cants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin. Such action shall extend to: employment, promotion, demotion, transfer, recruitment, recruitment advertising, layoff, termination, rates of pay, other compensation, training, selection for training, and other matters relating to employment.

(3) Each insured institution shall post in conspicuous places readily visible to employees and applicants for employment notices relating to Equal Opportunity in Employment as prescribed by regulation by the Office of Federal Contract Compliance of the Department of Labor (41 CFR 60-1.42).

(4) Each insured institution shall, in all solicitations or advertisements for employees placed by or on behalf of the institution, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin.

(5) Each insured institution shall send, to each labor union or representative of workers with which the institution has a collective bargaining contract or understanding, if any, a notice advising the labor union or workers' representative of the insured institution's commitments under this section and section 202 of Executive Order 11246.

(6) Each insured institution shall (i) comply with all provisions of such Order, and of applicable rules, regulations, and orders issued pursuant thereto by the Corporation, the Secretary of Labor (41 CFR Chapter 60), and the Secretary of the Treasury (41 CFR Subpart 10-12.8); (ii) furnish such information and reports as may be required by such rules, regulations, and orders; and (iii) permit access to its books, records, and accounts by the Corporation, the Secretary of Labor, and the Secretary of the Treasury for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

(c) Enforcement. In the event of an insured institution's noncompliance with the provisions of the Equal Employment Opportunity Clause contained in paragraph (b) of this section, such institution shall be subject to such sanctions and remedies as may be appropriate under the Executive Order or any other law, rule, regulation, or order. 138 FR 20318, July 31, 1973!

§ 563.37 Operation of service corporations; limited liability of insured institution for debt of service corporation.

(a) General. Each insured institution and service corporation thereof shall be operated in a manner which demonstrates to the public the separate corporate existence of the service corporation and the insured institution. Regulations of the Corporation which apply both to insured institutions and service corporations shall not be construed as requiring operation of an insured institution and its service corporations as a single entity.

(b) Service corporation debt. Every instrument evidencing borrowing by a service corporation shall indicate that its parent insured institution is not liable, or in the case of a service corporation owned by more than one insured institution, that none of its parent insured institutions is liable, except that no such statement is required if the loan is guaranteed by a parent insured institution and the total amount of such guaranteed loan, together with all other guaranteed loans, direct loans, and direct investment by the insured institution in its service corporations, does not exexceed the maximum investment permitted by law or regulation.

[38 FR 26112, Sept. 18, 1973]

§ 563.38 Salvage power of insured institution to assist service corporation.

(a) Salvage power and investment authority. No insured institution, in the exercise of its salvage power or otherwisewise, shall, without the prior approval of the Corporation, make any contribution, loan, or guarantee of a loan made by any other person to its service corporation, or invest in its service corporation or assume any of its liabilities, if such contribution, loan, investment, guarantee, or assumption of liability, together with all such guaranteed loans, direct loans, contributions and direct investments by the insured institution in its service corporations, would exceed the maximum investment permitted by law or regulation.

(b) Applications for approval. Each application by an insured institution to the Corporation for its approval to make any such contribution, loan, investment, guarantee, or assumption of liability shall establish, to the satisfaction of the

Corporation, in a written statement, that the action it proposes is for the protection of the insured institution's investment and is consistent with safe, sound, and economical home financing. The application shall describe and discuss alternative solutions to the service corporation's financial problem including solutions which do not involve increased investment by the insured institution, and contain such other information as the Corporation may require. In the case of a State-chartered insured institution, such application shall be accompanied by an opinion of counsel that the proposed action is within the authority of the insured institution. Every contribution, loan, investment, guarantee, or assumption of liability made pursuant to approval by the Corporation under this section shall comply with the terms and conditions of such approval. [38 FR 26112, Sept. 18, 1973]

§ 563.39

Employment contracts.

An insured institution shall not enter into an employment contract with any of its officers or other employees if such contract would constitute an unsafe or unsound practice. Section 545.25-1 of this chapter contains the requirements of the Board as to employment contracts by Federal savings and loan associations with their officers. The making of an employment contract by an insured institution other than a Federal association with any of its officers or employees will not be considered to be an unsafe or unsound practice merely for the reason that the contract varies from the requirements of § 545.25-1. However, the making of such an employment contract would be an unsafe or unsound practice if such contract could lead to material financial loss or damage to the insured institution or could materially interfere with the exercise by the members of its board of directors of their duty or discretion provided by law, charter, bylaw or regulation as to the employment or termination of employment of an officer or employee of the institution. This may occur, depending upon the circumstances of the case, where an employment contract provides for an excessive term or does not contain an appropriate termination for cause provision.

(Sec. 402, 48 Stat. 1260; 12 U.S.C. 1730) [39 FR 28611, Aug. 9, 1974]

§ 563a.1

Scope of part and definitions.

This part establishes minimum standards with which insured institutions shall comply with respect to the installation, maintenance, and operation of security devices and procedures to discourage robberies, burglaries, and larcenies and to assist in the identification and apprehension of persons who commit such acts; sets time limits within which insured institutions shall comply with the standards; and provides for the submis-sion of reports with respect to compliance. For the purposes of this part:

(a) The term "Chief Examiner" means the Chief Examiner of the Office of Examinations and Supervision of the Federal Home Loan Bank Board who is responsible for the conduct of such Office's examinations of insured institutions in the District of the Federal Home Loan Bank in which an insured institution is located.

(b) The term "business hours" means the time during which an office is open for the normal transaction of business with the public.

(c) The term "office" includes the principal office of an insured institution and any branch thereof.

(d) The term "branch" includes any branch business quarters, agency, additional office, mobile facility, or any branch place of business located in any State or territory of the United States or in the District of Columbia at which investments in insured accounts are received or payments on loans are received.

(e) The term "teller's station or window" means a location in an office at which the institution's customers routinely conduct transactions with the institution which involves the exchange of funds, including a walkup or drive-in teller's station or window.

§ 563a.2

Designation of security officer. On or before March 17, 1969 (or within 30 days after the effective date of insurance of accounts, whichever is later), the board of directors of each insured institution shall designate an officer or other employee of the institution who shall be charged, subject to supervision by the institution's board of directors, with responsibility for the installation, maintenance, and operation of security devices and for the development and administration of a security program which equal or exceed the standards prescribed by this part.

§ 563a.3 Security devices.

(a) Installation, maintenance, and operation of appropriate security devices. Before January 1, 1970 (or within 30 days after the effective date of insurance of accounts, whichever is later), the security officer of each insured institution, under such directions as shall be given him by the institution's board of directors, shall survey the need for security devices in each of the institution's offices and shall provide for the installation, maintenance, and operation, in each such office, of

(1) A lighting system for illuminating, during the hours of darkness, the area around the vault, if the vault is visible from outside the office;

(2) Tamper-resistant locks on exterior doors and exterior windows designed to be opened;

(3) An alarm system or other appropriate device for promptly notifying the nearest responsible law enforcement officers of an attempted or perpetrated robbery or burglary; and

(4) Such other devices as the security officer, after seeking the advice of law enforcement officers, shall determine to be appropriate for discouraging robberices, burglaries, and larcenies and for assisting in the identification and apprehension of persons who commit such acts.

(b) Considerations relevant to determining appropriateness. For the purpose of subparagraph (4) of paragraph (a) of this section, considerations relevant to

but are not limited to

(1) The incidence of crime against the particular office and/or against financial institutions in the area in which the office is or will be located;

(2) The amount of currency or other valuables exposed to robbery, burglary, or larceny;·

(3) The distance of the office from the nearest responsible law enforcement officers and the time required for such law enforcement officers ordinarily to arrive at the office;

(4) The cost of the security devices;

(5) Other security measures in effect at the office; and

(6) The physical characteristics of the office structure and its surroundings.

(c) Implementation. It is appropriate for offices of insured institutions in areas with a high incidence of crime to install many devices which would not be practicable because of costs for small offices in areas substantially free of crimes against financial institutions. Each institution shall consider the appropriateness of installing, maintaining, and operating security devices which are expected to give a general level of protection at least equivalent to the standards described in Appendix A of this part. In any case in which (on the basis of the factors listed in paragraph (b) of this section or similar ones, the use of other measures, or the decision that technological change allows the use of other measures judged to give equivalent protection) it is decided not to install, maintain, and operate devices at least equivalent to these standards, the institution shall preserve in its records a statement of the reasons for such decision and forward a copy of that statement to the Chief Examiner.

§ 563a.4 Security procedures.

(a) Development and administration. On or before July 15, 1969 (or within 30 days after the effective date of insurance of accounts, whichever is later), each insured institution shall develop and provide for the administration of a security program to protect each of its offices from robberies, burglaries, and larcenies and to assist in the identification and apprehension of persons who commit such acts. The security program shall be reduced to writing, approved by the institution's board of directors, and retained by the institution in such form as will readily permit determination of

its adequacy and effectiveness, and a copy shall be filed with the Chief Examiner.

(b) Contents of security programs. Such security programs shall

(1) Provide for establishing a schedule for the inspection, testing, and servicing of all security devices installed in each office; provide for designating the officer or other employee who shall be responsible for seeing that such devices are inspected, tested, serviced, and kept in good working order; and require such officer or other employee to keep a record of such inspections, testings, and servicings;

(2) Require that each office's currency be kept at a reasonable minimum and provide procedures for safely removing excess currency;

(3) Require that the currency at each teller's station or window be kept at a reasonable minimum and provide procedures for safely removing excess currency and negotiable securities to a locked safe, vault, or other protected place;

(4) Require that the currency at each teller's station or window include "bait" money, i.e., used Federal Reserve notes, the denominations, banks of issue, serial numbers, and series years of which are recorded, verified by a second officer or employee, and kept in a safe place;

(5) Require that all currency and negotiable securities be placed in a vault or safe at the earliest time practicable after business hours, that the vault or safe be locked at the earliest time practicable after business hours, and that the vault or safe be opened at the latest time practicable before business hours;

(6) Provide, where practicable, for designation of a person or persons to open each office and require him or them to inspect the premises, to ascertain that no unauthorized persons are present, and to signal other employees that the premises are safe before permitting them to enter;

(7) Provide for designation of a person or persons who will assure that all security devices are turned on and are operating during the periods in which such devices are intended to be used;

(8) Provide, where practicable, for designation of a person or persons to inspect, after the closing hour, all areas of each office where currency and negotiable securities are normally handled or stored in order to assure that such currency and negotiable securities have been put

away, that no unauthorized persons are present in such areas, and that the vault or safe and all doors and windows are securely locked; and

(9) Provide for training, and periodic retraining, of employees in their responsibilities under the security program including the proper use of security devices and proper employee conduct during and after a robbery, in accordance with the procedures listed in Appendix B of this part.

§ 563a.5 Filing of reports.

(a) Compliance reports. As of the last business day in June of 1970, and in connection with each periodic supervisory examination thereafter, each insured institution shall file with the Chief Examiner a statement certifying to its compliance with the requirements of this part. The statement shall be dated and signed by the president or other managing officer of the institution and may be in a form substantially as follows:

I hereby certify, to the best of my knowledge and belief, that this institution has developed and administers a security program that equals or exceeds the standards prescribed by § 563a.4 of the Rules and Regulations for Insurance of Accounts; that such security program has been reduced to writing, approved by this institution's board of directors, and retained by this institution in such form as will readily permit determination of its adequacy and effectiveness; and that this institution's security officer, after seeking the advice of law enforcement officers, has provided for the installation, maintenance, and operation of appropriate security devices, as prescribed by § 563a.3 of the Rules and Regulations for Insurance of Accounts, in each of this institution's offices.

(b) Reports on security devices. On or before April 17, 1969 (or within 30 days after the effective date of insurance of accounts, whichever is later), and upon such other occasions as the Corporation may specify, each insured institution shall file with the Chief Examiner a report on Form P-1 (in duplicate) for each of its offices that is subject to this part.

(c) External crime reports. Each time a robbery, burglary, or nonemployee larceny is perpetrated or attempted at an office operated by an insured institution, the institution shall, within a reasonable time, file a report in conformity with the requirements of Form P-2. State-chartered insured institutions shall file one copy of such report with the ap

propriate State supervisory authority. Three copies of such report shall be filled by each insured institution with the Chief Examiner.

(d) Special reports. Each insured institution shall file such other reports as the Corporation may require.

§ 563a.6 Corrective action.

Whenever the Corporation determines that the security devices or procedures used by an insured institution are defiicient in meeting the requirements of this part, or that the requirements of this part should be varied in the circumstances of a particular office, it may take or require the institution to take necessary corrective action. If the Corporation determines that such corrective action is appropriate or necessary, the institution will be so notified and will be furnished a statement of what the institution must do to comply with the requirements of this part.

§ 563a.7 Penalty provision.

Pursuant to section 5 of the Bank Protection Act of 1968, an insured institution that violates any provision of this part shall be subject to a civil penalty not to exceed $100 for each day of the violation.

APPENDIX A

MINIMUM STANDARDS FOR SECURITY DEVICES In order to assure realization of maximum performance capabilities, all security devices utilized by an insured institution should be regularly inspected, tested, and serviced by competent persons. Actuating devices for surveillance systems and robbery alarms should be operable with the least risk of detection by unauthorized persons that can be practicably achieved.

1. Surveillance systems.—(a) General. Surveillance systems should be:

(1) Equipped with one or more photographic, recording, monitoring, or like devices capable of reproducing images of persons in the institution's office with sufficient clarity to facilitate (through photographs capable of being enlarged to produce a oneinch vertical head-size of persons whose images have been reproduced) the identification and apprehension of robbers or other suspicious persons;

(2) Reasonably silent in operation; and (3) So designed and constructed that necessary services, repairs or inspections can readily be made.

Any camera used in such a system should be capable of taking at least one picture every 2 seconds and, if it uses film, should contain enough unexposed film at all times to be capable of operating for not less than 3

minutes, and the film should be at least 16mm.

(b) Installation and operation of surveillance systems providing surveillance of other than walk-up or drive-in teller's stations or windows and fully automated stations. Surveillance devices for other than walk-up or drive-in teller's stations or windows and fully automated stations should be:

(1) Located so as to reproduce identifiable images of persons either leaving the office or in a position to transact business at each such station or window; and

(2) Capable of actuation by initiating devices located at each teller's station or window.

(c) Installation and operation of surveillance systems providing surveillance of walkup or drive-in teller's stations or windows. Surveillance devices for walk-up or drive-in teller's stations or windows should be located in such a maner as to reproduce identifiable images of persons in a position to transact business at each such station or window and areas of such station or window that are vulnerable to robbery or larceny. Such devices should be capable of actuation by one or more initiating devices located within or in close proximity to such station or window. Such devices may be omitted in the case of a walk-up or drive-in teller's station or window in which the teller is effectively protected by a bullet-resistant barrier from persons outside the station or window. However, if the teller is vulnerable to larceny or robbery by members of the public who enter the office, the teller should have access to a device to actuate a surveillance system that covers the area of vulnerability or the exits to the office.

2. Robbery and burglary alarm systems(a) Robbery alarm systems. A robbery alarm system should be provided for each office which is vulnerable to robbery and at which the police ordinarily can arrive within 5 minutes after an alarm is actuated; all other such offices should be provided with appropriate devices for promptly notifying the police that a robbery has occurred or is in progress. Robbery alarm systems should be:

(1) Designated to transmit to the police, either directly or through an intermediary, a signal (not detectable by unauthorized persons) indicating that a crime against the office has occurred or is in progress;

(2) Capable of actuation by initiating devices located at each teller's station or window (except walk-up or drive-in teller's stations or windows in which the teller is effectively protected by a bullet-resistant barrier and effectively isolated from persons, other than fellow employees, inside an office of which such station or window may be a part);

(3) Safeguarded against accidental transmission of an alarm;

(4) Equipped with a visual and audible signal capable of indicating improper functioning of or tampering with the system; and