34844 Federal Register / Vol. 64, No. 124 / Tuesday, June 29, 1999 / Notices national bank’s honorary or advisory and purchase of services to provide Attorney, Community and Consumer directors (who act in advisory capacities information. Law Division (202/874–5750); Office of without voting power or the power of Dated: June 22, 1999. the Comptroller of the Currency, 250 E Street, SW., Washington DC 20219. final decision in matters concerning Mark Tenhundfeld, bank business) must distinguish Board: Rick Heyke, Senior Attorney, Assistant Director, Legislative & Regulatory Legal Division (202/452–3688), Board of between them and the bank’s board of Activities Division. directors, or indicate their advisory Governors of the Federal Reserve [FR Doc. 99–16472 Filed 6–28–99; 8:45 am] status. System, 20th and C Streets, NW., 12 CFR 7.2014(b) (Indemnification of BILLING CODE 4810±33±M Washington, DC 20551. For the hearing institution-affiliated parties in impaired only, Telecommunications Device for the Deaf (TDD), Diane Jenkins administrative proceedings or civil DEPARTMENT OF THE TREASURY actions not initiated by a federal (202/452–3544). banking agency): A national bank shall Office of the Comptroller of the FDIC: Curtis Vaughn, Examination Specialist, Division of Supervision (202/ designate in its bylaws the body of law Currency selected for making indemnification 898–6759); Gladys C. Gallagher, payments in administrative proceedings [Docket No. 99±06] Counsel, Legal Division (202/898–3833); or civil actions not initiated by a federal Federal Deposit Insurance Corporation, FEDERAL RESERVE SYSTEM banking agency. 550 17th Street, NW., Washington, DC National banks use the information to [Docket No. R±1036] 20429. ensure their compliance with applicable OTS: Larry Clark, Director of Trust federal banking law and regulations. FEDERAL DEPOSIT INSURANCE Programs, Compliance Policy and Further, the collections of information CORPORATION Specialty Examinations (202/906–5628); evidence bank compliance with various Lucrecia R. Moore, Attorney (202/906– regulatory requirements. This DEPARTMENT OF THE TREASURY 6161); Office of Thrift Supervision, 1700 G Street, NW., Washington DC 20552. information assists bank management in Office of Thrift Supervision the safe and sound operation of the SUPPLEMENTARY INFORMATION: bank. The OCC uses the information in [Docket No. 99±33] Background Information the conduct of bank examinations and as an audit tool to verify bank Branch Closings Section 42 of the Federal Deposit Insurance Act (12 U.S.C. 1831r–1) (FDI compliance with law and regulations. AGENCIES: Office of the Comptroller of Type of Review. Extension, without Act) requires an insured depository the Currency (OCC), Treasury; Board of institution to give 90 days prior written change, of a currently approved Governors of the Federal Reserve collection. notice of any branch closing to its System (Board); Federal Deposit primary Federal regulator and to branch Affected Public: Businesses or other Insurance Corporation (FDIC); and for-profit. customers, to post a notice at the branch Office of Thrift Supervision (OTS), site at least 30 days prior to closing, and Estimated Number of Respondents: Treasury. 2,430. to develop a policy with respect to ACTION: Estimated Total Annual Responses: Joint policy statement. branch closings. The notice to the regulator must include a detailed 2,430. SUMMARY: The OCC, the Board, the statement of the reasons for the decision Frequency of Response: FDIC, and the OTS (the agencies) are Recordkeeping. to close the branch and information in revising their joint policy statement support of those reasons. Estimated Total Annual Burden: regarding branch closings by insured 4,156 burden hours. On September 21, 1993 (58 FR 49083), depository institutions. This action is the agencies issued a joint policy Comments needed to incorporate changes in the statement to provide guidance to underlying statute made by section 106 Comments submitted in response to institutions in complying with section of the Riegle-Neal Interstate Banking this notice will be summarized and 42 of the FDI Act. The 1993 joint policy and Branching Efficiency Act of 1994 included in the request for OMB statement defines a branch for purposes and section 2213 of the Economic approval. All comments will become a of section 42, clarifies what constitutes Growth and Regulatory Paperwork matter of public record. Comments are a branch closing, and provides guidance Reduction Act of 1996. The action is invited on: to institutions in identifying customers intended to clarify the additional steps (a) Whether the collection of to be notified in the event of a branch regarding notice and consultation for information is necessary for the proper closing. proposed branch closings by interstate performance of the functions of the On September 29, 1994, section 42 of banks in low- or moderate-income areas, agency, including whether the the FDI Act was amended by section and to clarify the status of automated information has practical utility; 106 of the Riegle-Neal Interstate (b) The accuracy of the agency’s teller machines, relocations and Banking and Branching Efficiency Act estimate of the burden of the collection consolidations, and branch closings in of 1994 (Pub. L. 103–328, 108 Stat. of information; connection with emergency acquisitions 2338) (Interstate Act). The Interstate Act (c) Ways to enhance the quality, or assistance by the FDIC. changed section 42 of the FDI Act in utility, and clarity of the information to EFFECTIVE DATE: June 29, 1999. two ways, both relating to proposed be collected; FOR FURTHER INFORMATION CONTACT: closings by interstate banks (banks (d) Ways to minimize the burden of OCC: Crystal Maddox, National Bank which maintain branches in more than the collection on respondents, including Examiner, Licensing Policy and Systems one state) of branches in low- or through the use of automated collection Analyst, Bank Organization and moderate-income areas: First, by techniques or other forms of information Structure Division (202/874–5060); Sue providing a new notice procedure; and technology; and Auerbach, Senior Attorney, Bank second, by requiring the appropriate (e) Estimates of capital or startup costs Activities and Structure Division (202/ Federal banking agency to convene a and costs of operation, maintenance, 874–5300); Beth Knickerbocker, Senior meeting of community leaders and other

VerDate 18-JUN-99 18:06 Jun 28, 1999 Jkt 183247 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 E:\FR\FM\29JNN1.XXX pfrm03 PsN: 29JNN1 Federal Register / Vol. 64, No. 124 / Tuesday, June 29, 1999 / Notices 34845 persons to discuss the feasibility of Background as determined by the agency in its obtaining adequate alternative facilities The Federal Deposit Insurance discretion, to explore the feasibility of and services if a person from the Corporation Improvement Act of 1991 obtaining adequate alternative facilities affected area requests such a meeting (Pub. L. 102–242, 105 Stat. 2236) and services for the affected area and other prescribed requirements are (FDICIA) was enacted on December 19, following the closing of the branch. satisfied. 1991. Section 228 of the FDICIA added Finally, the law requires each On September 30, 1996, section 42 of a new section 42 to the Federal Deposit institution to adopt policies regarding the FDI Act was amended by section Insurance Act (12 U.S.C. 1831r–1) (FDI closings of branches of the institution. 2213 of the Economic Growth and Act) that imposes notice requirements Applicability Regulatory Paperwork Reduction Act of on insured depository institutions that Section 42 of the FDI Act applies to 1996 (Pub. L. 104–208, 110 Stat. 3009) intend to close branches. The provision (Regulatory Relief Act). The Regulatory the closing of a ‘‘branch’’ by an insured became effective on December 19, 1991. depository institution.3 The agencies Relief Act amended section 42 of the Section 42 was amended on September FDI Act to clarify that section 42 does consider a ‘‘branch’’ for purposes of 29, 1994, by section 106 of the Riegle- section 42 to be a traditional brick-and- not apply to: (1) An automated teller Neal Interstate Banking and Branching machine; (2) the relocation of a branch mortar branch, or any similar banking Efficiency Act of 1994 (Pub. L. 103–328, facility other than a main office, at or consolidation of one or more 108 Stat. 2338), and on September 30, branches into another branch, if the which deposits are received or checks 1996, by the Economic Growth and paid or money lent. Notice pursuant to relocation or consolidation occurs Regulatory Paperwork Reduction Act of within the immediate neighborhood and section 42 would not be required for the 1996 (Pub. L. 104–208, 110 Stat. 3009). closing of non-branch facilities, such as does not substantially affect the nature The law requires an insured an ATM, remote service facility, or loan of the business or customers served; and depository institution to submit a notice production office, or of a temporary (3) a branch that is closed in connection of any proposed branch closing to the branch.4 The law also does not apply to with an emergency acquisition under appropriate Federal banking agency no mergers, consolidations, or other sections 11(n), 13(f), or 13(k) of the FDI later than 90 days prior to the date of acquisitions, including branch sales, Act, or any assistance provided by the the proposed branch closing. The that do not result in any branch FDIC under section 13(c) of the FDI Act. required notice must include a detailed closings. Institutions that are in doubt (12 U.S.C. 1821(n), 1823(f) and (k), and statement of the reasons for the decision about the coverage of a particular 1823(c)). to close the branch and statistical or closing should consult the appropriate The agencies are revising the 1993 other information in support of such Federal banking agency. joint policy statement to reflect the reasons. changes to section 42 of the FDI Act The law also requires an insured Mergers made by the Interstate Act and the depository institution to notify its An institution must file a branch Regulatory Relief Act. The revised customers of the proposed closing. The policy statement incorporates the new closing notice whenever it closes a institution must mail the notice to the branch, including when the closing procedure and provides for banks to customers of the branch proposed to be inform customers in affected areas of occurs in the context of a merger, closed at least 90 days prior to the consolidation or other form of their ability to comment on a particular proposed closing. The institution also branch closing. The agencies are also acquisition.5 Branch closings that occur must post a notice to customers in a in the context of transactions subject to clarifying that main offices, remote conspicuous manner on the premises of service facilities, loan production the Bank Merger Act (12 U.S.C. 1828) the branch proposed to be closed at least require a branch closing notice, even if offices, and insured branches of foreign 30 days prior to the proposed closing. banks are not branches for purposes of the transaction received expedited An interstate bank (defined in section treatment under that Act. The section 42. A reference to the Resolution 42 as a bank that maintains branches in Trust Corporation (RTC) is being responsibility for filing the notice lies more than one state) proposing to close with the acquiring or resulting eliminated since the agency ceased to a branch located in a low- or moderate- exist on December 31, 1995. The institution, but either party to such a income area is required to include in its transaction may give the notice. Thus, agencies are also clarifying the section notice to customers the mailing address on allocation of customers to branches. for example, the purchaser may give the of the appropriate Federal banking notice prior to consummation of the The text of the revised joint policy agency and a statement that comments statement follows: transaction where the purchaser intends on the closing may be mailed to the to close a branch following 2 Policy Statement of Office of the agency. In those cases, a person from consummation, or the seller may give Comptroller of the Currency, Board of the affected area may submit a written the notice because it intends to close a Governors of the Federal Reserve request relating to the proposed closing branch at or prior to consummation. In System, Federal Deposit Insurance to the agency, stating specific reasons the latter example, if the transaction Corporation, and Office of Thrift for the request and including a Supervision Concerning Branch Closing discussion of the adverse effect the 3 Insured branches of foreign banks are not Notices and Policies closing may have on the availability of considered ‘‘branches’’ for purposes of section 42 banking services in the affected area. If because they are subject to separate liquidation Purpose procedures as specified in 12 CFR 28.22 (Federal the agency determines that the request branches of foreign banks) and 12 CFR 211.25(f) This policy statement provides is nonfrivolous, then the agency shall (state branches of foreign banks). guidance to each insured depository convene a meeting of appropriate 4 Consistent with the agencies’ original institution concerning requirements that individuals, organizations, depository interpretation, the 1996 amendment expressly an institution provide prior notice of institutions, and agency representatives, stated that section 42 of the FDI Act ‘‘shall not any branch closing and establish apply with respect to automated teller machines.’’ (Pub. L. 104–208, 110 Stat. 3009.) 1 internal policies for branch closings. 3 of the FDI Act (12 U.S.C. 1813), the deposits of 5 See ‘‘Other’’ below for certain branches closed which are insured by the FDIC. in connection with emergency acquisitions or FDIC 1 An ‘‘insured depository institution’’ means any 2 Under section 42, this requirement does not assistance or subsequently transferred back to the bank or savings association, as defined in Section apply when a savings association closes a branch. FDIC.

VerDate 18-JUN-99 14:18 Jun 28, 1999 Jkt 183247 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 E:\FR\FM\29JNN1.XXX pfrm03 PsN: 29JNN1 34846 Federal Register / Vol. 64, No. 124 / Tuesday, June 29, 1999 / Notices were to close ahead of schedule, the • A temporary interruption of service Notice of Branch Closing to Customers purchaser, if authorized by the caused by an event beyond the Customer Allocation appropriate Federal banking agency, institution’s control (e.g., a natural could operate the branch to complete catastrophe), if the insured depository The law requires an insured compliance with the 90-day institution plans to restore branching depository institution that proposes to requirement without the need for an services at the site in a timely manner; 8 close a branch to provide notice of the additional notice. • Transferring back to the FDIC, proposed closing to the customers of the pursuant to the terms of an acquisition branch. A customer of a branch is a Relocations and Consolidations agreement, a branch of a failed bank or patron of an institution who has been The law does not apply when a savings association operated on an identified with a particular branch by branch is relocated or consolidated with interim basis in connection with the such institution through use, in good one or more other branches if the acquisition of all or part of a failed bank faith, of a reasonable method for relocation or consolidation occurs or savings association, so long as the allocating customers to specific within the immediate neighborhood and transfer occurs within the option period branches. An institution that allocates does not substantially affect the nature or within an occupancy period, not to customers based on where a customer of the business or customers served. For exceed 180 days, provided in the opened his or her deposit or loan purposes of this policy statement, a agreement. account will be presumed to have branch relocation is a movement within • A branch that is closed in reasonably identified each customer of a the same immediate neighborhood that connection with an emergency branch. The agencies recognize that use does not substantially affect the nature acquisition under sections 11(n), 13(f), of this means of allocation, and perhaps of the business or customers served. or 13(k) of the FDI Act, or any assistance others, may result in certain facilities Generally, relocations will be found to provided by the FDIC under section which technically constitute branches have occurred only when short 13(c) of the FDI Act. (12 U.S.C. 1821(n), not being assigned any customers, but distances are involved: For example, 1823(f) and (k), and 1823(c)). believe that this result is permissible so moves across the street, around the Notice of Branch Closing to the Agency long as the means of allocation is corner, or a block or two away. Moves reasonable; if such a branch is closed, of less than 1,000 feet will generally be The law requires an insured then notification to the appropriate considered to be relocations. In less depository institution to give notice of agency and posting of a notice on the densely populated areas or where any proposed branch closing to the branch premises will suffice. Finally, an neighborhoods extend farther, and a appropriate Federal banking agency no institution need not change its long move would not significantly affect later than 90 days prior to the date of recordkeeping system in order to make the nature of the business or the the proposed branch closing. The a reasonable determination of who is a customers served by the branch, a required notice must include the customer of a branch. relocation may occur over substantially following: longer distances.6 Institutions that are in • Identification of the branch to be Timing doubt about whether a relocation or a closed; • Under section 42, an institution must closing has occurred should consult the The proposed date of closing; include a customer notice at least 90 • A detailed statement of the reasons appropriate Federal banking agency. days in advance of the proposed closing Consolidations of branches are for the decision to close the branch; and • Statistical or other information in in at least one of the regular account considered relocations for purposes of statements mailed to customers, or in a this policy statement if the branches are support of such reasons consistent with the institution’s written policy for separate mailing. If the branch closing located within the same neighborhood occurs after the proposed date of and the nature of the business or branch closings. If an institution believes certain closing, no additional notice is required customers served is not affected. Thus, to be mailed to customers (or provided for example, a consolidation of two information included in the notice is confidential in nature, the institution to the appropriate Federal banking branches on the same block following a agency) if the institution acted in good merger would not constitute a branch should prepare such information separately and request confidential faith in projecting the date for closing closing. The same guidelines apply to and in subsequently delaying the consolidations as to relocations. treatment. The agency will decide whether to treat such information closing. Other confidentially under the Freedom of Content Information Act (5 U.S.C. 552). Changes of services at a branch are The mailed customer notice should If a notice provided to a state not considered a branch closing, state the location of the branch to be supervisory agency pursuant to state provided that the remaining facility closed and the proposed date of closing, law contains the information outlined constitutes a branch (as defined and either identify where customers 7 above, then the institution may provide herein). may obtain service following the closing a copy of that notice to the appropriate Section 42 also does not apply when date or provide a telephone number for Federal banking agency in satisfaction a branch ceases operation but is not customers to call to determine such of section 42, provided that the notice closed by an institution. Thus, the law alternative sites. If a notice of branch is filed at least 90 days prior to the date does not apply to: closing provided to customers pursuant of the branch closing. to state law contains this information, 6 OCC and OTS regulations specify distances considered short-distance relocations. See 12 CFR 8 Section 42 would apply, however, if the then a separate notice need not be sent, 5.3(l) (national banks) and 12 CFR 545.95(c) institution did not reopen the branch following the provided that the notice is sent at least (thrifts). incident. Although prior notice would not be 90 days prior to the closing. 7 The agencies note that where, after a reduction possible in such a case, the institution should notify in services, the resulting facility no longer qualifies the customers of the branch and the appropriate Low- or Moderate-Income Areas Served as a branch, section 42 would apply. Thus, notices Federal banking agency in the manner specified by by Interstate Banks of branch closing would be required if an section 42 to the extent possible and as soon as institution were to replace a traditional brick-and- possible after the decision to close the branch has If the institution is a bank that mortar branch with an ATM. been made. maintains branches in more than one

VerDate 18-JUN-99 14:18 Jun 28, 1999 Jkt 183247 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 E:\FR\FM\29JNN1.XXX pfrm03 PsN: 29JNN1 Federal Register / Vol. 64, No. 124 / Tuesday, June 29, 1999 / Notices 34847 state and the branch to be closed is have been met by such bank with Dated: May 19, 1999. located in a low-or moderate-income respect to the branch being closed. John D. Hawke, Jr., area,9 the notice shall contain the Comptroller of the Currency. On-Site Notice mailing address of the appropriate By order of the Board of Governors of the Federal banking agency and a statement Under section 42, an institution also Federal Reserve System, June 22, 1999. that comments on the proposed branch must post notice to branch customers in Jennifer J. Johnson, closing may be mailed to that agency. a conspicuous manner on the branch Secretary of the Board. The notice should also state that the premises at least 30 days prior to the Dated: June 3, 1999. agency does not have the authority to proposed closing. This notice should Robert E. Feldman, approve or prevent the branch closing. state the proposed date of closing and Executive Secretary, Federal Deposit If the agency receives a written request identify where customers may obtain Insurance Corporation. by a person from the area in which the service following that date or provide a Dated: June 18, 1999. branch is located, relating to the telephone number for customers to call Ellen Seidman, proposed closing and stating specific to determine such alternative sites. An Director, Office of Thrift Supervision. reasons for the request, including a institution may revise the notice to [FR Doc. 99–16471 Filed 6–28–99; 8:45 am] discussion of the adverse effect of such extend the projected date of closing BILLING CODE Board of Governors: 6210±01±P (25%) closing on the availability of banking without triggering a new 30-day notice OCC: 4810±33±P (25%) FDIC: 6714±01±P (25%) OTS: 6720±01±P (25%) services in the affected area, and if the period. agency concludes that the request is nonfrivolous, then the agency shall Contingent Notices DEPARTMENT OF THE TREASURY convene a meeting of agency In some situations, an institution, in representatives, other interested its discretion and to expedite Customs Service depository institution regulatory transactions, may mail and post notices agencies, community leaders, and other Procedures if the Generalized System to customers of a proposed branch appropriate individuals, organizations, of Preferences Program Expires closing that is contingent upon an event. and depository institutions, as For example, in the case of a proposed AGENCY: Customs Service, Treasury. determined by the agency in its merger or acquisition, an institution ACTION: discretion. The purpose of the meeting General notice. may notify customers of its intent to shall be to explore the feasibility of close a branch upon approval by the SUMMARY: The Generalized System of obtaining adequate alternative facilities appropriate Federal banking agency of Preferences (GSP) is a renewable and services for the affected area, the proposed merger or acquisition. preferential trade program that allows including the establishment of a new the eligible products of designated branch by another depository Policies for Branch Closings developing countries to directly enter institution, the chartering of a new the United States free of duty. The GSP depository institution, or the The law requires all insured is currently scheduled to expire at establishment of a community depository institutions to adopt policies midnight on June 30, 1999, unless its development credit union, following the for branch closings. Each institution provisions are extended by Congress. closing of the branch. In the case of an with one or more branches must adopt This document provides notice to institution which will become an such a policy. If an institution currently importers that claims for duty-free interstate bank prior to the closure of a has no branches, it must adopt a policy treatment under the GSP will not be branch in a low-or moderate-income for branch closing when it establishes processed by Customs for merchandise area, such information must be included its first branch. The policy should be in entered or withdrawn from a warehouse in the notice unless the closure will writing and meet the size and needs of for consumption on or after July 1, 1999, occur immediately upon consummation the institution. if the program is not extended before of the transaction that causes the Each branch closing policy adopted that date. This document also sets forth institution to become interstate. No pursuant to section 42 should include the mechanisms that will facilitate action by the appropriate Federal factors for determining which branch to refunds, should the GSP be renewed banking agency under this provision close and which customers to notify, with retroactive effect. shall affect the authority of an interstate and procedures for providing the DATES: The plan set forth in this bank to close a branch (including the notices required by the statute. document will become effective as of timing of such closing) if the July 1, 1999, if Congress does not extend requirements of sections 42(a) and 42(b) Compliance the GSP program before that date. FOR FURTHER INFORMATION CONTACT: For of the FDI Act (regarding notice to the The Federal banking agencies will specific questions relating to the appropriate Federal banking agency and examine for compliance with section 42 notice to the institution’s customers) Automated Commercial System: of the FDI Act in accordance with each James Halpin, Office of Information agency’s compliance examination Technology, 703–921–7128. For general 9 The term ‘‘low-or moderate-income area’’ means procedures, to determine whether the a census tract for which the median family income operational questions: is: (1) Less than 80 percent of the median family institution has adopted a branch closing Formal entries—John Pierce, 202–927– income for the metropolitan statistical area (as policy and whether the institution 1249; designated by the Director of the Office of provided the required notices when it Management and Budget) in which the census tract Informal entries—John Considine, 202– is located; or (2) in the case of a census tract that closed a branch. If an institution fails to 927–0042; is not located in a metropolitan statistical area, less comply with section 42, the appropriate Mail entries—Robert Woods, 202–927– than 80 percent of the median family income for the Federal banking agency may make 1236; State in which the census tract is located, as adverse findings in the compliance Passenger claims—Wes Windle, 202– determined without taking into account family income in metropolitan statistical areas in such evaluation or take appropriate 927–0167 State. (12 U.S.C. 1831r-l(d)(4)). enforcement action. SUPPLEMENTARY INFORMATION:

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