FDIC: Proposed Restrictions on Transactions with Affiliates – Part 324 (to Parallel the FRB's Regulation W)

ABA Contact: Paul Smith, (202) 663-5331
Published: 69 Federal Register 12571; March 17, 2004
Comments Due: May 3, 2004
Disposition: Filed

The Federal Reserve Board issued its Regulation W, implementing Sections 23A & 23B late in 2002. Sections 23A & B restrict a member bank's transactions with affiliates, and they apply also to state nonmember banks under the FDI Act. The FDIC now proposes to issue their own regulation (new Part 324) paralleling the FRB's Regulation W, but the FDIC proposes some important differences. The FDIC proposes to make itself the exemptive agency for state nonmember banks for requests for exemption under Sections 23A & B, partly because state nonmember banks may conduct some activities that member banks may not, under Section 24 of the FDI Act. In fact, the FDIC proposes adding an additional exemption to the provisions of Regulation W as a grandfather for existing Section 24 subsidiaries. The FRB's general counsel has already written to the FDIC to express his belief that the FDIC lacks the authority to make additional exemptions.

ABA filed comments supporting the FDIC's adoption of the proposed regulation, because the FDIC's approach to implementing the law was more supportive of the dual banking system by making adjustments for differences between state and national banks.

2004 Regulations Chart
Federal Register
Comment Letter