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U.S. Code as of:
01/19/04
Section 3102. Establishment of Federal branches and agencies by foreign bank
(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.
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