§ 3102. Establishment of Federal branches and agencies by foreign bank

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1978

   International Banking Act of 1978

   Pub. L. 95–369 § 4 · 92 Stat. 607

   Enacted · 12 U.S.C. § 3102

   Pub. L. 95–369, § 4, Sept. 17, 1978, 92 Stat. 610

   Source evidence

   Code source credit
   Pub. L. 95–369, § 4, Sept. 17, 1978, 92 Stat. 610

   Enacted provision · exact public law section
   Sec. 4. federal branches and agencies (a) Except as provided in section 5, a foreign bank which 12 USC 3102. 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. (b) In establishing and operating a Federal branch or agency, a Regulations. 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 Act 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 12 USC 38. at the same location, except that (1) the requirements of section 5240 of the Revised Statutes (12 U.S.C. 481) shall be met with respect to a Federal branch or agency if it is examined at least once in each calendar year; (2) 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; (3) a Federal branch or agency shall not be required to become a member bank, as that term is defined in section 1 of the Federal Reserve Act; and (4) a 12 USC 221. Federal agency shall not be required to become an insured bank as that term is defined in section 3(h) of the Federal Deposit Insurance Act. 12 USC 1813. (c) 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) 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) No foreign bank may maintain both a Federal branch and a Federal agency in the same State. (f) 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) (1) Upon the opening of a Federal branch or agency in any Regulations. State and thereafter, a foreign bank, in addition to any deposit requirements imposed under section 6 of this Act, 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 5136 of the Revised Statutes, as amended, in an 12 USC 24. 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 Conditions and requirements. 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 7(a) of this Act, 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) A foreign bank with a Federal branch or agency operating in any State may (1) 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 (2) 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. (i) 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 Hearing. 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) (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.

2. 1991

   Foreign Bank Supervision Enhancement Act of 1991

   Pub. L. 102–242 § 202(b) · 105 Stat. 2236

   1. Inserted · 12 U.S.C. § 3102(a)

      Pub. L. 102–242, § 202(b), inserted heading

   2. Amended · 12 U.S.C. § 3102(a)

      Pub. L. 102–242, § 202(b), designated existing provisions as par. (1)

   3. Added · 12 U.S.C. § 3102(a)

      Pub. L. 102–242, § 202(b), added par. (2)

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 102–242, § 202(b), inserted heading, designated existing provisions as par. (1) and inserted heading, and added par. (2).

   Enacted provision · exact public law section
   (b) Standards for Approval of Federal Branches and Agencies.— Section 4(a) of the International Banking Act of 1978 (12 U.S.C. 3102(a)) is amended— (1) by striking “(a) Except as provided in section 5,” and inserting “(a) Establishment and Operation of Federal Branches and Agencies. — “(1) Initial federal branch or agency.— Except as provided in section 5,”; and (2) by adding at the end the following new paragraph: “(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 7(d)(5) as a condition for the approval of such application by the agency.”.

3. 1991

   Foreign Bank Supervision Enhancement Act of 1991

   Pub. L. 102–242 § 203(b) · 105 Stat. 2236

   Inserted · 12 U.S.C. § 3102(b)

   Pub. L. 102–242, § 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.”

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 102–242, § 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.”

   Enacted provision · exact public law section
   (b) Coordination of Examinations.— Section 4(b) of the International Banking Act of 1978 (12 U.S.C. 3102(b)) is amended by adding at the end thereof the following new sentence: “The Comptroller of the Currency shall coordinate examinations of Federal branches and agencies of foreign banks with examinations conducted by the Board under section 7(c)(1) 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.”.

4. 1991

   Foreign Bank Supervision Enhancement Act of 1991

   Pub. L. 102–242 § 202(c) · 105 Stat. 2236

   1. Amended · 12 U.S.C. § 3102(h)

      Pub. L. 102–242, § 202(c), amended heading

   2. Amended · 12 U.S.C. § 3102(h)

      Pub. L. 102–242, § 202(c), designated existing provisions as par. (1)

   3. Inserted · 12 U.S.C. § 3102(h)

      Pub. L. 102–242, § 202(c), inserted par. (1) heading

   4. Redesignated · 12 U.S.C. § 3102(h)

      Pub. L. 102–242, § 202(c), redesignated former pars. (1) and (2) as subpars. (A) and (B), respectively

   5. Added · 12 U.S.C. § 3102(h)

      Pub. L. 102–242, § 202(c), added par. (2)

   Source evidence

   Code amendment note
   Subsec. (h). Pub. L. 102–242, § 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).

   Enacted provision · exact public law section
   (c) Standards for Approval of Additional Federal Branches and Agencies.— Section 4(h) of the International Banking Act of 1978 (12 U.S.C. 3102(h)) is amended— (1) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively; (2) by striking “(h) A foreign bank” and inserting “(h) Additional Branches or Agencies. — “(1) Approval of agency required.— A foreign bank”; and (3) by adding at the end the following new paragraph: “(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.”.

5. 2000

   Financial Regulatory Relief and Economic Efficiency Act of 2000

   Pub. L. 106–569 title XII § 1234 · 114 Stat. 2944

   1. Redesignated · 12 U.S.C. § 3102(b)

      Pub. L. 106–569 redesignated cls. (2) to (4) as (1) to (3), respectively

   2. Struck · 12 U.S.C. § 3102(b)

      Pub. L. 106–569 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;”

   Source evidence

   Code amendment note
   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;”.

   Enacted provision · exact public law section
   SEC. 1234. CONFORMING CHANGE TO THE INTERNATIONAL RANKING ACT OF 1978. Section 4(b) of the International Banking Act of 1978 (12 U.S.C. 3102(b)) is amended in the second sentence, by striking paragraph (1) and by redesignating paragraphs (2) through (4) as paragraphs (1) through (3), respectively.

12 of 12 references resolved to an enrolled provision