(4) Copies of all reports for the previous five years made by the agent bank to each insurance company which it represents.

(d) The bank will be required to keep a record as to each company for which it acts as agent, showing: For fire insurance: The amount of each policy, the rate and premium, date of commencement, term, and date of expiration, as well as a description of property insured, with name of assured and to whom loss is payable. As to life insurance: Amount and date of policy, with premium, and a statement as to under what form the insurance is written, giving also name of assured and beneficiary. As to any and all other forms of insurance: The fullest possible particulars as to amounts, dates, rate, premiums, and what is insured by the policy, and of collection of all premiums collected for account of the company, refunds made, the proportion of premium credited to the profits of the bank under its agreement with the company, the proportion due the company, the amounts and dates of all remittances made to the insurance company on account of premiums collected, and the balance, if any, due from the bank to the insurance company.

(e) The bank will be required to carry on its general ledger an account which will, at all times, show the amount due to insurance companies for which it is acting as agent, on account of premiums collected but not remitted, and this liability must be shown in reports of condition and in the published statements of the bank under the heading "other liabilities-on account of insurance premiums collected and not remitted," unless specifically provided for in the report.

(f) The bank should also keep such records as may be required by each insurance company in the manner and under the forms prescribed by the various companies; all of which should be available for inspection by the Examiner on request.

(g) The agent bank must not assume any responsibility or liability for either the adjustment, settlement, or payment of losses under any policy issued by or through its agency.

(h) The records of all profits derived from the insurance agency should be carried in a separate account on the books of the bank, and the records should be so kept as to enable the Exam

iner readily to trace to the source all items of profit derived in this connection. [Regs., Dec. 1, 1916, as amended at 22 F.R. 10075, Dec. 17, 1957]

§ 2.3

Statutory requirements to be complied with by national bank desiring to act as broker or agent in making or procuring loans on real estate. (a) The bank must be located in a place the population of which does not exceed 5,000 as shown by the last preceding decennial census.

(b) The real estate by which the loans negotiated are secured must be located within 100 miles of the place in which the negotiating bank is located.

(c) The bank may receive for such services a reasonable fee or commission.

(d) The bank shall in no case guarantee either the principal or interest of any such loans.

(e) The powers conferred are to be exercised under such regulations as may be prescribed by the Comptroller of the Currency.

§ 2.4 Regulations for national bank acting as broker or agent in making or procuring loans on real estate.

(a) A bank intending to avail itself of this provision of the law must adopt by its board of directors a resolution in the following form:

Be it resolved, That the officers of the National Bank of

are hereby authorized and empowered on behalf of this bank, as broker or agent, to accept from customers of this bank deposits of funds to be invested for account of said customers, in loans secured by real estate, and to procure, as broker or agent, for customers of this bank loans which shall be secured by real estate, under the provisions of the act approved September 7, 1916; Provided, That the investment of such funds as stated, and all such procuring of loans or lending of funds for clients shall be undertaken only under written instructions from the customer for whom this bank, through its officers, may act as broker or agent, such written instructions in each case to be first delivered to an officer of this bank. Such instructions shall, in all cases, state clearly that the bank in acting as broker or agent in no way guarantees payment of either the principal or interest of any loan SO negotiated.

(b) A certified copy of such resolution, attested by the president or vice president and cashier and by a majority of the directors of the bank, must be forwarded to this office, on forms to be furnished by this office.

(c) No bank shall charge more than one commission or brokerage on the making of any loan; that is to say, if it shall charge a brokerage or commission to the party borrowing the money, it shall not charge a brokerage or commission to the party to whom money is so loaned, and vice versa.

(d) Each bank acting under this provision of law will be required to keep for a period of five years a record showing as to each loan negotiated by the bank:

(1) The name and address of the principal for whom the bank is acting, (2) Date of written instructions from the principal,

(3) Name and address of maker of note,

(4) Date of note,

(5) Date of maturity of note,

(6) Brief description of property securing note, showing location and distance from place in which bank is located,

(7) Character of improvements, etc., (8) Name and address of party to whom note was transferred or delivered by the bank,

(9) Date of such transfer or delivery, (10) Amount of principal of note, (11) Rate of interest or discount, (12) Rate of commission or brokerage charged by bank for acting as broker or agent, and

(13) Amount of such commission or brokerage, and whether said commission was paid by borrower of the money or by the party for whom it was loaned.

(e) A book should be kept showing the date on which each mortgage or deed of trust negotiated by the bank has been admitted to record, the court in which the same is recorded, and the recordation fees paid in each case.

(f) The records of all profits derived from acting as broker or agent in negotiating loans on real estate should be carried in a separate account on the books of the bank, and the records should be so kept as to enable the Examiner readily to trace to the source all items of profit derived in this connection.

(g) Deposits of money received by the bank as broker or agent to be invested in loans secured by real estate as prescribed by law, must be treated as trust funds and kept separate and apart from the other assets of the bank. Such funds must in no case be permitted to pass from the possession of the bank until the loan for which they are to be paid out is formally accepted by or in behalf

of the party for whose account negotiated.

(h) No bank shall advance or use its own funds in connection with real estate loans negotiated as broker or agent.

(i) No loans secured by real estate, which the bank has negotiated as broker or agent, should become a part of the assets of the bank even temporarily, unless such loans conform to the provisions of section 24 of the Federal Reserve Act (38 Stat. 273; 12 U.S.C. 371) as amended.

(j) There should be available in the bank for inspection by the National Bank Examiner:

(1) An authoritative statement showing the population of the town according to the last preceding decennial cen

sus.

(2) All records pertaining to the negotiation of real estate loans as broker or agent.

[Reg., Dec. 1, 1916, as amended at 22 F.R. 10075, Dec. 17, 1957]

§ 2.5 Application forms to be executed by applicants when national bank acts as broker for the placing of loans.

(a) These applications should show: (1) Location of property.

(2) Acreage.

(3) Assessed valuation.

(4) Estimated present value.

(5) Brief descriptions of buildings thereon, and estimated value of them.

(6) Whether buildings are insured, and, if so, for what amounts and in what companies.

(7) Whether property is already encumbered, and, if so, for what amount.

(8) If property is farm property applicant should state whether or not the dwelling is provided with sanitary arrangements approved by the local board of health, and, if not, what sanitary arrangements there are.

(b) At the foot of this application should be printed below the signature of the applicant a statement to the effect that "The statements in the foregoing application have been submitted to this bank by the applicant for the loan, but this bank does not undertake to guarantee the correctness of any of the statements made by the applicant."

(c) If any applicant for a loan makes statements in his application which any officers of the bank before whom the application may come may have reason to think are not correct, the attention of

the applicant should be called to the possible discrepancy.

PART 3-NATIONAL BANK LOANS SECURED OR COVERED BY GOVERNMENTAL GUARANTIES

§3.1 Definition of terms.

(a) The requirement of exception 10 (R.S. 5200, 12 U.S.C. 84(10)) that a guaranty or a commitment or agreement to take over or to purchase, referred to collectively herein as "agreement," must be unconditional means that the protection afforded to the bank thereby against loss resulting from factors beyond its control, must not be substantially diminished or impaired. This protection is not materially diminished or impaired by procedural requirements (for example, a requirement that notification of a default be given by the lender to the guarantor within 20 days of its occurrence, even though demand for payment under the guaranty cannot be made until after the expiration of 90 days) or by requirements of good faith on the part of the bank. Such requirements, therefore, would not prevent an agreement from being unconditional for the purposes of this statute.

(b) An agreement is not unconditional within the meaning of exception 10 if liability thereunder (1) is contingent upon the happening of an event or a condition precedent not within the control of the bank, or (2) is subject to defeasance by a contingency or a condition subsequent not within the control of the bank.

(c) An agreement may be unconditional even though it is to take over a loan only in the event of default. The requirement of the exception that the agreement must be unconditional and must be performed by payment in cash within sixty days after demand does not imply that there must be a right to demand performance prior to default. (R.S. 5200; 12 U.S.C. 84(10)) [29 F.R. 14981, Nov. 5, 1964]

PART 4-DESCRIPTION OF OFFICE, PROCEDURES, PUBLIC INFORMATION 1

Comptroller.

(a) Central office-(1) The Comptroller of the Currency is the head of the Office of Comptroller of the Currency. He is appointed by the President, by and with the advice and consent of the Senate, for a term of 5 years. His office is in the Treasury Department, 15th Street and Pennsylvania Avenue NW., Washington, D.C. 20220. He is assisted by the following officials who are responsible to him.

(2) First Deputy Comptroller. The First Deputy Comptroller of the Currency performs such duties as the Comptroller prescribes, including general supervision of all matters pertaining to all National Bank Regions. He is aided by an Assistant Chief National Bank Examiner. During a vacancy in the Office of the Comptroller or during the absence

or disability of the Comptroller, he possesses the powers and performs the duties of the Comptroller.

(3) Administrative Assistant. The Administrative Assitant to the Comptroller performs such duties as the Comptroller prescribes, including general supervision of all internal administrative matters.

(4) Chief Counsel. The Chief Counsel is in charge of the Law Department. He advises and assists the Comptroller with respect to all legal matters concerning the functions, activities, and operations of the Office of Comptroller and all national banks.

(5) Deputies Comptroller. Two Deputies Comptroller of the Currency perform such duties as the Comptroller prescribes, including general supervision of all matters pertaining to the National Bank Regions for which each is responsible. Each such Deputy is aided by an Assistant Chief National Bank Examiner.

(6) Chief National Bank Examiner. The Chief National Bank Examiner performs such duties as the Comptroller prescribes, including general supervision of all examining personnel and of all matters pertaining to the National Bank Regions for which he is responsible. He is aided by an Assistant Chief National Bank Examiner.

(7) Deputy Comptroller (Economics). The Deputy Comptroller for Economics performs such duties relating to matters of economic studies as the Comptroller prescribes, including supervision of the Department of Banking and Economic Research and the Division of Statistics and Data Processing.

(8) Deputy Comptroller (Mergers and Branches). The Deputy Comptroller for Mergers and Branches performs such duties relating to branches, mergers, and other matters pertaining to the structure of the national banking system as the Comptroller prescribes.

(9) Deputy Comptroller (Trusts). The Deputy Comptroller for Trusts performs such duties as the Comptroller prescribes, including supervision of the Trust Division and all trust examiners.

(10) Deputy Comptroller (F.D.I.C. Affairs). The Deputy Comptroller for F.D.I.C. Affairs performs such duties relating to the Federal Deposit Insurance Corporation as the Comptroller prescribes.

(11) Special Assistant (Congressional Affairs). The Special Assistant for Congressional Affairs performs such duties

relating to Congressional liaison as the Comptroller prescribes.

(12) Special Assistant (Public Affairs). The Special Assistant for Public Affairs performs such duties relating to press and similar matters as the Comptroller prescribes.

(13) Special Assistant. The Special Assistant to the Comptroller performs such duties as the Comptroller prescribes.

(14) Bank Organization Director. The Director, Bank Organization Division, has supervision over the Bank Organization Division.

(15) International Director. The Director, International Division, has supervision over the International Division and all national bank examinersinternational.

(16) Law Department. The Law Department handles all legal matters in the Office of Comptroller, including interpretation of national banking laws, related statutes and proposed legislation, implementation and development of regulations and rulings applicable to operations of national banks, corporate organization of national banks, branching, mergers, capital changes, and other matters of national bank corporate functions. Generally, it assists the Department of Justice in litigation involving the Comptroller's Office. It, however, represents the Comptroller in bank merger litigation. The Chief Counsel is aided by a Deputy Chief Counsel and five Associate Chief Counsels.

(17) Research Department. The Department of Banking and Economic Research studies various banking problems and reports its findings to the Comptroller. It publishes the National Banking Review and, from time to time, monographs and books dealing with banking and monetary subjects.

(18) Organization Division. The Bank Organization Division processes applications for national bank charters, branches, mergers, consolidations, purchases of assets and assumption of liabilities, resulting in national banks, and capital changes. The Director is aided by an Assistant Director, Bank Organization Division, who is responsible for merger, consolidation, and purchase and assumption matters. The Division also has a New Bank Section, a Branch Section, and a Capital Increase Section.

(19) International Division. The International Division is responsible for the examination of national bank branch offices located overseas.

(20) Trust Division. The Trust Division is responsible for supervision and examination of trust departments of national banks. It processes applications for fiduciary powers and monitors common trust funds of state and national banks. The Deputy Comptroller for Trusts is aided by a Chief Representative in Trusts.

(21) Administrative Activities. The administrative activities of the Office of Comptroller of the Currency are under the charge of the Administrative Assistant to the Comptroller. He is aided by a Deputy Administrative Assistant (Fiscal Management) and a Deputy Administrative Assistant (Personnel).

(b) Field offices. (1) Fourteen National Bank Regions cover the United States and the Virgin Islands. The office address of and the geographic area covered by each is as follows:

Office address

J. F. Kennedy, Federal Building, Room 1600, Boston, Mass. 02203.

33 Liberty St., Room
520, New York,
N. Y. 10005.
925 Chestnut St.,
Philadelphia, Pa.
19107.

1455 East Sixth St.,
Room 715, Cleve-
land, Ohio 44101.
Federal Office Build-
ing, 400 North

Eighth St.. Room 5209, Richmond, Va. 23240. 1315 Fulton National Bank Building, Atlanta, Ga. 30303. 164 West Jackson

Blvd., Room 715, Chicago, Ill. 60604. 167 North Main St., Memphis, Tenn. 38103.

20 South Washington Ave., Room 525, Minneapolis, Minn. 55401.

911 Main St., Suite 2616, Kansas City, Mo. 64105.

(2) A Regional Administrator of National Banks is in charge of each National Bank Region. He has general supervision over all matters pertaining to his region. He is assisted by one or more Deputy Regional Administrators, a Regional Economist, and, in some cases, a Regional Counsel.

(c) Delegations. The Comptroller of the Currency has delegated to each Regional Administrator final authority to approve (but not to disapprove)

(1) Capital increases through stock dividends or sales of additional common stock.

(2) Cash dividends, and

(3) Increases in investments in bank buildings and other fixed assets. [32 F.R. 9513, July 1, 1967]

(a) Public notice. The Comptroller of the Currency publishes in the FEDERAL REGISTER, except as provided in paragraph (f) of this section, notices of proposed regulations. A notice states the terms or substance of a proposed regulation or a description of the subject or issue involved. It also refers to the authority under which the regulation is proposed and states the time, place, and nature of the public proceeding applicable thereto.

(b) Public participation. Interested persons are afforded an opportunity to participate in the making of a proposed regulation, except as provided in paragraph (f) of this section or otherwise excepted by law. Such participation consists of submission of written data, views, or arguments and, if the Comptroller specifically provides, an opportunity for oral presentation.

(c) Petition. An interested person may seek issuance, amendment, or repeal of a regulation of the Comptroller. He should submit a written request which sets forth a complete and concise statement of his interest in the subject matter and the reason his request should be granted.

(d) Formulation. After consideration of all relevant matters, the Comptroller takes such action with respect to the proposed regulation as he deems appropriate. If a regulation is adopted, a concise general statement of its basis and purpose is set forth.

(e) Effective date. A regulation issued by the Comptroller is published not less