Q. What is considered a branch?
A: Section 208.2(c)(1)&(2) of Regulation H defines a branch as any branch bank, branch office, branch agency, additional office, or any branch place of business that receives deposits, pays checks, or lends money. The definition does not include automated or interactive teller machines, remote service facilities, loan production offices, temporary branches, or insured branches of foreign banks. Also, a state member bank's (SMB) main office is not considered a branch.

Q. Does the Federal Reserve have a standard branch form? Can I use the state branch form?
A: The Federal Reserve does not have a standard branch form. The application must be submitted in the form of a letter that includes a detailed description of the proposed branch. A copy of the affidavit of publication should also be included with the letter. If a state form is also used, it is helpful to include that form along with the letter. For additional information, refer to State Member Bank Branch Opening.

Q. What are the publication requirements, and when should I publish the notice?
A: Refer to Notice of Application to Establish a Branch of a State Member Bank.

Q. Is an application required to relocate a branch?
A: It depends on several factors. In considering a branch relocation or closure, the Federal Reserve follows the bright line test for short-distance branch relocations in the Office of the Comptroller of the Currency rules, 12 CFR 5.3(l). This test specifies relocation distances as: 1,000 feet if branches are in a principal city of a metropolitan statistical area (MSA), one mile if branches are in an MSA but not in a principal city, and two miles if branches are not within an MSA. If the relocation distance does not meet the applicable criteria, a branch application is required for the new branch, and a branch closure notice is required for the closing branch.

Q. Is an application required to relocate a bank's main office?
A: An application is not required. An SMB's main office is not considered a branch even if branch activities (receiving deposits, paying checks, or lending money) are conducted at the site. When an SMB relocates its main office from a location where it already conducts branch activities, no regulatory purpose would be served by requiring the bank to submit an application to continue conducting branch activities at the new main office location. Therefore, an SMB that conducts branch activities at its main office may continue to conduct branch activities at a different or new site following a main office relocation without filing a branch application. SMBs should contact the appropriate state banking regulator regarding applicable state laws with respect to the continuation of branch activities at the site of a former main office.

Q. What needs to be provided with a branch closing notice?
A: Prior to closing a branch, an SMB must comply with the notice requirements of Section 42 of the Federal Deposit Insurance Act (12 USC § 1831r-1), section 228 of the Federal Deposit Insurance Corporation Improvement Act of 1991, and the June 29, 1999, Interagency Policy Statement Regarding Branch Closings ("Branch Closing Policy Statement"), which require the following:

  • Written notice of the proposed closings must be made to the SMB's federal regulator and branch customers at least 90 days before the closings. The notification should include the location of the branch to be closed, the proposed date of branch closing, a detailed statement of the reasons for the decision to close the branch, and statistical or other information that supports the reasons for closing.
  • At least 30 days prior to the proposed closing, the SMB must also post a notice of the branches to be closed to its branch customers in a conspicuous manner on the premises. If the SMB is an interstate bank (that is, if it operates branches in other states) and the proposed branch closure is in a low-to-moderate income census tract, the lobby notice should contain the mailing address of the Reserve Bank and a statement that comments on the proposed branch closing may be mailed to the Reserve Bank. This statement should also be included in the customer notice, and the notice should state that the Reserve Bank does not have the authority to approve or prevent the closing.
  • As part of its Community Reinvestment Act requirements, an SMB is required to have a written policy for opening and closing offices.

Q. Is there a filing requirement for temporary closures of a branch?
A: A filing is not required for temporary closures. Section 42 of the Federal Deposit Insurance Act requires SMBs to give 90 days' prior written notice of any branch closing to the appropriate Federal Reserve Bank and branch customers and to post a notice at the branch site at least 30 days prior to closing. However, such requirements do not apply when an SMB temporarily ceases operating a branch that does not permanently close. Reasons for temporary closures of a branch include, but are not limited to, natural disaster, repairing significant maintenance issues, and renovation. SMBs are encouraged to advise the appropriate Federal Reserve Bank of a temporary branch closure and to contact their state banking regulator, as there may be requirements applicable to the temporary closure under applicable state laws. In addition, SMBs should inform customers of a temporary branch closure, including through email, notice on the bank's website, notice at the branch, or other means.

If an SMB decides to permanently close a branch that has been temporarily closed, it is required to follow the branch closing procedures set forth in section 42 of the Federal Deposit Insurance Act to the extent possible and as soon as possible after the decision to close the branch permanently has been made.

If in connection with the temporary closure of a branch, an SMB opens a temporary branch at a separate location, notice pursuant to section 42 of the Federal Deposit Insurance Act would not be required prior to terminating services at the temporary site, as section 42 does not apply to temporary branches.

Q. What if the bank is in less-than-satisfactory condition?
A: Institutions in less-than-satisfactory condition should refer to SR 13-7/CA 13-4 State Member Bank Branching Considerations and are encouraged to contact the appropriate Federal Reserve Bank prior to filing.

Q. Who can I contact for information and/or questions?
A: Contact Sabrina Francis, director of applications (404-498-7368).