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Supervision & Regulation


General Guidance on Specific Types of Filings

Updated 5/25/10

Please do not submit incomplete applications. Final applications should contain all required information.


BANK HOLDING COMPANY FORMATION

Guiding Regulation: Regulation Y, See Sections 225.17 and 225.15

Forms:

  • FRY-3 or FRY-3N for companies organized in the U.S.
  • FRY-3F for companies organized under the laws of a foreign country
  • FR2081C (Interagency Biographical and Financial Report) for (i) shareholders that will own 10 percent or more of the bank holding company; (ii) other proposed directors and senior executive officers of the bank holding company; and (iii) if the subject bank is a de novo institution, any other organizers.
  • FR2081C is NOT required for filings under Section 225.17 of Regulation Y.

Publication: Filings under Section 225.17 of Regulation Y — no publication. Filings under Section 225.15 of Regulation Y require publication in the newspaper and Federal Register

Number of Copies to Submit:
Final filing under Section 225.15 of Regulation Y - Original and 7 copies
Final filing under Section 225.17 of Regulation Y - Original and 5 copies

Justice Department Waiting Period: There is no post-approval waiting period for filings under Section 225.17 of Regulation Y. The United States Justice Department requires a 30-day post approval waiting period for applications filed under Section 225.15 of Regulation Y. In some cases, the Justice Department will shorten the waiting period to 15 days.

Miscellaneous Information: A proposal to form a bank holding company over a de novo bank is strengthened by the following commitment: "Applicant will not incur debt without the prior approval of the Federal Reserve." This commitment is routinely obtained from bank holding companies over de novo banks because a de novo bank has little or no historical record of satisfactory earnings to support debt servicing.

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BANK HOLDING COMPANY - BANKING ACQUISITION OR MERGER

Guiding Regulation: Regulation Y, See Sections 225.14 and 225.15

Forms:
FRY-3 or FRY-3N for companies organized in the U.S.

FRY-3F for companies organized under the laws of a foreign country

FR2081C (Interagency Biographical and Financial Reports) for (i) any shareholders that will own 10 percent or more on a pro forma basis and currently hold less than 10 percent and (ii) proposed new directors of the applicant bank holding company.

Publication: Newspaper and Federal Register

Number of Copies to Submit:
Final filing - Original and 7 copies

Justice Department Waiting Period: The United States Justice Department requires a 30-day post approval waiting period for applications filed under Section 225.14 or 225.15 of Regulation Y. In some cases, the Justice Department will shorten the waiting period to 15 days.

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BANK HOLDING COMPANY - NON-BANK ACTIVITIES AND ACQUISITIONS

Guiding Regulation: Regulation Y, See Subpart C

Form: FRY-4 for filings pursuant to section 225.23 or 225.24 of Regulation Y. No form is required for filings pursuant to section 225.22(a) of Regulation Y; the required information should be provided in a letter.

Publication: Requirements vary depending on proposed activity.

Number of Copies to Submit:
Final filing - Original and 8 copies

Miscellaneous Information:

Proposals to acquire thrifts or other nonbank insured depository institutions may be submitted following the procedures described in Section 225.14 of Regulation Y (Expedited action for certain bank acquisitions by well-run bank holding companies) if the proposal meets the criteria. Proposals that do not meet the criteria of Section 225.14 should be submitted using the procedures described in Section 225.24 (Procedures for other nonbank proposals).

If your proposal involves a joint venture, please refer to SR 96-39.

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BANK HOLDING COMPANY - APPLICATION WAIVER REQUESTS

Guiding Regulation: Regulation Y, See Section 225.12(d)(2)

Form: None. The required information should be provided in a letter along with a copy of the corresponding Bank Merger Act application.

Publication: None

Number of Copies to Submit:
Final filing - Original and 5 copies

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BANK HOLDING COMPANY - STOCK REDEMPTION

Guiding Regulation: Regulation Y, See Section 225.4(b)

Form: None. The required information should be provided in a letter.

Publication: None

Number of Copies to Submit:
Final filing - Original and 4 copies

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CHANGE IN MANAGEMENT

Guiding Regulation: Regulation Y, See Subpart H

Forms: FR2081B and FR2081C

Publication: None

Number of Copies to Submit:
Final filing - Original and 8 copies

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CHANGE IN CONTROL

Guiding Regulation: Regulation Y, See Subpart E

Forms: FR2081A and C (FR2081C should be completed for all parties to the filing)

Publication: Newspaper and Federal Register

Note: If an acquiring party is a partnership, the public notice should include the name and location of the partnership and each of its general partners. If an acquiring party is a trust, the public notice should include the name and location of the trust and each of its trustees.

Number of Copies to Submit:
Final filing - Original and 9 copies

Miscellaneous Information:

The Change in Bank Control Act requires that the notificant furnish independent verification of sources of funds to be used in the transaction. Examples of independent documentation are bank letters verifying cash balances, copies of federal income tax returns to verify income, and appraisals and sale contracts for assets to be liquidated. If any portion of the funds for the acquisition will be borrowed, the cash flow projections requested in FR2081C (Interagency Biographical and Financial Report) should demonstrate the notificant's ability to service the proposed borrowings.

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COMMITMENT RELIEF REQUEST

Guiding Regulation: Varies depending on the nature of the commitment and the request

Forms: None - provide letter as described below

Publication: None

Number of Copies to Submit:
Final filing - Original and 4 copies

Miscellaneous Information:

The Federal Reserve's processing of an application frequently involves obtaining commitments from the applicant company or a principal shareholder. If an applicant company or a principal shareholder seeks to revise the commitment or to be released from the commitment, a request letter should be submitted to the Reserve Bank including detailed support for why the revision or release is appropriate.

Some commitments require that an applicant company or principal shareholder obtain Reserve Bank approval before taking specific action (such as before incurring debt). Requests for this type of approval also fall under the "commitment relief request" category. Companies that have an active commitment to not incur debt without the prior approval of the Reserve Bank should note that Trust Preferred Securities are considered "debt" for purposes of the commitment.

The following information should be included with any commitment relief request by an applicant company to incur debt.

  • The specific reason(s) for borrowing;
  • A letter from the lender including the terms of the loan;
  • A minimum 3-year debt reduction schedule showing that the BHC can service the debt without financially straining its subsidiary bank(s). If the debt repayment source involves bank dividends, the schedule should show that the bank(s) will remain well-capitalized during the debt repayment period;
  • Supporting documentation outlining the detailed assumptions used in developing the pro foma financial statements;
  • A parent company cash flow statement (3-years);
  • At least one alternate repayment source;
  • A discussion of the applicant company's risk management policies and practices regarding asset/liability management; and
  • Results of any rate shock analysis performed, along with the detailed assumptions used in each of the rate scenarios (variable rate instruments only).

If the debt is in the form of Trust Preferred Securities, please also provide the following:

  • Documentation that the company's directors are aware that the company's capital position will be adversely affected if the principal portion of trust preferred securities is not repaid with capital-eligible funds; and
  • Confirmation that a tier 1 capital qualification has been obtained from Huston McKinney of this Reserve Bank (404.498.7221).

If a company wishes to be released from a commitment to not incur debt, the request letter should include detailed information supporting approval of the request. At a minimum, the BHC and its subsidiary bank(s) should be in overall satisfactory financial condition, well-managed, well-capitalized, and have achieved profitability. The Reserve Bank typically will not release a BHC from a commitment to not incur debt until the BHC's subsidiary bank has been in satisfactory operation for 5 years.

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MEMBERSHIPS

Guiding Regulation: Regulation H, Subpart A

Forms:

FR2083 (Section I for de novo banks, Section II for currently operating banks, and Section III for newly formed, non-operating "shell" banks formed to facilitate the acquisition of an existing bank)

FR 2083A or B (depending on charter type), and

FR 2083C

FR2081C (Interagency Biographical and Financial Reports) for all organizers, directors and principal shareholders if the applicant bank is a de novo institution.

Publication: None

Number of Copies to Submit:
Final filing - Original and 8 copies

Miscellaneous Information:

De Novo Banks:
Before filing the application, the organizers should contact the Reserve Bank to schedule a pre-filing meeting. All of the organizers and the president or chief executive officer (if identified) must attend the pre-filing meeting. At this meeting, the organizers will present their plans and ideas for the bank, and representatives of the Reserve Bank will identify any potential problems and issues with the proposal. At least one week before the meeting, the Interagency Biographical form should be submitted to the Reserve Bank for each proposed director, officer, and principal shareholder (See Section I, Question 5 of FR 2083). Preliminary charter approval from the appropriate State banking department is required before the final membership application may be submitted to the Federal Reserve.

Requirements for de novo banks and a list of items that should be included in the bank's business plan.

Currently Operating Banks:
Before filing the application with the Reserve Bank, please contact Assistant Vice President Robert Hawkins at (404) 498-7317, Assistant Vice President Allen Stanley at (404) 498-7274, or Assistant Vice President Carolyn Healy at (305) 597-6820, so that we may determine if an examination of the bank will be required.

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FINANCIAL HOLDING COMPANY DECLARATION

Guiding Regulation: Regulation Y, Subpart I

Form: None. The required information should be provided in a letter.

Publication: None

Number of Copies to Submit: Original and 4 copies. Also forward a copy to:

Lisa M. DeFerrari
Assistant Director
Division of Banking Supervision and Regulation
Board of Governors of the Federal Reserve System
20th St. and Constitution Avenue, NW
Washington, D.C. 20551

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STATE MEMBER BANK MERGER, CONSOLIDATION, OR ACQUISITION OF ASSETS OR ASSUMPTION OF LIABILITIES OF ANOTHER BANK OR SAVINGS ASSOCIATION

Guiding Regulation: No Federal Reserve Regulation, see 12 USC 1828(c) , 1815(d)(2), or 1815(d)(3)

Form: FR 2070

Publication: Newspaper publication required

Number of Copies to Submit:
Final filing - Original and 10 copies

Justice Department Waiting Period: The United States Justice Department requires a 30-day post approval waiting period for Bank Merger Act applications. In some cases, the Justice Department will shorten the waiting period to 15 days.

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STATE MEMBER BANK PREMISES INVESTMENTS

Guiding Regulation: Regulation H, Section 208.21

Form: None - provide letter as described below

Publication: None

Number of Copies to Submit:
Final filing - Original and 5 copies

Section 2206 of The Economic Growth and Regulatory Paperwork Reduction Act of 1996 (Act) amended Section 24A of the Federal Reserve Act concerning the prior approval requirements for premises investments. The Act provides that a state member bank may now invest between 100 and 150 percent of its capital and surplus in bank premises without prior approval, provided that the following criteria are met:

(1) The bank received a CAMELS composite rating of 1 or 2 at its most recent examination (or an equivalent rating under a comparable rating system);
(2) The bank is well capitalized and will continue to be well capitalized after the investment or loan; and
(3) The bank provides notice to the Federal Reserve within 30 days of making the investment or loan. In addition to the criteria specified in the Act, the Federal Reserve also requires that:

(4) The bank is not subject to any formal supervisory action; and
(5) The bank is well managed (i.e. management and risk management components were rated satisfactory or better at the bank's most recent examination).

Premises investments include investments in premises, the stock, bonds, debentures, or other obligations of any corporation holding the premises of the bank, and loans made to or upon the security of such corporation. The Board has determined that "capital stock and surplus" as referred to under the 150 percent threshold equals "perpetual preferred stock and related surplus plus common stock plus surplus, as those terms are defined in the FFIEC Consolidated Reports of Condition and Income."

A state member bank that does not meet these criteria should obtain prior Federal Reserve approval before making an investment that will cause the bank's aggregate investment in premises to total more than 100 percent of the bank's capital stock or a previously authorized limit, whichever is greater. The following information should be submitted in a letter to the Reserve Bank when making such a request.

1) The currently authorized limit for premises investments. If the Federal Reserve has approved an amount exceeding the thresholds mentioned above, please provide the approved amount and approval date. If the bank did not reach its approved limit before two years from the approval date, provide the total investment in fixed assets amount at the second anniversary date, which would be the current limit;
2) The additional amount being requested above the bank's currently authorized limit;
3) The purpose of the additional investment, e.g. renovation, construction of a new branch, purchase of land for future expansion, etc.;
4) A current balance sheet of the bank that shows a detailed breakdown of fixed assets by account; i.e. the amounts in land, building, leasehold improvements, capitalized leases, and furniture and equipment;
5) A description of how the additional investment will be funded;
6) A copy of any new debt agreement if debt will be incurred or existing debt renegotiated in connection with the additional investment;
7) A copy of any lease associated with the request;
8) Fair market value comparisons of the property if a lease is involved; and
9) A detailed, separate schedule for all existing premises-related indebtedness of the bank, including any loans made by the bank that relate to its own premises.

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STATE MEMBER BANK BRANCH OPENING

Guiding Regulation: Regulation H, Section 208.6

Form: None - provide letter as described below

Publication: Newspaper

Number of Copies to Submit:
Final filing - Original and 5 copies

Automated teller machines are not considered branches and do not require prior approval.

If certain criteria are met, a branch application may consist of a copy of the newspaper notice(s) and the affidavit(s) of publication. The application must be received by the Reserve Bank within seven days of publication. If the publisher's affidavit(s) is not available within that timeframe, it may be forwarded as soon as it becomes available. In this case, the final application would include the full newspaper page(s) that the notice appeared on including evidence of the date of publication and a statement that the affidavit of publication will be provided as soon as possible.

In order to qualify for the simplified application process, the applicant bank must meet the following criteria:
1. be in satisfactory financial condition as evidenced by a CAMELS composite rating of 1 or 2,
2. be well-capitalized,
3. have a satisfactory record of performance under the Community Reinvestment Act,
4. have satisfactory compliance with laws and regulations,
5. be in compliance with any supervisory directives, and
6. the proposal will not cause the bank's aggregate investment in fixed assets to exceed the limitations under Section 24A of the Federal Reserve Act.

Banks that do not meet the criteria for this simplified procedure will be required to file a more detailed application to establish a branch. Since the Board of Governors discourages any type of expansion by banks in less than satisfactory condition, it is expected that such situations will be unusual. Please consult with the Reserve Bank for further guidance.

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STATE MEMBER BANK BRANCH CLOSING INFORMATION

Guiding Regulation: Interagency Policy Statement on Branch Closings.

Form: None - provide letter as described below

Publication: None

Number of Copies to Provide: Original and 3 copies

Under Section 228 of the Federal Deposit Insurance Corporation Improvement Act of 1991, depository institutions must give notice to the appropriate federal banking agency at least 90 days prior to closing a branch office. This notice must include:

1. identification of the branch to be closed;
2. the proposed date of the closing;
3. a detailed explanation of the reasons for the closing;
4. statistical or other information that supports the decision to close the branch consistent with the bank's written policy for branch closings;
5. a copy of the notice sent to the branch customers advising them of the branch closing, dated at least 90 days prior to the date of the closing; and
6. a statement that the branch intends to post a notice of the closing in a conspicuous manner on its premises for at least 30 days prior to the closing.

Please note that insured institutions are mandated to adopt policies for closure of branches under Section 228.

Please note that items 1-6 are NOT required for branch relocations. The Reserve Bank has designated a "relocation" as a move that involves a maximum distance of less than 1 mile between old and new locations. Please advise us by letter of the date of the relocation, and include a statement that the distance between the old and new locations is not more than 1 mile.

Interstate banks should refer to the Interagency Policy Statement on Branch Closings for additional guidelines with respect to branches located in low- to moderate-income areas.

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FOREIGN BANK AGENCY OR REPRESENTATIVE OFFICE

Guiding Regulation: Regulation K

Forms:

FRK-2

FR 2081C (Interagency Biographical and Financial Report) for the chief executive officer and chief operating officer of the applicant, any individuals or companies in the upstream chain of ownership who own or control, directly or indirectly, 10 percent or more of the voting stock shares of the foreign bank, and the proposed manager of the U.S. office.

Also include a copy of the application for charter of the agency or representative office filed with either the State Banking Authority or the Comptroller of the Currency.

Publication: Newspaper

Number of Copies to Submit: Original and 6 copies

Relevant documents:

The Board of Governors' January 12, 1993 press release (PDF document) concerning consolidated home country supervision.

The Board of Governors' March 8, 1993 press release (PDF document) concerning processing procedures.

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OTHER INTERNATIONAL APPLICATIONS

Guiding Regulation: Regulation K

Form: FRK-1

Publication: Requirements vary depending on filing

Number of Copies to Submit: Original and 7 copies

Proposals to establish a foreign bank-owned Edge Corporation should include the following additional information:

1) Peer group information — if available, please provide comparative statistics for major home country banks such as total assets, equity, earnings, and relevant ratios. Typically, this information might be prepared by an independent bank analyst.
2) Lines of credit available from banks outside the home country advised, committed, utilized. Who knows you best in the U.S.?
3) Approvals necessary from home country banking authorities and status.
4) A statement as to the applying bank's ability to provide capital and other financial support to the Edge beyond initial capitalization.
5) Summarize the ownership of the applying bank; identify affiliated organizations. Provide an organization chart showing principal relationships.
6) To what degree is it anticipated that the Edge's risk assets will entail home country risk?
7) Summarize home country exchange controls.
8) Describe home country bank supervision. Are on-site examinations performed? Summarize prudential limitations.
9) To what extent are U.S. banks permitted entry into the home country?

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