OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
SUPERVISION AND REGULATION
December 23, 1998
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OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 |
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| DIVISION OF BANKING SUPERVISION AND REGULATION |
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| SR 98-38 (SUP) December 23, 1998 |
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TO THE OFFICER IN CHARGE OF SUPERVISION AT EACH FEDERAL RESERVE BANK
The Board and the other federal banking agencies ("Agencies") have issued a joint policy statement regarding intercompany tax allocations for banking organizations and savings associations that file an income tax return as members of a consolidated group. A copy of the interagency policy statement is attached.
The statement, which becomes effective immediately, is intended to provide guidance to institutions regarding the allocation and payment of taxes among a bank holding company and its depository institution subsidiaries. In general, the guidance set forth in the policy statement is consistent with the Federal Reserve's pre-existing policies on income taxes, but has been updated to reflect current tax terminology and to ensure a uniform interagency approach. Consistent with longstanding policy, the statement adheres to the general principle that intercorporate tax settlements between an institution and its parent company should be conducted in a manner that is no less favorable to the institution than if it were a separate taxpayer.
The policy statement is the result of the Agencies' ongoing effort to implement Section 303 of the Riegle Community Development and Regulatory Improvement Act of 1994, which requires the Agencies to work jointly to make uniform their regulations and guidelines implementing common statutory or supervisory policies.
The attached policy statement should be sent by your Reserve Bank to the chief executive officer of each bank holding company and state member bank in your District. A suggested transmittal letter is attached.
If you have questions concerning the interagency statement, please contact Arthur Lindo, Supervisory Financial Analyst, at (202) 452-2695.
Deputy Director
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SR letters | 1998
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