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within the spirit of the requirement in the RTC Completion Act that minority bidders receive a

meaningful preference while still maximizing returns to the taxpayer.

In addition, minority bidders for institutions or branches in PMNs are to be offered interim

capital assistance for up to two-thirds of required regulatory capital. This assistance may include

up to two-thirds of any premium paid by the acquirer, provided that the total amount of interim

capital assistance does not exceed the tangible equity of the institution. It is important to note

that this will increase the amount of capital assistance that may be provided by the RTC by as

much as 50 percent. In all instances, the primary regulator will have to approve the transaction.

As in existing minority acquisition programs, we will make earning assets available to minority

acquirers of institutions and branches in PMNs in order to augment their operating income.

These acquirers will have an option to purchase eligible RTC assets (generally, 1-4 family

mortgages) at market values. Asset prices will be based on FNMA commitment rates. These

assets will be offered with standard RTC representations and warranties. In order to provide

additional flexibility in asset selections, minority acquirers will have an option to acquire assets

at market value up to 100 percent of net deposits (total deposits less brokered deposits and

liquidity reserves), to be selected from a pool equal to 110 percent of net deposits.

All told, the RTC is holding approximately $3 billion in residential mortgages for possible

transfer to minority acquirers. Since assets transferred to minority acquirers will not be subject

to a marketing process, and since it is our intent to provide earning assets to minority-owned


institutions to hold in portfolio, the RTC will require that, if the acquiring institution sells these

assets within 6 months, any profits will be shared 50-50 with the RTC.

Finally, both to aid minority acquirers and to promote banking services in PMNs, the RTC has

the authority to offer minority acquirers branch offices owned by the failed institutions and

located within a PMN on a rent-free basis for 5 years.

In conclusion, let me reiterate that the RTC is committed to expanding opportunities for

minorities and women, and to fully implementing all aspects of the RTC Completion Act.

I would be happy to answer any questions.

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All Minority




13.9% 10,761

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Minority-Owned Firms




Women-Owned Firms




3.9% Smith, Senior Counsel, RTC Legal bank shall maintain records of all

Exhibit 3


Federal Register i Vol. 59. No. 37 / Thursday, February 24, 1994 / Rules and Regulations

bank or a foreign bank (as defined in 12 $213.22 (Amended)

Code geographical area in which 50% or U.S.C. 3101(7)).

4. Section 215.22 is amended by more of the persons residing therein are (b) Public disclosure. (1) Upon receipt removing “12 CFR 226.21p)" where it minorities based upon the most recent of a written request from the public, a appears in paragraph (c)(i)(ii) and Census data, unless the RTC has member bank shall make available the adding in its place '12 CFR

determined, in its sole discretion, that names of each of its executive officers 226.2(a)(12)".

other reasonably reliable, readily

accessible data indicates different and each of its principal shareholders to By order of the Board of Governors of the whom, or to whose related interests, the Federal Reserve System, February 15, 1994.

neighborhood boundaries. The RTC is member bank had outstanding as of the

also seeking comment on the interim Dated: February 15. 1994.

rule. end of the latest previous quarter of the William W. Wiles.

This interim rule is effective on year, an extension of credit that, when

Secretary of the Board. aggregated with all other outstanding

February 24, 1994. IFR Doc. 94-3860 Filed 2-18-94; 3:20 pm) extensions of credit at such time from

DATES: Comments must be submitted on BILLING COOL 21001 the member bank to such person and to

or before March 28, 1994. all related interests of such person,

ADDRESSES: Written comments equaled or exceeded 5 percent of the RESOLUTION TRUST CORPORATION

regarding the interim rule should be member bank's capital and unimpaired

addressed to John M. Buckley. Jr., surplus of $500,000, whichever amount 12 CFR Part 1630

Secretary, Resolution Trust Corporation, is less. No disclosure under this

801 17th Street, NW., Washington, DC RIN 3205 AA21 paragraph is required if the aggregate

20434_0001. Comments may be hand amount of all extensions of credit Definition of Predominantly Minority

delivered to room 321 on business days outstanding at such time from the

between the hours of 9 a.m. and 5 p.m. Neighborhood member bank to the executive officer or

Comments may also be inspected in the principal shareholder of the member AGENCY: Resolution Trust Corporation.

Public Reading Room, 801 17th Street, bank and to all related interests of such ACTION: Interim rule; request for

NW., during the same business hours. a person does not exceed $25.000.

Phone number: 202-416-6940: FAX comments.

number: 202-416-4753. (2) A member bank is not required to

SUMMARY: The Resolution Trust disclose the specific amounts of

FOR FURTHER INFORMATION CONTACT: Individual extensions of credit

Corporation (RTC) is hereby adopting an Robert C. Fick, Counsel, TRC Legal interim rule which defines

Division. (202) 736–3069: Gregory B. (c) Maintaining records. Each member “predominanty minority

neighborhood" as used in section 21A(s) Division, (202) 736–3013; Mark G. requests for the information described

of the Federal Home Loan Bank Act Flanigan, Senior Attorney, RTC Legal in paragraph (b) of this section and the

(FHLBA) and section 21A(w)(17) of the Division. (202) 736_3085; Edward disposition of such requests. These

FHLBA, as amended by the Resolution Thomas, Resolutions Analyst. (202) records may be disposed of after two

Trust Corporation Completion Act. 416-7179; Sherry Chen, Field years from the date of the request.

Section 21A(w)(17) of the FHLBA Resolutions Specialist. (202) 416-7209. 1218.12 Reporting requirement for credit

requires, among other things, that in These are not toll-free numbers. secured by certain benk stock considering offers to acquire any

SUPPLEMENTARY INFORMATION: insured depository institution, or any Each executive officer or director of a branch of an insured depository

Background member bank the shares of which are institution, located in a predominanty In August 1989, Congress enacted not publicly traded shall report

minority neighborhood (as defined in section 501 of the Financial Institutions annually to the board of directors of the

regulations prescribed under section Reform. Recovery, and Enforcement Act member bank the outstanding amount of 21A(s) of the FHLBA), the Corporation of 1989. (FIRREA). (codified as section any credit that was extended to the

shall give preference to an offer from 21A(b) of the FHLBA, 12 U.S.C. executive officer or director and that is

any minority individual, minority. 1441a(b)), which established the secured by shares of the member bank. owned business, or a minority

Resolution Trust Corporation (RTC). $216.13 Civil penalties

depository institution, over any other Pursuant to FIRREA the RTC has the

offer that results in the same cost to the duty to manage and resolve failed Any member bank, or any officer, Corporation, as determined under depository institutions that come under director, employee, agent, or other section 13(c)(4) of the Federal Deposit its jurisdiction and to conduct the person participating in the conduct of Insurance Act. Section 21A(s) of the operations of the RTC in a manner the affairs of the bank, that violates any FHLBA permits the RTC to lease to a which "maximizes the ..

• return provision of this part (other than minority acquiror, on a rent-free basis, from the sale of institutions or assets, $ 215.11 of this part) is subject to civil subject to certain conditions, any branch "makes efficient use of funds" and penalties as specified in section 29 of of a failed institution which is located "minimizes.. • losses .. in the the Federal Reserve Act (12 U.S.C. 504). in a “predominantly minority

resolution of (failed institutions)". neighborhood." Section 21A(w)(17) of Section 21A(b)(3) of the FHLBA, as Subpart B-{Amendoos

the FHLBA also generally provides that added by section 501(a) of FIRREA. In $215.21 (Amended)..

the RTC may provide to such minority addition, the RTC is required to resolve

individual. minority-owned business, or all failed institutions in the "least costly 3. Section 215.21 is amended by minority depository institution

*** of all possible methods removing "1841(c)" where it appears in additional preferences in the form of (collectively Cost Constraints). Section paragraph (a) and adding in its place capital assistance and performing assets. 13(c)(4)(A)(ii) of the Federal Deposit *1971 and 1972" and by removing The interim rule generally defines Insurance Act (FDLA). 12 U.S.C. footnote 10 and redesignating footnotes "predominantly minority

1823(c)(4)(A)(ii), as made applicable by 11 and 12 as footnotes 5 and 6.

neighborbood" as any U.S. Postal Zip section 21A(b)(4) of the FHLBA, 12

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