BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C.  20551 DIVISION OF BANKING SUPERVISION AND REGULATION SR 93-17 (FIS) April 6, 1993 TO THE OFFICER IN CHARGE OF SUPERVISION           AT EACH FEDERAL RESERVE BANK SUBJECT: Appropriate name checks for applications filed by foreign banks under Section 4(c)(8) of the Bank Holding Company Act                         As explained in its press release dated March 8, 1993, the Board recently adopted new procedures for processing applications filed by foreign banks under the Foreign Bank Supervision Enhancement Act of 1991.  At that time, the Board also considered when name checks with other U.S. government agencies should be conducted in connection with an application filed by a foreign banking organization under Section 4(c)(8) of the Bank Holding Company Act (the "BHC Act").1                         Name checks will be conducted with other U.S. government agencies in connection with applications or notices filed by foreign banking organizations under Section 4(c)(8) of the BHC Act, unless all of the following criteria are met: The applicant foreign bank is known to U.S. bank regulators and has an overall record of satisfactory performance in the United States. The proposed transaction does not represent a major expansion by the foreign bank in the United States. The proposed transaction does not involve a thrift or other federally-insured nonbank depository institution. The System has no other reason, such as evidence of possible illegal, criminal, or questionable activities on the part of the foreign bank or the other participants in the transaction, to believe that a name check would be appropriate.                           Board staff will continue to contact the applicant bank's home country supervisor for all applications.  In those cases that satisfy the above criteria, the home country supervisor will be notified of the proposal and provided an opportunity to comment within a certain date.2 In other cases, staff will specifically request the home country supervisor to provide comments with respect to the proposal, the financial condition of the applicant, and other relevant matters.3                         Please distribute this letter to all personnel involved in the processing of applications.  If there are any questions, please contact Melissa Clark (ext. 2277) or Beverly Evans (ext. 2573) in BS&R, or Scott Alvarez (ext. 3583) or Kathleen O'Day (ext. 3786) in the Legal Division. DON E. KLINE ASSOCIATE DIRECTOR Footnotes 1.  The name checks are conducted on the foreign banking organization and on any other individuals/parties relevant to the proposed transaction.  Return to text 2.  If the home country supervisor has not responded by that date, the application may be acted upon either by the Board or by the Reserve Bank under delegated authority (assuming all other factors are consistent with approval).  Return to text 3.  Prior to the acceptance of an application by a foreign bank, the Reserve Bank should notify Board staff of the need to send a letter to the home country supervisor.  Such notice should identify the name and location of the foreign bank, describe briefly the proposed transaction, and indicate whether other name checks are being conducted on the bank.  An appropriate form of notice will be distributed to the Reserve Banks shortly.  Return to text

SR letters | 1993