(a) Interstate branching
and agency operations.
(1) Subject to the provisions of this Act
and with the prior written approval by the Board and the Comptroller
of the Currency of an application, a foreign bank may establish and
operate a Federal branch or agency in any State outside the home State
of such foreign bank to the extent that the establishment and operation
of such branch would be permitted under section 5155(g) of the Revised
Statutes or section 44 of the Federal Deposit Insurance Act if the
foreign bank were a national bank whose home State is the same State
as the home State of the foreign bank.
(2) Subject to the provisions of this Act
and with the prior written approval by the Board and the appropriate
State bank supervisor of an application, a foreign bank may establish
and operate a State branch or agency in any State outside the home
State of such foreign bank to the extent that such establishment and
operation would be permitted under section 18(d)(4) or 44 of the Federal
Deposit Insurance Act if the foreign bank were a State bank whose
home State is the same State as the home State of the foreign bank.
1-565.1
(3) In approving an application
under paragraph (1) or (2), the Board and (in the case of an application
under paragraph (1)) the Comptroller of the Currency—
(A) shall
apply the standards applicable to the establishment of a foreign bank
office in the United States under section 7(d);
(B) may not approve an application unless
the Board and (in the case of an application under paragraph (1))
the Comptroller of the Currency—
(i) determine that the foreign
bank’s financial resources, including the capital level of the bank,
are equivalent to those required for a domestic bank to be approved
for branching under section 5155 of the Revised Statutes and section
44 of the Federal Deposit Insurance Act; and
(ii) consult with the Secretary of the Treasury
regarding capital equivalency; and
(C) shall apply the same requirements
and conditions to which an application for an interstate merger transaction
is subject under paragraphs (1), (3), and (4) of section 44(b) of
the Federal Deposit Insurance Act.
1-565.2
(4) Subsections (c) and (d)(2) of section
44 of the Federal Deposit Insurance Act shall apply with respect to
each branch and agency of a foreign bank which is established and
operated pursuant to an application approved under this subsection
in the same manner and to the same extent such provisions of such
section apply to a domestic branch of a national or State bank (as
such terms are defined in section 3 of such Act) which resulted from
a merger transaction under such section 44.
(5) Except as provided in this section,
a foreign bank may not, directly or indirectly, acquire, establish,
or operate a branch or agency in any State other than the home State
of such bank.
1-565.3
(6) If the Board or the
Comptroller of the Currency, taking into account differing regulatory or accounting
standards, finds that adherence by a foreign bank to capital requirements
equivalent to those imposed under section 5155 of the Revised Statutes
and section 44 of the Federal Deposit Insurance Act could be verified
only if the banking activities of such bank in the United States are
carried out in a domestic banking subsidiary within the United States,
the Board and (in the case of an application under paragraph (1))
the Comptroller of the Currency may approve an application under paragraph
(1) or (2) subject to a requirement that the foreign bank or company
controlling the foreign bank establish a domestic banking subsidiary
in the United States.
(7) Notwithstanding paragraphs (1) and (2), a foreign bank may—
(A) with the approval of the Board and the Comptroller of the Currency,
establish and operate a Federal branch or Federal agency or, with
the approval of the Board and the appropriate State bank supervisor,
a State branch or State agency in any State outside the foreign bank’s
home State if—
(i) the establishment and operation of such
branch or agency is permitted by the State in which the branch or
agency is to be established; and
(ii) in the case of a Federal or State branch,
the branch receives only such deposits as would be permitted for a
corporation organized under section 25A of the Federal Reserve Act;
or
(B) with the approval of the Board and the relevant licensing authority
(the Comptroller in the case of a Federal branch or the appropriate
State supervisor in the case of a State branch), upgrade an agency,
or a branch of the type referred to in subparagraph (A)(ii), located
in a State outside the foreign bank’s home State, into a Federal or
State branch if—
(i) the establishment and operation of such
branch is permitted by such State; and
(ii) such agency or branch—
(I) was in operation in such State on the
day before September 29, 1994; or
(II) has been in operation in such State
for a period of time that meets the State’s minimum age requirement
permitted under section 44(a)(5) of the Federal Deposit Insurance
Act.
1-565.4
(8) (A)
If a foreign bank acquires a bank or a branch of a bank, in a State
in which the foreign bank does not maintain a branch, and such acquired
bank is, or is part of, a regulated financial institution (as defined
in section 803 of the Community Reinvestment Act of 1977), the Community
Reinvestment Act of 1977 shall continue to apply to each branch of
the foreign bank which results from the acquisition as if such branch
were a regulated financial institution.
(B) Paragraph (1) shall not apply to
any branch that receives only such deposits as are permissible for
a corporation organized under section 25A of the Federal Reserve Act
to receive.
(9) For purposes of this subsection, the term “home State”
means—
(A) with respect to a national bank,
the State in which the main office of the bank is located; and
(B) with respect to
a State bank, the State by which the bank is chartered.
1-566
(b) Unless its authority to do so is lawfully revoked
otherwise than pursuant to this section, a foreign bank, notwithstanding
any restriction or limitation imposed under subsection (a) of this
section, may establish and operate, outside its home State, any State
branch, State agency, or bank or commercial lending company subsidiary
which commenced lawful operation or for which an application to commence
business had been lawfully filed with the appropriate State or Federal
authority, as the case may be, on or before July 27, 1978. Notwithstanding
subsection (a), a foreign bank may continue to operate, after the
enactment of the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994, any Federal branch, State branch, Federal agency, State agency,
or commercial lending company subsidiary which such bank was operating
on the day before the date of the enactment of such Act to the extent
the branch, agency, or subsidiary continues, after the enactment of
such Act, to engage in operations which were lawful under the laws
in effect on the day before such date.
1-566.01
(c) Determination
of home state of foreign bank. For the purposes of this section—
(1) in the case of a foreign
bank that has any branch, agency, subsidiary commercial lending company,
or subsidiary bank in more than 1 State, the home State of the foreign
bank is the 1 State of such States which is selected to be the home
State by the foreign bank or, in default of any such selection, by
the Board; and
(2)
in the case of a foreign bank that does not have a branch, agency,
subsidiary commercial lending company, or subsidiary bank in more
than 1 State, the home State of the foreign bank is the State in which
the foreign bank has a branch, agency, subsidiary commercial lending
company, or subsidiary bank.
1-566.02
(d) Clarification
of branching rules in the case of a foreign bank with a domestic bank
subsidiary. In the case of a foreign bank that has a domestic
bank subsidiary within the United States—
(1) the fact that such bank controls a
domestic bank shall not affect the authority of the foreign bank to
establish Federal and State branches or agencies to the extent permitted
under subsection (a); and
(2) the fact that the domestic bank is controlled by a foreign bank
which has Federal or State branches or agencies in States other than
the home State of such domestic bank shall not affect the authority
of the domestic bank to establish branches outside the home State
of the domestic bank to the extent permitted under section 5155(g)
of the Revised Statutes or section 18(d)(4) or 44 of the Federal Deposit
Insurance Act, as the case may be.
[12 USC 3103. As amended
by acts of Sept. 29, 1994 (108 Stat. 2354, 2356, 2361) and Nov. 12,
1999 (113 Stat. 1478).]
