BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
CA 03-4
Supersedes CA 98-7
February 6, 2003
TO THE OFFICERS AND MANAGERS OF CONSUMER AFFAIRS SECTIONS:
RE: Revised Examination Procedures for Section 109 of the Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act), as amended by the Gramm-Leach-Bliley Act of 1999 (GLBA)
Attached are revised examination procedures for Section 109 of the Interstate Act, which have been approved by the Federal Reserve, the OCC and the FDIC. As originally enacted, Section 109 of the Interstate Act prohibited any bank from establishing or acquiring a branch or branches outside of its home state, primarily for the purpose of deposit production. GLBA amended Section 109 by broadening the definition of an "interstate branch" to include any branch of a bank controlled by an out-of-state bank holding company. Changes to the implementing regulations were published in the Federal Register on June 6, 2002 and became effective October 1, 2002.
Please distribute these procedures to your examination staff for immediate use. Examiners generally should conduct Section 109 reviews at the same time that they conduct Community Reinvestment Act examinations.
To assist examiners in determining if a bank is controlled by an out-of-state bank holding company, the agencies have produced the attached Excel file (89 KB PDF) , 1 (listing such banks. The file contains three worksheets, listing the covered institutions by their supervisory agency. The information was produced by the FDIC and is based on September 30, 2002 data. Due to the changing nature of the banking industry, examiners should confirm with the management of state member banks whether our information reflects the current ownership structure of their banks. At least on an annual basis, the FDIC will update the information, which we then will post on the Fedweb.
Any questions on the examination procedures should be directed to the review examiner for your district, Kathleen Conley (202) 452-2389 or Gary Wicks (202) 452-3196.
Sincerely,
(signed)
Shawn McNulty
Associate Director
Attachments
Prohibition Against Use of Interstate Branches Primarily for Deposit Production (153 KB PDF)
Federal Reserve Supervised Banks That Are Controlled By Out-Of-State BHC's (89 KB PDF)
Notes:
1. The spreadsheets were created from two databases: the Federal Reserve's National Information Center and the FDIC's Research Information System. Return to text
CA letters | 2003 Letters