(a) Approval of interstate
merger transactions authorized.
(1) Beginning on June 1, 1997, the responsible
agency may approve a merger transaction under section 18(c) between
insured banks with different home States, without regard to whether
such transaction is prohibited under the law of any State.
(2) (A)
Notwithstanding paragraph (1), a merger transaction may not be approved
pursuant to paragraph (1) if the transaction involves a bank the home
State of which has enacted a law after the date of enactment of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
and before June 1, 1997, that—
(i) applies equally to all out-of-State
banks; and
(ii) expressly
prohibits merger transactions involving out-of-State banks.
(B) A law enacted by
a State pursuant to subparagraph (A) shall have no effect on merger
transactions that were approved before the effective date of such
law.
1-401.51
(3) (A) A merger transaction may
be approved pursuant to paragraph (1) before June 1, 1997, if the
home State of each bank involved in the transaction has in effect,
as of the date of the approval of such transaction, a law that—
(i) applies equally to all out-of-State banks; and
(ii) expressly permits interstate merger transactions
with all out-of-State banks.
(B) A host State may impose conditions
on a branch within such State of a bank resulting from an interstate
merger transaction if—
(i) the conditions do not have the effect
of discriminating against out-of-State banks, out-of-State bank holding
companies, or any subsidiary of such bank or company (other than on
the basis of a nationwide reciprocal treatment requirement);
(ii) the imposition of the conditions
is not preempted by Federal law; and
(iii) the conditions do not apply or require
performance after May 31, 1997.
1-401.52
(4) (A)
An interstate merger transaction may involve the acquisition of a
branch of an insured bank without the acquisition of the bank only
if the law of the State in which the branch is located permits out-of-State
banks to acquire a branch of a bank in such State without acquiring
the bank.
(B) In
the case of an interstate merger transaction which involves the acquisition
of a branch of an insured bank without the acquisition of the bank,
the branch shall be treated, for purposes of this section, as an insured
bank the home State of which is the State in which the branch is located.
1-401.53
(5) (A) The responsible agency
may not approve an application pursuant to paragraph (1) that would
have the effect of permitting an out-of-State bank or out-of-State
bank holding company to acquire a bank in a host State that has not
been in existence for the minimum period of time, if any, specified
in the statutory law of the host State.
(B) Notwithstanding subparagraph (A),
the responsible agency may approve a merger transaction pursuant to
paragraph (1) involving the acquisition of a bank that has been in
existence at least 5 years without regard to any longer minimum period
of time specified in a statutory law of the host State.
(6) For purposes of this
subsection, a bank that has been chartered solely for the purpose
of, and does not open for business prior to, acquiring control of,
or acquiring all or substantially all of the assets of, an existing
bank or branch shall be deemed to have been in existence for the same
period of time as the bank or branch to be acquired.
1-401.54
(b) Provisions relating
to application and approval process.
(1) (A) Any bank
which files an application for an interstate merger transaction shall—
(i) comply with the filing requirements of any host State of the
bank which will result from such transaction to the extent that the
requirement—
(I) does not have the effect
of discriminating against out-of-State banks or out-of-State bank
holding companies or subsidiaries of such banks or bank holding companies;
and
(II) is similar in
effect to any requirement imposed by the host State on a nonbanking
corporation incorporated in another State that engages in business
in the host State; and
(ii) submit a copy of the application to the
State bank supervisor of the host State.
(B) The responsible agency
may not approve an application for an interstate merger transaction
if the applicant materially fails to comply with subparagraph (A).
1-401.55
(2) (A) The responsible
agency may not approve an application for an interstate merger transaction
if the resulting bank (including all insured depository institutions
which are affiliates of the resulting bank), upon consummation of
the transaction, would control more than 10 percent of the total amount
of deposits of insured depository institutions in the United States.
(B) The responsible
agency may not approve an application for an interstate merger transaction
if—
(i) any bank involved in the transaction (including all insured depository
institutions which are affiliates of any such bank) has a branch in
any State in which any other bank involved in the transaction has
a branch; and
(ii) the
resulting bank (including all insured depository institutions which
would be affiliates of the resulting bank), upon consummation of the
transaction, would control 30 percent or more of the total amount
of deposits of insured depository institutions in any such State.
1-401.56
(C) No provision of
this subsection shall be construed as affecting the authority of any
State to limit, by statute, regulation, or order, the percentage of
the total amount of deposits of insured depository institutions in
the State which may be held or controlled by any bank or bank holding
company (including all insured depository institutions which are affiliates
of the bank or bank holding company) to the extent the application
of such limitation does not discriminate against out-of-State banks,
out-of-State bank holding companies, or subsidiaries of such banks
or holding companies.
(D) The responsible agency may approve an application for an interstate
merger transaction pursuant to subsection (a) without regard to the
applicability of subparagraph (B) with respect to any State if—
(i) there is a limitation described in subparagraph (C) in a State
statute, regulation, or order which has the effect of permitting a
bank or bank holding company (including all insured depository institutions
which are affiliates of the bank or bank holding company) to control
a greater percentage of total deposits of all insured depository institutions
in the State than the percentage permitted under subparagraph (B);
or
(ii) the transaction
is approved by the appropriate State bank supervisor of such State
and the standard on which such approval is based does not have the
effect of discriminating against out-of-State banks, out-of-State
bank holding companies, or subsidiaries of such banks or holding companies.
(E)
This paragraph shall not apply with respect to any interstate merger
transaction involving only affiliated banks.
1-401.57
(3) In determining whether to approve an
application for an interstate merger transaction in which the resulting
bank would have a branch or bank affiliate immediately following the
transaction in any State in which the bank submitting the application
(as the acquiring bank) had no branch or bank affiliate immediately
before the transaction, the responsible agency shall—
(A) comply
with the responsibilities of the agency regarding such application
under section 804 of the Community Reinvestment Act of 1977;
(B) take into account the
most recent written evaluation under section 804 of the Community
Reinvestment Act of 1977 of any bank which would be an affiliate of
the resulting bank; and
(C) take into account the record of
compliance of any applicant bank with applicable State community reinvestment
laws.
1-401.58
(4)
The responsible agency may approve an application for an interstate
merger transaction pursuant to subsection (a) only if—
(A) each
bank involved in the transaction is adequately capitalized as of the
date the application is filed; and
(B) the responsible agency determines
that the resulting bank will be well capitalized and well managed
upon the consummation of the transaction.
(5) The charters of all banks
involved in an interstate merger transaction, other than the charter
of the resulting bank, shall be surrendered, upon request, to the
Federal banking agency or State bank supervisor which issued the charter.
1-401.59
(c) Applicability of certain laws to interstate
banking operations.
(1) (A) No provision
of this section shall be construed as affecting the authority of any
State or political subdivision of any State to adopt, apply, or administer
any tax or method of taxation to any bank, bank holding company, or
foreign bank, or any affiliate of any bank, bank holding company,
or foreign bank, to the extent such tax or tax method is otherwise
permissible by or under the Constitution of the United States or other
Federal law.
(B)
In the case of a branch of an out-of-State bank which results from
an interstate merger transaction, a proportionate amount of the value
of the shares of the out-of-State bank may be subject to any bank
shares tax levied or imposed by the host State, or any political subdivision
of such host State that imposes such tax based upon a method adopted
by the host State, which may include allocation and apportionment.
1-401.6
(2) No provision of this
section shall be construed as affecting—
(A) the applicability
of the antitrust laws; or
(B) the applicability, if any, of any
State law which is similar to the antitrust laws.
(3) No provision of this
section shall be construed as limiting in any way the right of a State
to—
(A) determine the authority of State
banks chartered by that State to establish and maintain branches;
or
(B) supervise,
regulate, and examine State banks chartered by that State.
(4) A host State may impose
any notification or reporting requirement on a branch of an out-of-State
bank if the requirement—
(A) does not discriminate against out-of-State
banks or bank holding companies; and
(B) is not preempted by any Federal
law regarding the same subject.
1-401.61
(d) Operations of the resulting bank.
(1) A resulting bank may, subject to the
approval of the appropriate Federal banking agency, retain and operate,
as a main office or a branch, any office that any bank involved in
an interstate merger transaction was operating as a main office or
a branch immediately before the merger transaction.
(2) Following the consummation of any interstate
merger transaction, the resulting bank may establish, acquire, or
operate additional branches at any location where any bank involved
in the transaction could have established, acquired, or operated a
branch under applicable Federal or State law if such bank had not
been a party to the merger transaction.
1-401.62
(3) If, as a condition for the acquisition
of a bank by an out-of-State bank holding company before the date
of the enactment of the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994—
(A) the home State of the acquired bank
imposed conditions on such acquisition by such out-of-State bank holding
company; or
(B)
the bank holding company made commitments to such State in connection with
the acquisition,
the State may enforce such conditions and commitments
with respect to such bank holding company or any affiliated successor
company which controls a bank or branch in such State as a result
of an interstate merger transaction to the same extent as the State
could enforce such conditions or commitments against the bank holding
company before the consummation of the merger transaction.
1-401.63
(e) Exception for banks in default or in danger
of default. If an application under subsection (a)(1) for approval
of a merger transaction which involves 1 or more banks in default
or in danger of default or with respect to which the Corporation provides
assistance under section 13(c), the responsible agency may approve
such application without regard to subsection (b), or paragraph (2),
(4), or (5) of subsection (a).
(f) Applicable rate and other charge limitations.
(1) In the case of any State
that has a constitutional provision that sets a maximum lawful annual
percentage rate of interest on any contract at not more than 5 percent
above the discount rate for 90-day commercial paper in effect at the
Federal reserve bank for the Federal reserve district in which such
State is located, except as provided in paragraph (2), upon the establishment
in such State of a branch of any out-of-State insured depository institution
in such State under this section, the maximum interest rate or amount
of interest, discount points, finance charges, or other similar charges
that may be charged, taken, received, or reserved (or in the case
of a governmental entity located in such State, paid) from time to
time in any loan or discount made or upon any note, bill of exchange,
financing transaction, or other evidence of debt by—
(A) any
insured depository institution whose home State is such State shall
be equal to not more than the greater of—
(i) the maximum interest
rate or amount of interest, discount points, finance charges, or other
similar charges that may be charged, taken, received, or reserved
in a similar transaction under the constitution or any statute or
other law of the home State of the out-of-State insured depository
institution establishing any such branch, without reference to this
section, as such maximum interest rate or amount of interest may change
from time to time; or
(ii) the maximum rate or amount of interest, discount points, finance
charges, or other similar charges that may be charged, taken, received,
or reserved in a similar transaction by a State insured depository
institution chartered under the laws of such State or a national bank
or Federal savings association whose main office is located in such
State without reference to this section; and
(B) any governmental entity
located in such State or any person that is not a depository institution
described in subparagraph (A) doing business in such State, shall
be equal to not more than the greater of the State’s maximum lawful
annual percentage rate or 17 percent—
(i) to facilitate the uniform
implementation of federally mandated or federally established programs
and financings related thereto, including—
(I) uniform accessibility of student loans, including the issuance
of qualified student loan bonds as set forth in section 144(b) of
the Internal Revenue Code of 1986;
(II) the uniform accessibility of mortgage
loans, including the issuance of qualified mortgage bonds and qualified
veterans’ mortgage bonds as set forth in section 143 of such Code;
(III) the uniform accessibility
of safe and affordable housing programs administered or subject to
review by the Department of Housing and Urban Development, including—
(aa) the issuance of exempt facility bonds for
qualified residential rental property as set forth in section 142(d)
of such Code; and
(bb)
the issuance of low income housing tax credits as set forth in section
42 of such Code; and
(IV) the uniform accessibility of bonds and
obligations issued under the American Recovery and Reinvestment Act
of 2009;
(ii) to facilitate interstate commerce through the issuance of bonds
and obligations under any provision of State law, including bonds
and obligations for the purpose of economic development, education,
and improvements to infrastructure; and
(iii) to facilitate interstate commerce generally,
including consumer loans, in the case of any person or governmental
entity (other than a depository institution subject to subparagraph
(A) and paragraph (2)).
(2) (A)
No provision of this subsection shall be construed as superseding
or affecting—
(i) the authority of any insured depository
institution to take, receive, reserve, and charge interest on any
loan made in any State other than the State referred to in paragraph
(1); or
(ii) the applicability
of section 501 of the Depository Institutions Deregulation and Monetary
Control Act of 1980, section 5197 of the Revised Statutes of the United
States, or section 27 of this Act.
(B) This subsection shall be construed
to apply to any loan or discount made, or note, bill of exchange,
financing transaction, or other evidence of debt, originated by an
insured depository institution, a governmental entity located in such
State, or a person that is not a depository institution described
in subparagraph (A) doing business in such State.
1-401.64
(g) Definitions. For purposes of this section,
the following definitions shall apply:
(1) The term “adequately capitalized” has the same meaning as in section 38.
(2) The term “antitrust laws”—
(A) has the same meaning as in subsection (a) of the first section
of the Clayton Act; and
(B) includes section 5 of the Federal
Trade Commission Act to the extent such section 5 relates to unfair
methods of competition.
(3) The term “branch” means any
domestic branch.
(4)
The term “home State”—
(A) means—
(i) with respect
to a national bank, the State in which the main office of the bank
is located; and
(ii) with
respect to a State bank, the State by which the bank is chartered;
and
(B) with respect to a bank holding company, has the same meaning
as in section 2(o)(4) of the Bank Holding Company Act of 1956.
1-401.65
(5) The term “host
State” means, with respect to a bank, a State, other than the
home State of the bank, in which the bank maintains, or seeks to establish
and maintain, a branch.
(6) The term “interstate merger transaction” means any merger
transaction approved pursuant to subsection (a)(1).
(7) The term “merger transaction” has the meaning determined under section 18(c)(3).
(8) The term “out-of-State bank”
means, with respect to any State, a bank whose home State is another
State.
(9) The term
“out-of-State bank holding company” means, with respect to
any State, a bank holding company whose home State is another State.
(10) The term “responsible
agency” means the agency determined in accordance with section
18(c)(2) with respect to a merger transaction.
(11) The term “resulting bank” means
a bank that has resulted from an interstate merger transaction under
this section.
[12 USC 1831u. As added
by act of Sept. 29, 1994 (108 Stat. 2343) and amended by acts of Nov.
12, 1999 (113 Stat. 1477); June 24, 2009 (123 Stat. 1880); Oct. 28,
2009 (123 Stat. 2183); and July 21, 2010 (124 Stat. 1608).]
