District Circular Letters

May 1, 2001

BANKING SUPERVISION AND REGULATION:
PROPOSAL TO AMEND REGULATION H

To State Member Banks, Bank
Holding Companies, U.S. Branches
and Agencies of Foreign Banks,
and Others Concerned,
in the Twelfth Federal Reserve District

Request for Comment on Regulation H (R-1099 - PDF 53KB)

The Federal Reserve Board is requesting public comment on a proposal that would amend Regulation H (Membership of State Banking Institutions in the Federal Reserve System). The proposal would expand the rule prohibiting deposit production offices from including any branch of a bank controlled by an out-of-state bank holding company.

Comment is requested by June 8, 2001.

Section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act) prohibits banks from engaging in interstate branching primarily for the purpose of deposit production. It was intended to ensure that interstate branching authority would not result in the taking of deposits from a community without banks reasonably helping to meet the credit needs of that community.

Section 106 of the Gramm-Leach-Bliley Act of 1999 expanded the coverage of section 109 of the Interstate Act to include any branch of a bank controlled by an out-of-state bank holding company. The Board’s proposal amends the regulatory prohibition against branches being used as deposit production offices to include 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.

The proposed amendment to Regulation H is similar to proposed amendments to regulations of the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.

Copies

Copies of the Board's notice (Docket R-1099 - PDF 53KB) are available from our Corporate Services Department. To request copies to be sent by mail, please call (415) 974-2060.

All circulars and documents are available on the Internet through the Federal Reserve Bank of San Francisco's Internet site, at http://www.frbsf.org/banking/letters/.

Additional Information

For additional information about the request for comment on Regulation H, please contact our Banking Supervision and Regulation Department, at (415) 974-3007.

FEDERAL RESERVE BANK OF SAN FRANCISCO