Elimination of Advance Notice Requirement for Some Institutions
The Economic Growth and Regulatory Paperwork Reduction Act of 1996
amended Section 32 of the Federal Deposit Insurance Act, which
requires advance notification to regulators when appointing Directors
and officers in certain institutions.
The amendment eliminates the advance notice requirement for
institutions that have been in existence less than two years, and
those that have undergone a change of control within the past two
years. Undercapitalized institutions and institutions in "troubled
condition" (as defined in Part 303.14 of the FDIC's Rules and
Regulations) must continue to provide at least 30 days written notice
to their primary federal regulator of any pending appointments to the
institution's board of Directors or senior executive staff. In
addition, the amendment grants the federal agencies the authority to
require prior notification and approval in situations where the
agencies believe that such notification is appropriate.
This statutory provision took effect on September 30, 1996. Although
Part 303.14 of the FDIC's Rules and Regulations has not yet been
amended to incorporate this statutory change, institutions that are
no longer covered by Section 32 may stop providing the notifications.
Please share this information with the appropriate personnel in your
institution. For further information, please contact your Division of
Supervision Regional Office.
Nicholas J. Ketcha Jr.
Distribution: FDIC-Supervised Banks (Commercial and Savings)
Note: Paper copies of FDIC financial institution letters may be
obtained through the FDIC's Public Information Center, 801 17th
Street, N.W., Room 100, Washington, D.C. 20434 ((703) 562-2200 or
Congress created the Federal Deposit Insurance Corporation in 1933
to maintain public confidence in the nation's banking system. The
FDIC insures deposits at the nation's 12,000 banks and savings
associations and it promotes the safety and soundness of these
institutions by identifying, monitoring and addressing risks to
which they are exposed.
FDIC Press Releases, Financial Institution Letters, the Quarterly
Banking Profile and other important information is available on the
Federal Deposit Insurance Corporation World Wide Web home page at
Paper copies of press releases and other documents may be obtained
through the FDIC's Public Information Center, 801 17th Street, NW,
Room 100, Washington, DC 20429 ((703) 562-2200).