Circular 5566> > >
June 18, 2002
To: All Member Banks and Others Concerned in the Third Federal Reserve District
Attention: Chief Executive Officer and Compliance Officer
Subject: REGULATION H FINAL RULE: PROHIBITION AGAINST USE OF INTERSTATE BRANCHES PRIMARILY FOR DEPOSIT PRODUCTION
The Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency issued final regulations on June 5, 2002 amending their rules that currently prohibit interstate branches from being used primarily for deposit production.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 prohibits any bank from establishing or acquiring a branch outside of its home state primarily for the purpose of deposit production. Section 106 of the Gramm-Leach-Bliley Act expands this prohibition to include any branch of a bank controlled by an out-of-state bank holding company. To conform their regulations to this statutory change, the agencies have amended their rules so that the prohibition against branches being used as deposit production offices also applies to any bank or branch of a bank controlled by an out-of-state bank holding company, including a bank consisting only of a main office.
Effective Date: The final rule was published in the Federal Register on June 6, 2002 and is effective on October 1, 2002.
Additional Information: A copy of the final rule and supplementary information is attached (42 KB, 15 pages). For additional information, contact the Regulations Assistance Unit at this Reserve Bank at (215) 574-6568 or Michael J. O'Rourke, Counsel, Legal Division or Shawn McNulty, Assistant Director, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, Washington, D.C. 20551, at (202) 452-3288 or (202) 452-3946.