37748 Federal Register / Vol. 62, No. 135 / Tuesday, July 15, 1997 / Proposed Rules
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 303, 325, 326, 327, 346,
347, 351 and 362
RIN 3064–AC05
International Banking Regulations;
Consolidation and Simplification
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Notice of proposed rulemaking.
SUMMARY: As part of the FDIC’s
systematic review of its regulations and
written policies under section 303(a) of
the Riegle Community Development and
Regulatory Improvement Act of 1994
(CDRI), the FDIC is seeking public
comment on its proposal to revise and
consolidate its three different groups of
rules and regulations governing
international banking. The first group
governs insured branches of foreign
banks and specifies what deposit-taking
activities are permissible for uninsured
state-licensed branches of foreign banks.
The FDIC’s proposal makes conforming
changes throughout this group of
regulations to reflect the statutory
requirement that domestic retail deposit
activities must be conducted through an
insured bank subsidiary, not through an
insured branch. Also with respect to
this group of regulations, the FDIC is
proposing to rescind the provisions
concerning optional insurance for U.S.
branches of foreign banks; the pledge of
assets formula has been revised; and the
FDIC Division of Supervision’s (DOS)
new supervision program—the Case
Manager approach—has been integrated
throughout the applicable regulations.
The second group of regulations governs
the foreign branches of insured state
nonmember banks, and also governs
such banks’ investment in foreign banks
or other financial entities. The FDIC’s
proposal modernizes this group of
regulations and clarifies provisions
outlining the activities in which insured
state nonmember banks may engage
abroad, and reduces the instances in
which banks must file an application
before opening a foreign branch or
making a foreign investment. The third
group of regulations governs the
international lending of insured state
nonmember banks and specifies when
reserves are required for particular
international assets. The FDIC is
proposing to revise this group of
regulations to simplify the accounting
for fees on international loans to make
it consistent with generally accepted
accounting principles. Consistent with
the goals of CDRI, the proposed rule will
improve efficiency, reduce costs, and
eliminate outmoded requirements.
DATES: Comments must be received on
or before September 15, 1997.
ADDRESSES: Send written comments to
Robert E. Feldman, Executive Secretary,
Attention: Comments/OES, Federal
Deposit Insurance Corporation, 550 17th
Street NW, Washington, D.C. 20429.
Comments may be hand delivered to the
guard station at the rear of the 17th
Street Building (located on F Street), on
business days between 7:00 a.m. and
5:00 p.m. (Fax number (202) 898–3838;
Internet address: comments@fdic.gov).
Comments may be inspected and
photocopied in the FDIC Public
Information Center, Room 100, 801 17th
Street, NW, Washington, D.C. 20429,
between 9:00 a.m. and 4:30 p.m. on
business days.
FOR FURTHER INFORMATION CONTACT:
Christie A. Sciacca, Assistant Director,
(202/898–3671), Karen M. Walter, Chief,
(202/898–3540), Suzanne L. Williams,
Senior Financial Analyst, (202/898–
6788), Division of Supervision; Jamey
Basham, Counsel, (202/898–7265),
Wendy Sneff, Counsel (202/898–6865),
Karen L. Main, Senior Attorney (202/
898–8838), Legal Division, FDIC, 550
17th Street, NW, Washington, D.C.
20429.
SUPPLEMENTARY INFORMATION: The FDIC
is conducting a systematic review of its
regulations and written policies. Section
303(a) of the CDRI (12 U.S.C. 4803(a))
requires the FDIC to streamline and
modify its regulations and written
policies in order to improve efficiency,
reduce unnecessary costs, and eliminate
unwarranted constraints on credit
availability. Section 303(a) also requires
the FDIC to remove inconsistencies and
outmoded and duplicative requirements
from its regulations and written
policies.
As part of this review, the FDIC has
determined that certain portions of part
346 are out-of-date, and other provisions
of this part require clarification.
Although the FDIC previously made
certain regulatory amendments which
took effect as recently as 1996, other
regulatory language contained in part
346 does not accurately reflect the
underlying statutory authority. The
FDIC has also determined that part 347
is outmoded. Part 347 has not been
revised in any significant regard since
1979, when it was originally
promulgated.
The FDIC has decided to consolidate
its international banking rules into a
single part, part 347, for ease of
reference. This proposal places material
on foreign branching and foreign bank
investment by nonmember banks,
currently located in part 347, into
subpart A of part 347. Material currently
located in part 346, governing insured
branches of foreign banks and deposit-
taking by uninsured state-licensed
branches of foreign banks, is placed in
subpart B of part 347. Part 351 of the
FDIC’s current rules and regulations,
which contains rules governing the
international lending operations of
insured state nonmember banks, is
placed in subpart C of new part 347.
Part 351 was originally adopted in 1984
as an interagency rulemaking in
coordination with the Board of
Governors of the Federal Reserve
System (FRB) and the Office of the
Comptroller of the Currency (OCC). The
proposed revisions to part 351 have
been discussed with representatives
from the OCC and FRB and they are in
general agreement with the changes.
However, as the other two federal
banking agencies are not ready to act on
a revised regulation at this time, the
FDIC has decided to unilaterally issue
its proposed revision to part 351 in
connection with its consolidation of the
international banking regulations.
In addition, the FDIC is currently
processing a complete revision of part
303 of the FDIC’s rules and regulations,
which contains the FDIC’s applications
procedures and delegations of authority.
For ease of reference, the FDIC will
consolidate its applications procedures
for international banking matters into a
single subpart of part 303, subpart J. At
this time, the FDIC cannot determine
whether this part 347 rulemaking will
be finalized before or after the FDIC’s
part 303 rulemaking. To deal with this
uncertainty, the FDIC’s part 303
proposal will contain an ‘‘interim’’
version of subpart J, which will set out
application processes compatible with
the FDIC’s current versions of parts 346
and 347. In addition, this part 347
proposal includes, as a separate subpart
D of part 347, revised ‘‘permanent’’
application procedures compatible with
the substantive provisions of this part
347 proposal. These ‘‘permanent’’
application procedures will be located
in subpart J without substantive change,
displacing the interim procedures, once
both part 303 and part 347 are issued as
final rules.
The FDIC requests public comments
about all aspects of the proposal. In
addition, the FDIC is raising specific
questions for public comment, as set out
in connection with the analysis of the
proposal below.
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 303, 325, 326, 327, 346,
347, 351 and 362
RIN 3064–AC05
International Banking Regulations;
Consolidation and Simplification
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Notice of proposed rulemaking.
SUMMARY: As part of the FDIC’s
systematic review of its regulations and
written policies under section 303(a) of
the Riegle Community Development and
Regulatory Improvement Act of 1994
(CDRI), the FDIC is seeking public
comment on its proposal to revise and
consolidate its three different groups of
rules and regulations governing
international banking. The first group
governs insured branches of foreign
banks and specifies what deposit-taking
activities are permissible for uninsured
state-licensed branches of foreign banks.
The FDIC’s proposal makes conforming
changes throughout this group of
regulations to reflect the statutory
requirement that domestic retail deposit
activities must be conducted through an
insured bank subsidiary, not through an
insured branch. Also with respect to
this group of regulations, the FDIC is
proposing to rescind the provisions
concerning optional insurance for U.S.
branches of foreign banks; the pledge of
assets formula has been revised; and the
FDIC Division of Supervision’s (DOS)
new supervision program—the Case
Manager approach—has been integrated
throughout the applicable regulations.
The second group of regulations governs
the foreign branches of insured state
nonmember banks, and also governs
such banks’ investment in foreign banks
or other financial entities. The FDIC’s
proposal modernizes this group of
regulations and clarifies provisions
outlining the activities in which insured
state nonmember banks may engage
abroad, and reduces the instances in
which banks must file an application
before opening a foreign branch or
making a foreign investment. The third
group of regulations governs the
international lending of insured state
nonmember banks and specifies when
reserves are required for particular
international assets. The FDIC is
proposing to revise this group of
regulations to simplify the accounting
for fees on international loans to make
it consistent with generally accepted
accounting principles. Consistent with
the goals of CDRI, the proposed rule will
improve efficiency, reduce costs, and
eliminate outmoded requirements.
DATES: Comments must be received on
or before September 15, 1997.
ADDRESSES: Send written comments to
Robert E. Feldman, Executive Secretary,
Attention: Comments/OES, Federal
Deposit Insurance Corporation, 550 17th
Street NW, Washington, D.C. 20429.
Comments may be hand delivered to the
guard station at the rear of the 17th
Street Building (located on F Street), on
business days between 7:00 a.m. and
5:00 p.m. (Fax number (202) 898–3838;
Internet address: comments@fdic.gov).
Comments may be inspected and
photocopied in the FDIC Public
Information Center, Room 100, 801 17th
Street, NW, Washington, D.C. 20429,
between 9:00 a.m. and 4:30 p.m. on
business days.
FOR FURTHER INFORMATION CONTACT:
Christie A. Sciacca, Assistant Director,
(202/898–3671), Karen M. Walter, Chief,
(202/898–3540), Suzanne L. Williams,
Senior Financial Analyst, (202/898–
6788), Division of Supervision; Jamey
Basham, Counsel, (202/898–7265),
Wendy Sneff, Counsel (202/898–6865),
Karen L. Main, Senior Attorney (202/
898–8838), Legal Division, FDIC, 550
17th Street, NW, Washington, D.C.
20429.
SUPPLEMENTARY INFORMATION: The FDIC
is conducting a systematic review of its
regulations and written policies. Section
303(a) of the CDRI (12 U.S.C. 4803(a))
requires the FDIC to streamline and
modify its regulations and written
policies in order to improve efficiency,
reduce unnecessary costs, and eliminate
unwarranted constraints on credit
availability. Section 303(a) also requires
the FDIC to remove inconsistencies and
outmoded and duplicative requirements
from its regulations and written
policies.
As part of this review, the FDIC has
determined that certain portions of part
346 are out-of-date, and other provisions
of this part require clarification.
Although the FDIC previously made
certain regulatory amendments which
took effect as recently as 1996, other
regulatory language contained in part
346 does not accurately reflect the
underlying statutory authority. The
FDIC has also determined that part 347
is outmoded. Part 347 has not been
revised in any significant regard since
1979, when it was originally
promulgated.
The FDIC has decided to consolidate
its international banking rules into a
single part, part 347, for ease of
reference. This proposal places material
on foreign branching and foreign bank
investment by nonmember banks,
currently located in part 347, into
subpart A of part 347. Material currently
located in part 346, governing insured
branches of foreign banks and deposit-
taking by uninsured state-licensed
branches of foreign banks, is placed in
subpart B of part 347. Part 351 of the
FDIC’s current rules and regulations,
which contains rules governing the
international lending operations of
insured state nonmember banks, is
placed in subpart C of new part 347.
Part 351 was originally adopted in 1984
as an interagency rulemaking in
coordination with the Board of
Governors of the Federal Reserve
System (FRB) and the Office of the
Comptroller of the Currency (OCC). The
proposed revisions to part 351 have
been discussed with representatives
from the OCC and FRB and they are in
general agreement with the changes.
However, as the other two federal
banking agencies are not ready to act on
a revised regulation at this time, the
FDIC has decided to unilaterally issue
its proposed revision to part 351 in
connection with its consolidation of the
international banking regulations.
In addition, the FDIC is currently
processing a complete revision of part
303 of the FDIC’s rules and regulations,
which contains the FDIC’s applications
procedures and delegations of authority.
For ease of reference, the FDIC will
consolidate its applications procedures
for international banking matters into a
single subpart of part 303, subpart J. At
this time, the FDIC cannot determine
whether this part 347 rulemaking will
be finalized before or after the FDIC’s
part 303 rulemaking. To deal with this
uncertainty, the FDIC’s part 303
proposal will contain an ‘‘interim’’
version of subpart J, which will set out
application processes compatible with
the FDIC’s current versions of parts 346
and 347. In addition, this part 347
proposal includes, as a separate subpart
D of part 347, revised ‘‘permanent’’
application procedures compatible with
the substantive provisions of this part
347 proposal. These ‘‘permanent’’
application procedures will be located
in subpart J without substantive change,
displacing the interim procedures, once
both part 303 and part 347 are issued as
final rules.
The FDIC requests public comments
about all aspects of the proposal. In
addition, the FDIC is raising specific
questions for public comment, as set out
in connection with the analysis of the
proposal below.
37749Federal Register / Vol. 62, No. 135 / Tuesday, July 15, 1997 / Proposed Rules
Proposed Revisions to Part 347, Foreign
Branches and Investments in Foreign
Banks and Other Entities
Background
Section 18(d)(2) of the Federal
Deposit Insurance Act (12 U.S.C.
1828(d)(2)) requires a nonmember bank
to obtain the FDIC’s consent to establish
or operate a foreign branch. Section
18(d)(2) also authorizes the FDIC to
impose conditions and issue regulations
governing the affairs of foreign
branches.
Section 18(l) of the FDI Act (12 U.S.C.
1828(l)) requires a nonmember bank to
obtain the FDIC’s consent to acquire and
hold, directly or indirectly, stock or
other evidences of ownership in any
foreign bank or other entity. Section
18(l) also states that these entities may
not engage in any activities in the
United States except as the Board of
Directors of the FDIC (Board), in its
judgment, has determined are incidental
to the international or foreign business
of these entities. In addition, section
18(l) authorizes the FDIC to impose
conditions and issue regulations
governing these investments. Finally,
although nonmember banks subject to
the interaffiliate transaction restrictions
of sections 23A and 23B of the Federal
Reserve Act, 12 U.S.C. 371c and 371c–
1, as expressly incorporated by section
18(j) of the FDI Act, 12 U.S.C. 1821(j),
section 18(l) provides that nonmember
banks may engage in transactions with
these foreign banks and other entities in
which the nonmember bank has
invested in the manner and within the
limits prescribed by the FDIC.
A nonmember bank’s authority to
establish a foreign branch or invest in
foreign banks or other entities, and the
permissible activities for foreign
branches or foreign investment entities,
must be established in the first instance
under the law of its state chartering
authority. Congress created sections
18(d)(2) and 18(l) out of a concern that
there was no federal-level review of
nonmember banks’ foreign branching
and investments. S. Rep. No. 95–323,
95th Cong., 1st Sess. (1977) at 15.
Although the FRB had long held
authority over foreign branching and
investment by state member banks and
national banks (member banks) under
the Federal Reserve Act, as well as
foreign investment by bank holding
companies under the Bank Holding
Company Act, the FDIC did not hold
corresponding statutory authority over
nonmember banks until Congress
created sections 18(d)(2) and 18(l) as
part of the Financial Institutions
Regulatory and Interest Rate Control Act
of 1978, Public Law 95–630 (FIRIRCA).
When the FDIC originally adopted
part 347 in 1979, to implement the
Corporation’s new authority under
sections 18(d)(2) and 18(l), the FDIC
adopted a rule which was virtually the
same as the corresponding provisions of
the FRB’s rules and regulations at the
time. Based on the above legislative
history, the FDIC determined that
Congress intended to bring the
international activities of nonmember
banks under federal controls that were
similar, but not necessarily identical, to
those contained in the FRB’s rules
governing the international activities of
member banks and bank holding
companies. 44 FR 25194, 25195 (April
30, 1979).
In developing its proposal to revise
part 347, the FDIC has therefore
maintained a parity with the substance
of the FRB’s corresponding rules on
foreign branching and investments by
member banks, contained in subpart A
of Regulation K (12 CFR 211.1–211.8).
The permissible activities for foreign
branches of nonmember banks and for
foreign entities in which nonmember
banks invest are virtually identical to
those authorized for member banks
under Regulation K. The amount limits
and extent to which nonmember banks
may engage in such activities without
obtaining the FDIC’s specific approval
are also very similar, taking into account
certain variances attributable to
structural differences between the types
of institutions governed. Where there
are substantive differences between the
FDIC’s proposal and the FRB’s rules
under subpart A of Regulation K, the
differences are noted below.
In certain of the few limited instances
in which the FDIC is proposing a
different treatment than the FRB’s under
Regulation K, the difference raises
issues under section 24 of the FDI Act
(12 U.S.C. 1831a) and part 362 of the
FDIC’s rules and regulations (12 CFR
part 362). Section 24 and part 362
prohibit a state bank from engaging as
principal in any activity which is not
permissible for a national bank, unless
the FDIC first determines that it would
not pose a significant risk of loss to the
appropriate deposit insurance fund and
the bank meets its minimum capital
requirements. Section 24 and part 362
similarly prohibit a subsidiary of a state
bank from engaging as principal in any
activity which is not permissible for a
subsidiary of national bank, unless the
FDIC first determines that it would not
pose a significant risk of loss to the
appropriate deposit insurance fund and
the bank meets its minimum capital
requirements. Section 24 and part 362
also prohibit a state bank from making
an equity investment which is not
permissible for a national bank, unless
the investment is made through a
majority-owned subsidiary, the FDIC
determines that it would not pose a
significant risk of loss to the appropriate
deposit insurance fund for the
subsidiary to hold the equity
investment, and the bank meets its
minimum capital requirements. Where
these section 24 issues arise, they are
discussed below.
Subpart A—Foreign Branches
The most significant revision made by
the proposal is the FDIC’s grant of
authority to a nonmember bank meeting
certain eligibility criteria to establish
foreign branches under general consent
or prior notice procedures. The existing
list of foreign branch powers under
current § 347.3(c) has also been
redrafted to bring it more in line with
modern banking practice. The proposal
also introduces expanded powers for
foreign branches to underwrite,
distribute, deal, invest in, and trade
foreign government obligations.
The general consent and prior notice
procedures are discussed in detail in the
analysis of subpart D, below, but to
summarize them briefly, proposed
§ 347.103(b) gives the FDIC’s general
consent for an eligible nonmember
bank—one which is well-capitalized,
well-rated under certain supervisory
assessment benchmarks, has no
supervision problems and has been in
operation at least three years—to
establish additional branches within a
foreign country or relocate a branch
within a foreign country. An eligible
nonmember bank which has established
its international expertise by
successfully operating foreign branches
or affiliates in two or more foreign
countries may also establish branches in
additional foreign countries upon 45
days prior notice to the FDIC. There are
certain necessary limitations on these
general consent and prior notice
procedures, however, as discussed in
the analysis of subpart D.
In an effort to modernize the list of
foreign branch powers currently
contained in § 347.3(c), the proposal
eliminates § 347.3(c)(2), containing
specific authorization for a foreign
branch to accept drafts or bills of
exchange, and § 347.3(c)(5), containing
specific authorization for a foreign
branch to make loans secured by real
estate. In addition, the FDIC has not
included a counterpart to the FRB’s
specific authorization for a foreign
branch to engage in repurchase
agreements involving securities that are
the functional equivalent of extensions
of credit. In the FDIC’s view, these
activities are within the general banking
Proposed Revisions to Part 347, Foreign
Branches and Investments in Foreign
Banks and Other Entities
Background
Section 18(d)(2) of the Federal
Deposit Insurance Act (12 U.S.C.
1828(d)(2)) requires a nonmember bank
to obtain the FDIC’s consent to establish
or operate a foreign branch. Section
18(d)(2) also authorizes the FDIC to
impose conditions and issue regulations
governing the affairs of foreign
branches.
Section 18(l) of the FDI Act (12 U.S.C.
1828(l)) requires a nonmember bank to
obtain the FDIC’s consent to acquire and
hold, directly or indirectly, stock or
other evidences of ownership in any
foreign bank or other entity. Section
18(l) also states that these entities may
not engage in any activities in the
United States except as the Board of
Directors of the FDIC (Board), in its
judgment, has determined are incidental
to the international or foreign business
of these entities. In addition, section
18(l) authorizes the FDIC to impose
conditions and issue regulations
governing these investments. Finally,
although nonmember banks subject to
the interaffiliate transaction restrictions
of sections 23A and 23B of the Federal
Reserve Act, 12 U.S.C. 371c and 371c–
1, as expressly incorporated by section
18(j) of the FDI Act, 12 U.S.C. 1821(j),
section 18(l) provides that nonmember
banks may engage in transactions with
these foreign banks and other entities in
which the nonmember bank has
invested in the manner and within the
limits prescribed by the FDIC.
A nonmember bank’s authority to
establish a foreign branch or invest in
foreign banks or other entities, and the
permissible activities for foreign
branches or foreign investment entities,
must be established in the first instance
under the law of its state chartering
authority. Congress created sections
18(d)(2) and 18(l) out of a concern that
there was no federal-level review of
nonmember banks’ foreign branching
and investments. S. Rep. No. 95–323,
95th Cong., 1st Sess. (1977) at 15.
Although the FRB had long held
authority over foreign branching and
investment by state member banks and
national banks (member banks) under
the Federal Reserve Act, as well as
foreign investment by bank holding
companies under the Bank Holding
Company Act, the FDIC did not hold
corresponding statutory authority over
nonmember banks until Congress
created sections 18(d)(2) and 18(l) as
part of the Financial Institutions
Regulatory and Interest Rate Control Act
of 1978, Public Law 95–630 (FIRIRCA).
When the FDIC originally adopted
part 347 in 1979, to implement the
Corporation’s new authority under
sections 18(d)(2) and 18(l), the FDIC
adopted a rule which was virtually the
same as the corresponding provisions of
the FRB’s rules and regulations at the
time. Based on the above legislative
history, the FDIC determined that
Congress intended to bring the
international activities of nonmember
banks under federal controls that were
similar, but not necessarily identical, to
those contained in the FRB’s rules
governing the international activities of
member banks and bank holding
companies. 44 FR 25194, 25195 (April
30, 1979).
In developing its proposal to revise
part 347, the FDIC has therefore
maintained a parity with the substance
of the FRB’s corresponding rules on
foreign branching and investments by
member banks, contained in subpart A
of Regulation K (12 CFR 211.1–211.8).
The permissible activities for foreign
branches of nonmember banks and for
foreign entities in which nonmember
banks invest are virtually identical to
those authorized for member banks
under Regulation K. The amount limits
and extent to which nonmember banks
may engage in such activities without
obtaining the FDIC’s specific approval
are also very similar, taking into account
certain variances attributable to
structural differences between the types
of institutions governed. Where there
are substantive differences between the
FDIC’s proposal and the FRB’s rules
under subpart A of Regulation K, the
differences are noted below.
In certain of the few limited instances
in which the FDIC is proposing a
different treatment than the FRB’s under
Regulation K, the difference raises
issues under section 24 of the FDI Act
(12 U.S.C. 1831a) and part 362 of the
FDIC’s rules and regulations (12 CFR
part 362). Section 24 and part 362
prohibit a state bank from engaging as
principal in any activity which is not
permissible for a national bank, unless
the FDIC first determines that it would
not pose a significant risk of loss to the
appropriate deposit insurance fund and
the bank meets its minimum capital
requirements. Section 24 and part 362
similarly prohibit a subsidiary of a state
bank from engaging as principal in any
activity which is not permissible for a
subsidiary of national bank, unless the
FDIC first determines that it would not
pose a significant risk of loss to the
appropriate deposit insurance fund and
the bank meets its minimum capital
requirements. Section 24 and part 362
also prohibit a state bank from making
an equity investment which is not
permissible for a national bank, unless
the investment is made through a
majority-owned subsidiary, the FDIC
determines that it would not pose a
significant risk of loss to the appropriate
deposit insurance fund for the
subsidiary to hold the equity
investment, and the bank meets its
minimum capital requirements. Where
these section 24 issues arise, they are
discussed below.
Subpart A—Foreign Branches
The most significant revision made by
the proposal is the FDIC’s grant of
authority to a nonmember bank meeting
certain eligibility criteria to establish
foreign branches under general consent
or prior notice procedures. The existing
list of foreign branch powers under
current § 347.3(c) has also been
redrafted to bring it more in line with
modern banking practice. The proposal
also introduces expanded powers for
foreign branches to underwrite,
distribute, deal, invest in, and trade
foreign government obligations.
The general consent and prior notice
procedures are discussed in detail in the
analysis of subpart D, below, but to
summarize them briefly, proposed
§ 347.103(b) gives the FDIC’s general
consent for an eligible nonmember
bank—one which is well-capitalized,
well-rated under certain supervisory
assessment benchmarks, has no
supervision problems and has been in
operation at least three years—to
establish additional branches within a
foreign country or relocate a branch
within a foreign country. An eligible
nonmember bank which has established
its international expertise by
successfully operating foreign branches
or affiliates in two or more foreign
countries may also establish branches in
additional foreign countries upon 45
days prior notice to the FDIC. There are
certain necessary limitations on these
general consent and prior notice
procedures, however, as discussed in
the analysis of subpart D.
In an effort to modernize the list of
foreign branch powers currently
contained in § 347.3(c), the proposal
eliminates § 347.3(c)(2), containing
specific authorization for a foreign
branch to accept drafts or bills of
exchange, and § 347.3(c)(5), containing
specific authorization for a foreign
branch to make loans secured by real
estate. In addition, the FDIC has not
included a counterpart to the FRB’s
specific authorization for a foreign
branch to engage in repurchase
agreements involving securities that are
the functional equivalent of extensions
of credit. In the FDIC’s view, these
activities are within the general banking