12 U.S. Code § 1835a - Prohibition against deposit production offices
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The appropriate Federal banking agencies shall prescribe uniform regulations effective June 1, 1997, which prohibit any out-of-State bank from using any authority to engage in interstate branching pursuant to this title,  or any amendment made by this title  to any other provision of law, primarily for the purpose of deposit production.
(b) Guidelines for meeting credit needs
Regulations issued under subsection (a) of this section shall include guidelines to ensure that interstate branches operated by an out-of-State bank in a host State are reasonably helping to meet the credit needs of the communities which the branches serve.
(c) Limitation on out-of-State loans
Regulations issued under subsection (a) of this section shall require that, beginning no earlier than 1 year after establishment or acquisition of an interstate branch or branches in a host State by an out-of-State bank, if the appropriate Federal banking agency for the out-of-State bank determines that the bank’s level of lending in the host State relative to the deposits from the host State (as reasonably determinable from available information including the agency’s sampling of the bank’s loan files during an examination or such data as is otherwise available) is less than half the average of total loans in the host State relative to total deposits from the host State (as determinable from relevant sources) for all banks the home State of which is such State—
(A) the appropriate Federal banking agency for the out-of-State bank shall review the loan portfolio of the bank and determine whether the bank is reasonably helping to meet the credit needs of the communities served by the bank in the host State; and
(B) if the agency determines that the out-of-State bank is not reasonably helping to meet those needs—
(i) the agency may order that an interstate branch or branches of such bank in the host State be closed unless the bank provides reasonable assurances to the satisfaction of the appropriate Federal banking agency that the bank has an acceptable plan that will reasonably help to meet the credit needs of the communities served by the bank in the host State, and
In making a determination under paragraph (1)(A), the appropriate Federal banking agency shall consider—
(A) whether the interstate branch or branches of the out-of-State bank were formerly part of a failed or failing depository institution;
(B) whether the interstate branch was acquired under circumstances where there was a low loan-to-deposit ratio because of the nature of the acquired institution’s business or loan portfolio;
(C) whether the interstate branch or branches of the out-of-State bank have a higher concentration of commercial or credit card lending, trust services, or other specialized activities;
(D) the ratings received by the out-of-State bank under the Community Reinvestment Act of 1977 [12 U.S.C. 2901 et seq.];
(E) economic conditions, including the level of loan demand, within the communities served by the interstate branch or branches of the out-of-State bank; and
(3) Branch closing procedure
(A) Notice required
Before exercising any authority under paragraph (1)(B)(i), the appropriate Federal banking agency shall issue to the bank a notice of the agency’s intention to close an interstate branch or branches and shall schedule a hearing.
For the purposes of this section, the following definitions shall apply:
(1) Appropriate Federal banking agency, bank, State, and State bank
The terms “appropriate Federal banking agency”, “bank”, “State”, and “State bank” have the same meanings as in section 1813 of this title.
(2) Home State
The term “home State” means—
(3) Host State
The term “host State” means a State in which a bank establishes a branch other than the home State of the bank.
(4) Interstate branch
 See References in Text note below.
Source(Pub. L. 103–328, title I, § 109,Sept. 29, 1994, 108 Stat. 2362; Pub. L. 106–102, title I, § 106,Nov. 12, 1999, 113 Stat. 1359.)
References in Text
This title, referred to in subsecs. (a), (d), and (e)(4), is title I of Pub. L. 103–328, Sept. 29, 1994, 108 Stat. 2339, which enacted this section and sections 43, 215a–1, and 1831u of this title, amended sections 30, 36, 215, 215a, 215b, 1462a, 1820, 1828, 1831a, 1831r–1, 1841, 1842, 1846, 2906, 3103 to 3105, and 3106a of this title and section 1927 of Title 7, Agriculture, enacted provisions set out as notes under sections 215, 1811, 1828, 3104, 3105, and 3107 of this title and section 1927 of Title 7, and amended provisions set out as a note under section 1811 of this title. For complete classification of this title to the Code, see Tables.
The Community Reinvestment Act of 1977, referred to in subsec. (c)(2)(D), is title VIII of Pub. L. 95–128, Oct. 12, 1977, 91 Stat. 1147, as amended, which is classified generally to chapter 30 (§ 2901 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 2901 of this title and Tables.
Section was enacted as part of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, and not as part of the Federal Deposit Insurance Act which comprises this chapter.
1999—Subsec. (e)(4). Pub. L. 106–102inserted before period at end “and any branch of a bank controlled by an out-of-State bank holding company (as defined in section 1841 (o)(7) of this title)”.
Effective Date of 1999 Amendment
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