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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

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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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8842

Exhibit 3

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

bank or a foreign bank (as defined in 12 U.S.C. 3101(7)).

(b) Public disclosure. (1) Upon receipt of a written request from the public, a member bank shall make available the names of each of its executive officers and each of its principal shareholders to whom, or to whose related interests, the member bank had outstanding as of the end of the latest previous quarter of the year, an extension of credit that, when aggregated with all other outstanding extensions of credit at such time from the member bank to such person and to all related interests of such person. equaled or exceeded 5 percent of the member bank's capital and unimpaired surplus of $500,000, whichever amount is less. No disclosure under this paragraph is required if the aggregate amount of all extensions of credit outstanding at such time from the member bank to the executive officer or principal shareholder of the member bank and to all related interests of such a person does not exceed $25.000.

(2) A member bank is not required to disclose the specific amounts of individual extensions of credit.

(c) Maintaining records. Each member bank shall maintain records of all requests for the information described in paragraph (b) of this section and the disposition of such requests. These records may be disposed of after two years from the date of the request. $215.12 Reporting requirement for credit secured by certain bank stock.

Each executive officer or director of a member bank the shares of which are not publicly traded shall report annually to the board of directors of the member bank the outstanding amount of any credit that was extended to the executive officer or director and that is secured by shares of the member bank. $215.13 Civil penalties.

Any member bank, or any officer, director, employee, agent, or other person participating in the conduct of the affairs of the bank, that violates any provision of this part (other than $215.11 of this part) is subject to civil penalties as specified in section 29 of the Federal Reserve Act (12 U.S.C. 504).

Subpart B-[Amended

$215.21 [Amended]

3. Section 215.21 is amended by removing "1841(c)" where it appears in paragraph (a) and adding in its place "1971 and 1972" and by removing footnote 10 and redesignating footnotes 11 and 12 as footnotes 5 and 6.

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SUMMARY: The Resolution Trust Corporation (RTC) is hereby adopting an interim rule which defines "predominantly minority neighborhood" as used in section 21A(s) of the Federal Home Loan Bank Act (FHLBA) and section 21A(w)(17) of the FHLBA, as amended by the Resolution Trust Corporation Completion Act. Section 21A(w)(17) of the FHLBA requires, among other things, that in considering offers to acquire any insured depository institution, or any branch of an insured depository institution, located in a predominantly minority neighborhood (as defined in 21A(s) of the FHLBA), the Corporation regulations prescribed under section shall give preference to an offer from any minority individual, minorityowned business, or a minority depository institution, over any other offer that results in the same cost to the Corporation, as determined under section 13(c)(4) of the Federal Deposit Insurance Act. Section 21A(s) of the FHLBA permits the RTC to lease to a minority acquiror, on a rent-free basis, subject to certain conditions, any branch of a failed institution which is located in a "predominantly minority neighborhood." Section 21A(w)(17) of the FHLBA also generally provides that the RTC may provide to such minority individual, minority-owned business, or minority depository institution additional preferences in the form of capital assistance and performing assets. The interim rule generally defines "predominantly minority neighborhood" as any U.S. Postal Zip

Code geographical area in which 50% or more of the persons residing therein are minorities based upon the most recent Census data, unless the RTC has determined, in its sole discretion, that other reasonably reliable, readily accessible data indicates different neighborhood boundaries. The RTC is also seeking comment on the interim rule.

This interim rule is effective on February 24, 1994.

DATES: Comments must be submitted on or before March 28, 1994.

ADDRESSES: Written comments

regarding the interim rule should be addressed to John M. Buckley, Jr., Secretary, Resolution Trust Corporation, 801 17th Street, NW., Washington, DC 20434-0001. Comments may be hand delivered to room 321 on business days between the hours of 9 a.m. and 5 p.m. Comments may also be inspected in the Public Reading Room, 801 17th Street, NW., during the same business hours. Phone number: 202-416-6940: FAX number: 202-416-4753.

FOR FURTHER INFORMATION CONTACT: Robert C. Fick, Counsel, TRC Legal Division, (202) 736-3069; Gregory B. Smith, Senior Counsel, RTC Legal Division, (202) 736-3013; Mark G. Flanigan, Senior Attorney, RTC Legal Division, (202) 736-3085; Edward Thomas, Resolutions Analyst, (202) 416-7179; Sherry Chen, Field Resolutions Specialist, (202) 416-7209. These are not toll-free numbers. SUPPLEMENTARY INFORMATION: Background

In August 1989, Congress enacted section 501 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, (FIRREA), (codified as section 21A(b) of the FHLBA, 12 U.S.C. 1441a(b)), which established the Resolution Trust Corporation (RTC). Pursuant to FIRREA the RTC has the duty to manage and resolve failed depository institutions that come under its jurisdiction and to conduct the operations of the RTC in a manner which "maximizes the ⚫ ⚫ return from the sale of institutions or assets," "makes efficient use of funds" and "minimizes losses in the resolution of (failed institutions]". Section 21A(b)(3) of the FHLBA, as added by section 501(a) of FIRREA. In addition, the RTC is required to resolve all failed institutions in the "least costly * of all possible methods" (collectively Cost Constraints). Section 13(c)(4)(A)(ii) of the Federal Deposit Insurance Act (FDIA), 12 U.S.C. 1823(c)(4)(A)(ii), as made applicable by section 21A(b)(4) of the FHLBA, 12

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