Host State Loan-to-Deposit Ratios to Determine Compliance with Interstate Branching Legislation
June 25, 2002
Circular No. 11451

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

In a press release, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency announce their issuing of the host state loan-to-deposit ratios that the banking agencies will use to determine compliance with Section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. The new ratios update data released on June 28, 2001 [see Circular No. 11364] and are attached (pdf - 130kb).

Section 109 prohibits any bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production and provides a process to test compliance with the statutory requirements. The Gramm-Leach-Bliley Act expanded the coverage of Section 109 to include any branch of a bank controlled by an out-of-state bank holding company

Questions on this matter should be directed, at this Bank, to Maryann Campbell, Senior Bank Examiner, Legal and Compliance Risk Department.