§ 3103. — Interstate banking by foreign banks.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC3103]
TITLE 12--BANKS AND BANKING
CHAPTER 32--FOREIGN BANK PARTICIPATION IN DOMESTIC MARKETS
Sec. 3103. Interstate banking by foreign banks
(a) Interstate branching and agency operations
(1) Federal branch or agency
Subject to the provisions of this chapter and with the prior
written approval by the Board and the Comptroller of the Currency of
an application, a foreign bank may establish and operate a Federal
branch or agency in any State outside the home State of such foreign
bank to the extent that the establishment and operation of such
branch would be permitted under section 36(g) of this title or
section 1831u of this title if the foreign bank were a national bank
whose home State is the same State as the home State of the foreign
bank.
(2) State branch or agency
Subject to the provisions of this chapter and with the prior
written approval by the Board and the appropriate State bank
supervisor of an application, a foreign bank may establish and
operate a State branch or agency in any State outside the home State
of such foreign bank to the extent that such establishment and
operation would be permitted under section 1828(d)(4) or 1831u of
this title if the foreign bank were a State bank whose home State is
the same State as the home State of the foreign bank.
(3) Criteria for determination
In approving an application under paragraph (1) or (2), the
Board and (in the case of an application under paragraph (1)) the
Comptroller of the Currency--
(A) shall apply the standards applicable to the
establishment of a foreign bank office in the United States
under section 3105(d) of this title;
(B) may not approve an application unless the Board and (in
the case of an application under paragraph (1)) the Comptroller
of the Currency--
(i) determine that the foreign bank's financial
resources, including the capital level of the bank, are
equivalent to those required for a domestic bank to be
approved for branching under section 36 of this title and
section 1831u of this title; and
(ii) consult with the Secretary of the Treasury
regarding capital equivalency; and
(C) shall apply the same requirements and conditions to
which an application for an interstate merger transaction is
subject under paragraphs (1), (3), and (4) of section 1831u(b)
of this title.
(4) Operation
Subsections (c) and (d)(2) of section 1831u of this title shall
apply with respect to each branch and agency of a foreign bank which
is established and operated pursuant to an application approved
under this subsection in the same manner and to the same extent such
provisions of such section apply to a domestic branch of a national
or State bank (as such terms are defined in section 1813 of this
title) which resulted from a merger transaction under such section
1831u of this title.
(5) Exclusive authority for additional branches
Except as provided in this section, a foreign bank may not,
directly or indirectly, acquire, establish, or operate a branch or
agency in any State other than the home State of such bank.
(6) Requirement for a separate subsidiary
If the Board or the Comptroller of the Currency, taking into
account differing regulatory or accounting standards, finds that
adherence by a foreign bank to capital requirements equivalent to
those imposed under section 36 of this title and section 1831u of
this title could be verified only if the banking activities of such
bank in the United States are carried out in a domestic banking
subsidiary within the United States, the Board and (in the case of
an application under paragraph (1)) the Comptroller of the Currency
may approve an application under paragraph (1) or (2) subject to a
requirement that the foreign bank or company controlling the foreign
bank establish a domestic banking subsidiary in the United States.
(7) Additional authority for interstate branches and
agencies of foreign banks, upgrades of certain
foreign bank agencies and branches
Notwithstanding paragraphs (1) and (2), a foreign bank may--
(A) with the approval of the Board and the Comptroller of
the Currency, establish and operate a Federal branch or Federal
agency or, with the approval of the Board and the appropriate
State bank supervisor, a State branch or State agency in any
State outside the foreign bank's home State if--
(i) the establishment and operation of such branch or
agency is permitted by the State in which the branch or
agency is to be established; and
(ii) in the case of a Federal or State branch, the
branch receives only such deposits as would be permitted for
a corporation organized under section 25A of the Federal
Reserve Act [12 U.S.C. 611 et seq.]; or
(B) with the approval of the Board and the relevant
licensing authority (the Comptroller in the case of a Federal
branch or the appropriate State supervisor in the case of a
State branch), upgrade an agency, or a branch of the type
referred to in subparagraph (A)(ii), located in a State outside
the foreign bank's home State, into a Federal or State branch
if--
(i) the establishment and operation of such branch is
permitted by such State; and
(ii) such agency or branch--
(I) was in operation in such State on the day before
September 29, 1994; or
(II) has been in operation in such State for a
period of time that meets the State's minimum age
requirement permitted under section 1831u(a)(5) of this
title.
(8) Continuing requirement for meeting community credit
needs after initial interstate entry by acquisition
(A) In general
If a foreign bank acquires a bank or a branch of a bank, in
a State in which the foreign bank does not maintain a branch,
and such acquired bank is, or is part of, a regulated financial
institution (as defined in section 803 of the Community
Reinvestment Act of 1977 [12 U.S.C. 2902]), the Community
Reinvestment Act of 1977 [12 U.S.C. 2901 et seq.] shall continue
to apply to each branch of the foreign bank which results from
the acquisition as if such branch were a regulated financial
institution.
(B) Exception for branch that receives only deposits permissible
for an Edge Act corporation
Paragraph (1) shall not apply to any branch that receives
only such deposits as are permissible for a corporation
organized under section 25A of the Federal Reserve Act [12
U.S.C. 611 et seq.] to receive.
(9) Home State of domestic bank defined
For purposes of this subsection, the term ``home State'' means--
(A) with respect to a national bank, the State in which the
main office of the bank is located; and
(B) with respect to a State bank, the State by which the
bank is chartered.
(b) Continuance of lawful interstate banking operations previously
commenced
Unless its authority to do so is lawfully revoked otherwise than
pursuant to this section, a foreign bank, notwithstanding any
restriction or limitation imposed under subsection (a) of this section,
may establish and operate, outside its home State, any State branch,
State agency, or bank or commercial lending company subsidiary which
commenced lawful operation or for which an application to commence
business had been lawfully filed with the appropriate State or Federal
authority, as the case may be, on or before July 27, 1978.
Notwithstanding subsection (a) of this section, a foreign bank may
continue to operate, after September 29, 1994, any Federal branch, State
branch, Federal agency, State agency, or commercial lending company
subsidiary which such bank was operating on the day before September 29,
1994, to the extent the branch, agency, or subsidiary continues, after
September 29, 1994, to engage in operations which were lawful under the
laws in effect on the day before September 29, 1994.
(c) Determination of home State of foreign bank
For the purposes of this section--
(1) in the case of a foreign bank that has any branch, agency,
subsidiary commercial lending company, or subsidiary bank in more
than 1 State, the home State of the foreign bank is the 1 State of
such States which is selected to be the home State by the foreign
bank or, in default of any such selection, by the Board; and
(2) in the case of a foreign bank that does not have a branch,
agency, subsidiary commercial lending company, or subsidiary bank in
more than 1 State, the home State of the foreign bank is the State
in which the foreign bank has a branch, agency, subsidiary
commercial lending company, or subsidiary bank.
(d) Clarification of branching rules in case of foreign bank with
domestic bank subsidiary
In the case of a foreign bank that has a domestic bank subsidiary
within the United States--
(1) the fact that such bank controls a domestic bank shall not
affect the authority of the foreign bank to establish Federal and
State branches or agencies to the extent permitted under subsection
(a) of this section; and
(2) the fact that the domestic bank is controlled by a foreign
bank which has Federal or State branches or agencies in States other
than the home State of such domestic bank shall not affect the
authority of the domestic bank to establish branches outside the
home State of the domestic bank to the extent permitted under
section 36(g) of this title or section 1828(d)(4) or 1831u of this
title, as the case may be.
(Pub. L. 95-369, Sec. 5, Sept. 17, 1978, 92 Stat. 613; Pub. L. 103-328,
title I, Secs. 104, 107(f), Sept. 29, 1994, 108 Stat. 2354, 2361; Pub.
L. 106-102, title VII, Sec. 732, Nov. 12, 1999, 113 Stat. 1478.)
References in Text
For definition of ``this chapter'', referred to in subsec. (a)(1),
(2), see References in Text note set out under section 3101 of this
title.
The Community Reinvestment Act of 1977, referred to in subsec.
(a)(8)(A), is title VIII of Pub. L. 95-128, Oct. 12, 1977, 91 Stat.
1147, as amended, which is classified generally to chapter 30 (Sec. 2901
et seq.) of this title. For complete classification of this Act to the
Code, see Short Title note set out under section 2901 of this title and
Tables.
Section 25A of the Federal Reserve Act, referred to in subsec.
(a)(7)(A)(ii), (8)(B), popularly known as the Edge Act, is classified to
subchapter II (Sec. 611 et seq.) of chapter 6 of this title. For
complete classification of this Act to the Code, see Short Title note
set out under section 611 of this title and Tables.
Amendments
1999--Subsec. (a)(7). Pub. L. 106-102 amended heading and text of
par. (7) generally. Prior to amendment, text read as follows:
``Notwithstanding paragraphs (1) and (2), a foreign bank may, with the
approval of the Board and the Comptroller of the Currency, establish and
operate a Federal branch or Federal agency or, with the approval of the
Board and the appropriate State bank supervisor, a State branch or State
agency in any State outside the foreign bank's home State if--
``(A) the establishment and operation of a branch or agency is
expressly permitted by the State in which the branch or agency is to be
established; and
``(B) in the case of a Federal or State branch, the branch receives
only such deposits as would be permissible for a corporation organized
under section 25A of the Federal Reserve Act.''
1994--Subsec. (a). Pub. L. 103-328, Secs. 104(a), 107(f), inserted
heading and substituted provisions consisting of pars. (1) to (9) for
former provisions relating to limitations on interstate banking by
foreign banks.
Subsec. (b). Pub. L. 103-328, Sec. 104(b), inserted at end
``Notwithstanding subsection (a) of this section, a foreign bank may
continue to operate, after September 29, 1994, any Federal branch, State
branch, Federal agency, State agency, or commercial lending company
subsidiary which such bank was operating on the day before September 29,
1994, to the extent the branch, agency, or subsidiary continues, after
September 29, 1994, to engage in operations which were lawful under the
laws in effect on the day before September 29, 1994.''
Subsec. (c). Pub. L. 103-328, Sec. 104(d), amended subsec. (c)
generally. Prior to amendment, subsec. (c) read as follows: ``For the
purposes of this section, the home State of a foreign bank that has
branches, agencies, subsidiary commercial lending companies, or
subsidiary banks, or any combination thereof, in more than one State, is
whichever of such States is so determined by election of the foreign
bank, or, in default of such election, by the Board.''
Subsec. (d). Pub. L. 103-328, Sec. 104(c), added subsec. (d).
Section Referred to in Other Sections
This section is referred to in section 3102 of this title.
