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  4. Background and Summary of the Board’s Rules of Procedure

Background and Summary of the Board’s Rules of Procedure

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The Freedom of Information Act (5 USC 552, Pub. L. 89-554, 80 Stat. 383) was enacted to ensure that the public would be informed of the administrative procedures followed by the executive branch of government. The act requires that every agency publish statements about its procedural rules. The Board of Governors’ Rules of Procedure (12 CFR 262) were promulgated to fulfill this requirement.
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NOTICE AND PUBLIC PARTICIPATION

Section 262.2 of the Rules of Procedure defines the manner in which Board regulations are promulgated or amended. The notice provision in section (a) of this section requires that the proposed regulations be published in the Federal Register. The Federal Register notice should describe the nature of the proposed regulation or amendment as well as the subjects and issues involved. Also, the notice must include a reference to the authority for the proposals and must state the time, place, and manner in which the public may participate in the process. Public participation is generally in the form of written comments.
Following expiration of the comment period, the staff of the appropriate Board division, having reviewed all comments and other relevant material, submits a draft of the proposed amendment or regulation to the Board. The Board then acts on the proposal. Section 262.2(d) of the Rules of Procedure requires that any substantive regulation or amendment be published not less than 30 days prior to its effective date.
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EXCEPTIONS TO NOTICE AND EFFECTIVE DATE REQUIREMENTS

Section 262.2(e) of the Rules of Procedure al lows for exceptions to the notice and effective date requirements. Under this section, the notice and effective date requirements may be deferred if they would be “impracticable, unnecessary, contrary to the public interest, or otherwise not required in the public interest.” The types of situations that would warrant an exception are listed, including review and determination of discount rates and changes in requirements regarding reserves, maximum interest rates on savings and time deposits, and credit for purchasing or carrying securities.
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APPLICATIONS

Section 262.3 of the Rules of Procedure concerns the procedural requirements for the filing of applications to acquire or engage in banking or nonbanking business or activities. The application forms are prescribed by the Board of Governors. If there is no official form, the application must include the signature of the applicant or a registered representative, the type of action requested, and a description of all relevant facts. In addition, the applicant must indicate its interest in the matter and the reason why the applicant considers Board approval appropriate. Section 262.3(c) details the appropriate places for filing applications. Subparts (i) and (j) of section 262.3 indicate procedures that are appropriate for bank holding company and merger applications and for certain other applications.
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Notice and Public Comment

Section 262.3(b) requires a published notice of the filing of applications—
  • for Federal Reserve System membership, when membership would confer federal deposit insurance on a bank;
  • by a state member bank, (1) to establish a domestic branch or other facility authorized to receive deposits or (2) to relocate a domestic branch office;
  • for a merger, consolidation, or acquisition of assets or assumption of liabilities, if the resulting bank is to be a state member bank;
  • to become a bank holding company; and
  • by a bank holding company for acquisition of shares or assets of a bank, or for a merger of bank holding companies.
Notice of the application must be published on the same day of each of two consecutive weeks prior to the filing date. The notice must include the applicant’s name, the subject matter of the application, and the location of the proposed business, and it must invite written public comment. Sections 262.3(b)(1)(A) through (E) enumerate where notice of certain types of applications must be published.
Comments must be submitted in writing to the Board within the established time limits. Any comment on an application that requests a hearing must describe why written comments would not suffice in lieu of a hearing. All comments or requests received by the Board are forwarded to the applicant for response.
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Board Action

All relevant material is analyzed by the Board’s staff and reported to the Board. The Board then takes whatever action is deemed appropriate in the public interest, and notice of the Board’s decision is given to the applicant and to any interested party. The Board may also act on its own initiative in any matter on which an opportunity for hearing is not required by statute or regulation. Under these circumstances, the Board follows a procedure similar to that used when acting on applications.
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Reconsideration of Board Action

Section 262.3(k) provides the guidelines for reconsideration of Board actions. Generally, a request for reconsideration must indicate the reason for reconsideration and include any relevant facts which, for good cause, were not previously presented to the Board. The Board then determines whether or not it will reconsider the matter.
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