Branch Closing (FDI ACT) Flashcards
What is a branch?
a branch is considered to be a traditional brick-and-mortar branch, or any similar banking
facility other than a main office, at which deposits are received or checks paid or money lent.
Section 42 of the FDI act does not apply to what? (3)
Section 42 does not apply to the following:
• An ATM, a remote service facility, a loan production
office, or a temporary branch;
• The relocation of a branch or consolidation of one or more branches into another branch, if the relocation or
consolidation:
− Occurs within the immediate neighborhood; and
− Does not substantially affect the nature of the business or customers served; or
• A branch that is closed in connection with an emergency acquisition.
What are the two main objectives when reviewing a bank for this? (2)
The objectives are to determine whether the institution is in compliance with the statutory requirements for branch
closings, including those relating to the following:
• Providing prior notification of any branch closing to its
appropriate Federal banking agency and customers of the
branch.
• Establishing internal policies for branch closings.
When must a bank provide notice of a branch closing to the FDIC?
At least 90 days prior to the proposed closing of any branch.
What must be included in the branch closing notice sent to the FDIC?
The notice must include:
− A detailed statement of the reasons, and
− Statistical or other information in support of such reasons
When must a bank provide notice of a branch closing to its customers?
At least 90 days prior to the proposed closing of the branch.
How must a bank notify customers of a branch closing?
The institution must:
• Post a notice in a conspicuous manner on the premises of the proposed branch for a period of not less than 30 days ending on the date proposed for that closing, and
• Include a notice in:
− At least one regular account statement mailed to
customers of the branch proposed to be closed, or
− A separate mailing.
In the case of an interstate bank which proposes to
close any branch in a low- or moderate-income area, the
notice required shall also contain the mailing address of the FDIC and a statement that comments on the proposed closing may be mailed to the FDIC. (Section 42(c))
