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Federal Deposit Insurance Corporation

Division of Supervision

550 17th Street NW, Washington, DC 20429

Management Official Interlocks
August 17, 1998



Proposed Amendments to Management Official Interlocks Rule


The Federal Deposit Insurance Corporation's (FDIC) Board of Directors has proposed revising
the FDIC's rule on management official interlocks. Comments on the proposal, which is
attached, are due by October 13, 1998.


The amendments provide an exemption from the general prohibition against any management
interlock between two depository institutions, depository holding companies or their affiliates
located in a relevant metropolitan statistical area (RMSA) or other community if their combined
share of the total deposits in the RMSA or community is 20 percent or less.
Another provision reflects a statutory change that prohibits management officials of depository
organizations with total assets of $2.5 billion from serving as management officials of
unaffiliated depository organizations with assets exceeding $1.5 billion. These thresholds have
been raised from $1 billion and $500 million, respectively.
The proposed rule would also create a general exemption that would allow an otherwiseprohibited management interlock if dual service would not result in a monopoly or substantial
lessening of competition and would not otherwise threaten safety and soundness. Certain
categories of depository institutions would be entitled to a rebuttable presumption under the
exemption that the interlock would not result in a monopoly or a substantial lessening of
competition. These categories of institutions are: newly chartered organizations; depository
institutions deemed to be "troubled" (in danger of default); organizations in low- or moderateincome areas; and organizations controlled or managed by minorities or women.


For further information about the proposed rule, please call Mark Mellon, Counsel in the Legal
Division, at 202-898-3854 or Curtis Vaughn, Examination Specialist in the Division of
Supervision, at 202-898-6759.
Nicholas J. Ketcha Jr.


Federal Register: August 11,1998 (Volume 63, Number 154)
Distribution: FDIC-Supervised Institutions (Commercial and Savings)
NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's
Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (800-2766003 or (703) 562-2200).