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was not the office from which the operations of the institution were actually directed (pursuant to 12 CFR 545.91), it will not be used automatically as the home office for purposes of this definition. Such cases will be dealt with on a case by case basis and referred to the Vice President for the Division of Resolutions.

b. For Individual Branch offices. An individual branch office is to be designated as being located in a "predominantly minority neighborhood" as defined in 12 CFR 1630.3, if:

(1)

The branch office is located in a zip code area that, according to the most recent census data, has a minority residential population equal to or greater than 50 percent; or

(2) The branch office is located in a zip code area that has a minority population, according to the most recent census data, equal to or greater than 39 percent, but less than 50 percent; or a zip code area with a population of 1,500 or less; and if minorities constitute, according to the most recent census, 50 percent or more of the aggregate residential population of the census tract in which the branch is located and of other census tracts that reasonably appear to be served by that office; or

(3) The branch office is determined to be located in a "predominantly minority neighborhood," based on any other readily available and reasonably reliable information that indicates more accurate boundaries for a neighborhood (with a population that is at least: 50 percent minority) that is served by that branch office and has shared or distinctive characteristics. This determination will take into consideration written recommendations from RTC personnel in the institution, the RTC Division of Minority and Women's Programs, and potential acquirors. In order to avoid unnecessary delays in the resolution and unnecessary expenses for the RTC and other potential bidders, recommendations from potential acquirors for the designation of branches as being located in a "predominantly minority neighborhood" generally can only be accepted for consideration if received by the Resolutions Specialist no more than 5 business days after the date of the Bid Conference.

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5. Procedures for Implementing Bidding Preference in "Predominantly Minority Neighborhood" Resolutions

a. A winning bid by a minority or non-minority bidder must constitute the least costly resolution for the RTC. The Bid • Preference Provision of Section 21A (W) (17) (A) of the FHLBA gives a minority bidder a preference over a non-minority bidder only if both bids result in the "same cost" to the RTC under the least cost provisions of Section 13(C) (4) of FDIA for the resolution of the entire institution. Therefore, the minority status of a bidder constitutes a tie breaker on bids on an institution or branch located in a "predominantly minority neighborhood."

b. Whenever the premium bid by a minority bidder is within 10 percent of the highest premium bid by a non-minority bidder on an institution or branch located in a "predominantly minority neighborhood," a limited second round of bidding will be conducted, in order to give as much effect to the provision as possible without increasing the RTC's costs. The second round of bidding will be conducted as follows:

(1) The second round of bidding will only involve the subject (i.e., the whole institution or branches) of the minority bids located in a predominantly minority neighborhood that triggered the second round. Only the highest first round nonminority bidder(s) and the highest first round minority bidder(s) which were within 10 percent of the highest first round nonminority bid(s) are to be included in the second round of bidding. Multiple non-minority bidders may participate in the second round of bidding when the high first round bid is an aggregate of high bids on individual branches of the institution. Similarly, multiple minority bidders may participate in the second round of bidding when the second round has been triggered by different bids (e.g., a minority bid has triggered a second round on the whole institution and another minority bid has also triggered a second round on a branch). The above are not all inclusive examples. The Vice President for the Division of Resolutions must approve all second rounds of bidding.

(2) The second round of bidding will be conducted on a short time-frame (at least 2 business days, but not to delay the scheduled closing). The second-round bidders are to be informed of the date the second-round bids are due and of the reason for the second round (i.e., the 10 percent rule). The identity of

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each bidder and the amount of their bids are not to be revealed to the other bidder(s).

6. Staff Responsibilities for Recommendations. Approvals and Dispute Resolution

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(1) Vice Presidents and/or Directors in Resolution offices in the field shall make a written recommendation to the Director, Office of Field Resolutions, Washington D.c., for designation of institutions and branch offices which are located in "predominantly minority neighborhoods."

(2) Assistant Directors, Office of Major Resolutions, Washington D.C., shall make a written recommendation to the Director, Office of Major Resolutions, Washington D.C., for designation of institutions and branch offices which are located in "predominantly minority neighborhoods."

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(1) The Directors, office of Field Resolutions and Major Resolutions will be the "approving officials" for all "predominantly minority neighborhood" institution and branch office designations for institutions under their respective supervision.

(2) A copy of all approved recommendations will be forwarded to the Vice President, Division of Minority and Women's Programs.

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Disputes. Any disputed designations between recommending officials, approving officials, prospective acquirors, or other interested parties will be forwarded by approving officials to the Vice President, Division of Resolutions and the Vice President, Division of Minority and Women's Programs who will jointly make the determination. If agreement can not be reached, the matter shall be forwarded to the Chief Executive Officer for final determination.

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a.

For additional information and clarification of the terms or other provisions of this directive, contact Edward Thomas, Resolutions Specialist at (202) 416-7179.

b. For information on legal issues related to this directive, contact Gregory B. Smith, Senior Counsel, Resolutions at (202) 736-3013.

8.

Effective Date.

This directive is effective immediately.

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Note: Minority neighborhood locations are defined as those where 50% or more of the population

in the zip code is minority. Minority institutions include those where the head office is located in a minority neighborhood or where 50% or more of the branches are located in a minority neighborhood.

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