Agents and by officers and employees of the Board in connection with branch office applications shall be deemed to be privileged and confidential and subject to the provisions of § 505.6 of this chapter.

(b) Eligibility. (1) Except as provided in paragraph (b) (2) of this section, a Federal association shall be eligible to have an application for permission to establish a branch office (including an application for a limited facility branch office) considered and processed only if at the date on which such application is filed with the Board:

(i) The association does not have on file with the Board any other such application, excluding any application as to which more than 4 months have elapsed since the date of publication of notice thereof; except that the limitations of this subdivision (i) shall not prohibit the consideration and processing at the same time of (a) both an application in which the applicant proposes, under the provisions of paragraph (j) (1) of this section, that the office applied for be a limited facility branch office and an application in which it does not so propose or (b) more than one branch office or more than one limited facility branch office application of the same association to the extent that the appropriate State authority of the State in which the applicant's home office is located considers and processes at the same time (1) more than one branch office application or more than one limited facility branch office application of the same savings and loan association, savings bank or similar institution or commercial bank of such State, (2) more than one application of the same savings and loan or bank holding company to acquire de novo charters of savings and loan associations or similar institutions or commercial banks, respectively, which will have their home offices in such State, or (3) more than one application of savings and loan subsidiaries or bank subsidiaries controlled by the same savings and loan or bank holding company, respectively, to establish de novo branch offices or limited facilities branch offices in such State.

(ii) Two such applications, whereby such association proposes to serve any substantial part of the same savings service area (as determined by the Supervisory Agent) have not been disapproved by the Board during the 24 months preceding such date unless at least 12 months have elapsed since the

most recent disapproval. However, if two such applications by such association have been disapproved during the 24 months preceding such date, either of such disapproved applications will be considered and processed upon refiling if any other savings and loan association, savings bank, or similar institution files such an application whereby it proposes to serve any substantial part of the same savings service area (as determined by the Supervisory Agent) within 12 months since the most recent disapproval.

(iii) The association submits in support of its application evidence giving reasonable assurance, in the judgment of the Supervisory Agent, that the proposed branch office, if approved, will be opened within the following applicable time period after the date of approval by the Board:

(a) Twelve months, except as otherwise provided in (b) and (c) of this subdivision;

(b) Twenty-four months, if the proposed branch office is to be redesignated as the association's home office; or

(c) Thirty-six months, if the proposed branch office is to be located in a shopping center having not less than 400,000 square feet of shopping space.

(2) The Board may, with respect to particular applications or classes of applications, determine to consider and process such applications without regard to the eligibility requirement contained in subdivision (i) of subparagraph (1) of this paragraph.

(c) Application form; supporting information. An application for permission to establish a branch office shall be in form prescribed by the Board. Such application and prescribed "Outline of Information To Be Submitted in Support of an Application for Permission to Establish a Branch Office" may be obtained from the Supervisory Agent. Information shall be furnished in support of the application in accordance with such Outline designed to show: (1) There will be at the time the branch is opened a necessity for the proposed branch office in the community to be served by it; (2) there is a reasonable probability of usefulness and success of the proposed branch office; and (3) the proposed branch office can be established without undue injury to properly conducted existing local thrift and home-financing institutions. An application shall be deemed to be complete when the foregoing re

quirements of this paragraph (c) have been met.

(d) Filing of application. An application for permission to establish a branch office shall be filed with the Board by delivering four copies thereof, together with four copies of all supporting information, to the Supervisory Agent.

(e) Amendment of application; filing of additional information. After a complete application for permission to establish a branch office has been filed with the Board, and prior to the date of advice by the Supervisory Agent to the applicant to publish notice of the filing of the application pursuant to paragraph (g) of this section, the applicant may file additional information in support of the application and may amend the application; after the date of such advice, the applicant may not amend the application or file any additional supporting information unless requested to do so by the Supervisory Agent or otherwise by or on behalf of the Board.

(f) Supervisory objection. No application for permission to establish a branch office shall be approved if, in the opinion of the Board, the policies, condition, or operation of the applicant association afford a basis for supervisory objection to the application.

(g) Processing of application by Supervisory Agent; public notice; inspection. (1) Upon determination by the Supervisory Agent that an application for permission to establish a branch office is complete, that the association is eligible, and if it has been preliminarily determined that there is no basis for supervisory objection to approval of the application, the Supervisory Agent shall advise the applicant, in writing, to publish within 15 days from the date of such advice, in a newspaper printed in the English language and having general circulation in the community to be served by the proposed branch office, a notice of the filing of the application in the following form:

NOTICE OF FILING OF BRANCH OFFICE
APPLICATION

Notice is hereby given that, pursuant to the provisions of $545.14 of the rules and regulations for the Federal Savings and Loan System, the

Federal Savings and Loan

Association, has filed an

application with the Federal Home Loan Bank Board for permission to establish a

branch office at, or in the immediate vicinity of

(Street address) (City)

(State) The application has been delivered to the office of the Supervisory Agent of the said Board, located at the Federal Home Loan Bank of

(City) (Street address) (State)

Any person may file communications, including briefs, in favor or/in protest of said application at the aforesaid office of the Supervisory Agent within 10 days (or within 30 days if advice is filled within the first 10 days stating that more time is needed to furnish additional information) after the date of this publication. Four copies of any communication should be filed. The application and all communications in favor or in protest thereof are available for inspection by any person at the aforesaid office of the Supervisory Agent.

Federal Savings and Loan Association.

(2) Promptly after publication of the notice, the applicant shall transmit two copies thereof to the Supervisory Agent accompanied by two copies of a publisher's affidavit of publication.

(3) Within 10 days (or within 30 days if advice is filed within the first 10 days stating that more time is needed to furnish additional information) after the date of publication of said notice, any person may file, at the office of the Supervisory Agent designated in the notice, communications, including briefs, in favor or in protest of the application. Within 10 days after the date a communication (or additional information, if any) in protest of an application is timely filed in accordance with the provisions of the first sentence of this subparagraph, the Principal Supervisory Agent shall advise the applicant and the protestant, in writing, whether the protestant's communication is considered to be "substantial" in accordance with the provisions of subparagraph (4) of this paragraph. In the event any communication is filed in protest of the application, the applicant may file information relevant to such protest within 15 days after the last date for filing communications (or additional information, if any) pursuant to the first sentence of this subparagraph or waive the right to file such information. Information may be submitted in connection with an application only as provided in this section, unless additional information is requested by the Supervisory Agent or otherwise by or on behalf of the Board. Four copies shall be furnished of any communication or in

formation filed pursuant to this subparagraph.

(4)(i) For the purposes of subparagraph (3) of this paragraph and paragraphs (h) and (k) of this section, a communication in protest of an application shall be considered "substantial” only when such communication consists of, or is supported by, a memorandum, brief or affidavit, or any combination thereof, setting forth at least the following:

(a) A statement summarizing the reasons for the protest;

(b) A list of specific matters in the application to which the protestant objects, together with the reasons for each such objection;

(c) A statement of the facts supporting the protest, including relevant economic or financial data; and

(d) A statement of any adverse effects on the protestant which may result from approval of the application.

(ii) In the event of any controversy as to whether a particular communication in protest should be considered "substantial", the final determination shall be made by the Principal Supervisory Agent.

(5) The application, together with all communications in favor or in protest thereof, shall be available at the office of the Supervisory Agent during regular working hours for inspection by any person after the issuance to the applicant of advice to publish a notice. Prior thereto, the application and the fact that it has been filed shall be held as confidential except to the extent provided otherwise in a working understanding between the Board and a State agency which regulates State-chartered savings and loan associations.

(h) Oral argument.—(1) General provisions. In any case in which a communication in protest of an application has been filed within the time specified in subparagraph (3) of paragraph (g) of this section, oral argument on the merits of such application shall be heard upon the written request of the applicant or any person who has timely filed a substantial communication in protest of such application, if such request of the applicant is received by the Supervisory Agent within 10 days after the Principal Supervisory Agent has mailed or delivered to the applicant the last written advice specified in the second sentence of

subparagraph (3) of this paragraph or if such requests of a person who has timely filed a substantial communication in protest of such application is received by the Supervisory Agent within 10 days after the Principal Supervisory Agent has mailed or delivered to such person the written advice specified in the second sentence of subparagraph (3) of this paragraph. In any case in which no communication in protest of an application has been filed within the time specified in subparagraph (3) of paragraph (g) of this section, oral argument on the merits of such application shall be heard upon the written request of the applicant, if such request is received by the Supervisory Agent within 10 days after the expiration of the time specified in said subparagraph for filing communications in protest of such application. Such oral argument shall also be heard if the Supervisory Agent, after review of the application and other pertinent information, considers it desirable. When oral argument is to be held, the Supervisory Agent shall mail a notice, fixing the time and place thereof, to the applicant and to all persons who have filed a communication in favor or in protest of the application. Such oral argument shall be scheduled not less than 10 days after the mailing of such notice.

(1) Maintenance of branch office after conversion, consolidation, purchase of bulk assets, or merger. A Federal association into which an existing institution is converted shall not thereafter maintain any office of the predecessor institution as a branch office of such Federal association, and a Federal association shall not maintain any office of another institution which is acquired through consolidation, purchase of bulk assets, or merger, without written approval by the Board for permission to maintain such office.

(j) Limited facility branch office—(1) General. In connection with any application for permission to establish a branch office which the Board has determined does not satisfy in full the requirements of paragraph (c) of this section as to necessity and reasonable probability of usefulness and success, but such tests, in the opinion of the Board, are met to a degree which would support a limited operation of a branch office, the Board may approve the application as a limited facility branch office. Such an office, if approved by the Board, will be subject to

limitations imposed by the Board as to one or more of the following:

(i) Number and type (supervisory, clerical, teller) of personnel to be utilized;

(ii) Physical size and characteristics; (iii) Amount of capital investment by the applicant; and

(iv) Extent of activities.

In addition, an applicant for permission to establish a branch office under this section may propose that the office be a limited facility branch office in a case where the applicant believes that the tests in paragraph (c) of this section can be met only to a degree which would support a limited operation of a branch office, and the applicant may propose one or more of the limitations to be imposed by the Board. A limited facility branch office may be advertised to the public as a branch office.

(2) Removal or modification of limitations. The Supervisory Agent is authorized, on behalf of the Board, to remove or modify, in whole or in part, any limitations imposed on a limited facility branch office, upon application by the operating Federal association. If the Supervisory Agent determines that an application for removal or modification of limitations should not be approved, the Supervisory Agent shall forward such application to the Board for decision, together with his recommendation as to disapproval. If and when all limitations have been removed, the limited facility branch office will become a branch office to be operated by an association in the same manner, and subject to the same management discretion, as a branch office approved pursuant to this section.

(k) Appoval by Principal Supervisory Agent. The Principal Supervisory Agent is authorized to approve, on behalf of the Board, an application for permission to establish a branch office, including a limited facility branch office, in any case in which no substantial communication in protest of such application has been filed pursuant to, and within the time specified in, subparagraph (3) of paragraph (g) of this section. With respect to approval of a limited facility branch office by the Principal Supervisory Agent, any such approval shall be subject only to such limitations as have been proposed, or concurred in, by the applicant association. In all other cases, the decision on an application for per

mission to establish a branch office shall be made by the Board.

[35 F.R. 2511, Feb. 4, 1970, as amended at 36 FR 13680, July 23, 1971; 37 FR 12931, June 30, 1972; 37 FR 16534, Aug. 16, 1972; 38 FR 18461, July 11, 1973; 38 FR 28815, Oct. 17, 1973; 39 FR 789, Jan. 3, 1974; 39 FR 15111, May 1, 1974; 39 FR 34647, Sept. 27, 1974; 39 FR 43707, Dec. 18, 1974]

§ 545.14-1 Drive-in facility.

(a) A Federal association may, without prior approval of the Board, establish a single drive-in or pedestrian facility, in conjunction with the home office and each branch office of such association, which is not more than 500 feet from a public entrance of such office and closer to such entrance than to a public entrance of another institution insured by the Federal Savings and Loan Insurance Corporation. The functions which may be performed at any such facility shall be limited to the ordinary functions performed at a tellerwindow of the association.

(b) A drive-in or pedestrian facility that does not qualify under the preceding paragraph may only be established with the specific approval of the Board. Any application for such approval must contain a statement of the need for and a design of such facility and a map showing the location of the facility in relation to the office which it supplements and of all offices, located in the same vicinity, of any other institution or institutions insured by the Federal Savings and Loan Insurance Corporation.

[28 F.R. 10513, Oct. 1, 1963]

§ 545.14-2 Data Processing Service Office.

Subject to the provisions of § 545.10, a Federal association may establish or maintain, at a location separate and apart from any other office or offices maintained by the association, a service office the functions, facilities, and operations of which are limited to the providing of data processing services, primarily for such association; such service office shall be located within 100 miles of the home office of the association. A Federal association shall not provide data processing facilities or services to others as a business venture but may provide such facilities or services to others when incidental or secondary to the main objective of meeting the needs of the association. As used in this and succeeding sections, the term "data processing serv

ices" means the maintenance of bookkeeping, accounting, or other records primarily by mechanical or electronic methods.

[30 FR 11716, Sept. 14, 1965]

§ 545.14-3 Data Processing Service Center.

(a) General provisions. Subject to the provisions of this section, a Federal association may participate only with one or more institutions, each of which (1) is insured by the Federal Savings and Loan Insurance Corporation and (2) has legal power to do so, in the establishment or maintenance of a service center the functions, facilities, and operations of which are limited to the providing of data processing services, primarily for such participating institutions.

ог

(b) Participation arrangements. Participation in the establishment or maintenance of such a service center may be by means of a partnership or other noncoroprate arrangement between among the participating institutions or by arrangement for capital investment in a service corporation approved by the last sentence of paragraph (b) of $545.9-1, but a Federal association shall not be a participating institution if:

(1) Its investments, costs, and profit or loss in connection with such service center, as a percentage of the total investment, costs, and profit or loss in connection with such service center, is substantially greater than the facilities and services that are to be used by such Federal association, as a percentage of the total facilities and services provided by such service center; or

(2) Such service center is established or maintained to provide data processing facilities or services to others as a business venture but this shall not prevent the service center from providing such facilities or services to others when incidental or secondary to the main objective of meeting the needs of the participating institutions.

(c) Maintenance of records and examinations. Any arrangement under this section shall include a written agreement with the Board by each participating institution and the legal entity, if any, which establishes or maintains a service center under this section requiring the service center to:

(1) Establish and maintain such books, records, and accounting practices as will clearly and fully disclose its op

erations in relation to paragraph (b) of this section;

(2) Permit such examination and/or audit by the Board's examiners of the operations and affairs of such service center as the Board may from time to time deem necessary, and to pay the cost thereof as determined by the Board; and

(3) Make available to the Board's examiners upon request, for purposes of examination and/or audit, all books and records of such service center and any books and records of any participating institution which, at the time of such request, are physically in the possesion of the service center.

[30 F.R. 11716, Sept. 14, 1965] § 545.14-4 Mobile facility.

(a) General provisions. (1) All requests by a Federal association for advice or instructions with respect to any matter arising under this section shall be addressed to the Board's Supervisory Agent.

(2) As used in this section, the term "Supervisory Agent" means the President of the Federal Home Loan Bank of the district in which the applicant association is located or any other officer or employee of such bank designated by the Board as agent as provided by § 501.10 or § 501.11 of this chapter. All recommendations by Supervisory Agents and by officers and employees of the Board in connection with applications for permission to establish and operate mobile facilities shall be deemed to be privileged and confidential and subject to the provisions of § 505.6 of this chapter.

(3) A Federal association shall not establish a mobile facility without prior written approval by the Board. Decisions on all applications for permission to establish a mobile facility will be made such an application, the Board may require as a condition of approval that the mobile facility be opened within such by the Board. In the event of approval of period, not less than 6 months, as may be fixed by the Board.

(b) Eligibility. No application for permission to establish a mobile facility by a Federal association shall be considered or processed, except to determine the association's eligibility under the provisions of this paragraph (b), if, at the date on which such application is filed with the Board:

(1) The association has not been in operation for a period of at least 3 years;