Riegle-Neal Interstate & Branching Efficiency Act of 94 Flashcards
If the loan-to-deposit ratio is below __%, the regulatory agency may refuse to permit the bank to open a new branch in the host state unless the bank provides reasonable assurances, to the satisfaction of the agency, that the bank will reasonably help to meet the credit needs of the community that the new branch will serve.
50%
Which of the following banks CANNOT select Montana as its home state for deposit production purposes?
a. ABC National Bank with its headquarters in Missoula, Montana
b. XYZ State Bank, with a Montana state charter
c. ACME National Bank with its headquarters in Minneapolis, MN, but with most of its branches and the majority of its loans in Montana
d. Friendly Bank, a U.S. branch of a foreign bank with two U.S. locations, one in Montana and one in Wyoming
c. ACME National Bank with its headquarters in Minneapolis, MN, but with most of its branches and the majority of its loans in Montana
ABC is a national bank headquartered in Montana; XYZ is a state bank chartered in Montana. Both banks must use Montana as their home state. Friendly can choose to use Montana because it is a branch of a foreign bank with more than one location. ACME must choose the state in which its headquarters are located.
A banking agency is conducting a credit needs determination. Which of the following is NOT a criterion used in such a determination?
a. The bank’s CRA rating
b. Economic conditions, including loan demand in the bank’s communities
c. Whether the bank was once part of a failed institution
d. The bank’s profitability ratios
d. The bank’s profitability ratios
The regulatory agencies will consider several things when making a credit needs determination, including the first three factors listed in the alternatives. The agencies will also consider the bank’s line of business concentrations. However, the bank’s profitability will not play a role in the determination.
Williams National Bank has its home office in New York State; however, it has branches in Nebraska. The federal banking agencies most recent host state loan-to-deposit publication lists the loan-to-deposit ratio for Nebraska as 78 percent. For Williams Bank to pass the loan-to-deposit screen of the Reigle-Neal Act, what must its loan-to-deposit ratio be for Nebraska?
a. At least 78 percent
b. At least 50 percent
c. At least 39 percent
d. At least 25 percent
c. At least 39 percent
The bank’s statewide loan-to-deposit ratio must be at least 50 percent of the host state’s loan-to-deposit ratio. The federal agencies published the host state (Nebraska’s) loan-to-deposit ratio as 78 percent, so the bank’s statewide ratio must be at least 50 percent of that amount—or 39 percent.
One year after acquisition, the regulator will determine whether the bank’s statewide loan-to-deposit ratio is less than __% of the relevant host’s state loan-to-deposit ratio.
50%
What is the nationwide deposit cap for any one bank in the US?
10%
