Fed to Release More Information about Banking Applications

The Federal Reserve Board later this year will start publishing a semiannual report with aggregate data and other information about banking applications it receives.

First report to come later this year
The first issue of the report will be released in the second half of 2014, the Fed announced on February 24. It will include statistics on the length of time taken to process applications and notices, the number of approvals, denials, and withdrawals, and the main reasons for withdrawals. The Board receives applications from banking companies that seek to make proposed acquisitions, establish branches, and make other major changes.

The Board evaluates applications in light of statutory factors, including financial condition, performance under the Community Reinvestment Act (CRA), and managerial experience. If it approves the application, the Board makes a public announcement.

Enhanced transparency a main purpose
However, if Fed staff identify issues that could result in the staff recommending denial of a proposal, the staff informs the filer of the particular issues. In some cases, the filer withdraws the application. The new report will increase the transparency of the applications process by providing more detailed information to the public and supervised institutions regarding the bases for withdrawn applications.

As it announced the new report, the Board also released guidance describing common issues that have led to recent withdrawal of applications. Some of those issues include less-than-satisfactory supervisory ratings for safety and soundness, consumer compliance, or CRA; inadequate compliance with the Bank Secrecy Act; and concerns regarding the financial condition or management of the proposed organization.

February 25, 2014