(a) Grounds for termination.
(1) General. Under sections 7(e) and 10(b) of the IBA (12 USC 3105(d), 3107(b)),
the Board may order a foreign bank to terminate the activities of
its representative office, state branch, state agency, or commercial
lending company subsidiary if the Board finds that—
(i) the
foreign bank is not subject to comprehensive consolidated supervision
in accordance with section 211.24(c)(1), and the home-country supervisor
is not making demonstrable progress in establishing arrangements for
the consolidated supervision of the foreign bank; or
(ii) both of the following criteria
are met:
(A) there is reasonable cause to believe that
the foreign bank, or any of its affiliates, has committed a violation
of law or engaged in an unsafe or unsound banking practice in the
United States; and
(B)
as a result of such violation or practice, the continued operation
of the foreign bank’s representative office, state branch, state agency,
or commercial lending company subsidiary would not be consistent with
the public interest, or with the purposes of the IBA, the BHC Act,
or the FDIA.
(2) Additional
ground. The Board may also enforce any condition imposed in connection
with an order issued under section 211.24.
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(b) Factor. In making its findings
under this section, the Board may take into account the needs of the
community, the history of operation of the foreign bank, and its relative
size in its home country, provided that the size of the foreign bank
shall not be the sole determining factor in a decision to terminate
an office.
(c) Consultation
with relevant state supervisor. Except in the case of termination
pursuant to the expedited procedure in paragraph (d)(3) of this section,
the Board shall request and consider the views of the relevant state
supervisor before issuing an order terminating the activities of a
state branch, state agency, representative office, or commercial lending
company subsidiary under this section.
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(d) Termination procedures.
(1) Notice and
hearing. Except as otherwise provided in paragraph (d)(3) of
this section, an order issued under paragraph (a)(1) of this section
shall be issued only after notice to the relevant state supervisor
and the foreign bank and after an opportunity for a hearing.
(2) Procedures for hearing. Hearings under this section shall be
conducted pursuant to the Board’s Rules of Practice for Hearings (12
CFR 263).
(3) Expedited procedure. The Board may act
without providing an opportunity for a hearing, if it determines that
expeditious action is necessary in order to protect the public interest.
When the Board finds that it is necessary to act without providing
an opportunity for a hearing, the Board, solely in its discretion,
may—
(i) provide the foreign bank that is
the subject of the termination order with notice of the intended termination
order;
(ii) grant
the foreign bank an opportunity to present a written submission opposing
issuance of the order; or
(iii) take any other action designed
to provide the foreign bank with notice and an opportunity to present
its views concerning the order.
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(e) Termination of federal branch or federal
agency. The Board may transmit to the Comptroller a recommendation
that the license of a federal branch or federal agency be terminated
if the Board has reasonable cause to believe that the foreign bank
or any affiliate of the foreign bank has engaged in conduct for which
the activities of a state branch or state agency may be terminated
pursuant to this section.
(f) Voluntary termination. A foreign bank shall
notify the Board at least 30 days prior to terminating the activities
of any office. Notice pursuant to this paragraph (f) is in addition
to, and does not satisfy, any other federal or state requirements
relating to the termination of an office or the requirement for prior
notice of the closing of a branch, pursuant to section 39 of the FDIA
(12 USC 1831p).
