Amendments to Interim Rule and Request for Public Comment on Regulation Y (Bank Holding Companies and

Federal Reserve Bank Of Dallas

Informations

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Federal Reserve Bank
ll★K
of Dallas
DALLAS, TEXAS
March 31, 2000 75265-5906
Notice 2000-21
TO: The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District
SUBJECT
Amendments to Interim Rule and
Request for Public Comment on Regulation Y
(Bank Holding Companies and Change in Bank Control)
DETAILS
The Board of Governors of the Federal Reserve System has adopted interim basis
amendments to the interim rule published in the January 25 Federal Register (see Notice
2000-09). The interim rule, which became effective March 11, 2000, established procedures
whereby bank holding companies and some foreign banks may elect to become financial holding
companies.
As a result of its experience in processing elections under the interim rule, the Board
has amended the interim rule, effective immediately, to accomplish the following:
• Permit elections filed by foreign banks that meet the rule’s well-managed and
well-capitalized standards to become effective on the 31st day after filing, unless
the Board finds the election ineffective or the foreign bank agrees to extend the
review period;
• Require that all U.S. depository institution subsidiaries of electing foreign banks
be well capitalized and well managed and have satisfactory or better composite
and Community Reinvestment Act ratings; and
• Encourage foreign banks that are chartered in countries where no other bank from
that country has received a comprehensive consolidated supervision determination
from the Board to use the pre-clearance process provided by the interim rule if
such bank is considering making a financial holding company election.
For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office [phone]; El Paso Branch Intrastate [phone], Interstate [phone];
Houston Branch Intrastate [phone], Interstate [phone]; San Antonio Branch Intrastate [phone].- 2 -
The Board has requested public comment on whether comprehensive consolidated
supervision should be required in connection with comparability determinations on capital and
management. In addition, the Board has amended provisions of the interim rule applicable to bank
holding companies by removing the compliance rating component from the definition of “well
managed” for depository institutions to determine qualification as a financial holding company.
Comments on all aspects of the interim rule, including the amendments, must be re-
ceived by April 17, 2000. Please address comments to Jennifer J. Johnson, Secretary, Board of
Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington,
DC 20551. Also, you may mail comments electronically to [e-mail] v. All
comments should refer to Docket No. R-1057. The Board will amend the rule as appropriate in
response to comments received.
AT TACHMENT
A copy of the Board’s notice as it appears on pages 15053–57, Vol. 65, No. 55 of the
Federal Register dated March 21, 2000, is attached.
MORE INFORMATION
For more information, please contact Rob Jolley, Banking Supervision Department,
[phone]. For additional copies of this Bank’s notice, contact the Public Affairs Department
at [phone] or access District Notices on our web site at
http://www.dallasfed.org/banking/notices/index.html.15053
Federal RegisterRules and Regulations
Vol. 65, No. 55
Tuesday, March 21, 2000
This section of the FEDERAL REGISTER extend the review period. Second, in Constitution Avenue and C Street, NW
contains regulatory documents having general order to make the requirements for Members of the public may inspect
applicability and legal effect, most of which foreign banks consistent with the comments in Room MP–500 of the
are keyed to and codified in the Code of requirements imposed on bank holding Martin Building between 9:00 a.m. and
Federal Regulations, which is published under companies, the Board is amending the 5:00 p.m. on weekdays.
50 titles pursuant to 44 U.S.C. 1510.
interim rule to require that all U.S.
FOR FURTHER INFORMATION CONTACT: Ann
depository institution subsidiaries (suchThe Code of Federal Regulations is sold by E. Misback, Assistant General Counsel
as thrifts and nonbank trust companies)the Superintendent of Documents. Prices of (202/452–3788), Thomas M. Corsi,
new books are listed in the first FEDERAL of electing foreign banks be well Managing Senior Counsel (202/452–
REGISTER issue of each week. capitalized and well managed and have 3275), or Christopher W. Clubb, Senior
satisfactory or better composite and
Counsel (202/452–3904), Legal Division;
Community Reinvestment Act ratings.
for the hearing impaired only,FEDERAL RESERVE SYSTEM Third, the Board is amending the
Telecommunications Device for the Deaf
interim rule to encourage foreign banks
(TDD), Janice Simms (202) 872–4984.12 CFR Part 225 that are chartered in countries where no
SUPPLEMENTARY INFORMATION:other bank from that country has[Regulation Y; Docket No. R–1057]
received a comprehensive consolidated Background
Bank Holding Companies and Change supervision determination from the
in Bank Control Board to use the pre-clearance process Title I of the Gramm-Leach-Bliley Act
provided by the interim rule if such (Pub. L. No. 106–102, 113 Stat. 1338
AGENCY: Board of Governors of the
bank is considering making an financial (1999)) amends section 4 of the Bank
Federal Reserve System.
holding company election. The Board Holding Company Act (12 U.S.C. 1843)
ACTION: Interim rule with request for also is seeking comment on whether (‘‘BHC Act’’) to authorize bank holding
public comments. comprehensive consolidated companies and foreign banks that
supervision should be required in qualify as ‘‘financial holdingSUMMARY: The Board of Governors is
connection with comparability companies’’ to engage in securities,adopting on an interim basis, effective
determinations on capital and insurance, and other activities that areimmediately, amendments to the
management. Finally, the Board is financial in nature or incidental to ainterim rule published in the Federal
amending provisions of the interim rule financial activity. The Gramm-Leach-Register on January 25, 2000, that
applicable to bank holding companies Bliley Act defines a financial holdingestablished procedures for bank holding
by removing the compliance rating company as a bank holding companycompanies and foreign banks that
component from the definition of well that meets certain eligibilityoperate a branch, agency, or commercial
managed for depository institutions for requirements. In order for a banklending company in the United States to
purposes of determining qualification as holding company to become a financialelect to become financial holding
a financial holding company. holding company and be eligible tocompanies. The rule was promulgated
The Board solicits comments on all engage in the new activities authorizedon an interim basis, effective March 11,
aspects of the interim rule, including under the Gramm-Leach-Bliley Act, the2000, to implement provisions of the
these amendments, and will amend the Act requires that all depositoryrecently enacted Gramm-Leach-Bliley
rule as appropriate in response to institutions controlled by the bankAct that enable bank holding companies
comments received. holding company be well capitalizedand foreign banks that meet applicable
DATES: These amendments to the and well managed. With regard to astatutory requirements to become
interim rule are effective on March 15, foreign bank that operates a branch orfinancial holding companies and
2000. Comments on these amendments agency or owns or controls athereby engage in a broader range of
to the interim rule must be received by commercial lending company in thefinancial and other activities than are
April 17, 2000. United States, the Act requires thepermissible for bank holding
Board to apply comparable capital andADDRESSES: Comments should refer tocompanies.
management standards that give dueAs a result of its experience in docket number R–1057 and should be
regard to the principle of nationalprocessing elections under the interim sent to Ms. Jennifer J. Johnson,
treatment and equality of competitiverule, the Board is amending the interim Secretary, Board of Governors of the
opportunity.rule to make three changes concerning Federal Reserve System, 20th Street and
the elections by foreign banks. First, in Constitution Avenue, NW, Washington, In order to implement the provisions
order to make the processing of DC, 20551 or mailed electronically to of the Gramm-Leach-Bliley Act
elections by foreign banks parallel to the [e-mail]. governing the creation and conduct of
processing of elections filed by domestic Comments addressed to Ms. Johnson financial holding companies, on January
bank holding companies, the interim also may be delivered to the Board’s 19, 2000, the Board amended its
rule is being amended to permit mail room between the hours of 8:45 Regulation Y by adding subpart I to
elections filed by foreign banks that a.m. and 5:15 p.m. and, outside of those establish procedures for bank holding
meet the rule’s well managed and well hours, to the Board’s security control companies as well as foreign ban