Full text of International Banking Act of 1978

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

PUBLIC LAW 95-369—SEPT. 17, 1978

Public Law 95-369
95th Congress

92 STAT. 607

An Act

To provide for Federal regulation of participation by foreign banks in domestic
financial markets.

Sept. 17, 1978
[H.R. 10899]

Be it eTiacted iy the Senate aind Hcyase of Representatives of the
International
United States of America in Congress assembled,

Banking Act
of 1978.
12 u s e 3101
SECTION 1. (a) This Act may be cited as the "International Banking note.
SHORT TITLE; DEFINITIONS AND RULES OF CONSTRUCTION

Act of 1978".
12 u s e 3101.
(b) For the purposes of this Act—
(1) "agency" means any office or any place of business of a
foreign bank located in any State of the United States at which
credit balances are maintained incidental to or arising out of the
exercise of banking powers, checks are paid, or money is lent but
at which deposits may not be 'accepted from citizens or residents
of the United States;
(2) "Board" means the Board of Governors of the Federal
Reserve System;
(3) "branch" means any office or any place of business of a
foreign bank located in any State of the United States at which
deposits are received;
(4) "Comptroller" means the Comptroller of the Currency;
(5) "Federal agency" means an agency of a foreign bank
established and operating under section 4 of this Act;
(6) "Federal branch" means a branch of a foreign bank established and operating under section 4 of this Act;
(7) "foreign bank" means any company organized under the
laws of a foreign country, a territory of the United States, Puerto
Rico, Guam, American Samoa, or the Virgin Islands, which
engages in the business of banking, or any subsidiary or affiliate,
organized under such laws, of any such company. For the purposes of this Act the term "foreign bank" includes, without
limitation, foreign commercial banks, foreign merchant banks
and other f o r e i ^ institutions that engage in banking activities
usual in connection with the business of banking in the countries
where such foreign institutions are organized or operating;
(8) "foreign country" means any country other than the
United States, and includes any colony, dependency, or possession of any such country;
(9) "commercial lending company" means any institution,
other than a bank or an organization operating under section 25
of the Federal Reserve Act, organized under the laws of any
State of the United States, or the District of Columbia which
maintains credit balances incidental to or arising out of the exercise of banking powers and engages in the business of making
commercial loans;
(10) "State" means any State of the United States or the District of Columbia;
(11) "State agency" means an agency of a foreign bank established and operating under the laws of any State;

92 STAT. 608

12USCI841.

PUBLIC LAW 95-369—SEPT. 17, 1978
(12) "State branch" means a branch of a foreign bank established and operating under the laws of any State;
(13) the terms "bank", "bank holding company", "company",
"control", and "subsidiary" have the same meanings assigned to
those terms in the Bank Holding Company Act of 1956, and the
terms "controlled" and "controlling" shall be construed consistently with the term "control" as defined in section 2 of the
Bank Holding Company Act of 1956; and
(14) "consolidated" means consolidated in accordance with
generally accepted accounting principles in the United States
consistently applied.
DIRECTORS OF NATIONAL BANKS

SEC. 2. Section 5146 of the Kevised Statutes (12 U.S.C. 72) is
amended by striking out the period at the end of the first sentence and
adding the following new provision: ", except that in the case of an
association which is a subsidiary or affiliate of a foreign bank, the
Comptroller of the Currency may in his discretion waive the requirement of citizenship in the case of not more than a minority of the total
number of directors.".
EDGE ACT CORPORATIONS

12 use 611a
oote.
611 6^1

Effective date.

^
12 use 6Ila.

S E C 3. (a) I t is the purpose of this section to eliminate or modify
provisions in section 25(a) of the Federal Eeserve Act that (1) discriminate against foreign-owned banking institutions, (2) disadvantage or unnecessarily restrict or limit corporations organized under
section 25(a) of the Federal Reserve Act in competing with foreignowned banking institutions in the United States or abroad or (3)
impede the attainment of the Congressional purposes set forth in section 26(a) of the Federal Reserve Act as amended by subsection (b)
of this section. In furtherance of such purpose, the Congress believes
that the Board should review and revise its rules, regulations, and
interpretations issued pursuant to section 25(a) of the Federal
Reserve Act to eliminate or modify any restrictions, conditions, or
limitations not required by section 25(a) of the Federal Reserve Act,
as amended, that (1) discriminate against foreign-owned banking
institutions, (2) disadvantage or unnecessarily restrict or limit corporations organized under section 25(a) of the Federal Reserve Act in
competing with foreign-owned banking institutions in the United
States or abroad, or (3) impede the attainment of the Congressional
purposes set forth in section 25(a) of the Federal Reserve Act as
amended by subsection (b) of this section. Rules and regulations pursuant to this subsection and section 25(a) of the Federal Reserve Act
shall be issued not later than 150 days after the date of enactment of
this section and shall be issued in final form and become effective not
later than 120 days after they are first issued.
(b) Section 25 (a) of the Federal Reserve Act is amended by adding
after the first paragraph (12 U.S.C. 611), the following new
paragraph:
"The Congress hereby declares that it is the purpose of this section
to provide for the establishment of international banking and financial
corporations operating under Federal supervision with powers sufficiently broad to enable them to compete effectively with similar foreign-owned institutions in the United States and abroad; to afford to
the United States exporter and importer in particular, and to United

PUBLIC LAW 95-369—SEPT. 17, 1978

92 STAT. 609

States commerce, industry, and agriculture in general, at all times a
means of financing international trade, especially United States
exports; to foster the participation by regional and smaller banks
throughout the United States m the provision of international banking and financing services to all segments of United States agriculture, commerce, and industry, and, in particular small business and
farming concerns; to stimulate competition in the provision of international banking and financing services throughout the United States;
and, in conjunction with each of the preceding purposes, to facilitate
and stimulate the export of United States goods, wares, merchandise,
commodities, and services to achieve a sound United States international trade position. The Board of Governors of the Federal Reserve Regulations.
System shall issue rules and regulations under this section consistent
with and in furtherance of the purposes described in the preceding sentence, and, in accordance therewith, shall review and revise any such
rules and regulations at least once every five years, the first such period
commencing with the effective date of rules and regulations issued
pursuant to section 3(a) of the International Banking Act of 1978, in
order to ensure that such purposes are being served in light of prevailing economic conditions and banking practices.".
(c) The second sentence of the fourth paragraph of section 25(a)
of the Federal Reserve Act (12 U.S.C. 614) is amended by striking out
", all of whom shall be citizens of the United States" after "to elect or
appoint directors".
(d) The first sentence of the ^ixth paragraph of section 25 (a) of the
'•
Federal Reserve Act (12 U.S.C. 615(a)) is amended by striking
", but in no event having liabilities outstanding thereon at any one time
exceeding ten times its capital stock and surplus"; and the first sentence of the twelfth paragraph of section 25 (a) of the Federal Reserve
Act (12 U.S.C. 618) is amended by inserting a period after "and in
section 25 of the Federal Reserve Act as amended", and by striking the
remainder of the sentence.
(e) The third sentence of the sixth paragraph of section 25(a) of
the Federal Reserve Act (12 U.S.C. 615(a)) is amended by striking
", but in no event less than ten per centum of its deposits" and inserting
in lieu thereof "for member banks of the Federal Reserve System".
(f) The thirteenth paragraph of section 25(a) of the Federal
Reserve Act (12 U.S.C. 619) is deleted and the following paragraph is
inserted in lieu thereof:
"Except as otherwise provided in this section, a majority of the
shares of the capital stock of any such corporation shall at all times
'
be held and owned by citizens of the United States, by corporations
the controlling interest in which is owned by citizens of the United
States, chartered under the laws of the United States or of a State
of the United States, or by firms or companies, the controlling interest
in which is owned by citizens of the United States. Notwithstanding
any other provisions of this section, one or more foreign banks,
institutions organized under the laws of foreign countries which own
or control foreign banks, or banks organized under the laws of the
United States, the States of the United States, or the District of
Columbia, the controlling interests in which are owned by any such
foreign banks or institutions, may, with the prior approval of the
Board of Governors of the Federal Reserve System and upon such
terms and conditions and subject to such rules and regulations as the
Board of Governors of the Federal Reserve System may prescribe, own
and hold 50 per centum or more of the shares of the capital stock of

92 STAT. 610

Definitions.

12 use 1841.
Report to
Congress.
12 u s e 247 note.

12 use
601-631.
12 u s e 247 note.

12 use
241-247.

12 use
601-631.

PUBLIC LAW 95-369—SEPT. 17, 1978
any corporation organized under this section, and any such corporation shall be subject to the same provisions of law as any other corporation organized under this section, and the terms 'controls' and
'controlling interest' shall be construed consistently with the definition of 'control' in section 2 of the Bank Holding Company Act of
1956. For the purposes of the preceding sentence of this paragraph
the term 'foreign bank' shall have the meaning assigned to it in the
International Banking Act of 1978.".
(g) The Board shall report to the Congress not later than 270
days after the date of enactment of this Act its recommendations
with respect to permitting corporations organized or operating under
section 25 or 25(a) of the Federal Reserve Act, to become members of
Federal Reserve Banks.
(h) As part of its annual report pursuant to section 10 of the
Federal Reserve Act, the Board shall include its assessment of the
effects of the amendments made by this Act on the capitalization and
activities of corporations organized or operating under section 25 or
25(a) of the Federal Reserve Act, and on commercial banks and
the banking system.
FEDERAL BRANCHES AND AGENCIES

12 use 3102.

Regulations.

12 use 38.

12 use 221.
12 u s e 1 8 1 3 .

SEC. 4. (a) Except as provided in section 5, a foreign bank which
engages directly in a banking business outside the United States
may, with the approval of the Comptroller, establish one or more
Federal branches or agencies in any State in which (1) it is not
operating a branch or agency pursuant to State law and (2) the
establishment of a branch or agency, as the case may be, by a foreign
bank is not prohibited by State law.
(b) In establishing and operating a Federal branch or agency, a
foreign bank shall be subject to such rules, regulations, and orders as
the Comptroller considers appropriate to carry out this section, which
shall include provisions for service of process and maintenance of
branch and agency accounts separate from those of the parent bank.
Except as otherwise specifically provided in this Act or in rules,
regulations, or orders adopted by the Comptroller under this section,
operations of a foreign bank at a Federal branch or agency shall be
conducted with the same rights and privileges as a national bank at
the same location and shall be subject to all the same duties, restrictions, penalties, liabilities, conditions, and limitations that would
apply under the National Bank Act to a national bank doing business
at the same location, except that (1) the requirements of section 5240
of the Revised Statutes (12 U.S.C. 481) shall be met with respect to
a Federal branch or agency if it is examined at least once in each
calendar year; (2) any limitation or restriction based on the capital
stock and surplus of a national bank shall be deemed to refer, as
applied to a Federal branch or agency, to the dollar equivalent of
the capital stock and surplus of the foreign bank, and if the foreign
bank has more than one Federal branch or agency the business
transacted by all such branches and agencies shall be aggregated in
determining compliance with the limitation; (3) a Federal branch
or agency shall not be required to become a member bank, as that
term is defined in section 1 of the Federal Reserve Act; and (4) a
Federal agency shall not be required to become an insured bank as
that term is defined in section 3(h) of the Federal Deposit Insurance
Act.

. U ^U.U^ ..i ,.«U-,-U*J . . .

.^^ .:,. i.M:.

PUBLIC LAW 95-369—SEPT. 17, 1978

92 STAT. 611

(c) In acting on any application to establish a Federal branch or
agency, the Comptroller shall take into account the effects of the proposal on competition in the domestic and foreign commerce of the
United States, the financial and managerial resources and future
prospects of the applicant foreign bank and the branch or agency, and
the convenience and needs of the community to be served.
(d) Notwithstanding any other provision of this section, a foreign
bank shall not receive deposits or exercise fiduciary powers at any
Federal agency. A foreign bank may, however, maintain at a Federal
agency for the account of others credit balances incidental to, or aris^
ing out of, the exercise of its lawful powers.
(e) No f o r e i ^ bank may maintain both a Federal branch and a
Federal agency m the same State.
(f) Any branch or agency operated by a foreign bank in a State
pursuant to State law and any commercial lending company controlled
by a foreign bank may be converted into a Federal branch or agency
with the approval of the Comptroller. In the event of any conversion
pursuant to this subsection, all of the liabilities of such foreign bank
previously payable at the State branch or agency, or all of the liabilities of the commercial lending company, shall thereafter be payable
by such foreign bank at the branch or agency established under this
subsection.
(g) (1) Upon the opening of a Federal branch or agency in any Regulations.
State and thereafter, a foreign bank, in addition to any deposit requirements imposed under section 6 of this Act, shall keep on deposit, in
accordance with such rules and regulations as the Comptroller may
prescribe, with a member bank designated by such foreign bank,
dollar deposits or investment securities of the type that may be held
by national banks for their own accounts pursuant to paragraph
"Seventh" of section 5136 of the Revised Statutes, as amended, in an 12 USC 24.
amount as hereinafter set forth. Such depository bank shall be
located in the State where such branch or agency is located and shall
be approved by the Comptroller if it is a national bank and by the
Board of Governors of the Federal Reserve System if it is a State
Bank.
(2) The aggregate amount of deposited investment securities (calculated on the basis of principal amount or market value, whichever
is lower) and dollar deposits for each branch or agency established
and operating under this section shall be not less than the greater of
(1) that amount of capital (but not surplus) which would be required
of a national bank being organized at this location, or (2) 6 per
centum of the total liabilities of such branch or agency, includmg
X;-i-r.*?}!
acceptances, but excluding (A) accnied expenses, and (B) amounts
due and other liabilities to offices, branches, agencies, and subsidiaries of such foreign bank. The Comptroller may require that the
assets deposited pursuant to this subsection shall be maintained in
such amounts as he may from time to time deem necessary or desirable, for the maintenance of a soimd financial condition, the protection of depositors, and the public interest, but such additional
amount shall in no event be greater than would be required to conform
to generally accepted banking practices as manifested by banks in
the area in which the branch or agency is located.
(3) The deposit shall be maintained with any such member bank
pursuant to a deposit agreement in such form and containing such
limitations and conditions as the Comptroller may prescribe. So long

92 STAT. 612

Conditions and
requirements.

,

Hearing.

PUBLIC LAW 95-369—SEPT. 17, 1978
as it continues business in the ordinary course such foreign bank shall,
however, be permitted to collect income on the securities and funds
so deposited and from time to time examine and exchange such
securities.
(4) Subject to such conditions and requirements as may be prescribed by the Comptroller, each foreign bank shall hold in each State
in which it has a Federal branch or agency, assets of such types and
in such amount as the Comptroller may prescribe by general or specific
regulation or ruling as necessary or desirable for the maintenance of
a sound financial condition, the protection of depositors, creditors and
the public interest. In determining compliance with any such prescribed asset requirements, the Comptroller shall give credit tx> (A)
assets required to be maintained pursuant to paragraphs (1) and (2)
of this subsection, (B) reserves required to be maintained pursuant to
section 7(a) of this Act, and (C) assets pledged, and surety bonds
payable, to the Federal Deposit Insurance Corporation to secure the
payment of domestic deposits. The Comptroller may prescribe different asset requirements for branches or agencies in different States,
in order to ensure competitive equality of Federal branches and agencies with State branches and agencies and domestic banks in those
States.
(h) A foreign bank with a Federal branch or agency operating in
any State may (1) with the prior approval of the Comptroller establish and operate additional branches or agencies in the State in which
such branch or agency is located on the same terms and conditions and
subject to the same limitations and restrictions as are applicable to
the establishment of branches by a national bank if the principal office
of such national bank were located at the same place as the initial
branch or agency in such State of such foreign bank and (2) change
the designation of its initial branch or agency to any other branch or
agency subject to the same limitations and restrictions as are applicable to a change in the designation of the principal office of a national
bank if such principal office were located at the same place as such
initial branch or agency.
(i) Authority to operate a Federal branch or agency shall terminate
when the parent foreign bank voluntarily relinquishes it or Avhen such
parent foreign bank is dissolved or its authority or existence is otherwise terminated or canceled in the country of its organization. If (1)
at any time the Comptroller is of the opinion or has reasonable cause
to believe that such foreign bank has violated or failed to comply with
any of the provisions of this section or any of the rules, regulations.
or orders of the Comptroller made pursuant to this section, or (2) a
conservator is appointed for such foreign bank or a similar proceeding
is initiated in the foreign bank's country of organization, the Comptroller shall have the power, after opportunity for hearing, to revoke
the foreign bank's authority to operate a Federal branch or agency.
The Comptroller may, in his discretion, deny such opportunity for
hearing if he determines such denial to be in the public interest. The
Comptroller may restore any such authority upon due proof of compliance with the provisions of this section and the rules, regulations,
or orders of the Comptroller made pursuant to this section.
( j ) ( l ) Whenever the Comptroller revokes a foreign bank's
authority to operate a Federal branch or agency or whenever any
creditor of any such foreign bank shall have obtained a judgment
against it arising out of a transaction with a Federal branch or
agency in any court of i-ecord of the United States or any State of

PUBLIC LAW 95-369—SEPT. 17, 1978

92 STAT. 613

the United States and made application, accompanied by a certificate
from the clerk of the court stating that such judgment has been
rendered and has remained unpaid for the space of thirty days, or
whenever the Comptroller shall become satisfied that such f o r e i ^
bank is insolvent, he may, after due consideration of its affairs, in
any such case, appoint a receiver who shall take possession of all the
property and assets of such foreign bank in the United States and
exercise the same rights, privileges, powers, and authority with
respect thereto as are now exercised by receivers of national banks
appointed by the Comptroller.
(2) In any receivership proceeding ordered pursuant to this subsection ( p , whenever there has been paid to each and every depositor
and creditor of such foreign bank whose claim or claims shall have
been proved or allowed, the full amount of such claims arising out
of transactions had bjr them with any branch or agency of such
foreign bank located in any State of the United States, except
(A) claims that would not represent an enforceable legal obligation
against such branch or agency if such branch or agency were a separate legal entity, and (B) amounts due and other liabilities to other
oiSices or branches or agencies of, and wholly owned (except for a
nominal number of directors' shares) subsidiaries of, such foreign
bank, and all expenses of the receivership, the Comptroller or the
Federal Deposit Insurance Corporation, where that Corporation has
been appointed receiver of the foreign bank, shall turn over the
remainder, if any, of the assets and proceeds of such foreign bank
to the head office of such foreign bank, or to the duly appointed
domiciliary liquidator or receiver of such foreign bank.
INTERSTATE B A N K I N G OPERATIONS

SEC. 5. (a) Except as provided by subsection (b), (1) no foreign 12 USC 3103.
bank may directly or indirectly establish and operate a Federal
branch outside of its home State unless (A) its operation is expressly
permitted by the State in which it is to be operated, and (B)
the foreign bank shall enter into an agreement or undertaking
with the Board to receive only such deposits at the place of operation of such Federal branch as would be permissible for a corporation
organized under section 25(a) of the Federal Reserve Act under rules 12 USC
and regulations administered by the Board; (2) no foreign bank 611-^1.
may directly or indirectly establish and operate a State branch outside of its home State unless (A) it is approved by the bank regulatory authority of the State in which such branch is to be operated,
and (B) the foreign bank shall enter into an agreement or undertaking with the Board to receive only such deposits at the place of
operation of such State branch as would be permissible for a corporation organized under section 25(a) of the Federal Reserve Act
under rules and regulations administered by the Board; (3) no foreign bank may directly or indirectly establish and operate a Federal
agency outside of its home State unless its operation is expressly
permitted by the State in which it is to be operated; (4) no foreign
bank may directly or indirectly establish and operate a State agency
or commercial lending company subsidiary outside of its home State,
unless its establishment and operation is approved by the bank regulatory authority of the State in which it is to be operated; and
(5) no foreign bank may directly or indirectly acquire any voting
shares of, interest in, or substantially all of the assets of a bank

92 STAT. 614

12 use 1842.

PUBLIC LAW 95-369—SEPT. 17, 1978
located outside of its home State if such acquisition would be prohibited under section 3(d) of the Bank Holding Company Act of
1956 if the foreign bank were a bank holding company the operations
of whose banking subsidiaries were principally conducted in the
foreign bank's home State. Notwithstanding any other provisions
of Federal or State law, deposits received by any Federal or State
branch subject to the limitations of an agreement or undertaking
imposed under this subsection shall not be subject to any requirement
of mandatory insurance by the Federal Deposit Insurance Corporation.
(b) Unless its authority to do so is lawfully revoked otherwise than
pursuant to tbis section, a foreign bank, notwithstanding any restriction or limitation imposed under subsection (a) of this section, may
establish and operate, outside its home State, any State branch, State
agency, or bank or commercial lending company subsidiary which
commenced lawful operation or for which an application to commence
business had been lawfully filed with the appropriate State or Federal
authority, as the case may be, on or before July 27, 1978.
(c) For the purposes of this section, the home State of a foreign
bank that has branches, agencies, subsidiary commercial lending companies, or subsidiary banks, or any combination thereof, in more than
one State, is whichever of such States is so determined by election of
the foreign bank, or, in default of such election, by the Board.
INSURANCE OF DEPOSITS

12 use 3104.
12 use 1813.

SEC. 6. (a) No foreign bank may establish or operate a Federal
branch which receives deposits of less than $100,000 unless the branch
is an insured branch as defined in section 3(s) of the Federal Deposit
Insurance Act, or unless the Comptroller determines by order or
regulation that the branch is not engaged in domestic retail deposit
activities requiring deposit insurance protection, taking account of
the size and nature of depositors and deposit accounts.
(b) After the date of enactment of this Act no foreign bank may
establish a branch, and after one year following such date no foreign
bank may operate a branch, in any State in which the deposits of a
bank organized and existing under the laws of that State would be
required to be insured, unless the branch is an insured branch as defined
in section 3(s) of the Federal Deposit Insurance Act, or unless the
branch will not thereafter accept deposits of less than $100,000, or
unless the Federal Deposit Insurance Corporation determines by order
or regulation that the branch is not engaged in domestic retail deposit
activities requiring deposit insurance protection, taking account of the
size and nature of depositors and deposit accounts.
(c) (1) The Federal Deposit Insurance Act (12 U.S.C. 1811-1832)
is amended as set forth hereinafter in this subsection, in which section
numbers not otherwise identified refer to sections of that Act.
(2) Section 3(h) is amended by inserting "(including a foreign
bank having an insured branch)" immediately after "(h) The term
'insured bank' means any bank".
(3) Section 3 (j) is amended by inserting "or of a branch of a foreign
bank" immediately before the period at the end thereof.
(4) Section 3(m) is amended (A) by changing "(m) The" to read
" (m) (1) Subject to the provisions of paragraph (2) of this subsection,
the", and (B) by adding at the end thereof the following new
paragraph:

PUBLIC LAW 95-369—SEPT. 17, 1978

92 STAT. 615

"(2) In the case of any deposit in a branch of a foreign bank, the
ther 'insured deposit' means an insured deposit as defined in paragraph
(1) of this subsection which—
" (A) is payable in the United States to—
"(i) an individual who is a citizen or resident of the
United States,
"(ii) a partnership, corporation, trust, or other legally
cognizable entity created under the laws of the United States
or any State and having its principal place of business
within the United States or any State, or
"(iii) an individual, partnership, corporation, trust, or
other legally cognizable entity which is determined by the
Board of Directors in accordance with its regulations to have
such business or financial relationships in the United States
as to make the insurance of such deposit consistent with the
purposes of this Act;
and
"(B) meets any other criteria prescribed by the Board of
Directors by regulation as necessary or appropriate in its judgment to carry out the purposes of this Act or to facilitate the
administration thereof.".
(5) Section 3 (q) is amended to read as follows:
12 use 1813.
"(q) The term 'appropriate Federal banking agency' shall mean—
"(1) the Comptroller of the Currency in the case of a national
banking association, a District bank, or a Federal branch or
agency of a foreign bank;
" (2) the Board of Governors of the Federal Reserve System—
"(A) in the case of a State member insured bank (except
a District bank),
"(B) in the case of any branch or agency of a foreign
bank with respect to any provision of the Federal Reserve
Act which is made applicable under the International Banking Act of 1978,
"(C) in the case of any foreign bank which does not operate
an insured branch,
"(D) in the case of any agency or commercial lending
company other than a Federal agency, and
" ( E ) in the case of supervisory or regulatory proceedings
arising from the authority given to the Board of Governors
under section 7(c) (1) of the International Banking Act of
1978, including such proceedings under the Financial Institutions Supervisory Act, and
"(3) the Federal Deposit Insurance Corporation in the case
of a State nonmember insured Bank (except a District bank) or
a foreign bank having an insured branch.
Under the rule set forth in this subsection, more than one agency may
be an appropriate Federal banking agency with respect to any given
institution. For the purposes of subsections (b) through (n) of Insured
section 8 of this Act, the term 'insured bank' shall be deemed to include bank.
any uninsured branch or agency of a foreign bank or any commercial
lending company owned or controlled by a foreign bank.".
(6) Section 3 is amended by adding at the end thereof the following Definitions,
new subsections:
"(r) The terms 'foreign bank' and 'Federal branch' shall be construed consistently with the usage of such terms in the International
Banking Act of 1978.

92 STAT. 616

12 use 1815.

Regulations.

PUBLIC LAW 95-369—SEPT. 17, 1978
"(s) The term 'insured branch' means a branch of a foreign bank
any deposits in which are insured in accordance with the provisions
of this Act."
(7) Section 5 is amended (A) by changing "SEC. 5." to read "SEC. 5.
( a ) " and (B) by adding at the end thereof the following new subsections :
" (b) Subject to the provisions of this Act and to such terms and conditions as the Board of Directors may impose, any branch of a foreign
bank, upon application by the bank to the Corporation, and examination by the Corporation of the branch, and approval by the Board of
Directors, may become an insured branch. Before approving any such
application, the Board of Directors shall give consideration to—
" (1) the financial history and condition of the bank,
" (2) the adequacy of its capital structure,
" (3) its future earnings prospects,
"(4) the general character of its management, including but
not limited to the management of the branch proposed to be
insured,
"(5) the convenience and needs of the community to be served
by the branch,
"(6) whether or not its corporate powers, insofar as they will be
exercised through the proposed insured branch, are consistent with
the purposes of this Act, and
"(7) the probable adequacy and reliability of information supplied and to be supplied by the bank to the Corporation to enable
it to carry out its functions under this Act.
"(c) (1) Before any branch of a foreign bank becomes an insured
branch, the bank shall deliver to the Corporation or as the Corporation
may direct a surety bond, a pledge of assets, or both, in such amounts
and of such types as the Corporation may require or approve, for the
purpose set forth in paragraph (4) of this subsection.
" (2) After any branch of a foreign bank becomes an insured branch,
the bank shall maintain on deposit with the Corporation, or as the
Corporation may direct, surety bonds or assets or both, in such amounts
and of such types as shall be determined from time to time in accordance with such regulations as the Board of Directors may prescribe.
Such regulations may impose differing requirements on the basis of
any factors which in the judgment of the Board of Directors are reasonably related to the purpose set forth in paragraph (4).
" (3) The Corporation may require of any given bank larger deposits
of bonds and assets than required under paragraph (2) of this subsection if, in the judgment of the Corporation, the situation of that bank
or any branch thereof is or becomes such that the deposits of bonds
and assets otherwise required under this section would not adequately
fulfill the purpose set forth in paragraph (4). The imposition of any
such additional requirements may be without notice or opportunity for
hearing, but the Corporation shall afford an opportunity to any such
bank to apply for a reduction or removal of any such additional
requirements so imposed.
" (4) The purpose of the surety bonds and pledges of assets required
under this subsection is to provide protection to the deposit insurance
fund against the risks entailed in insuring the domestic deposits of a
foreign bank whose activities, assets, and personnel are in large part
outside the jurisdiction of the United States. In the implementation
of its authority under this subsection, however, the Corporation shall
endeavor to avoid imposing requirements on such banks which would

PUBLIC LAW 95-369—SEPT. 17, 1978
unnecessarily place them at a competitive disadvantage in relation to
domestically incorporated banks.
"(5) In the case of any failure or threatened failure of a foreign
bank to comply with any requirement imposed under this subsection
(c), the Corporation, in addition to all other administrative and judicial remedies, may apply to any United States district court, or United
States court of any territory, within the jurisdiction of which any
branch of the bank is located, for an injunction to compel such bank
and any officer, employee, or a^ent thereof, or any other person having
custody or control of any of its assets, to deliver to the Corporation
such assets as may be necessary to meet such requirement, and to take
any other action necessary to vest the Corporation with control of
assets so delivered. If the court shall determine that there has been
any such failure or threatened failure to comply with any such requirement, it shall be the duty of the court to issue such injunction. The
propriety of the requirement may be litigated only as provided in
chapter 7 of title 6 of the United States Code, and may not be made
an issue in an action for an injunction under this paragraph.".
(8) The first sentence of section 7(a) (1) is amended by inserting
"and each foreign bank having an insured branch which is not a Federal branch" immediately before "shall make to the Corporation".
(9) The first sentence of section 7(a) (3) is amended (A) by inserting "and each foreign bank having an insured branch (other than a
Federal branch)" immediately before "shall make to the Corporation"
and (B) by inserting ", each foreign bank having an insured branch
which is a Federal branch," immediately before "and each insured
district".
(10) Section 7(a) is amended by adding at the end thereof the following new paragraph:
"(7) In respect of any report required or authorized to be supplied
or published pursuant to this subsection or any other provision of law,
the Board of Directors or the Comptroller of the Currency, as the case
may be, may differentiate between domestic banks and foreign banks
to such extent as, in their judgment, may be reasonably required to
avoid hardship and can be done without substantial compromise of
insurance risk or supervisory and regulatory effectiveness.".
(11) Section 7(b) is amended (A) by changing "(4^ A bank's
assessment base" to read " (4) (A) Except as providea in suoparagraph
(B) of this paragraph, a bank's assessment base" and (B) by adding
at the end thereof the following new subparagraph:
"(B) In determining the assessment base and assessment base
additions and deductions of a foreign bank having an insured
branch, such adjustments shall be made as the Board of Directors
may by regulation prescribe in order to provide equitable treatment
for domestic and foreign banks.".
(12) Section ( 7 ) g ) ( l ) is amended (A) by changing " ( j ) ( l )
Whenever" to read "(j) (1) (A) Except as provided in subparagraph
(B) of this paragraph, whenever", and (B) by adding at the end
thereof the following new subparagraph:
"(B) The Board of Directors may by regulation exempt from the
reporting requirements of subparagraph (A) of this paragraph any
transaction in the stock of a foreign bank to the extent that the making
of any such report would be prohibited by the laws of the country of
domicile of the foreign bank in effect at the time such bank makes its
application under section 5(b) of this Act, or rendered impracticable
by the customs and usages of such country, but the Board of Directors

92 STAT. 617

Injunction

5 use 701
et seq.

12 use 1817,

ReguUtion*.

Regulations,

12 USC 1815,

92 STAT. 618

12 use 1815.
12 use 1817.

12 use 1818.

PUBLIC LAW 95-369—SEPT. 17, 1978
shall weigh the existence of any such prohibition or impracticability
in connection with its consideration of the factors enumerated in
sections 5 (b) (4) and 5 (b) (7).".
(13) Section 7(j)(2) is amended by changing "(2) Whenever"
to read "(2) (A) Except as provided in subparagraph (B) of this
paragraph, whenever" and by adding at the end thereof the following
new subparagraphs:
"(B) The requirements of subparagraph (A) of this paragraph
shall not apply in the case of a loan secured by the stock of a foreign
bank if the lending bank is a foreign bank under the laws of whose
domicile the report otherwise required by subparagraph (A) would
be prohibited.
"(C) No foreign bank under the laAvs of whose domicile a report
in compliance with subparagraph (A) of this paragraph would be
prohibited in the case of a loan to acquire the stock of an insured bank
which is not a foreign bank may make, acquire, or retain any such
loan. Each report of condition filed under subsection (a) by any
foreign bank to which this subparagraph applies shall contain either
a statement of the amount of each loan made, retained, or acquired by
the foreign bank in violation of this subparagraph during the period
from the date it became an insured bank or the date of its last report
of condition, whichever is later, to the date of the report of condition,
or a statement that no such loans were made and no such loans were
outstanding during such period.".
(14) The first sentence of section 8(a) is amended by inserting ", a
foreign bank having an insured branch which is a Federal branch, a
foreign bank having an insured branch which is required to be
insured under section 6 (a) or (b) of the International Banking Act
of 1978," immediately after "(except a national member bank".
(15) Section 8 is amended by adding at the end thereof the following new subsection:
" ( r ) ( l ) Except as otherwise specifically provided in this section,
the provisions of this section shall be applied to foreign banks in
accordance with this subsection.
"(2) An act or practice outside the United States on the part of a
foreign bank or any officer, director, employee, or agent therof may
not constitute the basis for any action by any officer or agency of the
United States under this section, unless—
"(A) such officer or agency alleges a belief that such act or
practice has been, is, or is likely to be a cause of or carried on in
connection with or in furtherance of an act or practice within
any one or more States which, in and of itself, would constitute
an appropriate basis for action by a Federal officer or agency
under this section; or
"(B) the alleged act or practice is one which, if proven, would,
in the judgment of the Board of Directors, adversely affect the
insurance risk assumed by the Corporation.
" (3) In any case in which any action or proceeding is brought pursuant to an allegation under paragraph (2) of this subsection for the
suspension or removal of any officer, director, or other person associated with a foreign bank, and such person fails to appear promptly as
a party to such action or proceeding and to comply with any effective
order or judgment therein, any failure by the foreign bank to secure
his removal from any office he holds in such bank and from any further
participation in its affairs shall, in and of itself, constitute grounds
for termination of the insurance of the deposits in any branch of the
bank.

PUBLIC LAW 95-369—SEPT. 17, 1978
"(4) Where the venue of any judicial or administrative proceeding
under this section is to be determined by reference to the location of the
home office of a bank, the venue of such a proceeding with respect to a
foreign bank having one or more branches or agencies in not more
than one judicial district or other relevant jurisdiction shall be within
such jurisdiction. Where such a bank has branches or agencies in more
than one such jurisdiction, the venue shall be in the jurisdiction within
which the branch or branches or agency or agencies involved in the
proceeding are located, and if there is more than one such jurisdiction,
the venue shall be proper in any such jurisdiction in which the proceeding is brought or to which it may appropriately be transferred.
"(5) Any service required or authorized to be made on a foreign
bank may be made on any branch or agency located within any State,
but if such service is in connection with an action or proceeding
involving one or more branches or one or more agencies located in
any State, service shall be made on at least one branch or agency so
involved.".
(16) (A) The first sentence of section 10(b) is amended (i) by
inserting "any insured State branch of a foreign bank, any State
branch of a foreign bank making application to become an insured
bank," immediately after "(except a District bank)", and (ii) by
inserting "or branch" before the comma after "any closed insured
bank".
(B) The second sentence of section 10(b) is amended by inserting
", msured Federal branch of a foreign bank," between the words
"national bank" and "or District bank".
(C) The third sentence of section 10(b) is amended by inserting
", and in the case of a foreign bank, a binding commitment by such
bank to permit such examination to the extent determined by the
Board of Directors to be necessary to carry out the purposes of this
Act shall be required as a condition to the insurance of any deposits"
immediately before the period at the end thereof.
(17) Section 11(c) is amended by inserting ", insured Federal
branch of a foreign bank," immediately before "or insured District
bank,".
(18) The first sentence of section 11(e) is amended by inserting
"or any insured branch (other than a Federal branch) of a foreign
bank" immediately before "shall have been closed".
(19) The second sentence of section 11(e) is amended by changing
"such insured State bank," to read "such insured State bank or insured
branch of a foreign bank,".
(20) Section 11(f) is amended by inserting "or insured branch of
a foreign bank" immediately before "shall have been closed".
(21) The first sentence of section 11(g) is amended by inserting
", insured branch of a foreign bank," immediately before "or District
bank,".
(22) The third sentence of section 11(g) is amended by changing
"In the case of any closed insured bank," to read "In the case of any
closed insured bank or closed insured branch of a foreign bank,".
(23) Section 12(a) is amended by inserting ", branch of a foreign
bank," immediately after "a closed national bank".
(24) Section 13 is amended by adding at the end thereof the following new subsection:
"(g) The powers conferred on the Board of Directors and the
Corporation by this section to take action to reopen a closed insured
bank or to avert the closing of an insured bank may be used with

39-194 O—80—pt. 1

43 : QL3

92 STAT. 619

12 USC 1820.

'

•

•

12 USC 1821.

12 USC 1822.
12 USC 1823.

92 STAT. 620

12 use 1828.

12 use 1829b.

12 use 1831b.

PUBLIC LAW 95-369—SEPT. 17, 1978
respect to an insured branch of a foreign bank if, in the judgment of
the Board of Directors, the public interest in avoiding the closing
of such branch substantially outweighs any additional risk of loss
to the insurance fund which the exercise of such powers would entail.".
(25) Section 18(c) is amended by adding at the end thereof the
following new p a r a ^ a p h :
"(11) The provisions of this subsection do not apply to any mergeitransaction involving a foreign bank if no party to the transaction
is principally engaged in business in the United States.".
(26) Section 18(d) is amended by inserting the following new
sentence immediately after the first sentence thereof: "No foreign
bank may move any insured branch from one location to another
without such consent.".
(27) The first sentence of section 18(g) is amended by inserting
"and in insured branches of foreign banks" immediately after "in
insured nonmember banks".
(28) Section 18(j) is amended by adding at the end thereof the
following new sentence: "The provisions of this subsection shall not
apply to any foreign bank having an insured branch with respect to
dealings between such bank and any affiliate thereof.".
(29) Section 21 is amended by adding at the end thereof the
following new subsection:
"(i) The provisions of this section shall not apply to any foreign
bank except with respect to the transactions and records of any
insured branch of such a bank.".
(30) The first sentence of section 25(a) is amended by inserting
"insured branch of a foreign bank," immediately after "No insured
bank,".
AUTHORITY o r FEDERAI. RESERVE SYSTEM

12 use 3105.
12 use 461,
374a, 464-466,
371a, 371b,
371b-l, 374,
463.

12 use 221.

SEC. 7. ( a ) ( 1 ) ( A ) Except as provided in paragraph (2) of this
subsection, subsections (a), (b), (c), (d), (f), (g), (i), (j), (k),and
the second sentence of subsection (e) of section 19 of the Federal
Reserve Act shall apply to every Federal branch and Federal agency of
a foreign bank in the same manner and to the same extent as if the
Federal branch or Federal agency were a member bank as that term is
defined in section 1 of the Federal Reserve Act; but the Board either
by general or specific regulation or ruling may waive the minimum
and maximum reserve ratios prescribed under section 19 of the Federal
Reserve Act and may prescribe any ratio, not more than 22 per centum,
for any obligation of any such Federal branch or Federal agency that
the Board may deem reasonable and appropriate, taking into consideration the character of business conducted by such institutions and
the need to maintain vigorous and fair competition between and among
such institutions and member banks. The Board may impose reserve
requirements on Federal branches and Federal agencies in such graduated manner as it deems reasonable and appropriate.
(B) After consultation and in cooperation with the State bank
supervisory authorities, the Board may make applicable to any State
branch or State agency any requirement made applicable to, or whicli
the Board has authority to impose upon, any Federal branch or agency
under subparagraph (A) of this paragraph.
(2) A branch or agency shall be subject to this subsection only if
(A) its parent foreign bank has total worldwide consolidated bank
assets in excess of $1,000,000,000; (B) its parent foreign bank is controlled by a foreign company which owns or controls foreign banks

PUBLIC LAW 95-369—SEPT. 17, 1978
that in the aggregate have total worldwide consolidated bank assets in
excess of $1,000,000,000; or (C) its parent foreign bank is controlled
by a group of foreign companies that own or control foreign banks
that in the aggregate have total worldwide consolidated bank assets
in excess of $1,000,000,000.
(b) Section 13 of the Federal Reserve Act is amended by adding at
the end thereof the following new paragraph:
"Subject to such restrictions, limitations, and regulations as may
be imposed by the Board of Governors of the Federal Reserve System,
each Federal Reserve bank may receive deposits from, discount paper
endorsed by, and make advances to any branch or agency of a foreign
bank in the same manner and to the same extent that it may exercise
such powers with respect to a member bank if such branch or agency
is maintaining reserves with such Reserve bank pursuant to section 7
of the International Banking Act of 1978. In exercising any such
powers with respect to any such branch or agency, each Federal
Reserve bank shall give due regard to account balances being maintained by such branch or agency with such Reserve bank and the proportion of the assets of such branch or agency being held as reserves
under section 7 of the International Banking Act of 1978. For the
purposes of this paragraph, the terms 'branch', 'agency', and 'foreign
bank' shall have the same meanings assigned to them in section 1 of
the International Banking Act of 1978.".
(c) (1) The Board may make examinations of each branch or agency
of a foreign bank, and of each commercial lending company or bank
controlled by one or more foreign banks or by one or more foreign
companies that control a foreign bank, the cost of which shall be
assessed against and paid by such foreign bank or company, as the
case may be. The Board shall, insofar as possible, use the reports of
examinations made by the Comptroller, the Federal Deposit Insurance
Corporation, or the appropriate State bank supervisory authority for
the purposes of this subsection.
(2) Each branch or agency of a foreign bank, other than a Federal
branch or agency, shall be subject to paragraph 20 and the provision
requiring the reports of condition contained in paragraph 6 of section 9 of the Federal Reserve Act (12 U.S.C. 335 and 324) to the
same extent and in the same manner as if the branch or agency were
a State member bank. In addition to any requirements imposed under
section 4 of this Act, each Federal branch and agency shall be subject
to subparagraph (a) of section 11 of the Federal Reserve Act (12
U.S.C. 248(a)) and to paragraph 5 of section 21 of the Federal
Reserve Act (12 U.S.C. 483) to the same extent and in the same
manner as if it were a member bank.
(d) On or before two years after enactment of this Act, the Board
after consultation with the appropriate State bank supervisory
authorities shall report to the Committee on Banking, Finance and
Urban Affairs of the United States House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of the United
States Senate its recommendations with respect to the implementation
of this Act, including any recommended requirements such as limitations on loans to affiliates or capital adequacy requirements which
should be imposed on foreign banks to carry out the purposes of this
Act. Not later than one hundred and eighty days after the enactment
of this Act, the Board shall report to such Committees the steps
which have been taken to consult and cooperate with State bank
supervisory authorities as required by subsection (a) (1) (B).

92 STAT. 621

12 u s e 347d.
12 u s e 82,
342-347,
347c, 372.

Definitions.

12 u s e 3105.

Report to
congressional
committees.

92 STAT. 622

PUBLIC LAW 95-369—SEPT. 17, 1978
N O N B A N K I N G ACTIVITIES

12 use 3106.

12 use 1841
note.
iQ7i^T^Q7R^^'
1971-1978.
12 use 1842.

12 use 1841
no*®-

SEC. 8. (a) Except as otherwise provided in this section (1) any
foreign bank that maintains a branch or agency in a State, (2) any
foreign bank or foreign company controlling a foreign bank that
controls a commercial lending company organized under State law,
and (3) any company of which any foreign bank or company referred
to in (1) and (2) is a subsidiary shall be subject to the provisions
of the Bank Holding Company Act of 1956, and to sections 105 and
106 of the Bank Holding Company Act Amendments of 1970 in the
same manner and to the same extent that bank holding companies
^^^ subject thereto, except that any such foreign bank or company
shall not by reason of this subsection be deemed a bank holding
company for purposes of section 3 of the Bank Holding Company
Act of 1956.
(b) Until December 31, 1985, a foreign bank or other company
to which subsection (a) applies on the date of enactment of this Act
may retain direct or indirect ownership or control of any voting
shares of any nonbanking company in the United States that it owned,
controlled, or held with power to vote on the date of enactment of
this Act or engage in any nonbanking activities in the United States
in which it was engaged on such date.
(c) After December 31, 1985, a foreign bank or other company to
which subsection (a) applies on the date of enactment of this Act may
continue to engage in nonbanking activities in the United States in
which directly or through an affiliate it was lawfully engaged on
July 26,1978 (or on a date subsequent to July 26,1978, in the case of
activities carried on as the result of the direct or indirect acquisition,
pursuant to a binding written contract entered into on or before July 26,
1978, of another company engaged in such activities at the time of
acquisition), and may engage directly or through an affiliate in nonbanking activities in the United States which are covered by an application to engage in such activities which was filed on or before July 26,
1978; except that the Board by order, after opportunity for hearing,
may terminate the authority conferred by this subsection (c) on any
such foreign bank or company to engage directly or through an affiliate
in any activity otherwise permitted by this subsection (c) if it determines having due regard to the purposes of this Act and the Bank
Holding Company Act of 1956, that such action is necessary to prevent
undue concentration of resources, decreased or unfair competition,
conflicts of interest, or unsound banking practices in the United States.
Notwithstanding subsection (a) of this section, a foreign bank or company referred to in this subsection (c) may retain ownership or control of any voting shares (or, where necessaiy to prevent dilution of its
voting interevSt, acquire additional voting shares) of any domesticallycontrolled affiliate covered in 1978 which engages in the business of
underwriting, distributing, or otherwise buying or selling stocks,
bonds, and other securities in the United States. Except in the case of
affiliates described in the preceding sentence, nothing in this subsection
(c) shall be construed to authorize any foreign bank or company referred to in this subsection (c), or any affiliate thereof, to engage in
activities authorized by this subsection (c) through the acquisition,
pursuant to a contract entered into after July 26,1978, of any interest
in or the assets of a going concern engaged in such activities. Any foreign bank or company that is authorized to engage in any activity pursuant to this subsection (c) but, as a result of action of the Board, is
required to terminate such activity may retain the ownership of con-

PUBLIC LAW 95-369—SEPT. 17, 1978
trol of shares in any company carrying on such activity for a period of
two years from the date on which its authority was so terminated by
the Board. As used in this subsection, the term "affiliate" shall mean
any company more than 5 per centum of whose voting shares is directly
or indirectly owned or controlled or held with power to vote by the
specified foreign bank or company, and the term "domesticallj^-controUed affiliate covered in 1978" shall mean any affiliate the majority of
whose voting shares is owned by a company or group of companies organized under the laws of the United States or any State thereof, if it
has been under continuous domestic majority-controlling ownership
since July 26, 1978, and if a foreign bank or group of foreign banks
does not own or control, directly or indirectly, 25 per centum or more of
its voting shares.
(d) Nothing in this section shall be construed to define a branch or
agency of a foreign bank or a commercial lending company controlled
by a foreign bank or foreign company that controls a foreign bank as a
"bank" for the purposes of any provisions of the Bank Holding Company Act of 1956, or section 105 of the Bank Holding Company Act
Amendments of 1970, except that any such branch, agency or commercial lending company subsidiary shall be deemed a "bank" or
"banking subsidiary", as the case may be, for the purposes of applying
the prohibitions of section 106 of the Bank Holding Company Act
Amendments of 1970 and the exemptions provided in sections 4(c) (1),
4(c) (2), 4(c) (3), and 4(c) (4) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(c) (1), (2), (3), and (4)) to any foreign bank
or other company to which subsection (a) applies.
(e) Section 2(h) of the Bank Holding Company Act of 1956 is
amended (1) by striking out "(h) The" and inserting in lieu thereof
"(h) (1) Except as provided by paragraph (2), the", (2) by striking
out the proviso, and (3) by inserting at the end thereof the following:
"(2) The prohibitions of section 4 of this Act shall not apply to
shares of any company organized under the laws of a foreign country
(or to shares held by such company in any company engaged in the
same general line of business as the investor company or in a business
related to the business of the investor company) that is principally
engaged in business outside the United States if such shares are held
or acquired by a bank holding company organized under the laws
of a foreign country that is principally engaged in the banking business outside the United States, except that (1) such exempt foreign
company (A) may engage in or hold shares of a company engaged
in the business of underwriting, selling or distributing securities in the
United States only to the extent that a bank holding company may do
so under this Act and under regulations or orders issued by the Board
under this Act, and (B) may engage in the United States in any banking or financial operations or types of activities permitted under section 4(c)(8) or in any order or regulation issued by the Board under
such section only with the Board's prior approval under that section,
and (2) no domestic office or subsidiary of a bank holding company
or subsidiary thereof holding shares of such company may extend
credit to a domestic office or subsidiary of such exempt company on
terms more favorable than those afforded similar borrowers in the
United States.".

92 STAT. 623

Definitions,

12 use 1841
note.

12 use 1850.

12 use
1971-1978.
12 USC 1841

12 USC 1843

STUDY OF rOREIGN TREATMENT OF UNITED STATES BANKS

SEC. 9. The Secretary of the Treasury, in conjunction with the Sec- 12 USC 601
retary of State, the Board, the Comptroller, and the Federal Deposit note.
Insurance Corporation shall within 90 days after enactment of this

92 STAT. 624

Report to
Congress.

PUBLIC LAW 95-369—SEPT. 17, 1978
bill commence a study of the extent to whicli banks orga-nized under
the laws of the United States or any State thereof are denied, whether
by law or practice, national treatment in conducting banking operations in foreign countries, and the effects, if any, of such discrimination on United States exports to those countries. On or before one
year after enactment of this section, the Secretary of the Treasury shall
be required to report his findings, conclusions, and recommendations
from such study to the Congress and describe the efforts undertaken
by the United States to eliminate any foreign laws or practices that
discriminate against banks organized under the laws of the United
States or any State thereof, or that serve as a barrier to the financing
of United States exports to any foreign country.
REPRESENTATIVE OFFICES

Rules.

12 use 3107.

SEC. 10. (a) Any foreign bank that maintains an office other than a
branch or agency in any State shall register with the Secretary of
the Treasury in accordance with rules prescribed by him, within one
hundred and eighty days after the date of enactment of this Act or
the date on which the office is established, whichever is later.
(b) This Act does not authorize the establishment of any such
office in any State in contravention of State law.
CEASE-AND-DESIST ORDERS

"Subsidiary."

12 use 1841.

SEC. 11. Subsection (b) of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818(b)) is amended by adding a t the end
thereof the following new paragraph:
"(4) This subsection and subsections (c), ( d ) , (h), (i), (k), (1),
(m), and (n) of this section shall apply to any foreign bank or company to which subsection (a) of section 8 of the International Banking Act of 1978 applies and to any subsidiary (other than a bank)
of any such foreign bank or company in the same manner as they
apply to a bank holding company and any subsidiary thereof (other
than a bank) under subparagraph (3) of this subsection. For the
purposes of this subparagraph, the term 'subsidiary' shall have the
meaning assigned to it in section 2 of the Bank Holding Company
Act of 1956.".
A M E N D M E N T TO T H E B A N K I N G ACT OF 1 9 3 3

SEC. 12. Section 21 of the Banking Act of 1933 (12 U.S.C. 378)
is amended by striking clause (B) of paragraph (2) of subsection
(a) thereof and inserting in lieu thereof the following: " ( B ) shall
be permitted by the United States, any State, territory, or district
to engage in such business and shall be subjected by the laws of the
United States, or such State, territory, or district to examination
and regulations or,".
REGULATION AND ENFORCEMENT

12 use 3108.

SEC. 13. (a) The Comptroller, the Board, and the Federal Deposit
Insurance Corporation, are authorized and empowered to issue such
rules, regulations, and orders as each of them may deem necessary in
order to perform their respective duties and functions under this Act
and to administer and carry out the provisions and purposes of this
Act and prevent evasions thereof.

PUBLIC LAW 95-369—SEPT. 17, 1978

92 STAT. 625

(b) In addition to any powers, remedies, or sanctions otherwise
provided by law, compliance with the requirements imposed under
this Act or any amendment made by this Act may be enforced under
section 8 of the Federal Deposit Insurance Act by any appropriate 12 use 1818.
Federal banking agency as defined in that Act.
(c) In the case of any provision of the Federal Reserve Act to 12 use 226.
which a foreign bank or branch thereof is subject imder this Act,
and which is made applicable to nonmember insured banks by the
Federal Deposit Insurance Act, whether by cross-reference to the 12 use 1811
Federal Reserve Act or by a provision in substantially the same terms note.
in the Federal Deposit Insurance Act, the administration, interpretation, and enforcement of such provision, insofar as it relates to
any foreign bank or branch thereof as to which the Board is an
appropriate Federal banking agency, are vested in the Board, but
where the making of any report to the Board or a Federal Reserve
bank is required under any such provision, the Federal Deposit Insurance Corporation may require that a duplicate of any such report be
sent directly to it. This subsection shall not be construed to impair
any power of the Federal Deposit Insurance Corporation to make
regular or special examinations or to require special reports.
REPORT ON MC FADDEN ACT

SEC. 14. (a) The President, in consultation with the Attorney 12USe36note.
General, the Secretary of the Treasury, the Board, the Comptroller,
and the Federal Deposit Insurance Corporation, shall transmit a
report to the Congress containing his recommendations concerning
the applicability of the McFadden Act to the present financial, bank- 44 Stat. 1224.
ing, and economic environment, including an analysis of the effects of
any proposed amendment to such Act on the structure of the banking
industry and on the financial and economic environment in general.
(b) The report required by subsection (a) shall be transmitted to the Transmittal to
Congress not later than one year after the date of enactment of this eongress,
effective
Act.
date.

Approved September 17, 1978.

LEGISLATIVE HISTORY:
HOUSE REPORT No. 95-910 (eomm. on Banking, Finance and Urban Affairs).
SENATE REPORT No. 95-1073 (eomm. on Banking, Housing, and Urban Affairs).
eONGRESSIONAL REeORD, VoL 124 (1978):
Apr. 6, considered and passed House.
Aug. 15, considered and passed Senate, amended.
Aug. 17, House concurred in Senate amendment.