(a) Applications for membership and stock.
(1) State banks applying
for membership in the Federal Reserve System shall file with the appropriate
Federal Reserve Bank an
application for membership in the Federal Reserve
System and for stock in the Reserve Bank,
2 in accordance with this
part and section 262.3 of the Rules of Procedure, located at 12 CFR
262.3.
(2) Board approval. If an applying bank conforms to all the requirements
of the Federal Reserve Act and this section, and is otherwise qualified
for membership, the Board may approve its application subject to such
conditions as the Board may prescribe.
(3) Effective date of membership. A
state bank becomes a member of the Federal Reserve System on the date
its Federal Reserve Bank stock is credited to its account (or its
deposit is accepted, if it is a mutual savings bank not authorized
to purchase Reserve Bank stock) in accordance with the Board’s Regulation
I (12 CFR 209).
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(b) Factors considered in approving applications for membership. Factors given special consideration by the Board in passing upon
an 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.
(4) Corporate
powers. Whether the bank’s corporate powers are consistent with
the purposes of the Federal Reserve Act.
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(c) Expedited approval for eligible banks and bank
holding companies.
(1) Availability of expedited treatment. The expedited membership 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 membership application filed with the
appropriate Reserve Bank will be deemed approved on the fifteenth
day after receipt of the complete application by the Board or appropriate
Reserve Bank, unless the Board or the appropriate Reserve Bank notifies
the bank that the application is approved prior to that date 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 will offer banking services
that are materially different from those currently offered by the
bank, or by the affiliates of the proposed bank;
(ii) the bank or bank holding company
does not meet the criteria under section 208.3(c)(1);
(iii) the application contains a material
error or is otherwise deficient; or
(iv) the application raises significant supervisory, 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) Conditions of membership.
(1)
Safety and soundness. Each member bank
shall at all times conduct its business and exercise its powers with
due regard to
safety and soundness. Each member bank shall comply with
the Interagency Guidelines Establishing Standards for Safety and Soundness
prescribed pursuant to section 39 of the FDI Act (12 U.S.C. 1831p-1),
set forth in appendix D-1 to this part [at
3-1579.3], and the Interagency
Guidelines Establishing Information Security Standards prescribed
pursuant to sections 501 and 505 of the Gramm-Leach-Bliley Act (15
U.S.C. 6801 and 6805) and section 216 of the Fair and Accurate Credit
Transactions Act of 2003 (15 U.S.C. 1681w), set forth in appendix
D-2 to this part [at
3-1571].
(2) General character of bank’s business. A
member bank may not, without the permission of the Board, cause or
permit any change in the general character of its business or in the
scope of the corporate powers it exercises at the time of admission
to membership.
(3) Compliance with conditions of membership. Each member bank shall comply at all times with this Regulation
H (12 CFR 208) and any other conditions of membership prescribed by the
Board.
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(e) Waivers.
(1) Conditions of membership. A member bank may petition the Board
to waive a condition of membership. The Board may grant a waiver of
a condition of membership upon a showing of good cause and, in its
discretion, may limit, among other items, the scope, duration, and
timing of the waiver.
(2) Reports of affiliates. Pursuant
to section 21 of the Federal Reserve Act (12 U.S.C. 486), the Board
waives the requirement for the submission of reports of affiliates
of member banks, unless such reports are specifically requested by
the Board.
(f) Voluntary
withdrawal from membership. Voluntary withdrawal from membership
becomes effective upon cancellation of the Federal Reserve Bank stock
held by the member bank, and after the bank has made due provision
to pay any indebtedness due or to become due to the Federal Reserve
Bank in accordance with the Board’s Regulation I (12 CFR 209).
