(a) Establishment and operation of Federal branches and agencies.
(1) 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.
(2) In considering any application for
approval under this subsection, the Comptroller of the Currency shall
include any condition imposed by the Board under section 7(d)(5) as
a condition for the approval of such application by the agency.
(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) 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; (2) 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 (3) 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. The Comptroller of the Currency shall coordinate examinations
of Federal branches and agencies of foreign banks with examinations
conducted by the Board under section 7(c)(1) and, to the extent possible,
shall participate in any simultaneous examinations of the United States
operations of a foreign bank requested by the Board under such section.
1-564.2
(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 arising
out of, the exercise of its lawful powers.
1-564.3
(e) No foreign
bank may maintain both a Federal branch and a Federal agency in 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.
1-564.4
(g) (1) Upon the opening of a Federal
branch or agency in any 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 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) 5 per centum of the
total liabilities of such branch or agency, including acceptances,
but excluding (A) accrued 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 sound 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 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 to (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 as set
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.
1-564.5
(h) Additional branches
or agencies.
(1) A foreign bank with a Federal branch
or agency operating in any State may (A) 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 (B) 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.
(2) The Comptroller of the
Currency shall provide the Board with notice and an opportunity for
comment on any application to establish an additional Federal branch
or Federal agency under this subsection.
1-564.6
(i) Authority to operate a Federal branch or agency shall terminate
when the parent foreign bank voluntarily relinquishes it or when 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.
1-564.7
(j) (1) 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 record of the United States or any
State of 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
foreign 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 (j), 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 by 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 offices
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.
[12 USC 3102. As amended
by acts of Dec. 19, 1991 (105 Stat. 2290, 2291) and Dec. 27, 2000
(114 Stat. 3037).]
