§ 1835a. Prohibition against deposit production offices
(a)
Regulations
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,[1] or any amendment made by this title [1] 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
(1)
Limitation
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
(2)
Considerations
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)
Definitions
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.
(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.
[1] See References in Text note below.
[2] See References in Text note below.