Full text of Federal Reserve Bank of New York Circulars : Rules Regarding Delegation of Authority

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September 20, 1977

To the Addressee:
Enclosed is a copy of the Rules Regarding Delegation of Authority
of the Board of Governors of the Federal Reserve System, as amended
effective September 1, 1977 (the effective date indicated on page 3 of
the pamphlet is incorrect).

The amended Rules replace the September 30,

1975 printing of the Rules, together with all of the outstanding amendments
thereto.




Circulars Division
FEDERAL RESERVE BANK OF NEW YORK

BOARD OF GOVERNORS

of the
FEDERAL RESERVE SYSTEM

RULES REGARDING DELEGATION OF AUTHORITY
(12 CFR 265)

As amended effective September 1, 1977

Any inquiry relating to this regulation should be addressed to the Federal
Reserve Bank of the Federal Reserve District in which the inquiry arises.




C O N TE N TS

Se c .

265.1—

D

e l e g a t io n

G

Sec.

of

enerally

265.1a— S p e c i f i c
gated

F

u n c t io n s

.....................................

F u n c t io n s

to

Board

M

D

ele

3

­

em bers

9

(e) The Director of the Division of Personneal Administration .................

9

(f) Each Federal Reserve B a n k ...............

9

(g) The Director of the Division of Inter­
national Finance ..............................

17

(h) The Director of the Division of Con­
sumer A ffairs....................................

18

3

(a) Any Board Member designated by
the Chairman ....................................

3

(b) Any Board member ..........................

3

Sec. 265.2— Specific

Functions D ele­
gated to Board Employees
and to Federal Reserve
Ba n k s

(d) The Director of the Division of Fed­
eral Reserve Bank Operations . . . .

(i) The Secretary of the Federal Open
Market Committee ..........................

...................................................

3

(a) The Secretary of the Board ...............

3

(b) The General Counsel of the Board ..

7

(c) The Director of the Division of Bank­
ing Supervision and Regulatioin . .

7

(j) The Director of the Division of Fed­
eral Reserve Bank Examinations
and B udgets......................................
S e c . 2 6 5 .3 — R e v ie w

of

gated

A

c t io n

Level

at D

ele

­

............................

18

S T A T U T O R Y A U T H O R IT Y

This regulation is issued under authority of
section 11 (k) of the Federal Reserve Act (12
U.S.C. 248(k)), which reads as follows:

any of its functions, other than those relating to
rulemaking or pertaining principally to monetary
and credit policies, to one or more hearing exam­
iners, members or employees of the Board, or
Federal Reserve Banks. The assignment of re­
Sec. 1 I. The Board of Governors of the Fed­
sponsibility for the performance of any function
eral Reserve System shall be authorized and em­
that the Board determines to delegate shall be a
powered:
function of the Chairman. The Board shall, upon
*
*
*
*
the vote of one member, review action taken at a
(k)
To delegate, by published order or rule delegated level within such time and in such
manner as the Board shall by rule prescribe.
and subject to the Administrative Procedure Act,




2

RULES REGARDING DELEGATION OF AUTHORITY*
(12 CFR 265)

As

amended effective June 10, 1977

SECTION 265.1—DELEGATION OF
FUNCTIONS GENERALLY
Pursuant to the provisions of section 11 (k) of
the Federal Reserve Act (12 U.S.C. 248(k)), the
Board of Governors of the Federal Reserve Sys­
tem delegates authority to exercise those of its
functions described in this Part, subject to the
limitations and guidelines herein prescribed. The
Chairman of the Board of Governors assigns the
responsibility for the performance of such dele­
gated functions to the persons herein specified. A
delegee may submit any matter to the Board for
determination if the delegee considers such sub­
mission appropriate because of the importance or
complexity of the matter.
SECTION 265.1a—SPECIFIC FUNCTIONS
DELEGATED TO BOARD MEMBERS
(a)

Any

Chairman

Board

member

designated

by

the

is authorized:

(1) Under section (a)(6) of the Freedom
of Information Act (5 U.S.C. § 552) and Part
261 of this Chapter (Rules Regarding Availabil­
ity of Information) to review and make a deter­
mination with respect to an appeal of denial of
access to records of the Board made in accord­
ance with the procedures prescribed by the Board.
(2) To approve, after receiving the recom­
mendations of the Director of the Division of
Banking Supervision and Regulation and the Gen­
eral Counsel, amendments to any notice of charges,
proposed order to cease and desist, or temporary
cease-and-desist order, previously approved by the
Board of Governors pursuant to the Financial
Institutions Supervisory Act, 12 U.S.C. §§ 1818(b),
(c) (Federal Deposit Insurance Act, §§ 8(b) and

SECTION 265.2—SPECIFIC FUNCTIONS
DELEGATED TO BOARD EMPLOYEES AND
TO FEDERAL RESERVE BANKS
(a) The Secretary of the Board (or, in the
Secretary’s absence, the Acting Secretary) is
authorized:
(1) Under the provisions of Part 261 of this
chapter, to make available, upon request, infor­
mation in the records of the Board.
(2) Under the provisions of section 3(a)(1)
of the Bank Holding Company Act (12 U.S.C.
1842), to approve the formation of a bank hold­
ing company through the acquisition by a com­
pany of a controlling interest in the voting shares
of one or more banks, if all of the following con­
ditions are met:
(i) the Reserve Bank could approve such
formation under subparagraph (22) of paragraph
(f) of this section, except for the fact that condi­

(c)).
* T h is text c o r re sp o n d s to the C o d e o f F ederal R egu la ­
tions, T itle 12, C h a p ter II, Part 265, cited as 12 C F R
265. T h e w ord s “ this P art,” as used herein, m ean R ules
R ega rd in g D e le g a tio n o f A u th ority.




(b) Any Board member is authorized, when re­
quested by the Secretary of the Board, to act
upon any request to the Board filed with the
Secretary pursuant to section 263.10(e) of the
Board’s Rules of Practice for Formal Hearings
(12 CFR 263) for special permission to appeal
from a ruling of the presiding officer at any
hearing conducted pursuant to such rules on any
motion ruled upon by such presiding officer (pro­
vided, that if such special permission is granted
the merits of the appeal shall thereupon be pre­
sented to the Board for decision). Notwithstanding
the provisions of section 265.3 hereof, the denial
of such special permission pursuant to this para­
graph shall be subject to review by the Board
only upon the request of a member of the Board
made within two days following the denial. No
person claiming to be adversely affected by such
denial shall have any right to petition the Board
or any Board member for review or reconsider­
ation of such action.

3

§ 265.2

DELEGATION OF AUTHORITY

tion (iv) of that subparagraph has not been met
(ii)
all relevant divisions of the Board’s
because one of the following policy issues has
staff recommend approval.
been raised with respect to such formation:
(4) Under the provisions of section 18(c)
(a) a director or senior officer of a
of the Federal Deposit Insurance Act (12 U.S.C
bank which would become a subsidiary of the
1828(c)), to approve a merger, consolidation,
holding company proposed to be formed or a
acquisition of assets or assumption of liabilities,
director or senior officer of the holding company
where the resulting bank is a State member bank,
proposed to be formed, is a director of a Federal
if all of the following conditions are met:
Reserve Bank or branch.
(i) the Reserve Bank could approve such
(b) a director or senior officer of a
merger, consolidation, acquisition of assets or as­
bank which would become a subsidiary of the
sumption of liabilities under subparagraph (28)
holding company proposed to be formed, or a
of paragraph (f) of this section, except for the
director or senior officer of the holding company
fact that condition (iv) of that subparagraph has
proposed to be formed, is a member of the Fed­
not been met because one of the following policy
eral Advisory Council.
issues has been raised with respect to such trans­
(c) an individual (or group of individ­
action:
uals) who is a principal in the holding company
(a) a director or senior officer of any
proposed to be formed is already a principal in
bank involved in such transaction is a director of
another bank holding company.
a Federal Reserve Bank or branch.
(d) the Board has made a general de­
(b) a director or senior officer of any
termination that another policy issue raised by the
bank involved in such transaction is a member of
proposal does not require Board consideration,
the Federal Advisory Council.
but nevertheless makes it inappropriate for a Re­
(c) the Board has made a general de­
serve Bank to approve the proposal.
termination that another policy issue raised by
(ii)
all relevant divisions of the Board’s
the proposal does not require Board considera­
tion, but nevertheless makes it inappropriate for
staff recommend approval.
(3)
Under the provisions of section 3(a)(3)a Reserve Bank to approve the proposal.
of the Bank Holding Company Act (12 U.S.C.
(ii) all relevant divisions of the Board’s
staff recommend approval.
1842), to approve the acquisition by a bank hold­
(5) Under the provisions of section 3(a)(5)
ing company of a controlling interest in the voting
shares of an additional bank, if all of the follow­
of the Bank Holding Company Act (12 U.S.C.
ing conditions are met:
1842), to approve the merger or consolidation of
a bank holding company with any other bank
(i) the Reserve Bank could approve such
acquisition under subparagraph (23) of para­
holding company, if all of the following condi­
tions are met:
graph (f) of this section, except for the fact that
condition (iv) of that subparagraph has not been
(i) the Reserve Bank could approve such
met because one of the following policy issues
merger or consolidation under subparagraph (30)
has been raised with respect to such acquisition:
of paragraph (f) of this section, except for the
fact that condition (iv) of that subparagraph has
(a) a director or senior officer of the
not been met because one of the following policy
holding company, of any subsidiary bank of the
issues has been raised with respect to such merger
holding company or of any bank sought to be
of consolidation:
acquired, is a director of a Federal Reserve Bank
(a) a director or senior officer of any
or branch.
of the holding companies or of any of the sub­
(b) a director or senior officer of the
sidiary banks of the holding companies involved
holding company, of any subsidiary bank of the
in such merger or consolidation is a director of a
holding company or of any bank sought to be
Federal Reserve Bank or branch.
acquired, is a member of the Federal Advisory
(b) a director or senior officer of any
Council.
of the holding companies or of any of the sub­
(c) the Board has made a general de­
sidiary banks of the holding companies involved
termination that another policy issue raised by the
in such merger or consolidation is a member of
proposal does not require Board consideration,
the Federal Advisory Council.
but nevertheless makes it inappropriate for a Re­
serve Bank to approve the proposal.
(c) the Board has made a general de­




4

§ 265.2

DELEGATION OF AUTHORITY

termination that another policy issue raised by the
proposal does not require Board consideration,
but nevertheless makes it inappropriate for a Re­
serve Bank to approve the proposal.
(ii) all relevant divisions of the Board’s
staff recommend approval.
(6) Under the provisions of section 4(c)(8)
of the Bank Holding Company Act (12 U.S.C.
1843(c)(8)) and sections 225.4(a)(1), (2), (3)
and (9)(ii) of Regulation Y (12 CFR 225.(4a)
(1), (2), (3) and (9)(ii)) to approve the ac­
quisition by a bank holding company of an inter­
est in a finance company or an industrial bank, as
such terms are respectively defined in subpara­
graph (31) of paragraph (f) of this section,
whether by acquisition of shares or assets, if all
of the following conditions are met:
(i) the Reserve Bank could approve such
acquisition under subparagraph (31) of para­
graph (f) of this section, except for the fact that
condition (v) of that subparagraph has not been
met because one of the following policy issues has
been raised with respect to such acquisition:
(a) a director or senior officer of the
holding company, of any subsidiary bank of the
holding company or of the finance company or
industrial bank to be acquired is a director of a
Federal Reserve Bank or branch.
(b) a director or senior officer of the
holding company, of any subsidiary bank of the
holding company or of the finance company or
industrial bank to be acquired is a member of the
Federal Advisory Council.
(c) the Board has made a general de­
termination that another policy issue raised by the
proposal does not require Board consideration,
but nevertheless makes it inappropriate for a Re­
serve Bank to approve the proposal.
(ii) all relevant divisions of the Board’s
staff recommend approval.
(7) Under the provisions of section 4(c)(8)
of the Bank Holding Company Act (12 U.S.C.
1843(c)(8)) and section 225.4(a)(9)(iii)(a) of
Regulation Y (12 CFR 225.4(a)(9)(iii)(a)) to
approve the acquisition or, as an incident to a
bank holding company formation pursuant to sec­
tion 3(a)(1) of the Act, the retention by a bank
holding company of shares or assets of a company
that acts as insurance agent or broker in offices at
which the holding company or its subsidiaries are
otherwise engaged in business (or in an office
adjacent thereto) with respect to any insurance
sold in a community that has a population not




exceeding 5,000, if all of the following conditions
are met:
(i) the Reserve Bank could approve such
acquisition or retention under subparagraph (32)
of paragraph (f) of this section, except for the
fact that condition (iv) of that subparagraph has
not been met because one of the following policy
issues has been raised with respect to such ac­
quisition or retention:
(a) a director or senior officer of the
holding company, of any subsidiary bank of the
holding company or of the company to be ac­
quired or retained, is a director of a Federal
Reserve Bank or branch.
(b) a director or senior officer of the
holding company, of any subsidiary bank of the
holding company or of the company to be ac­
quired or retained, is a member of the Federal
Advisory Council.
(c) the Board has made a general de­
termination that another policy issue raised by
the proposal does not require Board considera­
tion, but neverthless makes it inappropriate for
a Reserve Bank to approve the proposal.
(ii) all relevant divisions of the Board’s
staff recommend approval.
(8) Under the provisions of sections 25 and
25(a) of the Federal Reserve Act and Parts 211
and 213 of this chapter (Regulations K and M),
to approve the establishment, directly or indi­
rectly, of a foreign branch or agency by a mem­
ber bank or corporation organized under section
25(a) (an “Edge” corporation) or operating un­
der an agreement with the Board pursuant to sec­
tion 25 (an “Agreement” corporation) which has
already established, or has been authorized to
establish, branches in two or more foreign coun­
tries, if all of the following conditions are met:
(i) the appropriate Reserve Bank recom­
mends approval.
(ii) all relevant divisions of the Board’s
staff recommend approval.
(iii) no significant policy issue is raised by
the proposal as to which the Board has not ex­
pressed its view.
(9) Under the provisions of sections 25 and
25(a) of the Federal Reserve Act and Parts 211
and 213 of this chapter (Regulations K and M),
to grant specific consent to the acquisition, either
directly or indirectly, by a member bank or an
Edge or Agreement corporation of stock of (i)
a company chartered under the laws of a foreign
country or (ii) a company chartered under the

5

§ 265.2

DELEGATION OF AUTHORITY

bonds, promissory notes (with a maturity of more
than one year), or similar obligations, if all of the
following conditions are met:

laws of a State of the United States that is orga­
nized and operated for the purpose of financing
exports from the United States, and to approve
any such acquisition that may exceed the limita­
tions in section 25(a) of the Federal Reserve Act
based on such a corporation’s capital and surplus,
if all of the following conditions are met:
(a) The appropriate Reserve Bank recom­
mends approval.
(b) All relevant divisions of the Board's
staff recommend approval.
(c) No significant policy issue is raised by
the proposal as to which the Board has not ex­
pressed its view.
(d) Such acquisition does not result, either
directly or indirectly, in the acquisition by such
bank or corporation of effective control of any
such company except that this condition need
not be met if (1) the company is to perform
nominee, fiduciary, or other services incidental to
the activities of a foreign branch or affiliate of
such bank or corporation, or (2) the stock is being
acquired by such bank or corporation from its
parent bank or bank holding company, or sub­
sidiary Edge or Agreement corporation, as the
case may be, and such selling parent or subsidiary
holds such stock with the consent of the Board
pursuant to Parts 211, 213, or 225 of this chapter
(Regulations K, M, and Y).
(10) Under the provisions of sections 25
and 25(a) of the Federal Reserve Act and Parts
211 and 213 of this chapter (Regulations K and
M), to permit an Edge or Agreement corporation
to exceed the limitations in § 211.9(b) and (c)
of this chapter (Regulation K),1 if all of the fol­
lowing conditions are met:
(i) the appropriate Reserve Bank recom­
mends approval.
(ii) all relevant divisions of the Board's
staff recommend approval.
(iii) no significant policy issue is raised
by the proposal as to which the Board has not
expressed its view.
(11) Under sections 25 and 25(a) of the
Federal Reserve Act and Parts 211 and 213 of
this chapter (Regulations K and M), to approve,
under section 211.4 of this chapter (Regulation
K), the issuance by an Edge or Agreement cor­
poration or a subsidiary thereof of debentures,i

(i) the appropriate Reserve Bank recom­
mends approval.
(ii) all relevant divisions of the Board’s
staff recommend approval.
(iii) no significant policy issue is raised by
the proposal as to which the Board has not ex­
pressed its view.
(12) Under the provisions of section
4(c)( 13) of the Bank Holding Company Act (12
U.S.C. 1843), and section 225.4(f) of Part 225
of this chapter (Regulation Y), to grant specific
consent to the ownership or control, either di­
rectly or indirectly, by a bank holding company
of voting shares of a company chartered under
the laws of a foreign country, if all of the follow­
ing conditions are met:
(i) the appropriate Reserve Bank recom­
mends approval.
(ii) all relevant divisions of the Board’s
staff recommend approval.
(iii) no significant policy issue is raised by
the proposal as to which the Board has not ex­
pressed its view.
(iv) such acquisition does not result,
either directly or indirectly, in the acquisition by
such bank holding company of control of any
such company (other than a company performing
nominee, fiduciary, or other banking services in­
cidental to the activities of a direct or indirect
foreign subsidiary of such corporation).
(13) Under the provisions of sections
262.2(a) and (b) of the Board’s Rules of Pro­
cedure, to extend, when appropriate, the time
period provided for public participation with re­
spect to proposed regulations of the Board of
Governors.
(14) Under the provisions of section 6621
of the Internal Revenue Code (26 U.S.C. 6621),
to determine and report to the Secretary of
Treasury or his delegate, the average predominant
prime rate quoted by commercial banks to large
businesses.
(15) To grant or deny requests for the ex­
tension of any time period provided in any notice,
order, rule or regulation of the Board relating to
the filing of information, comments, opposition,
briefs, exceptions or other matters, in connection
with any application, request or petition for the
approval, authority, determination, or permission

i S u b ject, o f cou rse, to the lim itations in sectio n 2 5 ( a )
relating to aggregate liabilities ou tsta n d in g o n debentures,
b o n d s, and p rom issory notes.




6

DELEGATION OF AUTHORITY

§ 265.2

of, or any other action by the Board sought by
any person. Notwithstanding the provisions of
section 265.3 hereof, no person claiming to be
adversely affected by any action of the Secretary
on any such request shall have the right to peti­
tion the Board or any Board member for review
or reconsideration of such action.
(16) Under the provisions of Section 11 (i) of
the Federal Reserve Act (12 U.S.C. 248(i)) to
conform references to administrative positions or
units in outstanding rules and regulations of the
Board to changes in the administrative structure
of the Board.
(17) Pursuant to the requirement of the
Privacy Act (5 U.S.C. § 552a(p)), to approve
future Annual Reports on the Privacy Act from
the Board of Governors to the Office of Manage­
ment and Budget for inclusion in the President’s
annual consolidated report to the Congress.

(5) Pursuant to the provisions of Part 261
of this chapter, to make available information of
the Board of the nature and in the circumstances
described in § 261.6(b) and § 261.7 of that Part.
(6) Pursuant to Part 263.6(d) of this chap­
ter, to designate Board staff attorneys as Board
counsel in any proceeding ordered by the Board
to be conducted in accordance with Part 263 of
this chapter.
(c)

The Director o f the Division of Banking

(or, in the Director’s
absence, the Acting Director) is authorized:
(1) Under the provisions of the seventh
paragraph of section 9 of the Federal Reserve
Act (12 U.S.C. 325), to select or to approve the
appointment of Federal Reserve Bank examiners,
assistant examiners, and special examiners.
(2) Under the provisions of the nineteenth
paragraph of section 25(a) of the Federal Re­
(b)
The General Counsel of the Board (or, in serve Act (12 U.S.C. 625) and § 211.9(e) of
this chapter (Regulation K), to require submis­
the General Counsel’s absence, the Acting Gen­
sion and publication of reports by an “Edge Act”
eral Counsel) is authorized:
corporation.
(1) Under the provisions of section 2(g) of
(3) Under the provisions of section 5 of the
the Bank Holding Company Act (12 U.S.C.
Bank Holding Company Act (12 U.S.C. 1844),
1841(g)), to determine whether a company that
after having received clearance from the Bureau
transfers shares to any of the types of transferees
of the Budget (where necessary) and in accord­
specified therein is incapable of controlling the
ance with the law of Administrative Procedure (5
transferee.
U.S.C. 553), to promulgate registration, annual
(2) Under the provisions of section 4(c)(8)
report, and other forms for use in connection
of the Bank Holding Company Act (12 U.S.C.
with the administration of such Act.
1843(c)), to determine that a company engaged
(4) Under the provisions of section 12(g)
in activities of a financial, fiduciary, or insurance
of the Securities Exchange Act (15 U.S.C.
nature falls within the exemption described
78/(g)):
therein permitting retention or acquisition of con­
(i) to accelerate the effective date of a
trol thereof by a bank holding company.
registration statement filed by a member State
(3) Under the provisions of sections
bank with respect to its securities;
1101-1103 and section 6158 of the Internal
(ii) to accelerate termination of the reg­
Revenue Code (26 U.S.C. 1101-1103 and 6158),
istration
of such a security that is no longer held
to make certifications (prior and final) for Fed­
of
record
by 300 persons; and
eral tax purposes with respect to distributions pur­
(iii) to extend the time for filing a reg­
suant to the Bank Holding Company Act.
istration statement by a member State bank.
(4) Under the f provisions of section 4(c)(8)
(5) Under the provisions of section 12(d)
of the Bank Holding Company Act (12 U.S.C.
of the Securities Exchange Act (15 U.S.C.
1843(c)(8)) and § 222.4(a) of this chapter
78/(d)), to accelerate the effective date of an
(Regulation Y), to issue an order for a hearing
application by a member State bank for registra­
to be conducted for the purpose of determining
tion of a security on a national securities ex­
whether a company engaged in activities of a fi­
change.
nancial, fiduciary, or insurance nature falls within
(6) Under the provisions of section 12(f) of
the exemption described therein permitting reten­
the Securities Exchange Act (15 U.S.C. 78/(f)),
tion or acquisition of control thereof by a bank
to issue notices with respect to an application by
holding company.




Supervision and Regulation

7

§ 265.2

DELEGATION OF AUTHORITY

a national securities exchange for unlisted trading
privileges in a security of a member State bank.
(7) Under the provisions of section 12(h)
of the Securities Exchange Act (15 U.S.C.
78/(h)), to issue notices with respect to an appli­
cation by a member State bank for exemption
from registration.
(8) Under the provisions of § 206.5(f) and
(i) of this chapter (Regulation F). to permit the
mailing of proxy and other soliciting materials by
a member State bank before the expiration of the
time prescribed therein.
(9) Under the provisions of §§ 206.41.
206.42, and 206.43 (Instructions as to Financial
Statements 9, 4, and 3, respectively) of this chap­
ter (Regulation F). to permit the omission of
financial statements from reports by a member
State bank and/or to require other financial state­
ments in addition to, or in substitution for, the
statements require therein.
(10) To exercise the functions described in
subparagraph (4) of paragraph (f) of this section
in cases in which the conditions specified therein
as prerequisites to exercise of such functions by
the Federal Reserve Banks are not present or in
which, even though such conditions are present,
the appropriate Federal Reserve Bank considers
that nevertheless it should not take action on the
member bank’s request, and to exercise the func­
tions described in subparagraphs (1), (2), and
(7) of paragraph (f) of this section in cases in
which the appropriate Federal Reserve Bank con­
siders that it should not take action to approve
the member bank’s request.
(11) Under sections 25 and 25(a) of the
Federal Reserve Act and Parts 211 and 213 of
this chaper (Regulations K and M), to approve
increases and reductions in the capita] stock and
amendments to the articles of association of a
corporation organized under section 25(a) and
additional investments by a member bank in the
stock of a corporation operating under an agree­
ment with the Board pursuant to section 25.
(12) To exercise the functions described in
subparagraphs (15) (i) and (ii) of paragraph (f);
and to exercise the functions described in subparagraph ( 15) (iii) of paragraph (f) in those
cases in which the appropriate Federal Reserve
Bank concludes that, because of unusual consid­
erations, or for other good cause, it should not
take action.
(13) Under the provisions of the seventh




paragraph of section 25 of the Federal Reserve
Act (12 U.S.C. 602), to require submission of a
report of condition respecting any foreign bank
in which a member bank holds stock acquired
under the provisions of § 213.4 of this chapter
(Regulation M).
(14) Under the twelfth paragraph of section
13 of the Federal Reserve Act (39 Stat. 754), to
permit any member bank to accept drafts or bills
of exchange drawn upon it for the purpose of
furnishing dollar exchange.
(15) Under the provisions of section 4(b)
of the Federal Deposit Insurance Act (12 U.S.C.
1814(b)), to certify to the Federal Deposit Insur­
ance Corporation that, with respect to the admis­
sion of a State-chartered bank to Federal Reserve
membership, the factors specified in section 6 of
that Act (12 U.S.C. 1816) were considered.
(16) Under section 18(c)(4) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(c)(4)),
to furnish to the Comptroller of the Currency
and the Federal Deposit Insurance Corporation
reports on competitive factors involved in a bank
merger required to be approved by one of those
agencies if each of the appropriate departments
or divisions of the appropriate Federal Reserve
Bank and the Board of Governors is of the view
that the proposed merger either would have no
adverse competitive effects or would have only
slightly adverse competitive effects, and if no
member of the Board has indicated an objection
prior to the forwarding of the report to the ap­
propriate agency.
(17) Under the provisions of section
17(A)(c)(2) of the Securities Exchange Act of
1934, as amended (15 U.S.C. 78 q - 1), to accele­
rate the effective date of a registration statement
filed by a member State bank or a subsidiary
thereof, a bank holding company, or a subsidiary
of a bank holding company which is a bank as
defined in section 3(a)(6) of that Act other than a
bank specified in clause (i) or (iii) of section
3(a)(34)(B) of that Act (15 U.S.C. 78c) with re­
spect to its transfer agent activities.
(18) Under the provisions of section 17A
(c)(3)(C) of the Securities Exchange Act of 1934,
as amended, (15 U.S.C. § 78q-1(c)(3)(C)) to with­
draw or cancel the transfer agent registration of
a member State bank or a subsidiary thereof, a
bank holding company, or a subsidiary bank of a
bank holding company that is a bank as defined
in section 3(a)(6) of the Act (other than a bank

8

DELEGATION OF AUTHORITY

§ 265.2

specified in clause (i) or (iii) of section 3(a)(34)(B)
of the Act (15 U.S.C. § 78c(3)(a)(34)(B)) that has
filed a written notice of withdrawal with the Board
or upon a finding that such transfer agent is no
longer in existence or has ceased to do business as
a transfer agent.
(19) Under the provisions of §§ 207.2(f),
220.2(e), and 221.3(d) of this chapter (Regulations
G, T, and U, respectively) to approve issuance of
the list of OTC margin stocks and to add, omit,
or remove any stock in circumstances indicating
that such change is necessary or appropriate in
the public interest.
(20) Under the provisions of § 207.4(a)(2)(ii)
of this chapter (Regulation G) to approve repay­
ments of the “deficiency” with respect to stock
option or employee stock purchase plan credit in
lower amounts and over longer periods of time
than those specified in the regulation.
(21) Pursuant to the provisions of Part 261
of this chapter, to make available reports and
other information of the Board acquired pur­
suant to Parts 207, 220, 221, and 224 (Regula­
tions G, T, U, and X) of the nature and in circum­
stances described in § 261.6(a)(2) and (3) of Part
261.
(22) Pursuant to the provisions of section
11(a) of the Federal Reserve Act (12 U.S.C.
248(a)) and sections 17(c), 17(g), and 23 of the
Securities Exchange Act of 1934 (15 U.S.C.
78q(c), 78q(g), and 78w) to issue examination or
inspection manuals, registration, report, agree­
ment, and examination forms, guidelines, instruc­
tions or other similar materials for use in connec­
tion with the administration of sections 7, 8, 15B,
and 17A(c) of the Securities Exchange Act of 1934
(15 U.S.C. 78g, 78h, 78o-4, and 78q-l).
(23) With the prior concurrence of the ap­
propriate Federal Reserve Bank and the General
Counsel of the Board, to act to refuse an applica­
tion to the Board to stay, modify, terminate or set
aside any effective cease and desist order previ­
ously issued by the Board pursuant to section 8(b)
of the Federal Deposit Insurance Act or any writ­
ten agreement between the Board or the Reserve
Bank and a bank holding company or any non­
banking subsidiary thereof or a State member
bank (12 U.S.C. § 1818(b)).

and waiting period requirements for municipal
securities principals and municipal securities
representatives under Municipal Securities Rulemaking Board Rule G-3, (ii) to grant or deny re­
quests for a determination that a natural person
or municipal securities dealer subject to a statutory
disqualification is qualified to act as a municipal
securities principal or municipal securities repre­
sentative or municipal securities dealer under
Municipal Securities Rulemaking Board Rule G-4,
and (iii) to approve or disapprove clearing ar­
rangements under Municipal Securities Rulemak­
ing Board Rule G-8, in connection with the
administration of Municipal Securities Rulemak­
ing Board rules for municipal securities dealers
for which the Board is the appropriate regulatory
agency under section 3(a)(34) of the Securities Ex­
change Act of 1934 (15 U.S.C. 78c(a)(34)). (15
U.S.C. 78w and 12 U.S.C. 248.)
(d) The Director of the Division of Federal
Reserve Bank Operations (or, in the Director’s
absence, the Acting Director) is authorized:
(1) Under the provisions of the sixteenth
paragraph of section 4 of the Federal Reserve Act
(12 U.S.C. 304), to classify member banks for
the purposes of electing Federal Reserve Bank
class A and class B directors, giving consideration
to
(i) the statutory requirement that each of
the three groups shall consist as nearly as may be
of banks of similar capitalization and
(ii) the desirability that every member
bank have the opportunity to vote for a class A
or a class B director at least once every three
years.
(2) To approve or disapprove proposed re­
modeling or renovation of existing Reserve Bank
or Branch buildings or additions to such buildings
where the cost of such remodeling, renovation or
addition will be in excess of one hundred thou­
sand dollars ($100,000), provided that the cost
of each project approved by the Director may
not be in excess of two hundred and fifty thou­
sand dollars ($250,000).
(e) The Director of the Division of Personnel
(or, in the Director’s absence, the Acting Direc­
tor) is authorized, under the provisions of the
twenty-first paragraph of section 4 of the Federal
Reserve Act (12 U.S.C. 306), to approve the ap­
pointment of assistant Federal Reserve agents
(including representatives and alternate represen­
tatives of such agents).

(24) Pursuant to section 23 of the Securities
Exchange Act of 1934 (15 U.S.C. 78w) (i) to
grant or deny requests for waiver of examination




9

§ 265.2

DELEGATION OF AUTHORITY

(f) Each Federal Reserve Bank is authorized,
as to member banks or other indicated organiza­
tions headquartered in its district or under subparagraph (25) of this paragraph as to its officers
or under paragraph (f) (34) as to its own facilities:
(1) Under the provisions of the third para­
graph of section 9 of the Federal Reserve Act
(12 U.S.C. 321), section 5155 of the Revised
Statutes (12 U.S.C. 36), and § 208.8 of this
chapter (Regulation H), to approve the establish­
ment by a State member bank of a domestic
branch if the proposed branch has been approved
by the appropriate State authority and if the Re­
serve Bank is satisfied that approval is warranted
after giving consideration to:
(i) the bank's capitalization in relation to
the character and condition of its assets and to
its deposit liabilities and other corporate responsi­
bilities, including the volume of its risk assets and
of its marginal and inferior quality assets, all con­
sidered in relation to the strength of its manage­
ment;
(ii) the ability of bank's management to
cope successfully with existing or foreseeable
problems, and to staff the proposed branch with­
out any significant deterioration in the overall
management situation;
(iii) the convenience and needs of the
community;
(iv) the competitive situation (either ac­
tual or potential);
(v) the prospects for profitable operations
of the proposed branch within a reasonable time,
and the ability of the bank to sustain the opera­
tional losses of the proposed branch until it be­
comes profitable; and
(vi) the reasonableness of bank’s invest­
ment in bank premises after the expenditure for
the proposed branch.
(2) Under the provisions of the sixth para­
graph of section 9 of the Federal Reserve Act
(12 U.S.C. 324) and the provisions of section
5199 of the Revised Statutes (12 U.S.C. 60), to
permit a State member bank to declare dividends
in excess of net profits for the calendar year
combined with the retained net profits of the pre­
ceding two years, less any required transfers to
surplus or a fund for the retirement of any pre­
ferred stock, if the Reserve Bank is satisfied that
approval is warranted after giving consideration
to:
(i) the bank’s capitalization in relation to
the character and condition of its assets and to its




deposit liabilities and other corporate responsibil­
ities, including the volume of its risk assets and
of its marginal and inferior quality assets, all
considered in relation to the strength of its man­
agement; and
(ii) the bank’s capitalization after pay­
ment of the proposed dividend.
(3) Under the provisions of the tenth para­
graph of section 9 of the Federal Reserve Act
(12 U.S.C. 328), to approve or deny applications
by State banks for waiver of the required six
months’ notice of intention to withdraw from
Federal Reserve membership.
(4) Under the provisions of the eleventh
paragraph of section 9 of the Federal Reserve Act
(12 U.S.C. 329), to permit a State member bank
to reduce its capital stock if its capitalization
thereafter will be:
(i) in conformity with the requirements
of Federal law, and
(ii) adequate in relation to the character
and condition of its assets and to its deposit liabil­
ities and other corporate responsibilities, including
the volume of its risk assets and of its marginal
and inferior quality assets, all considered in rela­
tion to the strength of its management.
(5) Under the provisions of the seventeenth
paragraph of section 9 of the Federal Reserve
Act (12 U.S.C. 334), to extend the time, for
good cause shown, within which an affiliate of a
State member bank must file reports.
(6) Under the provisions of the seventh
paragraph of section 13 of the Federal Reserve
Act (12 U.S.C. 372), to permit a member bank
to accept commercial drafts in an aggregate
amount at any one time up to 100 per cent of its
capital and surplus.
(7) Under the provisions of section 24A of
the Federal Reserve Act (12 U.S.C. 37Id), to
permit a State member bank to invest in bank
premises in an amount in excess of its capital
stock, if the Reserve Bank is satisfied that ap­
proval is warranted after giving consideration to:
(i) the bank’s capitalization in relation to
the character and condition of its assets and to its
deposit liabilities and other corporate responsibil­
ities, including the volume of its risk assets and
of its marginal and inferior quality assets, all
considered in relation to the strength of its man­
agement: And provided. That
(ii) upon completion of the proposed in­
vestment, the bank’s aggregate investment (direct
and indirect) in bank premises plus the indebted­
10

DELEGATION OF AUTHORITY

ness of any wholly-owned bank premises subsid­
iary will not exceed 40 per cent of its total capital
funds (including capital notes and debentures)
plus reserves other than valuation reserves.
(8) Under the provisions of the ninth para­
graph of section 25(a) of the Federal Reserve
Act (12 U.S.C. 615), to extend the time in which
an “Edge Act” corporation must divest itself of
stock acquired in satisfaction of a debt previously
contracted.
(9) Under the provisions of the twenty-sec­
ond paragraph of section 25(a) of the Federal
Reserve Act (12 U.S.C. 628), to extend the
period of corporate existence of an “Edge Act”
corporation.
(10) Under the provisions of section 5(a)
of the Bank Holding Company Act (12 U.S.C.
1844(a)), to extend the time within which a
bank holding company must file a registration
statement.
(11) Under the provisions of section 4(a)
of the Bank Holding Company Act (12 U.S.C.
1843(a)), to extend the time within which a bank
holding company must divest itself of interests
in nonbanking organizations.
(12) Under the provisions of section
4(c)(2) of the Bank Holding Company Act (12
U.S.C. 143(c)), to extend the time within which
a bank holding company must divest itself of
interests in a nonbanking organization acquired in
satisfaction of a debt previously contracted.
(13) Under the provisions of section 5(c)
of the Bank Holding Company Act (12 U.S.C.
1844(c)), to require reports under oath to deter­
mine whether a company is complying with the
provisions of such Act and the Board's regula­
tions promulgated thereunder.
(14) Under the provisions of § 208.11(c)
of this chapter (Regulation H), to extend the
time within which a member bank that has given
notice of intention to withdraw from membership
must surrender its Federal Reserve Bank stock
and its certificate of membership.
(15) Under the provisions of §§ 216.5(b),
216.5(d), and 216.6 of this chapter (Regulation
P), with respect to State member banks only:
(i) to require reports on security devices;
(ii) to require special reports; and
(iii) to determine, in view of the provi­
sions of §§ 216.3 and 216.4, whether security
devices and procedures are deficient in meeting
the requirements of Part 216, to determine
whether such requirements should be varied in




§ 265.2

the circumstances of a particular banking office,
and to require corrective action.
(16) Under § 208.10(a) of this chapter
(Regulation H), for good cause shown, to extend
the time for publication of reports of condition,
such extensions not ordinarily to be for more
than 10 days except in very unusual circum­
stances beyond control of the reporting bank.
(17) Under the provisions of § 207.1(b) of
this chapter (Regulation G), to approve applica­
tions for termination of registration by persons
who are registered pursuant to § 207.1(a).
(18) Under the provisions of the second
paragraph of section 25(a) of the Federal Re­
serve Act (12 U.S.C. 612), and § 211.3 of this
chapter (Regulation K), to approve amendments
to the Articles of Association of any “Edge Act”
corporation to reflect the following:
(i) any increase in the capital stock of
such corporation where all additional shares are
to be acquired by existing shareholders;
(ii) any change in the location of the
home office of such corporation within the city
where such corporation is presently located; and
(iii) any change in the number of mem­
bers of the Board of Directors of such corpora­
tion.
(19) Under § 225.4(d) of this chapter
(Regulation Y),
(i) to notify a bank holding company
that has informed it of a proposed acquisition of
a going concern that, because the circumstances
surrounding the application indicate that addi­
tional information is required or that the acquisi­
tion should be considerd by the Board, the
acquisition should not be consummated until spe­
cifically authorized by the Reserve Bank or by
the Board.
(ii) to permit a bank holding company
that has informed it of a proposed acquisition of
a going concern to make the acquisition before
the expiration of the 45-day period referred to in
that paragraph, because exigent circumstances
justify consummation of the acquisition at an
earlier time.
(20) Under § 225.4(b)(1) of this chapter
(Regulation Y), and subject to § 265.3 if a per­
son submitting adverse comments that the Re­
serve Bank has decided are not substantive files a
petition for review by the Board of that decision,
(i) to permit a bank holding company
that has furnished it with a copy of a duly pub­

DELEGATION OF AUTHORITY

§ 265.2

holding company to purchase shares of any bank
involved in the proposal:
(a) an agreed plan for amortization of
the debt within a reasonable time exists, such
period normally not exceeding 12 years.
(b) the interest rate on any loan to
purchase the bank shares will be comparable with
other stock collateral loans by the lender to per­
sons of comparable credit standing.
(c) no compensating balances, spe­
cifically attributable to the loan, will be deposited
in the lending institution and the amount of any
correspondent account which the proposed sub­
sidiary bank will maintain with the lending insti­
tution should not exceed the amount necessary to
compensate the lending bank for correspondent
services rendered by it to the proposed subsidiary
bank(s).
(vii) the Reserve Bank determines that
the managerial and financial resources, including
the equity to debt relationships, of Applicant, it’s
existing subsidiaries, and any proposed subsidiary
bank, are adequate, or will be adequate within a
reasonable period of time after consummation of
the proposal, and any debt service requirements
to which the holding company may be subject
are such as to enable it to maintain the capital
adequacy of any proposed subsidiary bank in the
foreseeable future.
(viii) if Applicant or any of Applicant’s
existing or proposed nonbanking subsidiaries com­
pete in the same geographic and product market
as any proposed subsidiary bank, the resulting
organization will control no more than 10 per
cent of that product or service line after consum­
mation of the proposal.
(ix) total nonbank gross revenues of Ap­
plicant and its subsidiaries do not exceed 20 per
cent of total operating income of the proposed
banking subsidiaries.
(x) if Applicant engages, or is to engage,
in nonbanking activities requiring the Board’s ap­
proval under section 4(c) (8) of the Act, the Re­
serve Bank must also have delegated authority to
approve the section 4(c) (8) activities.
(xi) if the proposal involves the acquisi­
tion of the controlling stock of only one bank,
and any debt is incurred by the holding company
to purchase shares of the bank, the amount of
the loan does not exceed 75 per cent of the pur­
chase price of the shares of the proposed sub­
sidiary bank.

lished notice of a proposal to engage de novo in
activities specified in § 225.4(a) (or retain shares
in a company established de novo and engaging in
such activities) if its evaluation of the considera­
tions specified in section 4(c) (8) of the Bank
Holding Company Act leads it to conclude that
the proposal can reasonably be expected to pro­
duce benefits to the public.
(ii) to notify a bank holding company
that has furnished it with a duly published notice
of the kind described in subdivision (i) of this
subparagraph that the proposal should not be con­
summated until specifically authorized by the Re­
serve Bank or by the Board or that the proposal
should be processed in accordance with the pro­
cedures of § 225.4(b) (2).
(iii) to permit a bank holding company
that has furnished it with a duly published notice
of the kind described in subdivision (i) of this
subparagraph to consummate the proposal before
the expiration of the 45-day period referred to in
§ 225.4(b)(1), because exigent circumstances
justify consummation at an earlier time.
(21) Under § 225.4(c)(2) of this chapter
(Regulation Y) to permit or stay a proposed de
novo modification or relocation of activities en­
gaged in by a bank holding company on the same
basis as de novo proposals under subparagraph
(20) of this paragraph.
(22) Under the provisions of section
3(a)(1) of the Bank Holding Company Act (12
U.S.C. 1842), to approve the formation of a bank
holding company through the acquisition by a
company of a controlling interest in the voting
shares of one or more banks, if all of the follow­
ing conditions are met:
(i) no member of the Board has indicated
an objection prior to the Reserve Bank’s action.
(ii) all relevant departments of the Re­
serve Bank recommended approval.
(iii) no substantive objection to the pro­
posal has been made by a bank supervisory
authority, the United States Department of Jus­
tice, or a member of the public.
(iv) no significant policy issue is raised by
the proposal as to which the Board has not ex­
pressed its view.
(v) considerations relating to the con­
venience and needs of the communities to be
served are consistent with or lend weight toward
approval of the application.
(vi) in the event any debt incurred by the




12

§ 265.2

DELEGATION OF AUTHORITY

(a) an agreed plan for amortization of
the debt within a reasonable time exists, such
period normally not exceeding 12 years.
(b) the interest rate on any loan to
purchase the bank shares will be comparable with
other stock collateral loans by the lender to per­
sons of comparable credit standing.
(c) no compensating balances, spe­
cifically attributable to the loan, will be deposited
in the lending institution and the amount of any
correspondent account which the proposed sub­
sidiary bank will maintain with the lending insti­
tution should not exceed the amount necessary
to compensate the lending bank for correspondent
services rendered by it to the proposed subsidiary
bank.
(vii) the Reserve Bank determines that
the managerial and financial resources, including
the equity to debt relationships, of Applicant, its
existing subsidiaries, and any proposed subsidiary
bank, are adequate, or will be adequate within a
reasonable period of time after consummation of
the proposal, and any debt service requirements
to which the holding company may be subject
are such as to enable it to maintain the capital
adequacy of any existing or proposed subsidiary
bank in the foreseeable future.
(viii) if Applicant or any of Applicant’s
existing or proposed nonbanking subsidiaries com­
pete in the same geographic and product market
as any proposed subsidiary, the resulting organiza­
tion will not control more than 10 per cent of
that product or service line after consummation
of the proposal.
(ix) total nonbank gross revenues of Ap­
plicant and its subsidiaries do not exceed 20 per
cent of total operating income of the company’s
existing or proposed bank subsidiaries.
(x) if Applicant engages, or is to engage,
in nonbanking activities requiring the Board’s ap­
proval under section 4(c) (8) of the Act, the Re­
serve Bank must also have delegated authority to
approve the section 4(c) (8) activities.
(xi) in the event any debt is incurred by
Applicant to purchase shares of the bank, the re­
sulting total acquisition debt of the holding com­
pany will not exceed 20 per cent of the company’s
equity capital accounts after consummation of the
proposal.
(xii) Applicant is not one of the dominant
banking organizations in the State, and, unless
the proposed subsidiary is a proposed new bank,
Applicant will control no more than 15 per cent

(xii) if the proposal involves the acquisi­
tion of the controlling stock of more than one
bank, the following additional conditions must be
met:
(a) in the event any debt is incurred by
the holding company to purchase shares of any
proposed subsidiary bank(s), the total amount of
the debt does not exceed 20 per cent of the equity
capital accounts of the holding company.
(b) the Applicant will control no more
than 15 per cent of total deposits in commercial
banks in the State.
(xiii) neither Applicant nor the bank(s)
to be acquired has entered into or proposes to
enter into any agreement with any director, of­
ficer, employee or shareholder of the bank(s)
that contains any condition that limits or restricts
in any manner the right of such persons to com­
pete with Applicant or any of Applicant’s existing
or proposed subsidiaries.
(23) Under the provisions of section
3(a)(3) of the Bank Holding Company Act (12
U.S.C. 1842), to approve the acquisition by a
bank holding company of additional shares in a
bank that are to be acquired through exercise of
rights received, on a pro rata basis, by the bank’s
shareholders.
(24) Under the provisions of section
3(a) (3) of the Bank Holding Company Act (12
U.S.C. 1842), to approve the acquisition by a
bank holding company of a controlling interest in
the voting shares of an additional bank, if all of
the following conditions are met:
(i) no member of the Board has indicated
an objection prior to the Reserve Bank’s action.
(ii) all relevant departments of the Re­
serve Bank recommend approval.
(iii) no substantive objection to the pro­
posal has been made by a bank supervisory
authority, the United States Department of Jus­
tice, or a member of the public.
(iv) no significant policy issue is raised
by the proposal as to which the Board has not
expressed its view.
(v) considerations relating to the con­
venience and needs of the communities to be
served are consistent with or lend weight toward
approval of the application.
(vi) in the event any debt is incurred by
the holding company to purchase shares of any
bank involved in the proposal:




13

DELEGATION OF AUTHORITY

§ 265.2

assets and to its existing and prospective deposit
liabilities and other corporate responsibilities and
its future earnings prospects;
(iii) the convenience and needs of the
community to be served by the bank; and
(iv) whether its corporate powers are con­
sistent with the purposes of the Federal Reserve
Act and the Federal Deposit Insurance Act.
(27) Under the provisions of section 5(c)
of the Bank Holding Company Act, as amended
(12 U.S.C. 1844(c)), to grant to a bank holding
company a 90-day extension of time in which to
file an annual report; and for good cause shown
an additional extension of time, not to exceed 90
days, may be granted.
(28) Under the provisions of section 18(c)
of the Federal Deposit Insurance Act (12 U.S.C.
1828(c)), to approve a merger, consolidation,
acquisition of assets or assumption of liabilities,
where the resulting bank is a State member bank,
if all of the following conditions are met:
(i) no member of the Board has indicated
an objection prior to the Reserve Bank’s action.
(ii) all relevant departments of the Re­
serve Bank recommended approval.
(iii) no substantive objection to the pro­
posal has been made by a bank supervisory au­
thority, the United States Department of Justice,
or a member of the public.
(iv) no significant policy issue is raised
by the proposal as to which the Board has not
expressed its view.
(v) if the banks do not have offices in the
same market, the bank to be acquired has no
more than $25 million in total deposits or con­
trols no more than 15 per cent of the total de­
posits 2* in commercial banks in the market.
(vi) if the banks compete in the same
banking market, the resulting bank will control no
more than 10 per cent of total deposits :i in com­
mercial banks in the market.
(vii) neither of the merging or consolidat­
ing banks is a dominant banking organization in
the State and the resulting institution will control
no more than 15 per cent of the total deposits in

of the total deposits in commercial banks in the
State after consummation of the proposal.
(xiii) if the bank to be acquired is an ex­
isting bank and if no banking offices of Appli­
cant’s existing subsidiary bank are located in the
same market as the proposed subsidiary, the pro­
posed subsidiary has no more than $25 million in
total deposits or controls no more than 15 per
cent of deposits in commercial banks in the mar­
ket.
(xiv) if the bank to be acquired is an
existing bank and if any of Applicant’s existing
subsidiary banks compete in the same market as
the proposed subsidiary. Applicant will control no
more than 10 per cent of total deposits in com­
mercial banks in the market after consummation.
(xv) if the bank to be acquired is a pro­
posed new bank, bank subsidiaries of Applicant
will not hold in the aggregate more than 20 per
cent of the total deposits in commercial banks in
the relevant market area and Applicant will not
be one of the dominant banking organizations in
the State.
(xvi) Applicant has a proven record of
furnishing to its subsidiaries, when needed, special
services, management, capital funds and general
guidance.
(xvii) neither Applicant nor the bank to
be acquired has entered into or proposes to enter
into any agreement with any director, officer,
employee or shareholder of the bank that contains
any condition that limits or restricts in any man­
ner the right of such persons to compete with
Applicant or any of Applicant’s existing or pro­
posed subsidiaries.
(25) To set the salaries of its officers below
the level of Senior Vice Presidents (Salary Group
A), excluding the General Auditor, within officer
salary ranges approved and guidelines subse­
quently issued by the Board of Governors.
(26) Under the provisions of the first para­
graph of section 9 of the Federal Reserve Act
(12 U.S.C. 325) to approve applications for
membership in the Federal Reserve System if the
Reserve Bank is satisfied with respect to each of
the following criteria:
(i) the financial history and condition of
the applying bank and the general character of its
management;
(ii) the adequacy of its capital structure
in relation to the character and condition of its




2 I f eith er o f the p ro p o n e n t b an ks is a subsid iary o f a
h o ld in g co m p a n y and the parent c o m p a n y has a n oth er
b an k subsidiary o p e ra tin g in the m arket o f the b a n k to
be acq u ired , d ep osits o f such o ffice s sh ou ld b e in clu d e d
in the co m p u ta tio n o f m arket shares.
See fo o t n o t e 2, a b o v e .

14

DELEGATION OF AUTHORITY

§ 265.2

commercial banks in the State after consumma­
tion of the proposal.4
(viii) the Reserve Bank determines that
the managerial and financial resources, including
the equity capital accounts of the resulting bank,
are adequate, or will be adequate within a reason­
able period of time after the proposal is con­
summated.
(ix) considerations relating to the con­
venience and needs of the communities to be
served are consistent with, or lend weight toward,
approval of the application.
(x) no bank involved in this proposal has
entered into or proposes to enter into any agree­
ment with any director, officer, employee or
shareholder of either bank that contains any con­
dition that limits or restricts in any manner the
right of such persons to compete with the result­
ing institution.
(29) Under the provisions of section 3(a)
of the Bank Holding Company Act (12 U.S.C.
1842), to approve by a letter of notification with­
out compliance with section 262.3(h) of the
Board’s Rules of Procedure, the retention of
shares of bank stock acquired in a fiduciary
capacity (with sole voting rights) for a two-year
period from the date of such acquisition, pro­
vided that the Applicant undertakes uncondition­
ally to dispose of such shares or its sole discre­
tionary voting rights with respect to such shares
within two years from the date of such acquisi­
tion.
(30) Under the provisions of section
3(a)(5) of the Bank Holding Company Act (12
U.S.C. 1842), to approve the merger or consoli­
dation of a bank holding company with any other
bank holding company, if all of the following
conditions are met:
(i) no member of the Board has indicated
an objection prior to the Reserve Bank’s action.
(ii) all relevant departments of the Re­
serve Bank recommended approval.
(iii) no substantive objection to the pro­
posal has been made by a bank supervisory
authority, the United States Department of Jus­
tice, or a member of the public.
(iv) no significant policy issue is raised

by the proposal as to which the Board has not
expressed its view.
(v) considerations relating to the con­
venience and needs of the communities to be
served are consistent with or lend weight toward
approval of the application.
(vi) in the event any debt is incurred by
the resulting or surviving holding company to
effect the merger or consolidation:
(a) an agreed plan for amortization of
the debt within a reasonable time exists, such
period normally not exceeding 12 years.
(b) the interest rate on any loan in­
volved will be comparable with other stock col­
lateral loans by the lender to borrowers of com­
parable credit standing.
(c) no compensating balances, spe­
cifically attributable to the loan, will be deposited
in the lending institution and the amount of any
correspondent account which the subsidiary banks
of the resulting or surviving company will main­
tain with the lending institution should not exceed
the amount necessary to compensate the lending
bank for correspondent services rendered by it to
the depositing bank(s).
(d) the total acquisition of the re­
sulting or surviving company will not exceed 20
per cent of such company’s equity capital ac­
counts after consummation of the proposal.
(vii) the Reserve Bank determines that
the managerial and financial resources, including
the equity to debt relationships, of the merging or
consolidating companies, and their existing sub­
sidiaries, are adquate, or will be adequate within
a reasonable period of time after consummation
of the proposal, and any debt service require­
ments to which the resulting or surviving com­
pany may be subject are such as to enable it to
maintain the capital adequacy of any existing or
proposed subsidiary bank in the foreseeable fu­
ture.
(viii) if either of the merging or con­
solidating companies or any of their subsidiaries
compete in the same geographic and product
market as the other merging or consolidating
company or any of its subsidiaries, the resulting
or surviving organization will not control more
than 10 per cent of that product or service line
after consummation of the proposal.
(ix) if the merging or consolidating bank
holding companies do not have subsidiary bank­
ing offices in the same market, the resulting or
surviving bank holding company will not acquire

4 I f either o f the p rop on en t ban ks is a subsidairy o f a
h o ld in g co m p a n y , the d ep osits o f the oth er subsidiary
ban ks o f the h o ld in g co m p a n y sh ou ld b e in clu d ed in
determ in in g w hether the resulting institution will co n tr o l
m o re than 15 per cent o f the total d ep osits in c o m m e r­
cial b an ks in the State.




15

§ 265.2

DELEGATION OF AUTHORITY

a subsidiary bank with more than $25 million in
(i) no member of the Board has indicated
deposits or with more than 15 per cent of the
an objection prior to the Reserve Bank’s action.
total deposits in commercial banks in the market.
(ii) Applicant does not hold shares of a
subsidiary finance company or subsidiary industrial
(x) if any subsidiary bank(s) of either of
bank or directly engages in such activities itself
the merging or consolidating companies com­
pursuant to § 4(a) (2) of the Act which may not
petes in the same market as any subsidiary
be retained or engaged in beyond December 31,
bank(s) of the other merging or consolidating
1980 without Board approval.
company, the resulting or surviving company will
(iii) all relevant departments of the Re­
control no more than 10 per cent of total deposits
serve Bank recommend approval.
in commercial banks in the market after con­
(iv) no substantive objection to the pro­
summation of the proposal.
posal has been made by a bank supervisory au­
(xi) neither merging nor consolidating
thority, the United States Department of Justice,
company is one of the dominant banking orga­
or a member of the public.
nizations in the State, and the resulting or surviv­
(v) no significant policy issue is raised by
ing company will control no more than 15 per
the proposal as to which the Board has not ex­
cent of total deposits in commercial banks in the
pressed its view.
State after consummation of the proposal.
(vi) each office of Applicant’s existing7
(xii) total nonbank gross revenues of the
and proposed s subsidiary banks, subsidiary indus­
merging or consolidating companies and their
trial banks and subsidiary finance companies and
subsidiaries do not exceed 20 per cent of the total
of Applicant (if Applicant directly engages in such
operating income of the merging or consolidating
activities) is 25 miles or more distant (in a straight
companies’ bank subsidiaries.
line) from each office of the finance company or
(xiii) if either of the merging or consoli­
industrial bank to be acquired.
dating companies engages, or is to engage, in
(vii) (a) the maximum in assets of finance
nonbanking activities requiring the Board’s ap­
companies
and industrial banks acquired under
proval under section 4(c) (8) of the Act, the Re­
delegated authority in any calendar year 9 does not
serve Bank must also have delegated authority to
exceed $15 million; and
approve the section 4(c) (8) activities.
(b) the maximum size in assets of the
(xiv) Applicant has a proven record of fur­
finance company or industrial bank to be acquired
nishing to its subsidiaries, when needed, special
does not exceed $5 million. (Exception: The maxi­
services, management, capital funds and general
mum size in assets of the finance company or
guidance.
industrial bank to be acquired is $15 million if the
(xv) neither bank holding company in­
aggregate assets of Applicant’s existing subsidiary
volved in this proposal nor any of the subsidiary
finance companies and industrial banks 10 and of•
banks of either bank holding company involved in
this proposal has entered into or proposes to enter
into any agreement with any officer, director, em­
•
r> A finance c o m p a n y is d efin ed , fo r p u rp oses o f this
regulation, as a co n c e r n w h ich engages in co n su m e r
ployee or shareholder of the bank(s) involved in
finance, sales fin a n ce a n d /o r se co n d m o rtga ge activities.
this proposal that contains any condition that
T h e a cq u isition o f m o re than o n e separately in co r p o ra te d
c o m p a n y w hen such co m p a n ie s are part o f an identifiable
limits or restricts in any manner the right of such
unit sh o u ld be p ro ce sse d u n d er a single a cq u isition
person to compete with the resulting or surviving
a p p lica tion .
company or any of its existing or proposed sub­
A n industrial ban k is a S tate-chartered institution
w h ich p rov id es co n su m e r credit and a cce p ts lim ited types
sidiaries.
o f d ep osits; it d o e s n o t b o th a cce p t d em a n d d ep osits and
(31)
Under the provisions of § 4(c)(8) ofm ake co m m e rcia l loans. T h e term “ industrial b a n k ” also
e n com p a sses M o r ris P lan ban ks f o r p u rp oses o f this
the Bank Holding Company Act (12 U.S.C. 1843
regulation.
(c)(8)) and § § 225.4(a)(1), (2), (3) and (9) (ii)
" T h e defin ition o f an existing subsid iary also includ es,
of Regulation Y (12 CFR 225.4(a)(1), (2), (3)
fo r pu rp oses o f this regu la tion , a b an k o r c o m p a n y fo r
w hich the a cq u isition has b e e n a p p ro v e d b y the F ederal
and (9) (ii)), to approve the acquisition by a bank
R eserve S ystem but not yet co n su m m a ted .
holding company of an interest in a finance com­
s A p ro p o s e d subsidiary is d efined fo r pu rp oses o f this
regulation as a b an k o r c o m p a n y fo r w h ich an a p p lica ­
pany 5 or an industrial bank,'1whether by acquisi­
tion fo r a cq u isition has b een subm itted to the F ed era l
tion of shares or assets, provided that the following
R eserve System .
conditions are met:
9 F o r the yea r 1974, the m ax im u m figure is $8 m illion .




16

DELEGATION OF AUTHORITY

§ 265.2

the finance company or industrial bank to be
Act, the retention by a bank holding company of
acquired do not exceed $50 million.)
shares or assets of a company that acts as insur­
ance agent or broker in offices at which the hold­
(viii) total assets of the finance company
ing company or its subsidiaries are otherwise
or industrial bank to be acquired will not exceed
engaged in business (or in an office adjacent
10 per cent of the total consolidated assets of
thereto) with respect to any insurance sold in a
Applicant after consummation.
community that has a population not exceeding
(ix) the sale of credit-related insurance by
5,000, provided that the following conditions are
the finance company or industrial bank to be ac­
met:
quired is limited to the sale, under individual or
(i) no member of the Board has indicated
group policies, of credit life insurance,11 credit
an objection prior to the Reserve Bank’s action.
accident and health insurance, and property dam­
(ii) all relevant departments of the Re­
age insurance protecting collateral.12
serve Bank recommend approval.
(x) the activities of the firm to be ac­
(iii) no substantive objection to the pro­
quired are clearly permissible under § 4(c) (8) of
posal has been made by a bank supervisory au­
the Act and § § 225.4(a) (1), (2), (3) and (9)
thority, the United States Department of Justice,
(ii) of Regulation Y.
or a member of the public.
(xi) neither Applicant, Applicant’s sub­
sidiaries, nor the finance company or industrial
(iv) no significant policy issue is raised by
bank to be acquired has entered into or proposes
the proposal as to which the Board has not ex­
to enter into any agreement with any director, offi­
pressed its view.
cer, employee or shareholder of the finance com­
(v) neither Applicant, Applicant’s subsid­
pany or industrial bank that contains any condi­
iaries, nor the company to be acquired has en­
tion limiting or restricting in any manner the right
tered into or proposes to enter into any agreement
of such person to compete with Applicant or any
with any director, officer, employee or share­
of Applicant’s existing or proposed subsidiaries.
holder of the company that contains any condi­
(xii) the Reserve Bank determines that
tion that limits or restricts in any manner the
consummation of the proposal can reasonably be
right of such person to compete with applicant or
expected to result in benefits to the public, such
any of applicant’s existing or proposed subsidi­
as greater convenience, increased competition, or
aries.
gains in efficiency, that outweigh possible adverse
(vi) the Reserve Bank determines that
effects, such as undue concentration of resources,
consummation of the proposal can reasonably be
decreased or unfair competition, conflicts of in­
expected to result in benefits to the public, such
terests, or unsound banking practices.
as greater convenience, increased competition, or
(32)
Under the provisions of § 4(c) (8) ofgains in efficiency, that outweigh possible adverse
the Bank Holding Company Act (12 U.S.C. 1843
effects, such as undue concentration of resources,
(c) (8)) and §225.4(a) (9) (iii) (a) of Regulation
decreased or unfair competition, conflicts of in­
Y (12 CFR 225.4(a) (9) (iii) (a)) to approve the
terests, or unsound banking practices.
acquisition or, as an incident to a bank holding
(33) Under the provisions of § 3(a)(3) of the
company formation pursuant to § 3(a)(1) of the*I
Bank Holding Company Act (12 U.S.C. § 1842
(a)(3)), to approve the acquisition by any bank
holding company of additional voting shares of a
io I f A p p lica n t itself d irectly engages in fin a n ce c o m ­
bank in which such bank holding company owns
p a n y o r industrial ban k activities, the assets related to
such activities sh ou ld b e in clu d ed in a d eterm in ation o f
25 per cent or more of any class of voting secu­
aggregate assets.
rities,
if the proposal generally is in conformity
' i A p p lica tio n s in v olv in g level term credit life insurance
with the conditions specified in section 265.2(f)(24)
m ay n ot b e a cted u p o n b y the R eserve B ank un der d ele­
gated authority.
of this part. (12 U.S.C. 248(k) and 12 U.S.C.
I 2 I f a fin a n ce co m p a n y o r industrial b a n k otherw ise
1844(b)).
fa llin g within these gu idelines has a subsidiary engaged
in the un derw riting, as reinsurer, o f credit life and credit
(34) Under the provisions of sections 3 and
a ccid en t and health insurance in co n n e ctio n with exten­
1 lj of the Federal Reserve Act (12 U.S.C. § 521
sion s o f credit b y the fin a n ce co m p a n y o r industrial ban k
and 248(j)), to undertake remodeling, renovation
o r if a fin a n ce co m p a n y o r industrial ban k acts as agent
f o r the sale o f types o f credit-rela ted insurance oth er than
of or addition to its existing buildings or those of
designated herein, the a p p lica tion m ay n ot be acted u p on
its branches provided the expenditure for such
b y the R eserve Bank un d er delegated authority.




17

§ 265.2

DELEGATION OF AUTHORITY

(iv)
section 805 of the Civil Rights Act of
1968 (42 U.S.C. 3605); and rules and regulations
issued thereunder.
(2) Pursuant to sections 123 and 171(b) of
the Truth in Lending Act (15 U.S.C. § § 1633 and
1666j) and the Board’s Regulation Z, 12 C.F.R.
§ 226.12, to grant, but not deny or revoke, exemp­
tions to States from the requirements of Chapters
2 and 4 of the Truth in Lending Act (15 U.S.C.
§ § 1631-1644 and 1666), where State law im­
poses substantially similar requirements and there
is adequate provision for enforcement.
(3) Pursuant to section 703(b) of the Con­
sumer Credit Protection Act (15 U.S.C. 1691 b(b)),
to call meetings of and consult with the Consumer
Advisory Council established under that section,
to approve the agenda for such meetings, and to
accept any resignation from Consumer Advisory
Council members.
(i) The Secretary of the Federal Open Market
Committee (or, in his absence, the Deputy Secre­
tary) is authorized:
To approve for inclusion in the Board’s an­
nual report to Congress records of policy actions
of the Federal Open Market Committee.
(j) The Director of the Division of Federal Re­
serve Bank Examinations and Budgets (or, in the
Director’s absence, the Acting Director) is au­
thorized:
(1) Under the provisions of the third para­
graph of section 16 of the Federal Reserve Act
(12 U.S.C. 413), to apportion credit among the
Reserve Banks for unfit notes that are destroyed,
giving consideration to the net number of notes of
each denomination that were issued by each Re­
serve Bank during the preceding calendar year.
(2) Under the provisions of §§ 216.5(b),
216.5(d), and 216.6 of this chapter (Regulation P),
with respect to Federal Reserve Banks and
branches
(i) to require reports on security devices;
(ii) to require special reports; and
(iii) to determine, in view of the provi­
sions of §§ 216.3 and 216.4, whether security
devices and procedures are deficient in meeting
the requirements of Part 216, to determine whether
such requirements should be varied in the circum­
stances of a particular banking office, and to re­
quire corrective action.
(3) To approve or disapprove supplementary
budget requests and special incentive programs to
improve operations or reduce costs, provided that
the Board has previously approved the budget of

purpose does not exceed one hundred thousand
dollars ($100,000) within a single budget year.
(35) Under § 213.4(a) of this chapter (Reg­
ulation M) to extend the time in which a member
bank must divest itself of stock or other evi­
dences of ownership in a foreign bank acquired in
satisfaction of a debt previously contracted.
(36) With the prior approval of both the
Director of the Board’s Division of Banking
Supervision and Regulaton and the General Coun­
sel of the Board, to enter into a written agree­
ment with a bank holding company or any non­
banking subsidiary thereof or with a State mem­
ber bank concerning the correction of an unsafe
or unsound practice in conducting the business of
such bank holding company, nonbanking sub­
sidiary or State member bank and concerning
the correction of any violation of law, rule or
regulation incident to such an unsafe or unsound
practice. (12 U.S.C. 248(a), 321, 324, 325, 330,
1844; 12 CFR § 208.8).
(g) The Director of the Division of Interna­
tional Finance (or, in the Director’s absence, the
Acting Director) is authorized, under the provi­
sions of the sixth paragraph of section 14 of the
Federal Reserve Act (12 U.S.C. 358) to approve
the establishment of foreign accounts with the
Federal Reserve Bank of New York.
(h) The Director of the Division of Consumer
Affairs (or, in the Director’s absence, the Acting
Director) is authorized:
(1) Pursuant to the provisions of section
11(a) of the Federal Reserve Act (12 U.S.C.
248(a)), sections 108(b), 621(c), and 704(b) of
the Consumer Credit Protection Act (15 U.S.C.
1607(b), 1681 s(c) and 1691 c(b)), section 305(c)
of the Home Mortgage Disclosure Act (12 U.S.C.
2804(c)), section 18(f)(3) of the Federal Trade
Commission Act (15 U.S.C. 57a(f)(3)), and sec­
tion 808(c) of the Civil Rights Act of 1968 (42
U.S.C. 3608(c)), to issue examination or inspec­
tion manuals, report, agreement, and examina­
tion forms, guidelines, instructions or other simi­
lar materials for use in connection with
(i) sections 1 through 709 (excluding sec­
tions 201 through 500) of the Consumer Credit
Protection Act (15 U.S.C. 1601-1691 f),
(ii) sections 301 through 310 of the Home
Mortgage Disclosure Act (12 U.S.C. 2801-2809),
(iii) sections 18(f)(l)-(3) of the Federal
Trade Commission Act (15 U.S.C. 57a(f)(l )-(3)),
and




18

DELEGATION OF AUTHORITY

§ 265.2

view is requested by a member of the Board
either on his own initiative or on the basis of a
petition for review by any person claiming to be
adversely affected by the action. Any such petition
for review must be received by the Secretary of
the Board not later than the fifth day after the
date of such action. Notice of any such review
shall be given to the person with respect to
whom such action was taken and be received by
such person not later than the close of the tenth
day following the date of such action. Upon
receipt of such notice, such person shall not pro­
ceed further in reliance upon such action until
such person is notified of the outcome of review
thereof by the Board.

the requesting Reserve Bank and provided that
the supplemental request adheres to the Board’s
general expense guidelines and such guidelines as
the Board may have imposed in approving the Re­
serve Bank’s budget and provided that the amount
approved by the Director may not exceed in any
budgetary year one hundred thousand dollars
($100,000) for each Reserve Bank and seven hun­
dred fifty thousand dollars ($750,000) for all
Reserve Banks in the System.
SECTION 265.3—REVIEW OF ACTION
AT DELEGATED LEVEL
Any action taken at a delegated level shall be
subject to review by the Board only if such re­




19