Compliance Guide to Small Entities
Regulation L: Management Official Interlocks
12 CFR 212
Regulation L prohibits a management official of a depository institution or depository institution holding company from serving simultaneously as a management official of another depository organization if the organizations are not affiliated and both either are very large or are located in the same local area.
A general description of the regulation, by section, follows.
Section 212.1 Authority, purpose, and scope
Describes the purpose of the regulation, which is to foster competition among depository organizations by restricting the interlocking relationships that a management official may have with state member banks, bank holding companies, and their affiliates.
Section 212.2 Definitions
Defines key terms used in the regulation.
Section 212.3 Prohibitions
Restricts a management official of a depository organization from serving simultaneously as a management official of an unaffiliated depository organization if the organizations in question have offices in the same community; or have offices in the same metropolitan statistical area (MSA) and each organization has total assets of $20 million or more; or, regardless of location, if one organization has total assets exceeding $2.5 billion and the other organization has total assets exceeding $1.5 billion.
Section 212.4 Interlocking relationships permitted by statute
Outlines interlocking relationships that are permitted by statute.
Section 212.5 Small-market-share exemption
Sets forth an exemption from Interlocks Act restrictions for depository organizations that have offices in the same community or metropolitan statistical area but collectively control less than 20 percent of the deposits in each MSA or community in which both have offices.
Section 212.6 General exemption
Sets forth the authority of the Federal Reserve Board to exempt an interlock from the prohibitions of the Interlocks Act by order, if the interlock would not raise competitive or safety-and-soundness concerns.
Section 212.7 Change in circumstances
Describes when a management official must terminate service because of a change in circumstances and provides a transition period for terminating service.
Section 212.8 Enforcement
States that the Board administers and enforces the Interlocks Act with respect to state member banks, bank holding companies, and certain affiliates of either.
Section 212.9 Effect of Interlocks Act on Clayton Act
Recognizes that provisions of the Interlock Act supplant those in the Clayton Act.