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FED ER AL RESERVE BANK
OF NEW YORK
r Circular No. 8 9 7 1 "|
L
December 10, 1980
J
RULES OF PROCEDURE
Policy Statement Regarding the Handling of Protested Applications
To All Member Banks and Bank Holding Companies,
and Others Concerned, in the Second Federal Reserve District:
The Board of Governors of the Federal Reserve System has announced the adoption
of a statement of policy for the handling of protested applications. The following is
quoted from the Board’s announcement:
The policies set forth in the statement are intended to provide better notice to the public of
applications to expand bank holding companies or merge financial institutions, or for certain other
applications requiring the Board’s approval, and to provide for public meetings where appropriate
and generally improve on existing procedures.
The Board also adopted technical amendments to its Rules of Procedure concerning notice
requirements to give effect to certain provisions of the policy statement.
It is expected that these procedures will be of assistance to individuals, groups or others
desiring to protest applications that come before the Board, and to applicants whose applications
are protested.
Printed on the following pages is the text of the Board of Governors’ statement. A
printed copy of the amendments to the B oard’s Rules of Procedure, giving effect to certain
provisions of the policy statement, will be sent to you as soon as it is available.
Questions regarding the statement may be directed to our Consumer Affairs and
Bank Regulations Department (Tel. No. 2 1 2 -7 9 1 -5 9 1 4 ).
A n t h o n y M . S olomon ,
President.
FEDERAL RESERVE SYSTEM
12 CFR Part 262
[Rules of Procedure, Docket No. R-0334]
Rules of Procedure; Notice of Applications; Timeliness of Comments;
Informal Hearings
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Statement of Policy.
SUMMARY: This Statement outlines steps taken by the Board to improve
the effectiveness of notices of applications required under section
262.3(b) of the Rules of Procedure. The Statement also emphasizes the
Board's strict observance of its rules regarding timeliness of comments
and requests for hearing on applications found in section 262.3(d) of
the Rules of Procedure.
Finally, the Statement provides guidelines
for holding informal hearings in the form of public meetings on pro
tested applications, particularly those opposed on the basis of an
applicant's Community Reinvestment Act record.
EFFECTIVE DATE: This Statement will apply to applications for which
notice is published on or after February 1, 1981.
FOR FURTHER INFORMATION CONTACT: Robert E. Mannion, Deputy General
Counsel, (202/452-3274) or Bronwen Mason, Senior Attorney, (202/4523564) , Board of Governors of the Federal Reserve System, Washington,
D.C. 20551.
SUPPLEMENTARY INFORMATION: In 12 CFR 262, sections 262.7 through 262.24 are
reserved.
12 CFR 262 is amended by adding new section 262.25 to read as
follows:
§ 262.25 —
A.
Policy Statement Regarding Notice of Applications; Timeliness
of Comments and Guidelines for Public Meetings.
NOTICE OF APPLICATIONS.
A bank or company applying to the Board for a deposit-taking
facility must first publish notice of its application in local newspapers.
This requirement, found in section 262.3(b)(1) of the Board's Rules
of Procedure covers applications under the Bank Holding Company Act
and Bank Merger Act, as well as applications for membership in the
Federal Reserve System and for new branches of State member banks.
Notices of these applications are published in newspapers of general
circulation in the communities where the applicant intends to do business,
as well as the community where its head office is located. These notices
are important in calling the public's attention to an applicant's plans
and giving the public a chance to comment on these plans. To improve
the effectiveness of the notices, the Board is making several changes
in its notice procedures.
The Board has adopted standard forms of notice for use by
applicants that will specify the exact date on which the comment
period on the application ends, which may not be less than thirty
-2-
calendar days from the date of publication of the first notice. The
newspaper forms also provide the name and telephone number of a person
at the appropriate Reserve Bank to call to obtain more information about
submitting comments. The Board also publishes notice of bank holding
company applications for bank acquisitions in the Federal Register after
the application is accepted for filing, and the Reserve Bank can provide
the exact date in which this comment period ends.
(This period will
not end before the date indicated in the newspaper notice, and ordinari
ly will end after that date.) Comments received on or before the end
of the latest comment period on an application will be regarded as
timely. These steps should assist interested members of the public in
submitting timely comments that are relevant to the facts the Board
must consider.
In addition, each Reserve Bank will publish a weekly list
of (1) applications accepted as filed by the Reserve Bank; and (2)
applications for which newspaper notices have been published, submitted
to the Reserve Bank for acceptance. Any person or organization may
request the list. The Board notes that each Reserve Bank's list will
include only applications accepted or submitted with that particular
Reserve Bank, and persons or groups should request lists from each
Reserve Bank having jurisdiction over applications in which they
may be interested.
Since the lists will be prepared as a courtesy by
the Federal Reserve Banks, and are not intended to replace any formal
notice required by statute or regulation, the Reserve Banks and the
Board assume no responsibility for errors or omissions.
With respect to applications by bank holding companies to
engage in nonbank activities or make acquisitions of nonbank firms,
after the Board publishes notice of these applications in the Federal
Register after the applications are accepted for processing. While
these applications are not covered by the notice provisions of section
262.3 of the Board's Rules of Procedures or the provisions of the Com
munity Reinvestment Act, the other provisions of this Statement will
apply to such applications.
In addition, the weekly lists to be pre
pared by Reserve Banks will include certain applications by bank holding
companies for nonbank acquisitions as they are accepted for processing.
B.
TIMELENESS OF COMMENTS
All comments mu3t be received by the Federal Reserve on or
before the last date of the comment period specified in the notice.
The Board's rules allow it to disregard comments received after the
comment period expires. In particular, section 262.3(d) of the Board's
Rules of Procedure states that the Board will not consider comments
on an application that are not received on or before the expiration
of the applicable comment period. Thus, a commenter failing to submit
comments on an application within the specified comment period (or any
extension) may be precluded from participating in the consideration
of the application.
In cases where a commenter for good cause is unable to submit
its comment within the specified comment period, section 265.2(a)(10)
of the Board's Rules Regarding Delegation of Authority (12 CFR 265.2(a)(10))
allows the Secretary of the Board to grant requests for extension of
the period. Under this provision, upon receipt of a request prior to
-3-
the expiration of the comment period, the Secretary may grant a brief
extension upon clear demonstration of hardship or other meritorious
reason for seeking additional time.
C.
PUBLIC MEETINGS.
The Board is endorsing an experimental period during which
public meetings on protested applications will be held in appropriate
cases, particularly those protested on the basis of an applicant's CRA
record. Subject to determination by the Federal Reserve, a public
meeting may be held upon request of the applicant or a protestant who
files a timely protest; or may be instituted by the Federal Reserve.
The purpose of the public meetings will be to elicit information and
to clarify factual issues related to the application.
It should be
noted that the convening of public meetings is not intended to preclude
private meetings between the parties to resolve differences, and the
Board continues to encourage such private negotiations.
The Board has adopted the following guidelines to be used
for requesting, arranging, and conducting public meetings during the
experimental period:
Requesting a Public Meeting. A meeting may be requested by
a person or organization objecting to the application during the comment
period, and by the applicant during the period within which it must
respond to comments.
In requesting a meeting, the protestant should
submit material that meets the following criteria:
(a) It must be in writing and received by the Reserve Bank
within the specified comment period.
(b)
It should contain a summary of the specific matters to
which the protestant objects and the reasons for each objection.
(c)
It should contain facts and evidence supporting the
protest, including any financial, economic or demographic data.
(d) Where appropriate, it should contain a discussion of
any adverse effects on the protestant or the community if the appli
cation were to be approved.
(e) It should explain why a public meeting is needed, and
why written submissions would not suffice in lieu of a meeting.
The protest does not have to be filed in a legal brief or
other particular format in order for a public meeting to be granted.
The protest will be transmitted by the Reserve Bank to the applicant,
and applicant will be allowed ten business days to respond in writing
to the protest.
Certain personnel designated by the Reserve Bank will be
available to assist any member of the public regarding the types of
information generally included in protests, the format generally used
by protestants, and any other specific questions about the procedures
of the Federal Reserve System regarding protested applications.
Arranging the Public Meeting. Public meetings will be ar
ranged and presided over by a representative of the Federal Reserve
("Presiding Officer"). In determining a time and place for the public
meeting to be held, the Presiding Officer should take into account such
factors as convenience to the parties, the number of people expected
to attend the meeting, access to public transportation and possible
after-hours security problems.
The following time periods will be used as guides in arranging
the public meeting:
(a)
A public meeting will normally be scheduled no earlier
than 10 days and no later than 21 days from the end of the comment
period. The Presiding Officer will arrange the meeting within these
general time frames to accommodate the schedules of the parties where
possible.
(b) The Presiding Officer will notify the applicant and
protestant(s) in writing of the date, time and location of the meeting
as soon as possible after it is scheduled.
(c) At least 7 calendar days prior to the meeting the ap
plicant and protestant(s) should notify the Presiding Officer of the
names of all persons wishing to speak on the merits of the application
at the public meeting. If time permits, as many of these persons as
possible will be authorized by the Presiding Officer to speak.
(d) Two copies of any exhibits to be presented at the meeting
should be sent to the Presiding Officer at least 7 calendar days prior
to the meeting. One copy of each exhibit should also be sent to each
party at least 7 calendar days prior to the meeting.
Conducting the Public Meeting. The Presiding Officer will
prepare a written agenda for the public meeting and will provide it
to the applicant and protestant(s) at least 3 calendar days prior to
the meeting. The agenda will identify the applicant and protestant(s)
to the application, confirm the location of the meeting and the time
it will commence, list persons authorized to speak at the meeting, and
outline the format to be followed during the meeting.
The proceedings of the public meeting will be transcribed
by a court reporter paid for by the Federal Reserve. A copy of the
transcript will be available for inspection at the Reserve Bank. Parties
may obtain a copy of the transcript by purchasing it from the steno
grapher for the stenographer's usual fee.
In conducting the public meeting the Presiding Officer will
have the authority and discretion to ensure that the meeting proceeds
in a fair and orderly manner. Generally, the public meeting will be
conducted in accordance with the following format:
(a) Opening remarks by the Presiding Officer. These remarks
are to establish the purpose of the meeting and briefly outline the
remainder of the agenda.
(b) Protestant's Presentation. A presentation regarding
why the application should not be approved, including any data or other
materials that further the protestant's position. Persons previously
identified to the Presiding Officer may speak concerning the merits
of the application at this time.
(c) Applicant's Presentation. A presentation regarding
why the application should be approved, including any data or other
material in support of the application.
Persons previously identified
to the Presiding Officer may speak concerning the merits of the appli
cation at this time.
(d)
Protestant's Rebuttal.
(e)
Applicant's Rebuttal.
(f) Question and Answer Period. Questions may be addressed
by the protestant(s), and the applicant to one another, as directed
by the Presiding Officer.
Hie Applicant and Protestant(s) will each be allowed an
aggregate of one and one-half hours in which to conduct their presen
tation and rebuttal, although the time may be divided between presen
tation or rebuttal as desired by the applicant or protestant(s). If
there is more than one protestant, they will normally be expected to
apportion the one and one-half hour period among themselves. The ques
tion and answer portion of the meeting should not exceed one hour.
The total time for the meeting should not exceed four hours.
Hie Presiding Officer may accept new written material during
the meeting if it is relevant, and will allow the opposing party 10
business days to respond in writing to the new material. The conclusion
of the public meeting normally marks the close of the public portion
of the record, except for the receipt of written comments responding
to new material accepted at the public meeting.
Hie Board has issued this interpretation pursuant to its
statutory authority under sections 3(a), 4(c)(3) and 5(b) of the Bank
Holding Company Act of 1956 (12 U.S.C. §§ 1842(a), 1843(c) (8), and
1844(b)), section 18 of the Federal Deposit Insurance Act (12 U.S.C.
S 1828(c)), and sections 9 and ll(i) of the Federal Reserve Act (12
U.S.C. §§ 321 and 248(i)).
By order of the Board of Governors of the Federal Reserve
System, December 3, 1980.
(signed) Theodore E. Allison
Theodore E. Allison
Secretary of the Board
[SEAL]
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