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FED ER AL RESERVE B A * OF M E W YOR&C [ Circular No. 9642 February 22, 1984 1 Revision of Policy on Processing Protested Applications of Banks and Bank Holding Companies To All Bank Holding Companies, and Others Concerned, in the Second Federal Reserve District: The following statem ent was issued by the Board of G overnors o f the Federal Reserve System: The Federal Reserve Board has announced adoption o f amendments to its procedures for processing applications, including revision o f the B oard ’s Statement o f Policy on Handling Protested Applications o f banks and bank holding com panies. These amendments are intended to provide the public with clearer and easier-to-use procedures for filing protests, and for requesting meetings or hearings. The amendments are based in part on recommendations o f a Board staff task force, established to review the Board ’s procedures for handling protested applications. The Consumer Advisory C o u n cil1 was requested to study the Board ’s implementation o f the Community Reinvestment A ct, and the B oard ’s amendments to its procedures and policy statement incorporate most o f the CA C recommendations on procedures for bringing applications to public notice and for dealing with protests. The amendments apply to applications for which notice is published on or after January 3 1 , 1984. The amendments incorporate the follow ing recommendations by the Consumer Advisory Council task force: — Adopt a revised newspaper notice o f applications, published in plain English and including a statement that one of the factors the Board considers in acting on applications is the performance o f banks concerned in the application in helping to meet local credit needs. — Explore ways in which Reserve Bank weekly bulletins noting applications newly received can be made more informative. — Publish a comprehensive document consolidating publications relating to C R A and additional information on factors the Board considers in evaluating applications under C R A . — Formalize procedures for notifying protestants o f the Board’s decision on a protested application and take steps to explain the decision. — Make special efforts to provide protestants with an explanation o f the analysis o f data relating to a protest. To implement Board action on these recommendations o f the C ouncil’s task force, Federal Reserve procedures will be revised as follows: — A model “ plain E nglish” newspaper notice o f an application will be used and the Community Affairs O fficer o f the Reserve Banks will be designated as a source o f further information. Newspaper notices will include a state ment that in acting on applications one o f the factors the Board considers is the performance under C R A o f banks involved in the application. 1. The Consumer Advisory Council, established by Congress at the Board’s request, meets with the Board periodically to advise the Board on its responsibilities under the Consumer Credit Protection Act. It is comprised of 30 members representing a broad range of consumer and creditor interests. At the same time as the Board acted on the Council’s advice concerning protested applications it adopted most of the Council’s further recommendations deriving from its study of Board implementation of the Community Reinvestment Act in the fields of development of Federal Reserve compliance personnel, examination procedures and com munity affairs officers. These actions are being announced separately. (OVER) — An expanded uniform format has been developed and will be used for the weekly bulletin published by the Reserve Banks detailing applications received during the preceding week. This notice will include reference to laws or regulations governing the processing of applications, identify Reserve Bank personnel (Community Affairs Officer) who can provide further information, and list available publications concerning CRA. — The Board will work with the Federal Financial Institutions Examination Council to update the Council’s publica tion “ A Citizen’s Guide, to CRA” and will publish a summary reflecting current Board positions on CRA factors. — The Board will amend its Policy Statement to formalize notification of protestants of decisions on protested appli cations. — Federal Reserve personnel will be prepared to furnish protestants with an explanation of how data have been analyzed in a variety pf protests and provide a sampling of relevant Orders and other material. Additionally, the Board approved staff recommendations to: — Amend the Board’s Policy Statement on Flandling Protested Applications to specify that Reserve Banks generally will arrange private meetings between an applicant and protestant following the first exchange of correspondence between the parties. — Amend the policy statement and the Board’s rules regarding delegation of authority to delegate to the Board’s General Counsel authority to convene a public meeting or other proceeding and appoint a presiding officer with respect to a protested application. — Amend the policy statement to designate the Community Affairs Officer of the Reserve Banks as the contact person to answer questions concerning protest procedures and CRA matters in general. — Amend the Board’s Rules of Procedure, in the interests of ensuring due consideration of comment on an application, to clarify that comment must be received by the Board’s Secretary on or before the date specified as the end of the comment period. The Secretary can give extensions on showing of good cause. Enclosed is the text of the amended Policy Statement and of the amendments to the Board’s Rules Regarding Delegation of Authority and Rules of Procedure referred to in the above statement. It has been reprinted from the Federal Register of February 14, 1984. Copies of the enclosure are available to others upon request directed to the Circulars Division of this Bank (Tel. No. 212-791-5216). Questions regarding the amended policy may be directed to our Domestic Banking Applications Department (Tel. No. 212-791-5861). A nthony M. S olom on. President. Board. Based on its experience, the Board believes the Policy Statement has 12 CFR Parts 262 and 265 served a useful purpose, and that the changes being adopted today will [Docket Wo. R-Q5Q7] further facilitate the processing of Rules of Procedure; Applications; protested applications. Tim eliness of Comments; informal In the amended statement, the Board Meetings has clarified its policy concerning private meetings between the applicant aqensv : Board of Governors of the Federal Reserve System. and the protestant in connection with protested applications: specified that the ACTON: Amendment of Statement of Community Affairs Officer at the Policy and final rule. appropriate Reserve Bank will be SUMMARY: The Board has amended its available to answer questions by policy statement concerning the members of the public concerning the procedures used to process protested filing of a protest; delegated to its applications to provide more flexibility General Counsel the authority to in conducting public meetings. The convene public meetings and to statement also clarifies the Board’s designate the Presiding Officer in such policy with respect to sponsoring private meetings between the applicant and the proceedings and has amended its procedures for conducting public protestant and specifically designates meetings to provide more flexibility. Community Affairs Officers at the FEDERAL RESERVE SYSTEM List of Subjects 12 CFR Part 262 Administrative practice and procedure, Federal Reserve System. 12 CFR Part 265 Authority delegations (Government Agencies), Banks, banking, Federal Reserve System. The Board has issued these amendments pursuant to its statutory authority under sections 3(a), 4(c)(8) and 5(b) of the Bank Holding Company Act of 1956 as amended (12 U.S.C. 1842(a), 1843(c)(8) and 1844(b)), section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)), and sections 9 and ll(i) of the Federal Reserve Act (12 U.S.C. 321 and 248(i)). The Board is not soliciting public comment with regard to these amendments under authority of 5 U.S.C. 553(b), which authorizes waiver of Regulatory Flexibility Act Analysis public comment in case of interpretative statements and rules of procedure. The Pursuant to section 605(b) of the interpretation is issued as a policy Regulatory Flexibility Act (Pub. L. 96statement and not as a part of the 354, 5 U.S.C. 601 et seq.), the Board regulation and is, therefore, considered certifies that the amendments will not interpretative. The amendments to the have a significant impact on a Rules Regarding Delegation of Authority substantial number of small entities, and to the Rules of Procedure are since they pertain to the Board’s procedural in nature and do not procedures. constitute substantive rules subject to the requirements of 5 U.S.C. 553 and 604. Regulatory Impact Analysis The Board’s expanded rulemaking Pursuant to section 3(a)(1) of procedures have not been followed because the amendments are technical Executive Order 12991 of February 17, in nature. The amendments are effective 1981, it has been determined that the proposed amendments do not constitute January 31,1984 pursuant to 5 U.S.C. 553(d)(2). a major rule within the meaning of section (l)(b) of the Executive Order. PART 262—[AMENDED] Reserve Banks as the Federal Reserve representatives available to answer questions concerning Federal Reserve procedures for protested applications. In addition, the General Counsel has been delegated authority, in consultation with the directors of the other interested divisions of the Board and the Reserve Bank (or their designees), to convene a public meeting and to designate the presiding officer in any such proceeding. The Board is also amending its Rules of Procedure to clarify that comments on an application must be received on or before the last date specified in the notice. E F F E C T IV E © A T E: January 31,1984. This Statement will apply to applications for which notice is published on or after The proposed amendments have no January 31, 1984. effect on the operations of the depository institutions subject to them. Bronwen Chaiffetz, Senior Counsel (202/ 452-3564) or Susan Weinburg, Attorney As such, the amendments will not have an annual effect on the economy of $100 (202/452-3707), Board of Governors of million or more, will not effect costs or the Federal Reserve System, prices for consumers, individual Washington, D.C. 20551. industries, government agencies or S U P P L E M E N T A R Y IN F O R M A T IO N : In geographic regions, and will not have adverse effects on competition, December 1980, the Board adopted a Policy Statement to provide members of employment, investment productivity or on the ability of United States the public with guidance on the procedures to be used in filing protests enterprises to compete with foreignbased enterprises in domestic or export and requesting public meetings or hearings, on applications filed with the markets. F<DR F U R T H E R IN F O R M A T IO N C O N T A C T : |Enc. Cir. No. 96421 1. Therefore, § 262.25 is revised to read as follows: § 262.25 Po SScy statement regarding notice of applications; timeliness of comments; informal meetings. (a) 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 1 262.3(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 in the community where the applicant’s 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 has supplemented its notice procedures as follows. (1) 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 calendar days from the date of publication of the first notice. The newspaper forms also provide the name and telephone number of the Community Affairs Officer of the appropriate Reserve Bank as the person to call to obtain more information about submitting comments on an application. In general, the Community Affairs Officer will be available to answer questions of a general nature concerning the submission of comments and the processing of applications. (2) The Board also publishes notice of bank holding company applications for bank acquisitions (but not for bank mergers or branches) in the Federal Register after the application is received and the Community Affairs Officer can provide the exact date on which this comment period ends. (The Federal Register comment period will generally end after the date specified in the newspaper notice.) (3) In addition to the formal newspaper and Federal Register notices discussed above, each Reserve Bank publishes a weekly list of applications submitted to the Reserve Bank for which newspaper notices have been published. Any person or organization may arrange to have the list mailed to them regularly, or may request particular lists, by contacting the Reserve Bank’s Community Affairs Officer. Each Reserve Bank’s list includes only applications submitted to that particular Reserve Bank, and persons or groups (12CFR 265.2(a)(10)) allows the Secretary of the Board to grant requests for an extension of the period. Under this provision, upon receipt of a request received on or before 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) Private Meetings. When a timely protest to approval of an application is received, the Reserve Bank may arrange a meeting between the applicant and the protestant to clarify and narrow the issues, and to provide a forum for the resolution of differences between the protestant and the applicant. If the Reserve Bank decides that a private meeting would be appropriate, the Reserve Bank will arrange a private meeting soon after the receipt of a protest and the applicant’s response, if any, to the protest. In scheduling the meeting, the Reserve Bank will consider convenience to the parties with respect to the time and place of the meeting. A decision to hold a private meeting will not preclude the Reserve Bank or the Board from holding a public meeting or other proceeding if it is deemed appropriate. (d) Public Meetings. The Board’s General Counsel (in consultation with the Reserve Bank and the directors of other interested divisions of the Board) may order that a public meeting or other proceeding be held if requested by the applicant or a protestant who files a timely protest, or if such a proceeding appears appropriate. In most instances, the determination to order a public meeting will be made after a private meeting has been held; however, where appropriate a public meeting may be convened immediately after receipt of the protest and the applicant’s response, if any. Additional information may be requested prior to making a determination to convene a public meeting. In these cases, a determination will be made within ten days from the date all relevant information is received. (2) In cases where a commenter for The public meeting will be scheduled as good cause is unable to send its soon as possible, but in no event, later comment within the specified comment than 30 days after the decision to hold period, § 265.2(a)(10) of the Board’s the proceeding is made. The purpose of Rules Regarding Delegation of Authority the public meeting will be to elicit should request lists from each Reserve Bank having jurisdiction over applications in which they may be interested. Since the lists are prepared as a courtesy by the Reserve Bank, and are not intended to replace any formal notice required by statute or regulation, the Reserve Banks and the Board do not assume responsibility for errors or omissions. In addition, the weekly lists prepared by Reserve Banks include certain applications by bank holding companies for nonbank acquisitions filed with the Reserve Bank. (4) With respect to applications by bank holding companies to engage de novo in nonbank activities or make acquisitions of nonbank firms, the Board publishes notice of most of these applications in the Federal Register when the applications are filed. Notice of certain small acquisitions may be published in a newspaper of general circulation in the area(s) to be served. While applications for nonbanking activities are not covered by the provisions of the Community Reinvestment Act or the notice provisions of § 262.3 of the Board’s Rules of Procedure, the provisions of this Statement apply to such applications. (b) Timeliness of Comments. (1) All comments must be actually received by the Board or the Reserve Bank on or before the last date of the comment period specified in the notice. Where more than one notice is published with respect to an application, comments must be received on or before the last date of the latest comment period. The Board’s Rules allow it to disregard comments received after the comment period expires. In particular, § 262.3(e) 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 comment period. Thus, a commenter who fails to comment on an application within the specified comment period (or any extension) may be precluded from participating in the consideration of the application. 2 information, to clarify factual issues related to the application and to provide an opportunity for interested individuals to provide testimony. The Board has adopted the following guidelines to be used for convening public meetings, although specific provisions may be altered by the General Counsel if circumstances warrant. (1) A meeting may be requested by a person or an organization objecting to the application during the comment period, and by the applicant during the period within which it must respond to comments. Such a request must be timely and in writing. (1) A protest does not have to be filed in a legal brief or other format in order for a public meeting to be granted. The Community Affairs Officer at 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. (ii) In general, a protest should identify the protestant, state the basis for objection to approval of the application, and provide available written evidence to support the objection. Objections to approval of an application must relate to the factors that the Board is authorized to consider in acting on an application. Generally, these factors relate to the financial and managerial resources of the companies and banks involved, the effects of the proposal on competition, and the convenience and needs of the communities to be served by the companies and banks involved. If a public meeting is requested, the protest should indicate that there are members of the public who wish to speak on the issues in a public forum. (iiij The protest will be transmitted by the Reserve Bank to the applicant, and the applicant will generally be allowed eight business days to respond in writing to the protest. (2] Public meetings will be arranged and presided over by a representative of the Federal Reserve System (“Presiding RequestingaPublicMeeting. Arranging thePublicMeeting. Officer”). In determining the time and place for the public meeting, such factors as convenience to the parties, the number of people expected to attend the meeting, access to public transportation and possible after-hour security problems will be taken into account. (10) Pursuant to the provisions of section 265.25 of this chapter (Rules of Procedure) after consultation with the directors of other interested Divisions of the Board and the appropriate Reserve Bank, to order, under such terms and conditions as the General Counsel deems appropriate, that a public meeting or other proceeding be held in (3) Prior to the meeting, all necessary steps connection with any application or will be taken to ensure that the meeting notice filed with the Board and to designate the presiding officer in any is conducted appropriately, including scheduling of witnesses, submission of such proceeding. Conducting thePublicMeeting. written materials and other arrangements. 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 consist of opening and closing remarks by the Presiding Officer, a presentation by the protestant and a presentation by the applicant. An official transcript will be made of the proceedings and entered into the record. The conclusion of the public meeting normally marks the close of the public portion of the record on the application. * * * * * 3. Pursuant to its authority under sections 3(a), 4(c)(8) and 5(b) of the Bank Holding Company Act, 12 U.S.C. 1842(a), 1843(c)(8) and 1844(b); and section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)) and sections 9 and ll(i) of the Federal Reserve Act (12 U.S.C. 321 and 248(i)), the Board is amending 12 CFR Part 262 (Rules of Procedure) effective January 31,1984. PART 262—RULES OF PROCEDURE Notifi ofBoard decision on revising the first five sentences in the appl icaticati on.onAfter a decision is made paragraph (e) as follows: In Part 262, § 262.3 is amended by (4) on the application, and the applicant is Applicators. notified of the decision, staff will notify §* 262.3 * * * * the protestant by telephone. This (e) * * * The Board is only required to notification will be confirmed promptly consider a comment or a request for a in writing. As set forth in § 262.3(k) of the Board’s Rules of Procedure (12 CFR hearing with respect to an application or 262.3(k)) or § 265.3 of the Board’s Rules notice if it is in writing and received by the Secretary of the Board or the Regarding Delegation of Authority (12 appropriate Federal Reserve Bank on or CFR 265.3), a party to the application before the latest date prescribed in any may request reconsideration of the Board’s order, or review of the Reserve notice with respect to the application or notice, or where no such date is Bank’s decision. prescribed, on or before the 30th day after the date notice is first published. Similarly, the Board will consider 2. Pursuant to its authority under section ll(k) of the Federal Reserve Act comments on an application from the (12U.S.C. 248(k)) and section 5(b) of the Attorney General or a banking supervisory authority to which Bank Holding Company Act (12 U.S.C. notification of receipt of an application 1844(b)) the Board of Governors is has been given, only if such comment is amending 12 CFR Part 265 (Rules received by the Secretary of the Board Regarding Delegation of Authority) within 30 days of the date of the letter effective January 31,1984 by revising giving such notification. Any comment (b)(10) of § 265.2 to read as follows: on an application or notice that requests a hearing must include a statement of § 265.2 Specific functions delegated to why a written presentation would not Board employees and to Federal Reserve Banks. suffice in lieu of a hearing, identifying * * * * * specifically any questions of fact that are in dispute and summarizing the (b) * * * PART 265—[AMENDED] 3 evidence that would be presented at a hearing. In every case where a timely comment or request for hearing is received as provided herein, a copy of such comment or request shall be forwarded promptly to the applicant for its response. The Board will consider the applicant’s response only if it is in writing and sent to the Secretary of the Board on or before eight business days after the date of the letter by which it is forwarded to the applicant. * * * 4 B y order of the B o ard of Governors, effective January 31,1984. William W. Wiles, Secretary of the Board. [FR Doc. 84-3085 Filed 2-13-84; 8:45 ami BILLING CODE 6210-O1-M
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