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(6) The applicant's aggregate direct and indirect fixed asset investment, including its direct and indirect investment in the proposed branch," is determined to be reasonable relative to its earnings capacity and other pertinent bases of consideration.

(7) The estimated income of the proposed branch is equal to or in excess of its expenses during the third year of its operation, or, alternatively, the applicant's earnings are adequate to support limited operating losses incurred by the branch during its formative years.

(8) The applicant's management has been rated fair or better at its most recent examination.

(9) Any financial arrangements which have been made in connection with the proposed branch 10 and involve the applicant's directors, officers, major shareholders," or their interests, are fair and reasonable in comparison to similar arrangements that could have been made with independent third parties.

[35 FR 19748, Dec. 30, 1970, as amended at 38 FR 4572, Feb. 16, 1973; 38 FR 14263, May 31, 1973; 39 FR 16230, May 8, 1974] § 303.13

Other delegations of authority. (a) In general. Except as otherwise provided in this part, or with respect to matters which generally involve conditions or circumstances requiring prompt action in the field for the better protection of the interests of the Corporation and to achieve flexibility and expedition in its operations and in the exercise of its functions in connection with the Corporation's litigation and liquidation

See footnote on page 9.

On a consolidated basis.

10 Including arrangements relating to fees, the acquisition of property, rentals, and construction contracts.

11 The term "major shareholder" means any shareholder who directly or indirectly controls 5 percent or more of any class of the applicant's outstanding voting stock.

matters and with the payment of claims for insured deposits, the Board of Directors does not delegate its authority and no delegations of final authority are made by the Board of Directors. Any person having a proper and direct concern therein may ascertain the scope of authority of any officer, agent, or employee of the Corporation by communicating with the Executive Secretary of the Corporation.

(b) Disclosure law and regulations. Except as provided in paragraph (c) of this section, the Board of Directors has delegated to the Director of the Division of Bank Supervision, or, where confirmed in writing by the Director of the Division of Bank Supervision, to the Regional Director of the Region in which the applicant bank is located, the authority on behalf of the Board of Directors to act on disclosure matters under and pursuant to section 12, 13 or 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78) or Part 335 of the Corporation's rules and regulations in this chapter.

(c) Limitations on delegation. Authority to act on disclosure matters under paragraph (b) of this section is not delegated by the Board of Directors when such matters involve:

(1) Exemption from disclosure requirements pursuant to section 12 (h) of the Securities Exchange Act of 1934 (15 U.S.C. 787(h));

(2) Exemption from tender offer requirements pursuant to section 14(d) (8) of the Securities Exchange Act of 1934 (15 U.S.C. 78n (d) (8));

(3) Authority, pursuant to § 335.3(c) of the Corporation's regulations in this chapter, to accord confidential treatment to information required to be filed in a disclosure report;

(4) Authority, pursuant to § 335.5 (f) (5) of the Corporation's regulations in this chapter, to disclose to departments and agencies of the United States otherwise confidential information submitted in copies of preliminary proxy solicitation material.

(d) Security devices and procedures and bank service arrangements. The Board of Directors has delegated to the Director of the Division of Bank Supervision, or where confirmed in writing by the Director of Bank Supervision, to the Regional Director of the Region in which the applicant bank is located, the authority on behalf of the Board of Directors to administer the provisions of Parts 326

and 334 of the Corporation's rules and regulations in this chapter.

(e) In emergencies. For the purpose of assuring the performance of, and continuity in the management functions and activities of the Corporation, the Board of Directors has delegated, to the extent deemed necessary, authority with respect to the management of the Corporation's affairs to certain designated officers, such authority to be exercised only in the event of an emergency involving an enemy attack on the continental United States or other warlike occurrence which renders the Board of Directors unable to perform the management functions and activities normally performed by it.

(f) Competitive factor reports on "phantom" bank mergers. The Board of Directors has delegated to the Director of the Division of Bank Supervision, or, where confirmed in writing by the Director of the Division of Bank Supervision, to the Regional Director of the Region in which the applicant bank "a is located, the authority on behalf of the Board of Directors to furnish reports to the Board of Governors of the Federal Reserve System or the Comptroller of the Currency on the competitive factors involved in any "phantom" bank merger required to be approved by one or the other of those agencies.

11b

[35 FR 19748, Dec. 30, 1970, as amended at 38 FR 14263, May 31, 1973; 39 FR 16230, May 8, 1974]

§ 303.14 Application procedures.

(a) Scope of section. This section applies to: (1) Applications for deposit insurance by proposed new banks; (2) applications by insured State nonmember banks to establish branches; (3) applications by insured State nonmember banks to relocate their main offices or branch offices; and (4) any other applications, requests or submittals which the Board of Directors in its sole discretion deems appropriate. In the case of applications, requests, or submittals which come within this fourth category, the applicant will be notified at the time its application is accepted for filing that the

11a As used in this paragraph (f), the term "applicant bank" means the bank which is applying for merger approval either to the Board of Governors of the Federal Reserve System or to the Comptroller of the Currency. 11b The term "'phantom' bank merger" is defined in footnote 2a of this Part 303.

procedures set forth in this section shall be followed in connection therewith.

(b) Notice of filing of application(1) Notice by publication. The applicant shall, within 15 days after the Regional Director has notified the applicant in writing that an application has been accepted for filing, publish one time in a newspaper of general circulation in the community in which the applicant's head office is located and in a newspaper of general circulation in the community in which the applicant proposes to engage in business a notice containing the name of the applicant or applicants, the subject matter of the application, the location at which the applicant proposes to engage in business, and the date upon which the application was accepted for filing. Immediately after publication, the applicant shall furnish the Regional Director with a certification from the publisher and a tear sheet or clipping evidencing such publication.

(2) Comments and protests. Anyone who wishes to comment on the application may do so by filing his comments in writing with the Regional Director. Anyone who wishes to protest the granting of the application has a right to do so if he files a written notice of his intent with the Regional Director within 15 days of the date of publication of the notice described in paragraph (b) (1) of this section. In order to fully apprise the public of its rights under this paragraph (b)(2), the notice described in paragraph (b)(1) of this section shall include the following statement:

Any person wishing to comment on this application may file his comments in writing with the Regional Director of the Federal Deposit Insurance Corp. at its Regional Office (address of the Regional Office). If any person desires to protest the granting of this application he has a right to do so if he files a written notice of his intent with the Regional Director within 15 days of the date of this publication. The nonconfidential portion of the application are on file in the Regional Office as part of the public file maintained by the Corporation. This file is available for public inspection during regular business hours.

(3) Solicitation of comments by Regional Director. Whenever he deems it appropriate, the Regional Director may solicit comments from any person or institution which, in his opinion, might have an interest in or be affected by the pending application.

(c) Public file.-(1) Contents. Subject to the provisions of paragraph (c) (2) of

this section, the public file in each case shall consist of:

(i) The application with supporting data and supplementary information.

(ii) Data and information submitted by interested persons in favor of or in opposition to such application.

(iii) Those portions of the investigation report prepared by the Corporation's field examiner in connection with the application which cover future earnings prospects and the convenience and needs of the community to be served by the applicant.12

(iv) Where a hearing has been held pursuant to paragraph (e) of this section, any evidence submitted pursuant to paragraph (f) (3) of this section and the hearing transcript described in paragraph (f) (5) of this section.

(2) Withholding of confidential information. No material described in paragraph (c)(1) of this section shall be included in the public file if it is determined to be confidential by the Corporation under the provisions of 5 U.S.C. 552. In making such determination, the Corporation will generally consider the following information as confidential:

(i) Personal information, the release of which would constitute a clearly unwarranted invasion of privacy.

(ii) Trade secrets and commercial or financial information obtained from a person and deemed by the Corporation to be privileged or confidential.

(iii) Information whose disclosure could seriously affect the financial condition of any financial institution.

(3) Inspection of public file. Any person may inspect the public file. The public file shall be available for inspection in the office of the Regional Director during regular business hours. No documents in the public file may be removed from the Regional Director's office by persons other than employees of the Corporation. Photocopies will be made available, on request, to all persons. The charge for such copies shall be made in accordance with a written schedule approved by the Board of Directors and maintained by the Regional Director.

(d) Proceedings-(1) Requests for hearing or other proceeding. Once the Corporation's field examiner has completed his investigation of an application

12 Where no field investigation has been conducted, the public file will include comparable information from the Regional Office report.

subject to the provisions of this section, anyone who, within the 15-day period prescribed in paragraph (b) (2) of this section, filed a written notice of his intent to protest the granting of the application, shall be entitled to file a formal protest and request an opportunity to be heard so long as he does so within 15 days after receipt of the notice set forth in paragraph (d) (2) of this section.13 He may also request that a hearing be held on the application pursuant to paragraph (e) of this section.

(2) Notice. Upon completion of the investigation by the field examiner or the Regional Office, the Regional Director shall give notice to all persons who filed a written notice of intent to protest the granting of the application within the 15-day period prescribed in paragraph (b) (2) of this section. This notice will be sent by registered or certified mail and shall take substantially the following form:

You are advised that the Federal Deposit Insurance Corporation's field examiner (or Regional Office) has completed the investigation of the application filed by (name of applicant) on (date accepted for filing) in connection with (subject matter of application). Portions of the report of investigation (or Regional Office report) have been made a part of the public file on this application. The public file is available for inspection in the Corporation's Regional Office (address) during the hours of a.m. to -p.m. Photocopies of information in the public file will be made available on request. A schedule of the charges for such copies can be obtained from the Regional Office.

You have 15 days from the date of receipt of this notice within which to file a formal protest to the granting of the subject application and to request an opportunity to be heard. You may also ask that a hearing be held on the application pursuant to § 303. 14(e) of the Corporation's rules and regulations. Should you desire to present your views orally before a representative of the Corporation designated for that purpose, or at a hearing held pursuant to § 303.14(e), you must accompany your request with a brief statement of your interest in the application and the matters which you wish to discuss.

If the Corporation determines that a hearing or other form of oral presentation should be allowed, you will be advised of its date, time, and location.

A copy of this notice has been sent to the applicant.

13 Where no field investigation has been conducted, the notice in paragraph (d) (2) of this section will be given up on completion of the Regional Office report.

Where notice has been sent pursuant to this paragraph, the Regional Director shall send a copy to the applicant.

(3) Form of proceeding. The Corporation may, at its discretion, decide to hold a hearing on the application in accordance with paragraph (e) of this section; it may decide to hold an informal proceeding in accordance with paragraph (d) (4) of this section; or it may decide not to hold a hearing or an informal proceeding in which case, where there has been a request for an opportunity to be heard pursuant to paragraph (d) (2) of this section, it will so advise the applicant and all persons who requested an opportunity to be heard. A decision as to the form of proceeding to be held will be made not more than 30 days after notice has been given pursuant to paragraph (d) (2) of this section.

(4) Informal proceedings. If the Corporation decides to hold an informal proceeding, the Regional Director shall, not less than 10 days prior thereto, notify the applicant and each person who filed a formal protest in accordance with paragraph (d) (2) of this section, of the date, time, and place of the proceeding. The Regional Director may, if he deems it advisable, notify other persons who have expressed an interest in the application and invite them to attend. The proceeding may assume any form, including a meeting with Corporation representatives at which the participants will be asked to present their views orally.

The Regional Director shall also have the discretion to hold separate meetings with each of the participants where he deems it desirable.

(e) Hearings. Hearings of the kind provided for in this paragraph will not generally be afforded the participants if they have had the opportunity to participate in prior hearings before the appropriate State authority which covered essentially the same issues or if the Regional Director determines that less formal proceedings will be adequate.

(1) Notice of hearing.—(i) Contents. If the Corporation determines that a hearing on the application is warranted, the Regional Director shall, not less than 10 days prior thereto, give notice of the scheduling of the hearing, and shall set forth in the notice the subject matter of the application, the significant issues to be presented, and the date, time, and place at which the hearing shall be held.

(ii) To whom sent. The above notice shall be sent by registered or certified mail to the applicant and to each person who filed a formal protest in accordance with paragraph (d) (2) of this section. The Regional Director may also notify other persons who have expressed an interest in the application and invite them to participate in the hearing.

(2) Attendance at hearing. Each interested person who wishes to attend the hearing shall notify the Regional Director accordingly within 5 days after the date upon which he receives the above notice. Unless he has already done so, he shall submit a brief written summary of the matters which he wishes to cover at the hearing together with the number and names of witnesses he wishes to present. The applicant and other interested persons attending the hearing may be represented by counsel.

(3) Presiding officer. The presiding officer at the hearing shall be the Regional Director, his designee, or such other person as may be named by the Board of Directors or the Director of the Division of Bank Supervision. The presiding officer shall have the authority to appoint a panel to assist him.

(f) Hearing rules—(1) Order of presentation. The following schedule is intended to serve as a general guide to the conduct of the hearing. It is not fixed and may be varied at the discretion of the presiding officer. The presiding officer shall determine the order of opening statements and presentations to be followed by all participants other than the applicant who in each instance shall have the opportunity to speak first.

(i) Opening statements. The applicant and each other participant may make opening statements which should concisely state what the participant intends to show.

(ii) Applicant's presentation. Following the opening statements, the applicant shall present its data and materials, oral or documentary.

(iii) Protestant's presentation. Following the applicant's presentation, each person protesting the application shall present his data and materials, oral or documentary. The protestants may agree, with the approval of the presiding officer, to have one of their number make their presentation.

(iv) Other interested persons. Following the evidence of the applicant and the protestants, the presiding officer will recognize other interested persons who may

present their views with respect to the application under consideration.

(v) Summary statement. After all the above presentations have been concluded, the applicant may make a short and concise rebuttal.

(2) Witnesses. Each participant is responsible for providing his own witnesses, including the payment of all expenses associated with their appearance at the hearing. All witnesses will be present on their own volition, but any person appearing as a witness may be subject to questioning by any participant, by the presiding officer, or by any member of the panel. The refusal of a witness to answer questions may be considered by the Corporation in determining the weight to be accorded the testimony of that witness. Witnesses shall not be sworn.

(3) Evidence. The presiding officer shall have the authority to exclude data or materials which he deems to be improper, irrelevant, or repetitive. Formal rules of evidence shall not be applicable to these hearings. Documentary material submitted as evidence must be of a size consistent with ease of handling, transportation, and filing. Three copies of all such documentary material shall be furnished to the Regional Director, and any participant who specifically requests the same shall be furnished a copy at his own expense. While large exhibits may be used during the hearing, copies of such exhibits must be provided by the person in reduced size for submission as evidence.

(4) Procedural questions. The presiding officer, or any designated member of the panel, shall determine all procedural questions not governed by this section. The presiding officer shall have the authority to limit the number of witnesses to be used by any person and to impose reasonable time limitations.

(5) Transcript. A transcript of each hearing will be arranged for by the Corporation. The person or persons who requested the hearing will be expected to pay all the expenses of such service, including the furnishing of one copy of the transcript to the Regional Director: Provided, however, That the Corporation may, for good cause, waive this requirement in individual cases. Where a hearing is held at the Corporation's initiative, the Corporation shall bear the expenses of such service. Copies of the transcript will be furnished to any in

terested person requesting the same at that person's expense.

(6) The hearing record—(i) Contents. The public file described in paragraph (c) of this section shall automatically be deemed a part of the hearing record.

(ii) Closing the hearing record—additional statements. Any person who participates in the hearing may request that the hearing record remain open for 10 days following receipt of the transcript by the Regional Director during which time the person may submit corrected copies of the transcript, or additional written statements or materials which he agreed to furnish at the hearing, to the Regional Director. Such person shall simultaneously mail or have delivered copies of the corrected transcript or additional statements or materials to all other persons who participated in the hearing.

(g) Disposition and notice thereof. (1) The final disposition of any application or other matter under this section need not be determined exclusively by, or be limited to, the information contained in the public file established by paragraph (c) of this section.

(2) The applicant, and any other person who so requests in writing, shall be notified by the Board of Directors of the final disposition of the application or other matter. The Board of Directors shall also provide a statement of the reasons for the final disposition made.1

(h) Closing the public file. The public file described in paragraph (c) of this section shall be closed 30 days after final disposition of the application or other matter.

(i) Notice to applicant in the case of a tentative denial. Generally, in the case of an application subject to the provisions of this section, where the Board of Directors, based upon the information available at that time, plans to deny the application and no hearing has been held thereon pursuant to paragraph (e) of this section, the Director of the Division of Bank Supervision or his designee will send the applicant a written statement by registered or certified mail which shall

14 Where final authority to dispose of an application or other matter has been delegated to the Director of the Division of Bank Supervision or the Regional Directors pursuant to § 303.11, the Director of the Division of Bank Supervision or the appropriate Regional Director will provide the notice and statement described in this paragraph (g) (2).

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