Prohibition Against Use of Interstate Branches Primarily for Deposit Production
Effective October 10, 1997
To All State Member Banks, and Branches and Agencies
of Foreign Banks, in the Second Federal Reserve District:
The following is from a statement by the Board of Governors of the Federal Reserve System:
The Federal Reserve Board, along with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, has issued a final rule that adopts uniform regulations implementing section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act).
The rule is effective October 10, 1997.
As required by section 109, the rule prohibits any bank from establishing or acquiring a branch or branches outside of its home state under the Interstate Act primarily for the purpose of deposit production. The rule also provides guidelines for determining whether such a bank is reasonably helping to meet the credit needs of the communities served by the interstate branches.
A copy of the interagency notice on this matter published in the Federal Register of September 10 is available as a file (pdf - 81kb). Additional copies may be obtained from our Public Information Department (Tel. No. 212-720-6130). Questions may be directed to Janice A. Oser, Supervising Examiner, Compliance Examinations Department.