§3102 Establishment of Federal branches and agencies by foreign bank

Summary

Foreign banks that do banking outside the United States may open one or more federal branches or agencies in a State if the bank gets permission from the Comptroller of the Currency, the bank is not already operating there under State law, and State law does not forbid it. The Comptroller must include any conditions the Federal Reserve Board requires when approving an application. Once open, a federal branch or agency must follow rules the Comptroller sets, keep its accounts separate from the parent bank, and is mostly treated like a national bank at the same place. A few differences apply: capital rules use the dollar equivalent of the foreign bank’s capital, a federal branch does not have to be a Federal Reserve member bank, and a federal agency does not have to be insured in the same way as U.S. banks. A federal agency may not take deposits or act as a trustee, though it can hold small credit balances for customers. A foreign bank may not have both a federal branch and a federal agency in the same State. Foreign banks with a federal branch or agency must keep certain dollar deposits or investment securities in a member bank in the same State, in an amount at least equal to the greater of the capital a U.S. national bank would need there or 5% of the branch’s total liabilities (with some listed exclusions). The Comptroller can require more assets if needed for safety, and can set different rules by State. A bank can convert State-law branches or related lending companies into federal branches with approval. The Comptroller can end a bank’s authority for violations, insolvency, or if the foreign bank stops existing, and may appoint a receiver if the bank is insolvent or a U.S. judgment against it stays unpaid for 30 days; after valid U.S. claims and costs are paid, any remaining U.S. assets go back to the foreign bank’s head office or its foreign liquidator.