US (United States) Code. Title 12. Chapter 32: Foreign bank participation in domestic markets

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # Banks and banking

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publicidad

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12 USC CHAPTER 32 - FOREIGN BANK PARTICIPATION IN

DOMESTIC MARKETS 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 32 - FOREIGN BANK PARTICIPATION IN DOMESTIC MARKETS

.

-HEAD-

CHAPTER 32 - FOREIGN BANK PARTICIPATION IN DOMESTIC MARKETS

-MISC1-

Sec.

3101. Definitions.

3102. Establishment of Federal branches and agencies by foreign

bank.

(a) Establishment and operation of Federal branches

and agencies.

(b) Rules and regulations; rights and privileges;

duties and liabilities; exceptions;

coordination of examinations.

(c) Application to establish Federal branch or

agency; matters considered.

(d) Receipt of deposits and exercising of fiduciary

powers at Federal agency prohibited.

(e) Maintenance of Federal branch and Federal agency

in same State prohibited.

(f) Conversion of foreign bank branch, agency or

commercial lending company into Federal branch

or agency; approval of Comptroller.

(g) Deposit requirements; asset requirements.

(h) Additional branches or agencies.

(i) Termination of authority to operate Federal

branch or agency.

(j) Receivership over assets of foreign bank in

United States.

3103. Interstate banking by foreign banks.

(a) Interstate branching and agency operations.

(b) Continuance of lawful interstate banking

operations previously commenced.

(c) Determination of home State of foreign bank.

(d) Clarification of branching rules in case of

foreign bank with domestic bank subsidiary.

3104. Insurance of deposits.

(a) Objective.

(b) Deposits of less than $100,000.

(c) Deposits required to be insured under State law.

(d) Retail deposit-taking by foreign banks.

3105. Authority of Federal Reserve System.

(a) Bank reserves.

(b) Omitted.

(c) Foreign bank examinations and reporting.

(d) Establishment of foreign bank offices in United

States.

(e) Termination of foreign bank offices in United

States.

(f) Judicial review.

(g) Consultation with State bank supervisor.

(h) Limitations on powers of State branches and

agencies.

(i) Proceedings related to conviction for money

laundering offenses.

(j) Study on equivalence of foreign bank capital.

(k) Management of shell branches.

3106. Nonbanking activities of foreign banks.

(a) Applicability of Bank Holding Company Acts.

(b) Ownership or control of shares of nonbanking

companies for certain period.

(c) Engagement in nonbanking activities after certain

period.

(d) Construction of terms.

3106a. Compliance with State and Federal laws.

3107. Representative offices.

(a) Prior approval to establish representative

offices.

(b) Termination of representative offices.

(c) Examinations.

(d) Compliance with State law.

3108. Regulation and enforcement.

(a) Rules, regulations and orders.

(b) Enforcement.

(c) Powers of Federal Reserve Board and Federal

Deposit Insurance Corporation.

3109. Cooperation with foreign supervisors.

(a) Disclosure of supervisory information to foreign

supervisors.

(b) Requirement of confidentiality.

3110. Penalties.

(a) Civil money penalty.

(b) Notice under this section after separation from

service.

(c) Penalty for failure to make reports.

3111. Criminal penalty.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 619, 1813, 3902 of this

title; title 15 section 78c; title 31 sections 3121, 9110.

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12 USC Sec. 3101 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 32 - FOREIGN BANK PARTICIPATION IN DOMESTIC MARKETS

-HEAD-

Sec. 3101. Definitions

-STATUTE-

For the purposes of this chapter -

(1) ''agency'' means any office or any place of business of a

foreign bank located in any State of the United States at which

credit balances are maintained incidental to or arising out of

the exercise of banking powers, checks are paid, or money is lent

but at which deposits may not be accepted from citizens or

residents of the United States;

(2) ''Board'' means the Board of Governors of the Federal

Reserve System;

(3) ''branch'' means any office or any place of business of a

foreign bank located in any State of the United States at which

deposits are received;

(4) ''Comptroller'' means the Comptroller of the Currency;

(5) ''Federal agency'' means an agency of a foreign bank

established and operating under section 3102 of this title;

(6) ''Federal branch'' means a branch of a foreign bank

established and operating under section 3102 of this title;

(7) ''foreign bank'' means any company organized under the laws

of a foreign country, a territory of the United States, Puerto

Rico, Guam, American Samoa, or the Virgin Islands, which engages

in the business of banking, or any subsidiary or affiliate,

organized under such laws, of any such company. For the purposes

of this chapter the term ''foreign bank'' includes, without

limitation, foreign commercial banks, foreign merchant banks and

other foreign institutions that engage in banking activities

usual in connection with the business of banking in the countries

where such foreign institutions are organized or operating;

(8) ''foreign country'' means any country other than the United

States, and includes any colony, dependency, or possession of any

such country;

(9) ''commercial lending company'' means any institution, other

than a bank or an organization operating under section 25 of the

Federal Reserve Act (12 U.S.C. 601 et seq.), organized under the

laws of any State of the United States, or the District of

Columbia which maintains credit balances incidental to or arising

out of the exercise of banking powers and engages in the business

of making commercial loans;

(10) ''State'' means any State of the United States or the

District of Columbia;

(11) ''State agency'' means an agency of a foreign bank

established and operating under the laws of any State;

(12) ''State branch'' means a branch of a foreign bank

established and operating under the laws of any State;

(13) the terms ''affiliate,'' (FOOTNOTE 1) ''bank'', ''bank

holding company'', ''company'', ''control'', and ''subsidiary''

have the same meanings assigned to those terms in the Bank

Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), and the

terms ''controlled'' and ''controlling'' shall be construed

consistently with the term ''control'' as defined in section 2 of

the Bank Holding Company Act of 1956 (12 U.S.C. 1841);

(FOOTNOTE 1) So in original. The comma probably should follow

the quotation marks.

(14) ''consolidated'' means consolidated in accordance with

generally accepted accounting principles in the United States

consistently applied;

(15) the term ''representative office'' means any office of a

foreign bank which is located in any State and is not a Federal

branch, Federal agency, State branch, or State agency;

(16) the term ''office'' means any branch, agency, or

representative office; and

(17) the term ''State bank supervisor'' has the meaning given

to such term in section 1813 of this title.

-SOURCE-

(Pub. L. 95-369, Sec. 1(b), Sept. 17, 1978, 92 Stat. 607; Pub. L.

102-242, title II, Sec. 202(e), Dec. 19, 1991, 105 Stat. 2290; Pub.

L. 106-102, title I, Sec. 142(a), Nov. 12, 1999, 113 Stat. 1384.)

-REFTEXT-

REFERENCES IN TEXT

This chapter, referred to in text, was in the original ''this

Act'', meaning Pub. L. 95-369, Sept. 17, 1978, 92 Stat. 607, known

as the International Banking Act of 1978, which enacted this

chapter and sections 347d and 611a of this title, amended sections

72, 378, 614, 615, 618, 619, 1813, 1815, 1817, 1818, 1820 to 1823,

1828, 1829b, 1831b, and 1841 of this title, and enacted provisions

set out as notes under sections 36, 247, 601, 611a, and 3101 of

this title. For complete classification of this Act to the Code,

see Short Title note set out below and Tables.

The Bank Holding Company Act of 1956, referred to in par. (13),

is act May 9, 1956, ch. 240, 70 Stat. 133, as amended, which is

classified principally to chapter 17 (Sec. 1841 et seq.) of this

title. For complete classification of this Act to the Code, see

Short Title note set out under section 1841 of this title and

Tables.

-MISC2-

AMENDMENTS

1999 - Par. (15). Pub. L. 106-102 substituted ''or State

agency;'' for ''State agency, or subsidiary of a foreign bank;''.

1991 - Par. (13). Pub. L. 102-242, Sec. 202(e)(1), inserted

reference to affiliate after first reference to ''the terms''.

Pars. (15) to (17). Pub. L. 102-242, Sec. 202(e)(2), added pars.

(15) to (17).

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by Pub. L. 106-102 effective 120 days after Nov. 12,

1999, see section 161 of Pub. L. 106-102, set out as a note under

section 24 of this title.

SHORT TITLE OF 1991 AMENDMENT

Section 201 of Pub. L. 102-242 provided that: ''This subtitle

(subtitle A (Sec. 201-215) of title II of Pub. L. 102-242, enacting

sections 3109 to 3111 of this title, amending this section and

sections 1467a, 1817, 1820, 1842, 2803, 2804, 3102, 3104 to 3108,

and 4009 of this title and sections 44, 57a, 1607, 1681s, 1691c,

1692l, and 1693o of Title 15, Commerce and Trade, and enacting

provisions set out as a note under section 3102 of this title) may

be cited as the 'Foreign Bank Supervision Enhancement Act of

1991'.''

SHORT TITLE

Section 1(a) of Pub. L. 95-369 provided that: ''This Act

(enacting this chapter and sections 347d and 611a of this title,

amending sections 72, 378, 614, 615, 618, 619, 1813, 1815, 1817,

1818, 1820 to 1823, 1828, 1829b, 1831b and 1841 of this title, and

enacting provisions set out as notes under sections 36, 247, 601,

and 611a of this title) may be cited as the 'International Banking

Act of 1978'.''

FOREIGN CONTROL OF UNITED STATES FINANCIAL INSTITUTIONS

Pub. L. 96-221, title IX, Sec. 901, 902, Mar. 31, 1980, 94 Stat.

192, 193, provided that:

''Sec. 901. For purposes of this title enacting this provision -

''(1) the term 'domestic financial institution' means any bank,

mutual savings bank, or savings and loan association organized

under the laws of any State or of the United States;

''(2) the term 'foreign person' means any foreign organization

or any individual resident in a foreign country or any

organization or individual owned or controlled by such an

organization or individual; and

''(3) the term 'takeover' means any acquisition of the stock or

assets of any domestic financial institution if, after such

acquisition, the amount of stock or assets held is 5 per centum

or more of the institution's stock or assets.

''Sec. 902. The Board of Governors of the Federal Reserve System,

the Comptroller of the Currency, the Board of Directors of the

Federal Deposit Insurance Corporation, and the Federal Home Loan

Bank Board may not approve any application relating to the takeover

of any domestic financial institution by a foreign person until

July 1, 1980, unless -

''(1) such takeover is necessary to prevent the bankruptcy or

insolvency of the domestic financial institution involved;

''(2) the application was initially submitted for filing on or

before March 5, 1980;

''(3) the domestic financial institution has deposits of less

than $100,000,000;

''(4) the application relates to a takeover of shares or assets

pursuant to a foreign person's intrafirm reorganization of its

interests in a domestic financial institution, including

specifically any application to establish a bank holding company

pursuant to such reorganization;

''(5) the application relates to a takeover of the assets or

shares of a domestic financial institution if such assets or

shares are owned or controlled by a foreign person; or

''(6) the application relates to the takeover of a domestic

financial institution which is a subsidiary of a bank holding

company under an order to divest by December 31, 1980.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 347d, 1813, 1817, 1828,

1843, 2804, 4009, 4402 of this title; title 7 sections 1a, 27;

title 15 sections 57a, 78c, 78q, 80a-2, 1607, 1681s, 1691c, 1692l,

1693o, 6805; title 18 sections 20, 212, 213, 648, 655, 984, 1004,

1014, 1030, 1906, 1956, 2113; title 31 section 5313.

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12 USC Sec. 3102 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 32 - FOREIGN BANK PARTICIPATION IN DOMESTIC MARKETS

-HEAD-

Sec. 3102. Establishment of Federal branches and agencies by

foreign bank

-STATUTE-

(a) Establishment and operation of Federal branches and agencies

(1) Initial Federal branch or agency

Except as provided in section 3103 of this title, a foreign

bank which engages directly in a banking business outside the

United States may, with the approval of the Comptroller,

establish one or more Federal branches or agencies in any State

in which (1) it is not operating a branch or agency pursuant to

State law and (2) the establishment of a branch or agency, as the

case may be, by a foreign bank is not prohibited by State law.

(2) Board conditions required to be included

In considering any application for approval under this

subsection, the Comptroller of the Currency shall include any

condition imposed by the Board under section 3105(d)(5) of this

title as a condition for the approval of such application by the

agency.

(b) Rules and regulations; rights and privileges; duties and

liabilities; exceptions; coordination of examinations

In establishing and operating a Federal branch or agency, a

foreign bank shall be subject to such rules, regulations, and

orders as the Comptroller considers appropriate to carry out this

section, which shall include provisions for service of process and

maintenance of branch and agency accounts separate from those of

the parent bank. Except as otherwise specifically provided in this

chapter or in rules, regulations, or orders adopted by the

Comptroller under this section, operations of a foreign bank at a

Federal branch or agency shall be conducted with the same rights

and privileges as a national bank at the same location and shall be

subject to all the same duties, restrictions, penalties,

liabilities, conditions, and limitations that would apply under the

National Bank Act to a national bank doing business at the same

location, except that (1) any limitation or restriction based on

the capital stock and surplus of a national bank shall be deemed to

refer, as applied to a Federal branch or agency, to the dollar

equivalent of the capital stock and surplus of the foreign bank,

and if the foreign bank has more than one Federal branch or agency

the business transacted by all such branches and agencies shall be

aggregated in determining compliance with the limitation; (2) a

Federal branch or agency shall not be required to become a member

bank, as that term is defined in section 221 of this title; and (3)

a Federal agency shall not be required to become an insured bank as

that term is defined in section 1813(h) of this title. The

Comptroller of the Currency shall coordinate examinations of

Federal branches and agencies of foreign banks with examinations

conducted by the Board under section 3105(c)(1) of this title and,

to the extent possible, shall participate in any simultaneous

examinations of the United States operations of a foreign bank

requested by the Board under such section.

(c) Application to establish Federal branch or agency; matters

considered

In acting on any application to establish a Federal branch or

agency, the Comptroller shall take into account the effects of the

proposal on competition in the domestic and foreign commerce of the

United States, the financial and managerial resources and future

prospects of the applicant foreign bank and the branch or agency,

and the convenience and needs of the community to be served.

(d) Receipt of deposits and exercising of fiduciary powers at

Federal agency prohibited

Notwithstanding any other provision of this section, a foreign

bank shall not receive deposits or exercise fiduciary powers at any

Federal agency. A foreign bank may, however, maintain at a Federal

agency for the account of others credit balances incidental to, or

arising out of, the exercise of its lawful powers.

(e) Maintenance of Federal branch and Federal agency in same State

prohibited

No foreign bank may maintain both a Federal branch and a Federal

agency in the same State.

(f) Conversion of foreign bank branch, agency or commercial lending

company into Federal branch or agency; approval of Comptroller

Any branch or agency operated by a foreign bank in a State

pursuant to State law and any commercial lending company controlled

by a foreign bank may be converted into a Federal branch or agency

with the approval of the Comptroller. In the event of any

conversion pursuant to this subsection, all of the liabilities of

such foreign bank previously payable at the State branch or agency,

or all of the liabilities of the commercial lending company, shall

thereafter be payable by such foreign bank at the branch or agency

established under this subsection.

(g) Deposit requirements; asset requirements

(1) Upon the opening of a Federal branch or agency in any State

and thereafter, a foreign bank, in addition to any deposit

requirements imposed under section 3104 of this title, shall keep

on deposit, in accordance with such rules and regulations as the

Comptroller may prescribe, with a member bank designated by such

foreign bank, dollar deposits or investment securities of the type

that may be held by national banks for their own accounts pursuant

to paragraph ''Seventh'' of section 24 of this title, in an amount

as hereinafter set forth. Such depository bank shall be located in

the State where such branch or agency is located and shall be

approved by the Comptroller if it is a national bank and by the

Board of Governors of the Federal Reserve System if it is a State

Bank.

(2) The aggregate amount of deposited investment securities

(calculated on the basis of principal amount or market value,

whichever is lower) and dollar deposits for each branch or agency

established and operating under this section shall be not less than

the greater of (1) that amount of capital (but not surplus) which

would be required of a national bank being organized at this

location, or (2) 5 per centum of the total liabilities of such

branch or agency, including acceptances, but excluding (A) accrued

expenses, and (B) amounts due and other liabilities to offices,

branches, agencies, and subsidiaries of such foreign bank. The

Comptroller may require that the assets deposited pursuant to this

subsection shall be maintained in such amounts as he may from time

to time deem necessary or desirable, for the maintenance of a sound

financial condition, the protection of depositors, and the public

interest, but such additional amount shall in no event be greater

than would be required to conform to generally accepted banking

practices as manifested by banks in the area in which the branch or

agency is located.

(3) The deposit shall be maintained with any such member bank

pursuant to a deposit agreement in such form and containing such

limitations and conditions as the Comptroller may prescribe. So

long as it continues business in the ordinary course such foreign

bank shall, however, be permitted to collect income on the

securities and funds so deposited and from time to time examine and

exchange such securities.

(4) Subject to such conditions and requirements as may be

prescribed by the Comptroller, each foreign bank shall hold in each

State in which it has a Federal branch or agency, assets of such

types and in such amount as the Comptroller may prescribe by

general or specific regulation or ruling as necessary or desirable

for the maintenance of a sound financial condition, the protection

of depositors, creditors and the public interest. In determining

compliance with any such prescribed asset requirements, the

Comptroller shall give credit to (A) assets required to be

maintained pursuant to paragraphs (1) and (2) of this subsection,

(B) reserves required to be maintained pursuant to section 3105(a)

of this title, and (C) assets pledged, and surety bonds payable, to

the Federal Deposit Insurance Corporation to secure the payment of

domestic deposits. The Comptroller may prescribe different asset

requirements for branches or agencies in different States, in order

to ensure competitive equality of Federal branches and agencies

with State branches and agencies and domestic banks in those

States.

(h) Additional branches or agencies

(1) Approval of agency required

A foreign bank with a Federal branch or agency operating in any

State may (A) with the prior approval of the Comptroller

establish and operate additional branches or agencies in the

State in which such branch or agency is located on the same terms

and conditions and subject to the same limitations and

restrictions as are applicable to the establishment of branches

by a national bank if the principal office of such national bank

were located at the same place as the initial branch or agency in

such State of such foreign bank and (B) change the designation of

its initial branch or agency to any other branch or agency

subject to the same limitations and restrictions as are

applicable to a change in the designation of the principal office

of a national bank if such principal office were located at the

same place as such initial branch or agency.

(2) Notice to and comment by Board

The Comptroller of the Currency shall provide the Board with

notice and an opportunity for comment on any application to

establish an additional Federal branch or Federal agency under

this subsection.

(i) Termination of authority to operate Federal branch or agency

Authority to operate a Federal branch or agency shall terminate

when the parent foreign bank voluntarily relinquishes it or when

such parent foreign bank is dissolved or its authority or existence

is otherwise terminated or canceled in the country of its

organization. If (1) at any time the Comptroller is of the opinion

or has reasonable cause to believe that such foreign bank has

violated or failed to comply with any of the provisions of this

section or any of the rules, regulations, or orders of the

Comptroller made pursuant to this section, or (2) a conservator is

appointed for such foreign bank or a similar proceeding is

initiated in the foreign bank's country of organization, the

Comptroller shall have the power, after opportunity for hearing, to

revoke the foreign bank's authority to operate a Federal branch or

agency. The Comptroller may, in his discretion, deny such

opportunity for hearing if he determines such denial to be in the

public interest. The Comptroller may restore any such authority

upon due proof of compliance with the provisions of this section

and the rules, regulations, or orders of the Comptroller made

pursuant to this section.

(j) Receivership over assets of foreign bank in United States

(1) Whenever the Comptroller revokes a foreign bank's authority

to operate a Federal branch or agency or whenever any creditor of

any such foreign bank shall have obtained a judgment against it

arising out of a transaction with a Federal branch or agency in any

court of record of the United States or any State of the United

States and made application, accompanied by a certificate from the

clerk of the court stating that such judgment has been rendered and

has remained unpaid for the space of thirty days, or whenever the

Comptroller shall become satisfied that such foreign bank is

insolvent, he may, after due consideration of its affairs, in any

such case, appoint a receiver who shall take possession of all the

property and assets of such foreign bank in the United States and

exercise the same rights, privileges, powers, and authority with

respect thereto as are now exercised by receivers of national banks

appointed by the Comptroller.

(2) In any receivership proceeding ordered pursuant to this

subsection (j), whenever there has been paid to each and every

depositor and creditor of such foreign bank whose claim or claims

shall have been proved or allowed, the full amount of such claims

arising out of transactions had by them with any branch or agency

of such foreign bank located in any State of the United States,

except (A) claims that would not represent an enforceable legal

obligation against such branch or agency if such branch or agency

were a separate legal entity, and (B) amounts due and other

liabilities to other offices or branches or agencies of, and wholly

owned (except for a nominal number of directors' shares)

subsidiaries of, such foreign bank, and all expenses of the

receivership, the Comptroller or the Federal Deposit Insurance

Corporation, where that Corporation has been appointed receiver of

the foreign bank, shall turn over the remainder, if any, of the

assets and proceeds of such foreign bank to the head office of such

foreign bank, or to the duly appointed domiciliary liquidator or

receiver of such foreign bank.

-SOURCE-

(Pub. L. 95-369, Sec. 4, Sept. 17, 1978, 92 Stat. 610; Pub. L.

102-242, title II, Sec. 202(b), (c), 203(b), Dec. 19, 1991, 105

Stat. 2290, 2291; Pub. L. 106-569, title XII, Sec. 1234, Dec. 27,

2000, 114 Stat. 3037.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsec. (b),

see References in Text note set out under section 3101 of this

title.

The National Bank Act, referred to in subsec. (b), is act June 3,

1864, ch. 106, 13 Stat. 99, as amended, which is classified

principally to chapter 2 (Sec. 21 et seq.) of this title. For

complete classification of this Act to the Code, see References in

Text note set out under section 38 of this title.

Section 3104 of this title, referred to in subsec. (g)(1), was in

the original a reference to section 6 of Pub. L. 95-369, which

enacted section 3104 of this title and amended sections 1813, 1815,

1817, 1818, 1820 to 1823, 1828, 1829b, and 1831b of this title.

-MISC2-

AMENDMENTS

2000 - Subsec. (b). Pub. L. 106-569 redesignated cls. (2) to (4)

as (1) to (3), respectively, and struck out former cl. (1) which

read as follows: ''the requirements of section 481 of this title

shall be met with respect to a Federal branch or agency if it is

examined at least once in each calendar year;''.

1991 - Subsec. (a). Pub. L. 102-242, Sec. 202(b), inserted

heading, designated existing provisions as par. (1) and inserted

heading, and added par. (2).

Subsec. (b). Pub. L. 102-242, Sec. 203(b), inserted at end: ''The

Comptroller of the Currency shall coordinate examinations of

Federal branches and agencies of foreign banks with examinations

conducted by the Board under section 3105(c)(1) of this title and,

to the extent possible, shall participate in any simultaneous

examinations of the United States operations of a foreign bank

requested by the Board under such section.''

Subsec. (h). Pub. L. 102-242, Sec. 202(c), amended heading,

designated existing provisions as par. (1), inserted par. (1)

heading, redesignated former pars. (1) and (2) as subpars. (A) and

(B), respectively, and added par. (2).

STUDY AND REPORT ON SUBSIDIARY REQUIREMENTS FOR FOREIGN BANKS

Section 215 of Pub. L. 102-242, as amended by Pub. L. 102-550,

title XVI, Sec. 1604(a)(14), Oct. 28, 1992, 106 Stat. 4083,

directed Secretary of the Treasury, jointly with Board of Governors

of the Federal Reserve System and in consultation with Comptroller

of the Currency, Federal Deposit Insurance Corporation, and

Attorney General, to conduct a study of whether foreign banks

should be required to conduct banking operations in United States

through subsidiaries rather than branches and, not later than 1

year after Dec. 19, 1991, to transmit to Congress a report on the

results of the study.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3101, 3105 of this title.

-CITE-

12 USC Sec. 3103 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 32 - FOREIGN BANK PARTICIPATION IN DOMESTIC MARKETS

-HEAD-

Sec. 3103. Interstate banking by foreign banks

-STATUTE-

(a) Interstate branching and agency operations

(1) Federal branch or agency

Subject to the provisions of this chapter and with the prior

written approval by the Board and the Comptroller of the Currency

of an application, a foreign bank may establish and operate a

Federal branch or agency in any State outside the home State of

such foreign bank to the extent that the establishment and

operation of such branch would be permitted under section 36(g)

of this title or section 1831u of this title if the foreign bank

were a national bank whose home State is the same State as the

home State of the foreign bank.

(2) State branch or agency

Subject to the provisions of this chapter and with the prior

written approval by the Board and the appropriate State bank

supervisor of an application, a foreign bank may establish and

operate a State branch or agency in any State outside the home

State of such foreign bank to the extent that such establishment

and operation would be permitted under section 1828(d)(4) or

1831u of this title if the foreign bank were a State bank whose

home State is the same State as the home State of the foreign

bank.

(3) Criteria for determination

In approving an application under paragraph (1) or (2), the

Board and (in the case of an application under paragraph (1)) the

Comptroller of the Currency -

(A) shall apply the standards applicable to the establishment

of a foreign bank office in the United States under section

3105(d) of this title;

(B) may not approve an application unless the Board and (in

the case of an application under paragraph (1)) the Comptroller

of the Currency -

(i) determine that the foreign bank's financial resources,

including the capital level of the bank, are equivalent to

those required for a domestic bank to be approved for

branching under section 36 of this title and section 1831u of

this title; and

(ii) consult with the Secretary of the Treasury regarding

capital equivalency; and

(C) shall apply the same requirements and conditions to which

an application for an interstate merger transaction is subject

under paragraphs (1), (3), and (4) of section 1831u(b) of this

title.

(4) Operation

Subsections (c) and (d)(2) of section 1831u of this title shall

apply with respect to each branch and agency of a foreign bank

which is established and operated pursuant to an application

approved under this subsection in the same manner and to the same

extent such provisions of such section apply to a domestic branch

of a national or State bank (as such terms are defined in section

1813 of this title) which resulted from a merger transaction

under such section 1831u of this title.

(5) Exclusive authority for additional branches

Except as provided in this section, a foreign bank may not,

directly or indirectly, acquire, establish, or operate a branch

or agency in any State other than the home State of such bank.

(6) Requirement for a separate subsidiary

If the Board or the Comptroller of the Currency, taking into

account differing regulatory or accounting standards, finds that

adherence by a foreign bank to capital requirements equivalent to

those imposed under section 36 of this title and section 1831u of

this title could be verified only if the banking activities of

such bank in the United States are carried out in a domestic

banking subsidiary within the United States, the Board and (in

the case of an application under paragraph (1)) the Comptroller

of the Currency may approve an application under paragraph (1) or

(2) subject to a requirement that the foreign bank or company

controlling the foreign bank establish a domestic banking

subsidiary in the United States.

(7) Additional authority for interstate branches and agencies of

foreign banks, upgrades of certain foreign bank agencies and

branches

Notwithstanding paragraphs (1) and (2), a foreign bank may -

(A) with the approval of the Board and the Comptroller of the

Currency, establish and operate a Federal branch or Federal

agency or, with the approval of the Board and the appropriate

State bank supervisor, a State branch or State agency in any

State outside the foreign bank's home State if -

(i) the establishment and operation of such branch or

agency is permitted by the State in which the branch or

agency is to be established; and

(ii) in the case of a Federal or State branch, the branch

receives only such deposits as would be permitted for a

corporation organized under section 25A of the Federal

Reserve Act (12 U.S.C. 611 et seq.); or

(B) with the approval of the Board and the relevant licensing

authority (the Comptroller in the case of a Federal branch or

the appropriate State supervisor in the case of a State

branch), upgrade an agency, or a branch of the type referred to

in subparagraph (A)(ii), located in a State outside the foreign

bank's home State, into a Federal or State branch if -

(i) the establishment and operation of such branch is

permitted by such State; and

(ii) such agency or branch -

(I) was in operation in such State on the day before

September 29, 1994; or

(II) has been in operation in such State for a period of

time that meets the State's minimum age requirement

permitted under section 1831u(a)(5) of this title.

(8) Continuing requirement for meeting community credit needs

after initial interstate entry by acquisition

(A) In general

If a foreign bank acquires a bank or a branch of a bank, in a

State in which the foreign bank does not maintain a branch, and

such acquired bank is, or is part of, a regulated financial

institution (as defined in section 803 of the Community

Reinvestment Act of 1977 (12 U.S.C. 2902)), the Community

Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) shall

continue to apply to each branch of the foreign bank which

results from the acquisition as if such branch were a regulated

financial institution.

(B) Exception for branch that receives only deposits

permissible for an Edge Act corporation

Paragraph (1) shall not apply to any branch that receives

only such deposits as are permissible for a corporation

organized under section 25A of the Federal Reserve Act (12

U.S.C. 611 et seq.) to receive.

(9) Home State of domestic bank defined

For purposes of this subsection, the term ''home State'' means

-

(A) with respect to a national bank, the State in which the

main office of the bank is located; and

(B) with respect to a State bank, the State by which the bank

is chartered.

(b) Continuance of lawful interstate banking operations previously

commenced

Unless its authority to do so is lawfully revoked otherwise than

pursuant to this section, a foreign bank, notwithstanding any

restriction or limitation imposed under subsection (a) of this

section, may establish and operate, outside its home State, any

State branch, State agency, or bank or commercial lending company

subsidiary which commenced lawful operation or for which an

application to commence business had been lawfully filed with the

appropriate State or Federal authority, as the case may be, on or

before July 27, 1978. Notwithstanding subsection (a) of this

section, a foreign bank may continue to operate, after September

29, 1994, any Federal branch, State branch, Federal agency, State

agency, or commercial lending company subsidiary which such bank

was operating on the day before September 29, 1994, to the extent

the branch, agency, or subsidiary continues, after September 29,

1994, to engage in operations which were lawful under the laws in

effect on the day before September 29, 1994.

(c) Determination of home State of foreign bank

For the purposes of this section -

(1) in the case of a foreign bank that has any branch, agency,

subsidiary commercial lending company, or subsidiary bank in more

than 1 State, the home State of the foreign bank is the 1 State

of such States which is selected to be the home State by the

foreign bank or, in default of any such selection, by the Board;

and

(2) in the case of a foreign bank that does not have a branch,

agency, subsidiary commercial lending company, or subsidiary bank

in more than 1 State, the home State of the foreign bank is the

State in which the foreign bank has a branch, agency, subsidiary

commercial lending company, or subsidiary bank.

(d) Clarification of branching rules in case of foreign bank with

domestic bank subsidiary

In the case of a foreign bank that has a domestic bank subsidiary

within the United States -

(1) the fact that such bank controls a domestic bank shall not

affect the authority of the foreign bank to establish Federal and

State branches or agencies to the extent permitted under

subsection (a) of this section; and

(2) the fact that the domestic bank is controlled by a foreign

bank which has Federal or State branches or agencies in States

other than the home State of such domestic bank shall not affect

the authority of the domestic bank to establish branches outside

the home State of the domestic bank to the extent permitted under

section 36(g) of this title or section 1828(d)(4) or 1831u of

this title, as the case may be.

-SOURCE-

(Pub. L. 95-369, Sec. 5, Sept. 17, 1978, 92 Stat. 613; Pub. L.

103-328, title I, Sec. 104, 107(f), Sept. 29, 1994, 108 Stat. 2354,

2361; Pub. L. 106-102, title VII, Sec. 732, Nov. 12, 1999, 113

Stat. 1478.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsec.

(a)(1), (2), see References in Text note set out under section 3101

of this title.

The Community Reinvestment Act of 1977, referred to in subsec.

(a)(8)(A), is title VIII of Pub. L. 95-128, Oct. 12, 1977, 91 Stat.

1147, as amended, which is classified generally to chapter 30 (Sec.

2901 et seq.) of this title. For complete classification of this

Act to the Code, see Short Title note set out under section 2901 of

this title and Tables.

Section 25A of the Federal Reserve Act, referred to in subsec.

(a)(7)(A)(ii), (8)(B), popularly known as the Edge Act, is

classified to subchapter II (Sec. 611 et seq.) of chapter 6 of this

title. For complete classification of this Act to the Code, see

Short Title note set out under section 611 of this title and

Tables.

-MISC2-

AMENDMENTS

1999 - Subsec. (a)(7). Pub. L. 106-102 amended heading and text

of par. (7) generally. Prior to amendment, text read as follows:

''Notwithstanding paragraphs (1) and (2), a foreign bank may, with

the approval of the Board and the Comptroller of the Currency,

establish and operate a Federal branch or Federal agency or, with

the approval of the Board and the appropriate State bank

supervisor, a State branch or State agency in any State outside the

foreign bank's home State if -

''(A) the establishment and operation of a branch or agency is

expressly permitted by the State in which the branch or agency is

to be established; and

''(B) in the case of a Federal or State branch, the branch

receives only such deposits as would be permissible for a

corporation organized under section 25A of the Federal Reserve

Act.''

1994 - Subsec. (a). Pub. L. 103-328, Sec. 104(a), 107(f),

inserted heading and substituted provisions consisting of pars. (1)

to (9) for former provisions relating to limitations on interstate

banking by foreign banks.

Subsec. (b). Pub. L. 103-328, Sec. 104(b), inserted at end

''Notwithstanding subsection (a) of this section, a foreign bank

may continue to operate, after September 29, 1994, any Federal

branch, State branch, Federal agency, State agency, or commercial

lending company subsidiary which such bank was operating on the day

before September 29, 1994, to the extent the branch, agency, or

subsidiary continues, after September 29, 1994, to engage in

operations which were lawful under the laws in effect on the day

before September 29, 1994.''

Subsec. (c). Pub. L. 103-328, Sec. 104(d), amended subsec. (c)

generally. Prior to amendment, subsec. (c) read as follows: ''For

the purposes of this section, the home State of a foreign bank that

has branches, agencies, subsidiary commercial lending companies, or

subsidiary banks, or any combination thereof, in more than one

State, is whichever of such States is so determined by election of

the foreign bank, or, in default of such election, by the Board.''

Subsec. (d). Pub. L. 103-328, Sec. 104(c), added subsec. (d).

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3102 of this title.

-CITE-

12 USC Sec. 3104 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 32 - FOREIGN BANK PARTICIPATION IN DOMESTIC MARKETS

-HEAD-

Sec. 3104. Insurance of deposits

-STATUTE-

(a) Objective

In implementing this section, the Comptroller and the Federal

Deposit Insurance Corporation shall each, by affording equal

competitive opportunities to foreign and United States banking

organizations in their United States operations, ensure that

foreign banking organizations do not receive an unfair competitive

advantage over United States banking organizations.

(b) Deposits of less than $100,000

No foreign bank may establish or operate a Federal branch which

receives deposits of less than $100,000 unless the branch is an

insured branch as defined in section 3(s) of the Federal Deposit

Insurance Act (12 U.S.C. 1813(s)), or unless the Comptroller

determines by order or regulation that the branch is not engaged in

domestic retail deposit activities requiring deposit insurance

protection, taking account of the size and nature of depositors and

deposit accounts.

(c) Deposits required to be insured under State law

(1) After September 17, 1978, no foreign bank may establish a

branch, and after one year following such date no foreign bank may

operate a branch, in any State in which the deposits of a bank

organized and existing under the laws of that State would be

required to be insured, unless the branch is an insured branch as

defined in section 3(s) of the Federal Deposit Insurance Act (12

U.S.C. 1813(s)), or unless the branch will not thereafter accept

deposits of less than $100,000, or unless the Federal Deposit

Insurance Corporation determines by order or regulation that the

branch is not engaged in domestic retail deposit activities

requiring deposit insurance protection, taking account of the size

and nature of depositors and deposit accounts.

(2) Notwithstanding the previous paragraph, a branch of a foreign

bank in operation on September 17, 1978, which has applied for

Federal deposit insurance pursuant to section 5 of the Federal

Deposit Insurance Act (12 U.S.C. 1815) by September 17, 1979, and

has not had such application denied, may continue to accept

domestic retail deposits until January 31, 1980.

(d) Retail deposit-taking by foreign banks

(1) In general

After December 19, 1991, notwithstanding any other provision of

this chapter or any provision of the Federal Deposit Insurance

Act (12 U.S.C. 1811 et seq.), in order to accept or maintain

domestic retail deposit accounts having balances of less than

$100,000, and requiring deposit insurance protection, a foreign

bank shall -

(A) establish 1 or more banking subsidies in the United

States for that purpose; and

(B) obtain Federal deposit insurance for any such subsidiary

in accordance with the Federal Deposit Insurance Act.

(2) Exception

Domestic retail deposit accounts with balances of less than

$100,000 that require deposit insurance protection may be

accepted or maintained in a branch of a foreign bank only if such

branch was an insured branch on December 19, 1991.

(3) Insured banks in U.S. territories

For purposes of this subsection, the term ''foreign bank'' does

not include any bank organized under the laws of any territory of

the United States, Puerto Rico, Guam, American Samoa, or the

Virgin Islands the deposits of which are insured by the Federal

Deposit Insurance Corporation pursuant to the Federal Deposit

Insurance Act (12 U.S.C. 1811 et seq.).

-SOURCE-

(Pub. L. 95-369, Sec. 6, Sept. 17, 1978, 92 Stat. 614; Pub. L.

96-64, Sept. 14, 1979, 93 Stat. 412; Pub. L. 102-242, title II,

Sec. 214(a), Dec. 19, 1991, 105 Stat. 2303; Pub. L. 102-550, title

XVI, Sec. 1604(a)(10), (11), Oct. 28, 1992, 106 Stat. 4082, 4083;

Pub. L. 102-558, title III, Sec. 302(a), 305, Oct. 28, 1992, 106

Stat. 4224, 4226; Pub. L. 103-328, title I, Sec. 107(a), (d), Sept.

29, 1994, 108 Stat. 2358, 2360.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsec.

(d)(1), see References in Text note set out under section 3101 of

this title.

The Federal Deposit Insurance Act, referred to in subsec. (d)(1),

(3), is act Sept. 21, 1950, ch. 967, Sec. 2, 64 Stat. 873, as

amended, which is classified generally to chapter 16 (Sec. 1811 et

seq.) of this title. For complete classification of this Act to

the Code, see Short Title note set out under section 1811 of this

title and Tables.

-MISC2-

AMENDMENTS

1994 - Subsecs. (a) to (d). Pub. L. 103-328, Sec. 107(a), added

subsec. (a) and redesignated former subsecs. (a) to (c) as (b) to

(d), respectively.

Subsec. (d)(3). Pub. L. 103-328, Sec. 107(d), added par. (3).

1992 - Subsec. (c). Pub. L. 102-550, Sec. 1604(a)(10), struck out

the subsec. (c) which was in effect before the subsec. (c) added by

Pub. L. 102-242, Sec. 214(a)(3), and which amended various other

sections of this title.

Subsec. (c)(1). Pub. L. 102-558, Sec. 302(a)(1), inserted

''domestic retail'' before ''deposit accounts'' and ''and requiring

deposit insurance protection,'' after ''$100,000,'' in introductory

provisions. Pub. L. 102-550, Sec. 1604(a)(11)(A), which made an

identical amendment, was repealed, effective Oct. 28, 1992, by Pub.

L. 102-558, Sec. 305, set out as a Repeal of Duplicative Provisions

note under section 1815 of this title.

Subsec. (c)(2). Pub. L. 102-558, Sec. 302(a)(2), substituted

''Domestic retail deposit'' for ''Deposit'' and inserted ''that

require deposit insurance protection'' after ''$100,000''. Pub. L.

102-550, Sec. 1604(a)(11)(B), which made an identical amendment,

was repealed, effective Oct. 28, 1992, by Pub. L. 102-558, Sec.

305, set out as a Repeal of Duplicative Provisions note under

section 1815 of this title.

1991 - Subsec. (b). Pub. L. 102-242, Sec. 214(a)(1), (2),

redesignated subsec. (b) as (b)(1) and designated last undesignated

par. as par. (2).

Subsec. (c). Pub. L. 102-242, Sec. 214(a)(3), added subsec. (c).

1979 - Subsec. (b). Pub. L. 96-64 inserted second par. which

extended time for foreign banks to obtain required deposit

insurance with respect to domestic existing branches.

EFFECTIVE DATE OF 1992 AMENDMENTS

Section 302(b) of Pub. L. 102-558 provided that: ''This section,

and the amendments made by this section (amending this section),

shall have the same effective date as the Federal Deposit Insurance

Corporation Improvement Act of 1991 (Pub. L. 102-242).''

Amendment by Pub. L. 102-550 effective as if included in the

Federal Deposit Insurance Corporation Improvement Act of 1991, Pub.

L. 102-242, as of Dec. 19, 1991, see section 1609(a) of Pub. L.

102-550, set out as a note under section 191 of this title.

REGULATIONS

Section 107(b) of Pub. L. 103-328 provided that:

''(1) In general. - Each Federal banking agency, after

consultation with the other Federal banking agencies to assure

uniformity, shall revise the regulations adopted by such agency

under section 6 of the International Banking Act of 1978 (12 U.S.C.

3104) to ensure that the regulations are consistent with the

objective set forth in section 6(a) of the International Banking

Act of 1978.

''(2) Specific factors. - In carrying out paragraph (1), each

Federal banking agency shall consider whether to permit an

uninsured branch of a foreign bank to accept initial deposits of

less than $100,000 only from -

''(A) individuals who are not citizens or residents of the

United States at the time of the initial deposit;

''(B) individuals who -

''(i) are not citizens of the United States;

''(ii) are residents of the United States; and

''(iii) are employed by a foreign bank, foreign business,

foreign government, or recognized international organization;

''(C) persons to whom the branch or foreign bank has extended

credit or provided other nondeposit banking services;

''(D) foreign businesses and large United States businesses;

''(E) foreign governmental units and recognized international

organizations; and

''(F) persons who are depositing funds in connection with the

issuance of a financial instrument by the branch for the

transmission of funds.

''(3) Reduction in regulatory de minimis exemption. - In carrying

out paragraph (1), each Federal banking agency shall limit any

exemption which is -

''(A) available under any regulation prescribed pursuant to

section 6(d) of the International Banking Act of 1978 (12 U.S.C.

3104(d)) providing for the acceptance of initial deposits of less

than $100,000 by an uninsured branch of a foreign bank; and

''(B) based on a percentage of the average deposits at such

branch;

to not more than 1 percent of the average deposits at such branch.

''(4) Additional relevant considerations. - In carrying out

paragraph (1), each Federal banking agency shall also consider the

importance of maintaining and improving the availability of credit

to all sectors of the United States economy, including the

international trade finance sector of the United State economy.

''(5) Deadline for prescribing revised regulations. - Each

Federal banking agency -

''(A) shall publish final regulations under paragraph (1) in

the Federal Register not later than 12 months after the date of

enactment of this Act (Sept. 29, 1994); and

''(B) may establish reasonable transition rules to facilitate

any termination of any deposit-taking activities that were

permissible under regulations that were in effect before the date

of enactment of this Act.

''(6) Definitions. - For purposes of this subsection -

''(A) the term 'Federal banking agency' means -

''(i) the Comptroller of the Currency with respect to Federal

branches of foreign banks; and

''(ii) the Federal Deposit Insurance Corporation with respect

to State branches of foreign banks; and

''(B) the term 'uninsured branch' means a branch of a foreign

bank that is not an insured branch, as defined in section 3(s)(3)

of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)(3)).''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1818, 3102 of this title.

-CITE-

12 USC Sec. 3105 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 32 - FOREIGN BANK PARTICIPATION IN DOMESTIC MARKETS

-HEAD-

Sec. 3105. Authority of Federal Reserve System

-STATUTE-

(a) Bank reserves

(1)(A) Except as provided in paragraph (2) of this subsection,

sections 371a, 371b, 371b-1, (FOOTNOTE 1) 374, 374a, 461, 464, and

465 of this title shall apply to every Federal branch and Federal

agency of a foreign bank in the same manner and to the same extent

as if the Federal branch or Federal agency were a member bank as

that term is defined in section 221 of this title; but the Board

either by general or specific regulation or ruling may waive the

minimum and maximum reserve ratios prescribed under sections 461,

463, 464, 465, and 466 of this title and may prescribe any ratio,

not more than 22 per centum, for any obligation of any such Federal

branch or Federal agency that the Board may deem reasonable and

appropriate, taking into consideration the character of business

conducted by such institutions and the need to maintain vigorous

and fair competition between and among such institutions and member

banks. The Board may impose reserve requirements on Federal

branches and Federal agencies in such graduated manner as it deems

reasonable and appropriate.

(FOOTNOTE 1) See References in Text note below.

(B) After consultation and in cooperation with the State bank

supervisory authorities, the Board may make applicable to any State

branch or State agency any requirement made applicable to, or which

the Board has authority to impose upon, any Federal branch or

agency under subparagraph (A) of this paragraph.

(2) A branch or agency shall be subject to this subsection only

if (A) its parent foreign bank has total worldwide consolidated

bank assets in excess of $1,000,000,000; (B) its parent foreign

bank is controlled by a foreign company which owns or controls

foreign banks that in the aggregate have total worldwide

consolidated bank assets in excess of $1,000,000,000; or (C) its

parent foreign bank is controlled by a group of foreign companies

that own or control foreign banks that in the aggregate have total

worldwide consolidated bank assets in excess of $1,000,000,000.

(b) Omitted

(c) Foreign bank examinations and reporting

(1) Examination of branches, agencies, and affiliates

(A) In general

The Board may examine each branch or agency of a foreign

bank, each commercial lending company or bank controlled by 1

or more foreign banks or 1 or more foreign companies that

control a foreign bank, and other office or affiliate of a

foreign bank conducting business in any State.

(B) Coordination of examinations

(i) In general

The Board shall coordinate examinations under this

paragraph with the Comptroller of the Currency, the Federal

Deposit Insurance Corporation, and appropriate State bank

supervisors to the extent such coordination is possible.

(ii) Simultaneous examinations

The Board may request simultaneous examinations of each

office of a foreign bank and each affiliate of such bank

operating in the United States.

(iii) Avoidance of duplication

In exercising its authority under this paragraph, the Board

shall take all reasonable measures to reduce burden and avoid

unnecessary duplication of examinations.

(C) On-site examination

Each Federal branch or agency, and each State branch or

agency, of a foreign bank shall be subject to on-site

examination by an appropriate Federal banking agency or State

bank supervisor as frequently as would a national bank or a

State bank, respectively, by the appropriate Federal banking

agency.

(D) Cost of examinations

The cost of any examination under subparagraph (A) shall be

assessed against and collected from the foreign bank or the

foreign company that controls the foreign bank, as the case may

be, only to the same extent that fees are collected by the

Board for examination of any State member bank.

(2) Reporting requirements

Each branch or agency of a foreign bank, other than a Federal

branch or agency, shall be subject to section 335 of this title

and the provision requiring the reports of condition contained in

section 324 of this title to the same extent and in the same

manner as if the branch or agency were a State member bank. In

addition to any requirements imposed under section 3102 of this

title, each Federal branch and agency shall be subject to section

248(a) of this title and to section 483 of this title to the same

extent and in the same manner as if it were a member bank.

(d) Establishment of foreign bank offices in United States

(1) Prior approval required

No foreign bank may establish a branch or an agency, or acquire

ownership or control of a commercial lending company, without the

prior approval of the Board.

(2) Required standards for approval

Except as provided in paragraph (6), the Board may not approve

an application under paragraph (1) unless it determines that -

(A) the foreign bank engages directly in the business of

banking outside of the United States and is subject to

comprehensive supervision or regulation on a consolidated basis

by the appropriate authorities in its home country; and

(B) the foreign bank has furnished to the Board the

information it needs to adequately assess the application.

(3) Standards for approval

In acting on any application under paragraph (1), the Board may

take into account -

(A) whether the appropriate authorities in the home country

of the foreign bank have consented to the proposed

establishment of a branch, agency or commercial lending company

in the United States by the foreign bank;

(B) the financial and managerial resources of the foreign

bank, including the bank's experience and capacity to engage in

international banking;

(C) whether the foreign bank has provided the Board with

adequate assurances that the bank will make available to the

Board such information on the operations or activities of the

foreign bank and any affiliate of the bank that the Board deems

necessary to determine and enforce compliance with this

chapter, the Bank Holding Company Act of 1956 (12 U.S.C. 1841

et seq.), and other applicable Federal law; and

(D) whether the foreign bank and the United States affiliates

of the bank are in compliance with applicable United States

law.

(4) Factor

In acting on an application under paragraph (1), the Board

shall not make the size of the foreign bank the sole determinant

factor, and may take into account the needs of the community as

well as the length of operation of the foreign bank and its

relative size in its home country. Nothing in this paragraph

shall affect the ability of the Board to order a State branch,

agency, or commercial lending company subsidiary to terminate its

activities in the United States pursuant to any standard set

forth in this chapter.

(5) Establishment of conditions

The Board may impose such conditions on its approval under this

subsection as it deems necessary.

(6) Exception

(A) In general

If the Board is unable to find, under paragraph (2), that a

foreign bank is subject to comprehensive supervision or

regulation on a consolidated basis by the appropriate

authorities in its home country, the Board may nevertheless

approve an application by such foreign bank under paragraph (1)

if -

(i) the appropriate authorities in the home country of the

foreign bank are actively working to establish arrangements

for the consolidated supervision of such bank; and

(ii) all other factors are consistent with approval.

(B) Other considerations

In deciding whether to use its discretion under subparagraph

(A), the Board shall also consider whether the foreign bank has

adopted and implements procedures to combat money laundering.

The Board may also take into account whether the home country

of the foreign bank is developing a legal regime to address

money laundering or is participating in multilateral efforts to

combat money laundering.

(C) Additional conditions

In approving an application under this paragraph, the Board,

after requesting and taking into consideration the views of the

appropriate State bank supervisor or the Comptroller of the

Currency, as the case may be, may impose such conditions or

restrictions relating to the activities or business operations

of the proposed branch, agency, or commercial lending company

subsidiary, including restrictions on sources of funding, as

are considered appropriate. The Board shall coordinate with

the appropriate State bank supervisor or the Comptroller of the

Currency, as appropriate, in the implementation of such

conditions or restrictions.

(D) Modification of conditions

Any condition or restriction imposed by the Board in

connection with the approval of an application under authority

of this paragraph may be modified or withdrawn.

(7) Time period for Board action

(A) Final action

The Board shall take final action on any application under

paragraph (1) not later than 180 days after receipt of the

application, except that the Board may extend for an additional

180 days the period within which to take final action on such

application after providing notice of, and the reasons for, the

extension to the applicant foreign bank and any appropriate

State bank supervisor or the Comptroller of the Currency, as

appropriate.

(B) Failure to submit information

The Board may deny any application if it does not receive

information requested from the applicant foreign bank or

appropriate authorities in the home country of the foreign bank

in sufficient time to permit the Board to evaluate such

information adequately within the time periods for final action

set forth in subparagraph (A).

(C) Waiver

A foreign bank may waive the applicability of this paragraph

with respect to any application under paragraph (1).

(e) Termination of foreign bank offices in United States

(1) Standards for termination

The Board, after notice and opportunity for hearing and notice

to any appropriate State bank supervisor, may order a foreign

bank that operates a State branch or agency or commercial lending

company subsidiary in the United States to terminate the

activities of such branch, agency, or subsidiary if the Board

finds that -

(A)(i) the foreign bank is not subject to comprehensive

supervision or regulation on a consolidated basis by the

appropriate authorities in its home country; and

(ii) the appropriate authorities in the home country of the

foreign bank are not making demonstrable progress in

establishing arrangements for the comprehensive supervision or

regulation of such foreign bank on a consolidated basis; or

(B)(i) there is reasonable cause to believe that such foreign

bank, or any affiliate of such foreign bank, has committed a

violation of law or engaged in an unsafe or unsound banking

practice in the United States; and

(ii) as a result of such violation or practice, the continued

operation of the foreign bank's branch, agency or commercial

lending company subsidiary in the United States would not be

consistent with the public interest or with the purposes of

this chapter, the Bank Holding Company Act of 1956 (12 U.S.C.

1841 et seq.), or the Federal Deposit Insurance Act (12 U.S.C.

1811 et seq.).

However, in making findings under this paragraph, the Board shall

not make size the sole determinant factor, and may take into

account the needs of the community as well as the length of

operation of the foreign bank and its relative size in its home

country. Nothing in this paragraph shall affect the ability of

the Board to order a State branch, agency, or commercial lending

company subsidiary to terminate its activities in the United

States pursuant to any standard set forth in this chapter.

(2) Discretion to deny hearing

The Board may issue an order under paragraph (1) without

providing for an opportunity for a hearing if the Board

determines that expeditious action is necessary in order to

protect the public interest.

(3) Effective date of termination order

An order issued under paragraph (1) shall take effect before

the end of the 120-day period beginning on the date such order is

issued unless the Board extends such period.

(4) Compliance with State and Federal law

Any foreign bank required to terminate activities conducted at

offices or subsidiaries in the United States pursuant to this

subsection shall comply with the requirements of applicable

Federal and State law with respect to procedures for the closure

or dissolution of such offices or subsidiaries.

(5) Recommendation to agency for termination of a Federal branch

or agency

The Board may transmit to the Comptroller of the Currency a

recommendation that the license of any Federal branch or Federal

agency of a foreign bank be terminated in accordance with section

3102(i) of this title if the Board has reasonable cause to

believe that such foreign bank or any affiliate of such foreign

bank has engaged in conduct for which the activities of any State

branch or agency may be terminated under paragraph (1).

(6) Enforcement of orders

(A) In general

In the case of contumacy of any office or subsidiary of the

foreign bank against which -

(i) the Board has issued an order under paragraph (1); or

(ii) the Comptroller of the Currency has issued an order

under section 3102(i) of this title,

or a refusal by such office or subsidiary to comply with such

order, the Board or the Comptroller of the Currency may invoke

the aid of the district court of the United States within the

jurisdiction of which the office or subsidiary is located.

(B) Court order

Any court referred to in subparagraph (A) may issue an order

requiring compliance with an order referred to in subparagraph

(A).

(7) Criteria relating to foreign supervision

Not later than 1 year after December 19, 1991, the Board, in

consultation with the Secretary of the Treasury, shall develop

and publish criteria to be used in evaluating the operation of

any foreign bank in the United States that the Board has

determined is not subject to comprehensive supervision or

regulation on a consolidated basis. In developing such criteria,

the Board shall allow reasonable opportunity for public review

and comment.

(f) Judicial review

(1) Jurisdiction of United States courts of appeals

Any foreign bank -

(A) whose application under subsection (d) of this section or

section 3107(a) of this title has been disapproved by the

Board;

(B) against which the Board has issued an order under

subsection (e) of this section or section 3107(b) of this

title; or

(C) against which the Comptroller of the Currency has issued

an order under section 3102(i) of this title,

may obtain a review of such order in the United States court of

appeals for any circuit in which such foreign bank operates a

branch, agency, or commercial lending company that has been

required by such order to terminate its activities, or in the

United States Court of Appeals for the District of Columbia

Circuit, by filing a petition for review in the court before the

end of the 30-day period beginning on the date the order was

issued.

(2) Scope of judicial review

Section 706 of title 5 (other than paragraph (2)(F) of such

section) shall apply with respect to any review under paragraph

(1).

(g) Consultation with State bank supervisor

The Board shall request and consider any views of the appropriate

State bank supervisor with respect to any application or action

under subsection (d) or (e) of this section.

(h) Limitations on powers of State branches and agencies

(1) In general

After the end of the 1-year period beginning on December 19,

1991, a State branch or State agency may not engage in any type

of activity that is not permissible for a Federal branch unless -

(A) the Board has determined that such activity is consistent

with sound banking practice; and

(B) in the case of an insured branch, the Federal Deposit

Insurance Corporation has determined that the activity would

pose no significant risk to the deposit insurance fund.

(2) Single borrower lending limit

A State branch or State agency shall be subject to the same

limitations with respect to loans made to a single borrower as

are applicable to a Federal branch or Federal agency under

section 3102(b) of this title.

(3) Other authority not affected

This section does not limit the authority of the Board or any

State supervisory authority to impose more stringent

restrictions.

(i) Proceedings related to conviction for money laundering offenses

(1) Notice of intention to issue order

If the Board finds or receives written notice from the Attorney

General that -

(A) any foreign bank which operates a State agency, a State

branch which is not an insured branch, or a State commercial

lending company subsidiary;

(B) any State agency;

(C) any State branch which is not an insured branch; or

(D) any State commercial lending subsidiary,

has been found guilty of any money laundering offense, the Board

shall issue a notice to the agency, branch, or subsidiary of the

Board's intention to commence a termination proceeding under

subsection (e) of this section.

(2) Definitions

For purposes of this subsection -

(A) Insured branch

The term ''insured branch'' has the meaning given such term

in section 3(s) of the Federal Deposit Insurance Act (12 U.S.C.

1813(s)).

(B) Money laundering offense defined

The term ''money laundering offense'' means any criminal

offense under section 1956 or 1957 of title 18 or under section

5322 of title 31.

(j) Study on equivalence of foreign bank capital

Not later than 180 days after December 19, 1991, the Board and

the Secretary of the Treasury shall jointly submit to the Committee

on Banking, Housing, and Urban Affairs of the Senate and the

Committee on Banking, Finance and Urban Affairs of the House of

Representatives a report -

(1) analyzing the capital standards contained in the framework

for measurement of capital adequacy established by the

Supervisory Committee of the Bank for Inter