FDIC Law, Regulations, Related Acts
2000 - Rules and Regulations
Subpart DRules and Procedures Applicable to Proceedings
Disapproval of Acquisition of Control
§ 308.110 Scope.
Except as specifically indicated in this subpart, the rules and procedures in this subpart, subpart B of the Local Rules, and the Uniform Rules shall apply to proceedings in connection with the disapproval by the Board of Directors or its designee of a proposed acquisition of control of an insured nonmember bank.
§ 308.111 Grounds for disapproval.
The following are grounds for disapproval of a proposed acquisition of control of an insured nonmember bank:
(a) The proposed acquisition of control would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the banking business in any part of the United States;
(b) The effect of the proposed acquisition of control in any section of the United States may be to substantially lessen competition or to tend to create a monopoly or would in any other manner be in restraint of trade, and the anticompetitive effects of the proposed acquisition of control are not clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served;
(c) Either the financial condition of any acquiring person or the future prospects of the institution might jeopardize the financial stability of the bank or prejudice the interest of the depositors of the bank.
(d) The competence, experience, or integrity of any acquiring person or of any of the proposed management personnel indicates that it would not be in the interest of the depositors of the bank, or in the interest of the public to permit, such person to control the bank;
(e) Any acquiring person neglects, fails, or refuses to furnish to the FDIC all the information required by the FDIC; or
(f) The FDIC determines that the proposed acquisition would result in an adverse effect on the Deposit Insurance Fund.
[Codified to 12 C.F.R. § 308.111]
§ 308.112 Notice of disapproval.
(a) General rule. (1) Within three days of the decision by the Board of Directors or its designee to disapprove a proposed acquisition of control of an insured nonmember bank, a written notice of disapproval shall be mailed by first class mail to, or otherwise served upon, the party seeking acquire control.
(2) The notice of disapproval shall:
(i) Contain a statement of the basis for the disapproval; and
(ii) Indicate that a hearing may be requested by filing a written request with the Executive Secretary within ten days after service of the notice of disapproval; and if a hearing is requested, that an answer to the notice of disapproval, as required by § 308.113, must be filed within 20 days after service of the notice of disapproval.
(b) Waiver of hearing. Failure to request a hearing pursuant to this section shall constitute a waiver of the opportunity for a hearing and the notice of disapproval shall constitute a final and unappealable order.
(c) Section 308.18(b) of the Uniform Rules shall not apply to the content of the Notice of Disapproval.
§ 308.113 Answer to notice of disapproval.
(a) Contents. (1) An answer to the notice of disapproval of a proposed acquisition of control shall be filed within 20 days after service of the notice of disapproval and shall specifically deny those portions of the notice of disapproval which are disputed. Those portions of the notice of disapproval which are not specifically denied are deemed admitted by the applicant.
(2) Any hearing under this subpart shall be limited to those parts of the notice of disapproval that are specifically denied.
(b) Failure to answer. Failure of a respondent to file an answer required by this section within the time provided constitutes a waiver of his or her right to appear and contest the allegations in the notice of disapproval. If no timely answer is filed, Enforcement Counsel may file a motion for entry of an order of default. Upon a finding that no good cause has been shown for the failure to file a timely answer, the administrative law judge shall file a recommended decision containing the findings and relief sought in the notice. A final order issued by the Board of Directors based upon a respondent's failure to answer is deemed to be an order issued upon consent.
§ 308.114 Burden of proof.
The ultimate burden of proof shall be upon the person proposing to acquire a depository institution. The burden of going forward with a prima facie case shall be upon the FDIC.
[Codified to 12 C.F.R. § 308.114]