Other Regs

Front 1

Part 303 - Applications

What constitutes a bank in "troubled condition"

Back 1

• Composite 4 or 5
• Under formal action
• FDIC determines in writing

Front 2

Part 303 - Applications

30 days prior notice required for change in directors or senior management when:

Back 2

• Troubled condition
• Not in compliance with capital requirements
• FDIC deems appropriate

Front 3

Part 303 - Applications

Minimum fidelity coverage for new institution?

Back 3

$1,000,000

Front 4

Part 303 - Applications

What four policies required for new institution?

Back 4

Loan Policy

Investment Policy

Funds Management Policy

Liquidity Policy

Front 5

Part 303 - Applications

Stock financing arrangements to start up bank

Back 5

Must be able to service the debt

More than 75% for individuals, more than 50% as a group --> Justification required

Front 6

Part 304 - Forms, Instructions, and Reports

What does it do?

Back 6

• Informs public where to obtain forms & instructions
• Requires Call Reports

Front 7

Part 308 - Rules of Practice and Procedure

What does this establish?

Back 7

Rules of practice and procedure applicable to proceedings as to which hearings on the record are provided for formal enforcement actions.

Front 8

Part 308 - Rules of Practice and Procedure

When does FDIC require a compliance plan?

Back 8

Upon determination that bank has failed to satisfy safety & soundness standards set fourth in Part 364 Appendix A and B.

Contains steps bank will take to correct deficiencies & timeframe

Front 9

Part 309 - Disclosure of Information

What does this part establish?

Back 9

Basic FDIC policies regarding info maintained and procedures for obtaining access to info.

Freedom of Info Act request. Director of division has authority over records of that division

Front 10

Part 309 - Disclosure of Information

Request for records denied if contain exempt information. Exempt info includes:

Back 10

• Related to exam, operating, or condition reports prepared by FDIC or regulatory agency
• Private info on personnel
• Trade secrets
• Interagency memoranda & related to internal personnel rules and practices

Front 11

Part 326 - Minimum Security Devices & Procedures/BSA

When must a security officer be designated and what are his duties?

Back 11

Within 180 days of granting of insurance.

Develop written security program, give reports to the board annually.

Front 12

Part 326 - Minimum Security Devices & Procedures/BSA

What should security program have?

Back 12

• Procedures for opening/closing business
• Safekeeping currency, negotiable secs, other valuables
• Procedures to assist in identifying persons committing crimes against bank and serve as evidence (record, camera, ID devices)
• Training
• Security devices - selecting, testing, operating, maintaining

Front 13

Part 326 - Minimum Security Devices & Procedures/BSA

What are minimum security devices?

Back 13

• Vault, safe, or secure space
• Lighting system for vault if visible from outside
• Alarm system
• Tamper-resistant locks exterior doors & windows
• Other devices deemed appropriate

Front 14

Part 327 - Assessments

Risk classification based on what

Back 14

Capital, and

Supervisory factors (based on composite rating)

Group A: 1 or 2

Group B: 3

Group C: 4 or 5

Front 15

Part 327 - Assessments

What are the four risk categories?

Back 15

By capital and supervisory categories

• Risk Category I: Group A, Well
• Risk Category II: Group A, Adequate; Group B, Well/Adequate
• Risk Category III: Group A, B Undercapitalized; Group C, Well/Adequate
• Risk Category IV: Group C, Undercapitalized

Front 16

Part 330 - Deposit Insurance Coverage

What are the different ownership categories?

Back 16

• Single ownership (incl. sole proprietorship)
• Joint
• Revocable Trust (per beneficiary)
• Irrevocable Trust (per beneficiary)
• Insurance company for annuity (per annuitant)
• IRA/Employee Benefit Plan (employee's vested interest)
• Business (incl. non-commercial, e.g. church, etc)
• Public Unit (per political subdivision)

Front 17

Part 335 - Securities of Insured Nonmember Banks

Bank or BHC must register its equity securities with SEC if:

Back 17

• TA over $10 million, AND
• Equity securties held of record by 2,000 persons, or
• 500 persons who are not accredited investors (?)

Cannot un-register unless holders of record fall below 1,200

Front 18

Part 336 - FDIC Employees

Under what circumstances is an individual not able to provide service for the FDIC?

Back 18

• Felony
• Prohibition - i.e. Sec 8(e) action
• Pattern or practice of defalcation regarding obligations to banks
• Caused substantial loss to FDIC

Front 19

Part 337 - Unsafe & Unsound Practices

Restriction regarding Standby Letters of Credit

Back 19

SBLOC shall be aggregated to all other loans for purposes of calculating Legal Lending Limit, unless fully secured by deposit

Front 20

Part 337 - Unsafe & Unsound Practices

What if bank cannot provide maturity dates for SBLOCs originated over the last year?

Back 20

Violation of 337. Requires adequate controls & records on SBLOCs like for loans, so total liability can be determined

Front 21

Part 337 - Unsafe & Unsound Practices

Definition of deposit broker

Back 21

• Placing or facilitating placement of deposits of third parties with bank, or
• Placing deposits with bank and selling interests in those deposits to third parties, and
• Agent or trustee who establishes deposit acct to facilitate business agreement with bank to use proceeds of acct to fund a prearranged loan
• Listing service does not count

Front 22

Part 337 - Unsafe & Unsound Practices

Requirements to be considered listing service

Back 22

• Compensated solely by means of subscription/listing fees
• Fees are flat fees (not based on amt of deposits)
• Only transmits information concerning bank and availability of deposits
• Does not place or confirm placement of deposits

Front 23

Part 337 - Unsafe & Unsound Practices

What is not a deposit broker?

Back 23

• Trust dept - as long as primary purpose is not to place deposits with banks
• Trust acct
• Pension plan
• Profit sharing - trustee/custodian of profit sharing plan

Front 24

Part 337 - Unsafe & Unsound Practices

What banks can accept/renew/rollover brokered deposits?

Back 24

• Well Capitalized
• Adequately Capitalized - must obtain waiver
• Undercapitalized - may not

Front 25

Part 337 - Unsafe & Unsound Practices

Rate restrictions on deposits

Back 25

Adequately Capitalized - may not pay over 75 bps of: (1) comparable deposits in bank's market area; or (2) national rate

Undercapitalized - may not pay over 75 bps of comparable deposits in bank's market area

Front 26

Part 337 - Unsafe & Unsound Practices

What items are required in brokered deposit waiver?

Back 26

• Time period requested for
• Use of BDs in overall funding/liquidity program
• Volume,rates,maturities for held/anticipated, and internal limits
• Cost comparison to other funding sources
• Recent financials
• Management systems for BDs
• Reason won't pose undue risk
• Procedures and practices for BD solicitation

Front 27

Part 350 - Disclosure of Financial and Other Information

What does this require?

Back 27

Every bank: public disclosure of info by March 31

Includes:

• Call Report
• Other info deemed necessary
• Optional info at discretion of bank

Front 28

Part 350 - Disclosure of Financial and Other Information

May be satisfied:

Back 28

• Bank w/ registered secs: annual report to shareholders
• Bank w/ indep. external audit: copies of audited financials
• One bank HC, bank is at least 95% assets of HC: annual HC report
• Part 363 bank: annual report pursuant to 363

Front 29

Part 362 - Activities of Insured State Banks

Prohibits state banks and subsidiaries from engaging in what?

Back 29

Activities and investments not permissible by a national bank or its subsidiaries

Except:

1. Activities conducted other than "as principal" (as agent, broker, custodian, advisor, admin capacity, or as trustee)

2. Investments in RE to be used as bank premises or public welfare

3. Equity investments acquired in connection w/ debts previously contracted, as long as not speculative

4. Insurance underwriting must be separate from banking activities

Front 30

Part 362 - Activities of Insured State Banks

No state bank may acquire equity investment of a type that is not permissible for a national bank except:

Back 30

• Equity investment in majority-owned subs
• Investments in qualified housing projects (limit 2% of TA)
• Grandfathered investments in stock (limit 100% T1C)
• Stock in banks owned exclusively by other banks
• Stock in insurance companies

Front 31

Part 362 - Activities of Insured State Banks

What is required when an insured savings institution acquires/establishes a sub or engages in a new activity in a sub

Back 31

At least 30 days prior notice to FDIC

Front 32

Part 364 - Standards for Safety and Soundness, Appendix A

Pursuant to Sec 39, what does this part establish?

Back 32

Guidelines for Safety & Soundness Standards

Operational and Managerial Standards:

1. Internal controls & information systems

2. Internal audit system

3. Loan documentation

4. Credit underwriting

5. Interest rate exposure

6. Asset growth

7. Asset quality

8. Earnings

9. Compensation

Front 33

Part 364 - Standards for Safety and Soundness, Appendix A

What is excessive compensation?

Back 33

When amounts (incl, fees, benefits) paid are unreasonable or disproportionate to services performed by insider considering history, others with comparable expertise, condition of bank, comparable practices at other banks, or any compensation leading to material financial loss.

Unsafe and unsound practice

Front 34

Part 364 - Standards for Safety and Soundness, Appendix B

What does this part establish?

Back 34

Safeguarding Customer Info

Implementing Information Security Program

1. Involve Board of Directors

2. Assess risk

3. Manage and control risk

4. Oversee serivce provider agreements

5. Adjust program

6. Report to the Board

Front 35

Reg U - Loans Secured by Margin Stock

Requirements

Back 35

Loans secured by margin stock

exceeding $100M require:

• Form U-1
• 50% collateral margin