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SECTION 208.6—Establishment and Maintenance of Branches

(a) Branching.

(1) To the extent authorized by state law, a member bank may establish and maintain branches (including interstate branches) subject to the same limitations and restrictions that apply to the establishment and maintenance of national bank branches (12 U.S.C. 36 and 1831u), except that approval of such branches shall be obtained from the Board rather than from the Comptroller of the Currency.

(2) Branch applications. A state member bank wishing to establish a branch in the United States or its territories must file an application in accordance with the Board’s Rules of Procedure, located at 12 CFR 262.3, and must comply with the public-notice and comment rules contained in paragraphs (a)(3) and (a)(4) of this section. Branches of member banks located in foreign nations, in the overseas territories, dependencies, and insular possessions of those nations and of the United States, and in the Commonwealth of Puerto Rico, are subject to the Board’s Regulation K (12 CFR 211).

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(3) Public notice of branch applications.

(i) Location of publication. A state member bank wishing to establish a branch in the United States or its territories must publish notice in a newspaper of general circulation in the form and at the locations specified in section 262.3 of the Rules of Procedure (12 CFR 262.3).

(ii) Contents of notice. The newspaper notice referred to in paragraph (a)(3) of this section shall provide an opportunity for interested persons to comment on the application for a period of at least 15 days.

(iii) Timing of publication. Each newspaper notice shall be published no more than seven calendar days before and no later than the calendar day on which an application is filed with the appropriate Reserve Bank.

(4) Public comment.

(i) Timely comments. Interested persons may submit information and comments regarding a branch application under section 208.6. A comment shall be considered timely for purposes of this subpart if the comment, together with all supplemental information, is submitted in writing in accordance with the Board’s Rules of Procedure (12 CFR 262.3) and received by the Board or the appropriate Reserve Bank prior to the expiration of the public comment period provided in paragraph (a)(3)(ii) of this section.

(ii) Extension of comment period. The Board may, in its discretion, extend the public comment period regarding any application under section 208.6. In the event that an interested person requests a copy of an application submitted under section 208.6, the Board may, in its discretion and based on the facts and circumstances, grant such person an extension of the comment period for up to 15 calendar days.

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(b) Factors considered in approving domestic-branch applications. Factors given special consideration by the Board in passing upon a branch application are:

(1) Financial condition and management. The financial history and condition of the applying bank and the general character of its management;

(2) Capital. The adequacy of the bank’s capital in accordance with section 208.4, and its future earnings prospects;

(3) Convenience and needs. The convenience and needs of the community to be served by the branch;

(4) CRA performance. In the case of branches with deposit-taking capability, the bank’s performance under the Community Reinvestment Act (12 USC 2901 et seq.) and Regulation BB (12 CFR 228); and

(5) Investment in bank premises. Whether the bank’s investment in bank premises in establishing the branch is consistent with section 208.21.

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(1) Availability of expedited treatment. The expedited branch-application procedures described in paragraph (c)(2) of this section are available to—

(i) an eligible bank; and

(ii) a bank that cannot be determined to be an eligible bank because it has not received CAMELS compliance or CRA ratings from a bank regulatory authority, if it is controlled by a bank holding company that meets the criteria for expedited processing under section 225.14(c) of Regulation Y (12 CFR 225.14(c)).

(2) Expedited procedures. A completed domestic-branch application filed with the appropriate Reserve Bank will be deemed approved on the fifth day after the close of the comment period, unless the Board or the appropriate Reserve Bank notifies the bank that the application is approved prior to that date (but in no case will an application be approved before the third day after the close of the public comment period) or the Board or the appropriate Federal Reserve Bank notifies the bank that the application is not eligible for expedited review for any reason, including, without limitation, that—

(i) the bank or bank holding company does not meet the criteria under section 208.6(c)(1);

(ii) the application contains a material error or is otherwise deficient; or

(iii) the application or the notice required under paragraph (a)(3) of this section raises significant supervisory, Community Reinvestment Act, compliance, policy, or legal issues that have not been resolved, or a timely substantive adverse comment is submitted. A comment will be considered substantive unless it involves individual complaints, or raises frivolous, previously considered, or wholly unsubstantiated claims or irrelevant issues.

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(d) Consolidated applications.

(1) Proposed branches; notice of branch opening. A member bank may seek approval in a single application or notice for any branches that it proposes to establish within one year after the approval date. The bank shall, unless notification is waived, notify the appropriate Reserve Bank not later than 30 days after opening any branch approved under a consolidated application. A bank is not required to open a branch approved under either a consolidated or single branch application.

(2) Duration of branch approval. Branch approvals remain valid for one year unless the Board or the appropriate Reserve Bank notifies the bank that in its judgment, based on reports of condition, examinations, or other information, there has been a change in the bank’s condition, financial or otherwise, that warrants reconsideration of the approval.

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(e) Branch closings. A member bank shall comply with section 42 of the FDI Act (FDI Act), 12 USC 1831r-1, with regard to branch closings.

(f) Branch relocations. A relocation of an existing branch does not require filing a branch application. A relocation of an existing branch, for purposes of determining whether to file a branch application, is a movement that does not substantially affect the nature of the branch’s business or customers served.