(2) prohibit directors and officers of an (3) limits director interlocks between an FSLIC- These restrictions generally apply to institutions within the same geographic market area. The restrictions generally do not apply to interlocks within the same holding company system. The anti-interlock provisions of the Board's conflict of interest regulations seek to establish independent and representative boards of directors of insured savings and loan associations and to control conflict of interest situations. The Board also opposes any interlock situation which in fact involves an unfair method of competition or restraint of trade. However, it remains an open question whether every management interlock between institutions in the same geographic market area necessarily involves unfair competition or a restraint of trade. If Congress intends that all management interlocks between depositary institutions in the same geographic market area are to be barred, the Board prefers that this result be attained through legislation such as S. 73, rather than being decided by the Federal Trade Commission ("FTC") on a case-by-case basis. S. 73, as opposed to ad hoc FTC actions, provides for an orderly phase-out of interlocks over a five-year period and gives the Board exclusive enforcement authority over FSLICinsured institutions and savings and loan holding companies. The Board assumes that the enactment of S. 73, or similar legislation, would render moot the current FTC activity seeking to establish a precedent respecting director interlocks between savings and loan associations and commercial banks. I trust that this letter is responsive to your inquiry. However, we are available to meet with you or your staff if you wish to further discuss this matter or if you desire our assistance. Sincerely, Garth Marston 91-727 O-77 - 19 95TH CONGRESS 1ST SESSION S. 895 IN THE SENATE OF THE UNITED STATES MARCH 3 (legislative day, FEBRUARY 21), 1977 Mr. PROXMIRE (by request) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the Federal Deposit Insurance Act, and for other purposes. 1 Be it enacted by the Senate and House of Representa 2 tives of the United States of America in Congress assembled, SECTION 1. (a) Section 3 (o) of the Federal Deposit 3 4 Insurance Act (12 U.S.C. 1813 (o)) is amended (1) by inserting "domestic" immediately before "branch" the first place it appears; and (2) by inserting before the period at the end thereof a semicolon and the following: "and the term 'foreign branch' means any office, place of business, or similar establishment located outside the United States, its ter 2 1 2 ritories, Puerto Rico, Guam, American Samoa, and the Virgin Islands". 3. (b) Section 18 (d) of the Federal Deposit Insurance 4 Act (12 U.S.C. 1828 (d)) is amended— 5 6 7 8 9 10 11 12 (1) by inserting "(1)” after "(d)”; (2) by inserting "domestic" between "new" and "branch"; (3) by inserting "such" between "any" and "branch"; and (4) by adding at the end thereof the following new paragraph: "(2) No State nonmember insured bank shall establish 13 or operate any foreign branch, except with the prior written 14 consent of the Corporation and upon such conditions and 15 pursuant to such regulations as the Corporation may pre16 scribe from time to time.". 17 (c) Section 18 of the Federal Deposit Insurance Act 18 (12 U.S.C. 1828) is amended by adding at the end thereof 19 the following new subsection: 20 "(1) When authorized by State law, a State nonmem 21 ber insured bank may, but only with the prior written con22 sent of the Corporation and upon such conditions and under 23 such regulations as the Corporation may prescribe from time 24 to time, acquire and hold, directly or indirectly, stock or 25 other evidences of ownership in one or more banks or other 3 1 entities organized under the law of a foreign country or a 2 dependency or insular possession of the United States and not 3 engaged, directly or indirectly, in any activity in the United 4 States except as, in the judgment of the Board of Directors, 5 shall be incidental to the international or foreign business of 6 such foreign bank or entity; and, notwithstanding the pro7 visions of subsection (j) of this section, such State nonmem8 ber insured bank may, as to such foreign bank or entity, en9 gage in transactions that would otherwise be covered 10 thereby, but only in the manner and within the limits pre11 scribed by the Corporation by general or specific regulation or ruling.". 12 13 SEC. 2. The sixth sentence of section 7 (a) (3) of the 14 Federal Deposit Insurance Act (12 U.S.C. 1817 (a) (3)) 15 is amended to read as follows: "The correctness of said re16 port of condition shall be attested by the signatures of at 17 least two directors or trustees of the reporting bank other 18 than the officer making such declaration, with a declaration 19 that the report has been examined by them and to the best 20 of their knowledge and belief is true and correct.". 21 SEC. 3. (a) Section 8 (n) of the Federal Deposit In22 surance Act (12 U.S.C. 1818 (n)) is amended 222 23 24 25 (1) by inserting in the first sentence after "this section," the first place it appears therein the following: "or in connection with any claim for insured deposits or 4 1 2 3 4 5 6 7 8 co 9 10 11 127 13 14 any examination or investigation under section 10 (c),”; (2) by inserting "examination, or investigation or considering the claim for insured deposits," in the first sentence after "proceeding," the second place it appears therein; (3) by striking out "proceedings" at the end of the first sentence thereof and inserting in lieu thereof "proceedings, claims, examinations, or investigations"; (4) by inserting "such agency or any" after "Any" at the beginning of the third sentence thereof; and (5) by striking out "section" and inserting in lieu thereof "subsection" in the fourth sentence thereof. (b) Section 8 (q) of the Federal Deposit Insurance Act 15 (12 U.S.C. 1818 (q)) is amended to read as follows: 16. "(q) Whenever the liabilities of an insured bank for 17 deposits shall have been assumed by another insured bank or 18 banks, whether by way of merger, consolidation, or other 19 statutory assumption, or pursuant to contract (1) the insured status of the bank whose liabilities are so assumed 21 shall terminate on the date of receipt by the Corporation of 22 satisfactory evidence of such assumption; (2) the separate 23 insurance of all deposits so assumed shall terminate at the 24 end of six months from the date such assumption takes effect 25 or, in the case of any time deposit, the earliest maturity date 2225 |