasion of the BHC
Act.
Printed on the following pages is the official notice of the B oard’s action, as
subm itted for publication in the Federal Register. Questions on this m atter may be
directed to our Dom estic Banking Applications Division (Tel. No. 212-720-5861).
E. G e r a l d C o r r i g a n ,
President.
FEDERAL RESERVE SYSTEM
12 CFR PART 225
[Docket No. R-0751]
Rescission of Policy Statement Requiring Application
for Relocation of a Subsidiary Bank to Another State
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Interpretation; Rescission of Policy Statement.
SUMMARY:
The Board has rescinded its policy statement requiring
applications for relocations of a subsidiary bank to another
state.
12 C.F.R. § 225.144.
Accordingly, the Board has
determined not to require the filing of an application for Board
approval under the Bank Holding Company Act ("BHC Act") for bank
relocations except in situations in which the Board has found an
evasion of the BHC Act.
EFFECTIVE DATE:
March 23, 1992
FOR FURTHER INFORMATION CONTACT:
Scott G. Alvarez, Associate
General Counsel, Legal Division (202) 452-3583, or Anne R.
Wolfson, Attorney, Legal Division (202) 452-2246.
For the
hearing impaired only. Telecommunications Device for the Deaf
(TDD), Dorothea Thompson (202) 452-3544, Board of Governors of
the Federal Reserve System, Washington, DC 20551.
SUPPLEMENTARY INFORMATION:
In 1985, the Board issued a policy
statement regarding the relocation of banks owned by bank holding
companies.
50 Fed. Reg. 33913 (1985).
That policy statement was
issued in response to a petition requesting that the Board review
a proposal by a subsidiary national bank of Mark Twain
10527'*
- 2 Bancshares, Independence, Missouri, to relocate from Missouri to
Kansas, pursuant to section 30 of the National Bank Act.
The
policy statement explains that the Board believed that the
constraint imposed by the Douglas Amendment to the BHC Act on the
Board's authority to approve the bank acquisition proposals
similarly constrained a bank holding company's authority to
retain control of a bank.
The Douglas Amendment provides that
the Board may not approve an application to acquire control of a
bank outside of the applicant holding company's home state,
unless the acquisition is specifically authorized by the state
where the bank to be acquired is located.
12 U.S.C. 1842(d).
In
the policy statement the Board stated that its approval of an
acquisition of a bank is necessarily subject to the condition
that the bank remain located in the state specified to the Board
in the application by the bank holding company to acquire the
bank.
Consequently, a change in location of the bank outside of
the bank holding company's home state constituted a material
change in an essential predicate of the Board's approval of the
acquisition of the bank.
This material change required prior
Board approval under the BHC Act and the Douglas Amendment.
On this basis, the Board in 1989 reviewed and approved
an application by SouthTrust Corporation, Birmingham, Alabama, to
retain a subsidiary national bank of SouthTrust Corporation after
its relocation from Alabama to Georgia.
The SouthTrust
relocation was recently reviewed by the U.S. Court of Appeals for
3
the District of Columbia Circuit.
10527*
Svnovus Financial Corporation
v. Board of Governors of the Federal Reserve System. No. 89-1394
(D.C. Cir. Dec. 20, 1991), petition for reh'g pending.
In that
case, the Court held that the Board did not have jurisdiction
under the BHC Act to review the relocation proposed by
SouthTrust.
The Court reasoned that the relocation of a national
bank did not represent "an acquisition" that was subject to the
requirements of the BHC Act and that a condition restricting the
location of the bank was not imposed by the Douglas Amendment
where the relocation was permitted under the terms of section 30
of the National Bank Act.
The U.S. District Court for the
Eastern District of Pennsylvania had reached a similar conclusion
in an earlier lawsuit against the Comptroller of the Currency
that has since become moot.
See McEnteer v. Clarke. 644 F. Supp.
290 (E.D. Pa. 1986).
The Board has reconsidered its policy statement in
light of these court decisions, and has determined not to require
the filing of an application for Board approval under the BHC Act
for the relocation of a national bank owned by a bank holding
company except in situations in which the Board has found an
evasion of the BHC Act.
Accordingly, the Board has determined to
rescind its policy statement regarding national bank relocations.
Regulatory Flexibility Act Analysis
The action would apply equally to entities of all
sizes, and does not have particular effect on small entities.
10527
- 4 Accordingly, pursuant to section 605(b) of the Regulatory
Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601 et sea.). the Board
believes that the interpretation will not have a significant
economic impact on a substantial number of small entities.
Public Comment
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 this
action, because it represents the announcement of a Board policy
that was not subject to these requirements.
In addition, the
change in policy relieves a previous restriction, and is not
subject to the requirements of section 553.
The Board's expanded
rule making procedures have not been followed for the same
reason.
List of Subjects in 12 CFR Part 225
Administrative practice and procedure, Appraisals,
Banks, Banking, Capital adequacy, Federal Reserve System, Holding
Companies, Reporting and recordkeeping requirements, Securities,
State member banks.
1 ^ 5 2 7 *
5
PART 225 - BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL
The authority citation for Part 225 continues to read
as follows:
1.
AUTHORITY:
12 U.S.C. 1817(j)(13), 1818, 1831i,
1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3907, 3909, 3310, and
3331-3351.
§225.144 [Removed]
2.
12 CFR 225.144 is removed.
By order of the Board of Governors of the Federal
Reserve System, March 16, 1992.
(signed) Jennifer J. Johnson
Jennifer J. Johnson
Associate Secretary of the Board
@FedFRASER