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



[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 12USC3102]

 
                       TITLE 12--BANKS AND BANKING
 
       CHAPTER 32--FOREIGN BANK PARTICIPATION IN DOMESTIC MARKETS
 
Sec. 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.

(Pub. L. 95-369, Sec. 4, Sept. 17, 1978, 92 Stat. 610; Pub. L. 102-242, 
title II, Secs. 202(b), (c), 203(b), Dec. 19, 1991, 105 Stat. 2290, 
2291; Pub. L. 106-569, title XII, Sec. 1234, Dec. 27, 2000, 114 Stat. 
3037.)

                       References in Text

    For definition of ``this chapter'', referred to in subsec. (b), see 
References in Text note set out under section 3101 of this title.
    The National Bank Act, referred to in subsec. (b), is act June 3, 
1864, ch. 106, 13 Stat. 99, as amended, which is classified principally 
to chapter 2 (Sec. 21 et seq.) of this title. For complete 
classification of this Act to the Code, see References in Text note set 
out under section 38 of this title.
    Section 3104 of this title, referred to in subsec. (g)(1), was in 
the original a reference to section 6 of Pub. L. 95-369, which enacted 
section 3104 of this title and amended sections 1813, 1815, 1817, 1818, 
1820 to 1823, 1828, 1829b, and 1831b of this title.


                               Amendments

    2000--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;''.
    1991--Subsec. (a). Pub. L. 102-242, Sec. 202(b), inserted heading, 
designated existing provisions as par. (1) and inserted heading, and 
added par. (2).
    Subsec. (b). Pub. L. 102-242, Sec. 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.''
    Subsec. (h). Pub. L. 102-242, Sec. 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).


      Study and Report on Subsidiary Requirements for Foreign Banks

    Section 215 of Pub. L. 102-242, as amended by Pub. L. 102-550, title 
XVI, Sec. 1604(a)(14), Oct. 28, 1992, 106 Stat. 4083, directed Secretary 
of the Treasury, jointly with Board of Governors of the Federal Reserve 
System and in consultation with Comptroller of the Currency, Federal 
Deposit Insurance Corporation, and Attorney General, to conduct a study 
of whether foreign banks should be required to conduct banking 
operations in United States through subsidiaries rather than branches 
and, not later than 1 year after Dec. 19, 1991, to transmit to Congress 
a report on the results of the study.

                  Section Referred to in Other Sections

    This section is referred to in sections 3101, 3105 of this title.



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