[Code of Federal Regulations]
[Title 12, Volume 2]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR211.25]

[Page 377-378]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 211--INTERNATIONAL BANKING OPERATIONS (REGULATION K)--Table of Contents
 
                Subpart B--Foreign Banking Organizations
 
Sec. 211.25  Termination of offices of foreign banks.

    (a) Grounds for termination--(1) General. Under sections 7(e) and 
10(b) of the IBA (12 U.S.C. 3105(d), 3107(b)), the Board may order a 
foreign bank to terminate the activities of its representative office, 
state branch, state agency, or commercial lending company subsidiary if 
the Board finds that:
    (i) The foreign bank is not subject to comprehensive consolidated 
supervision in accordance with Sec. 211.24(c)(1), and the home country 
supervisor is not making demonstrable progress in establishing 
arrangements for the consolidated supervision of the foreign bank; or
    (ii) Both of the following criteria are met:
    (A) There is reasonable cause to believe that the foreign bank, or 
any of its affiliates, has committed a violation of law or engaged in an 
unsafe or unsound banking practice in the United States; and
    (B) As a result of such violation or practice, the continued 
operation of the foreign bank's representative office, state branch, 
state agency, or commercial lending company subsidiary would not be 
consistent with the public interest, or with the purposes of the IBA, 
the BHC Act, or the FDIA.
    (2) Additional ground. The Board also may enforce any condition 
imposed in connection with an order issued under Sec. 211.24.
    (b) Factor. In making its findings under this section, the Board may 
take into account the needs of the community, the history of operation 
of the

[[Page 378]]

foreign bank, and its relative size in its home country, provided that 
the size of the foreign bank shall not be the sole determining factor in 
a decision to terminate an office.
    (c) Consultation with relevant state supervisor. Except in the case 
of termination pursuant to the expedited procedure in paragraph (d)(3) 
of this section, the Board shall request and consider the views of the 
relevant state supervisor before issuing an order terminating the 
activities of a state branch, state agency, representative office, or 
commercial lending company subsidiary under this section.
    (d) Termination procedures--(1) Notice and hearing. Except as 
otherwise provided in paragraph (d)(3) of this section, an order issued 
under paragraph (a)(1) of this section shall be issued only after notice 
to the relevant state supervisor and the foreign bank and after an 
opportunity for a hearing.
    (2) Procedures for hearing. Hearings under this section shall be 
conducted pursuant to the Board's Rules of Practice for Hearings (12 CFR 
part 263).
    (3) Expedited procedure. The Board may act without providing an 
opportunity for a hearing, if it determines that expeditious action is 
necessary in order to protect the public interest. When the Board finds 
that it is necessary to act without providing an opportunity for a 
hearing, the Board, solely in its discretion, may:
    (i) Provide the foreign bank that is the subject of the termination 
order with notice of the intended termination order;
    (ii) Grant the foreign bank an opportunity to present a written 
submission opposing issuance of the order; or
    (iii) Take any other action designed to provide the foreign bank 
with notice and an opportunity to present its views concerning the 
order.
    (e) Termination of federal branch or federal agency. The Board may 
transmit to the Comptroller a recommendation that the license of a 
federal branch or federal agency be terminated if the Board has 
reasonable cause to believe that the foreign bank or any affiliate of 
the foreign bank has engaged in conduct for which the activities of a 
state branch or state agency may be terminated pursuant to this section.
    (f) Voluntary termination. A foreign bank shall notify the Board at 
least 30 days prior to terminating the activities of any office. Notice 
pursuant to this paragraph (f) is in addition to, and does not satisfy, 
any other federal or state requirements relating to the termination of 
an office or the requirement for prior notice of the closing of a 
branch, pursuant to section 39 of the FDIA (12 U.S.C. 1831p).