vision of a District Chief National Bank Examiner, who has attached to his office a staff of examiners, assistant examiners and clerks, for the purpose of examining the banks in his district. The offices of the District Chief National Bank Examiners are as follows:

District and Address

First, Federal Reserve Bank Bldg., Boston 10, Massachusetts.

Second, 525 Federal Reserve Bank Bldg., New York 5, New York.

Third, 925 Chestnut Street, Philadelphia 7, Pennsylvania.

Fourth, 715 Federal Reserve Bank Bldg., Cleveland 1, Ohio.

Fifth, 1109 State-Planters Bldg., Richmond 19, Virginia.

Sixth, 303 New Post Office Bldg., Atlanta 3, Georgia.

Seventh, 164 West Jackson Blvd., Rm. 725, Chicago 4, Illinois.

Eighth, 518 U. S. Court House & Custom House, St. Louis 1, Missouri.

Ninth, 223 Federal Office Bldg., Minneapolis 1, Minnesota.

Tenth, 800 Federal Reserve Bank Bldg., Kansas City 6, Missouri.

Eleventh, 401 Dallas National Bank Bldg., Dallas 1, Texas.

Twelfth, 1 Montgomery Street, Rm. 921, San Francisco 4, California.

§ 4.2 Delegations of final authority. There are no delegations of final authority in this Bureau. When there is a vacancy in the office of the Comptroller, or the Comptroller is absent or unable to perform his duties, a Deputy Comptroller functions as Acting Comptroller. There is a geographic division of responsibility between the three Deputies for correspondence and decisions on matters arising in the particular districts under their supervision, but the Comptroller retains final authority on all matters.

§4.3 Public information. Information may be secured from and submittals or requests presented in writing to the office of the Comptroller of the Currency, Washington, D. C., or to the offices of the District Chief National Bank Examiners in the respective districts in which the inquires arise. (See § 4.1 (b)). (a) Opinions and orders. All final opinions and orders in the adjudication of cases before this Bureau (except those required for good cause to be held confidential and not cited as precedents) and all rules, will be published or made available to public inspection at the office of the Comptroller of the Currency, Treasury Building, Washington, D. C.

If in the opinion of the Comptroller the revelation of the contents of a particular final opinion or order might adversely affect the financial institutions involved or would encroach upon the right to privacy of such institutions, their customers or other individuals or concerns dealing with them or this Bureau, or would be inimical to the public interest, they will be classified as confidential.

(b) Public records. Matters of official record of this Bureau, except information held confidential for good cause found, will be made available to persons properly and directly concerned, at the offices of the Comptroller of the Currency, Treasury Building, Washington, D. C. Reports of examination of financial institutions under the jurisdiction of the Comptroller and other information obtained by him in the exercise of his visitatorial powers over such institutions are classified as confidential, because such information is obtained by or submitted to him in confidence, its revelation might adversely affect such institutions, the affairs of their customers, or others dealing with them or with this Bureau and would be inimical to the public interest. As to communications with such financial institutions and others concerning their affairs, and all other matters of official record in this Bureau, they will be classified as confidential to the extent that the revelation of the contents thereof might, in the opinion of the Comptroller, be a breach of confidence, adversely affect such financial institutions, their customers, or others dealing with them or this Bureau, would be inimical to the public interest.

or

Sec.

5.13 Supervision of liquidation of insolvent financial institutions.

5.14 Conservatorships. 5.15

Remedial actions.

5.16 Issue and redemption of Federal Reserve Notes.

AUTHORITY: §§ 5.1 to 5.16, inclusive, issued under R.S. 324, as amended, 12 U.S.C. 1 et seq.

SOURCE: 5.1 to 5.16, inclusive, contained in Regulations, Acting Secretary of the Treasury, effective Sept. 11, 1946, 11 F.R. 177A-14.

§ 5.1 Chartering national banks. (a) Copies of Form 1955, entitled "Application to Organize a National Bank”, are furnished upon request. In substance, this form is a letter addressed to the Comptroller of the Currency by a minimum of five prospective shareholders, being natural persons and of lawful age, who intend with others to organize a national bank. The application states the proposed name of the bank, its location, and the intended capital, surplus and undivided profits, and furnishes certain other information regarding the banking connections of the applicants.

(b) Upon receipt of an application properly executed, the applicants are informed that their application is being considered, and the appropriate District Chief National Bank Examiner is instructed to make an investigation. Among other matters to be considered are the adequacy of the proposed capital structure of the new bank, its future earnings prospects, the general character of its management, the convenience and needs of the community to be served by the bank, and whether or not the proposed corporate powers would be consistent with the applicable statutory provisions. Generally, the Federal Deposit Insurance Corporation, and the Federal Reserve bank for the district in which the proposed bank would be 10cated, are consulted, and their recommendations obtained.

(c) Upon receipt of the report of investigation and other data, the Organization Division analyzes and briefs the information, and appends its recommendation to the brief, which (with its accompanying data) is routed through the Assistant Chief National Bank Examiner who handles the district in which the proposed bank would be located, the Chief National Bank Examiner, and the three Deputies, all of whom append their recommendations and com

ments. It is then submitted to the Comptroller of the Currency for final decision.

(d) If the decision is unfavorable the applicants are so informed. If the decision is favorable the applicants are furnished with: (1) The standard Articles of Association (Form 1904), which recite the title of the association, the place of doing business, the number of shareholders to be elected on the board of directors, the names of the first board of directors, the date for the regular annual meeting, the amount of stock of the association, the powers of the board, the perpetual succession of the association until dissolved by act of its shareholders, etc., and the method by which special meetings of shareholders shall be called; (2) the Organization Certificate (Form 1903), wherein the organizers certify that they have organized an association for carrying on the business of banking under the laws of the United States, the title of the proposed association, its location, the capital stock and the par value thereof and the name and financial worth and residence of each original shareholder of the association; (3) the oaths of directors (Form 1900), which certify the place of their residences, that the signatories are directors of the designated bank, that they each swear or affirm to administer the affairs of the association in conformity with law, and that each signatory owns in his own right and unhypothecated the number of shares of the association which directors are required to own as a condition of offices; (4) the form (Form 1902) on which appear the official signatures of the officers of the bank and the dates of their appointment; (5) the certificate (Form 1918) to be signed and sworn to by at least a majority of the directors and the president or cashier of the bank, stating that the authorized capital stock has been paid in, and listing names of all directors with their places of residence and the number of shares owned by each; (6) Standard By-Laws (Form 2054), which provide for the annual meeting of shareholders, the manner in which shares shall be voted, the officers and their duties, adoption of a seal, the means of conveyance of real estate, the increase in capital stock, the banking hours, directors' meetings, the establishment of a discount committee, the manner of transferring stock, and the manner of changing the by-laws, etc.; (7) an outline of the general procedure

to be followed in executing and submitting the papers mentioned in this paragraph. If the new bank at its inception contemplates purchasing the assets of an existing bank, one additional form (Form 2006) is required to be signed by the majority of the board of directors of the new bank, certifying that the assets purchased will not include real estate, stocks, or real-estate loans in conflict with statutory limitations.

(e) When the papers have been properly executed and received by this office and the Bureau has been advised by the appropriate Federal Reserve bank that the new bank has purchased Federal Reserve stock in compliance with statutory requirements, the Comptroller issues to the new bank what is commonly called a Charter (Form 1998). This is a formal declaration by the Comptroller that the bank has complied with the requirements of the statutes of the United States and is authorized to commence the business of banking as a national banking association. The charter is forwarded to the new bank together with an Affidavit of Publication of Charter (Form 1951), which must be signed by the publisher of the newspaper in which the advertisement of the charter has appeared for the requisite statutory period. Also the bank is requested to execute a formal notification to the Comptroller of the Currency that the bank commenced business on a specified date (Form 2008).

In

(f) Additional procedural steps are necessary where the new bank contemplates exercising fiduciary powers. such case it is necessary for the bank to obtain a permit from the Board of Governors of the Federal Reserve System and this office must be notified that such permit has been granted, as a condition precedent to the issuance of a charter.

(g) Upon issuance of a charter, the Federal Deposit Insurance Corporation is informed that the requirements of law have been complied with and that the designated bank has been authorized to commence business as of a specified date.

15.2 Supervision of financial institution. (a) By statute, each national bank must be examined not less than twice a year, except that the trust departments of banks having fiduciary powers need not be examined more than once a year. The examinations are made by national bank examiners operating

under a District Chief Examiner, of whom there are twelve, one for each Federal Reserve district. The report of examination is submitted to the District Chief Examiner, and by him to the Washington office, where it is analyzed in the Examination Division. Supervisory action is taken by the Comptroller or one of his Deputy Comptrollers on the basis of the information thus obtained.

(b) In the Fifth Federal Reserve District, the Comptroller's supervisory powers extend to District of Columbia credit unions, building associations organized under the District of Columbia Code, and building and loan associations and state banks located and doing business in the District of Columbia.

§ 5.3 Conversions of state banks into national banks. (a) A state bank desiring to convert into a national bank is requested to execute an application to convert a state bank into a national banking association (Form 1988). It is similar in substance to the application for organization of a new national bank but must be executed by the directors of the state bank. When this form, properly executed, is received, the District Chief Examiner is directed to make an examination of the applicant bank, taking into consideration the factors which would be considered on the application for the creation of a new national bank, and in addition the factor of the financial history and condition of the state bank. Generally, the appropriate Federal Reserve bank is consulted and, in addition, if the state bank is not a member of the Federal Reserve System, the Federal Deposit Insurance Corporation is consulted.

(b) When the report and other data are received, they are analyzed, briefed, and routed in the same manner as in the case of an application for a national bank charter.

(c) If the decision is unfavorable the state bank is so notified. If the decision is favorable the bank is furnished with: (1) A suggested resolution to be passed by the shareholders of the state bank authorizing the conversion (Form 1945, No. 2); (2) Standard Articles of Association for a national bank formed by the conversion of a state bank (Form 1945), which are substantially the same as the articles of association in the case of a new national bank; (3) the organization certificate for a converting bank (Form 1947), which is substantially the same as the organiza

tion certificate in the case of a new national bank; (4) the required oaths of directors (Form 1900), the same form as in the case of a new national bank; (5) the form (Form 1902) on which appear the official signatures of the officers of the bank and the dates of their appointment; (6) the certificate (Form 1919), which certifies that the converting bank has a paid-in and unimpaired capital of a certain specified amount; (7) Standard Bylaws (Form 2054) identical with those forwarded to new national banks; (8) an outline of the general procedure to be followed in executing and submitting the papers mentioned in this paragraph, and a letter reciting any conditions which must be complied with before authorization to begin business as a national bank. There are many variations to these conditions, dependent upon circumstances in each case; hence no standard form is possible.

(d) Upon receipt of the forms, properly executed, and approval thereof, the Comptroller issues to the applicant bank a Charter (Form 1998), which is substantially the same as in the case of a new bank and authorizes the bank to commence the business of banking as a national banking association on a specified date. This charter is forwarded to the bank, accompanied by an Affidavit of Publication of Charter (Form 1951) and a form letter to be returned to the Comptroller advising him that the bank did commence the business of banking as a national bank on the date specified.

(e) There may be additional procedural steps in certain cases of conversions where, for instance, the converted bank will have branches, in which case a formal approval of the operation of the specific branches is forwarded to the bank, or where there is an increase in capital or change of location coincidental with the conversion, necessitating specific approval of this office. If the state bank was not insured by the Federal Deposit Insurance Corporation, that Corporation is notified that the bank has been "authorized to commence the business of banking as a national bank and that consideration was given to the applicable statutory requirements.

(f) If the state bank was exercising fiduciary powers and contemplates continuing such activity as a national bank, it must obtain a permit so to do from the Board of Governors of the Federal Reserve System, and the Comptroller must

be notified that such permit has been issued, as one of the conditions for authorizing the bank to commence the business of banking as a national bank.

§ 5.4 Consolidation of national banks, and state and national banks. (a) Of necessity, consolidations are handled on a case-by-case basis. The Bureau assists the banks concerned in formulating a plan of consolidation and drafting a consolidation agreement. Where one of the consolidating banks is a state bank, it is examined by a national bank examiner. When the consolidation agreement has been agreed to by the board of directors of each bank, it is submitted to the Comptroller. The plan is analyzed and briefed by the Organization Division and routed in the same manner as an application for a charter.

(b) If the decision of the Comptroller is unfavorable, the banks are so notified. If the decision of the Comptroller is favorable, the consolidating banks are advised of any conditions precedent to final approval, as, for instance, the concurrence of the Federal Deposit Insurance Corporation if any of the consolidating banks are uninsured.

(c) When the consolidation agreement has been executed by the boards of directors of the consolidating banks, one executed copy thereof is submitted to the Comptroller. The banks are furnished with instructions as to the procedure to be followed in obtaining the consent of their shareholders, together with suggested forms of notice to shareholders. When the plan has been approved by the shareholders of the consolidating banks, certified copies of their resolutions are submitted to the Comptroller, together with, among other things, a copy of the form of proxy used by each bank, a copy of the notice of meeting given to the shareholders of each bank by registered mail, with advice of the date when same was mailed, and a copy of any other letter which may have been sent to the shareholders of each bank relating to the proposed consolidation. Proof of publication of notices of meetings of the shareholders is required. Also, each bank must certify the amount of its contribution to the capital structure of the consolidated bank.

(d) When the documents referred to in paragraphs (a), (b), and (c) of this section, properly executed, are submitted to the Comptroller along with proof of compliance with any conditions imposed

by him, he issues a certificate certifying that the named banks have been consolidated under the charter of one of said national banks and under the title specified. The certificate recites the amount of capital stock and the date when the consolidation is to be effective.

(e) There are additional procedural steps in some cases, as where the consolidated bank will operate branches formerly operated by one of the consolidating banks or will establish new branches, in which cases formal approval by the Comptroller is necessary. In addition, the rights of dissenting shareholders are protected in accordance with specific statutory procedure.

§ 5.5 Authorizing branches and seasonal agencies-(a) Branch banks. (1) Under the provisions of R.S. 5155, as amended; 12 U.S.C. 36, national banks may, subject to the approval of the Comptroller of the Currency, establish and operate branches and seasonal agencies. Upon receipt of an application from a national bank or any bank operating in the District of Columbia, for a branch or seasonal agency, the appropriate District Chief Examiner is instructed to make an investigation, taking into consideration the financial history and condition of the bank, the adequacy of its capital structure, its future earnings prospects, the general character of its management, the number of branches now in operation and their location, the proposed location of the new branch and the distance from the head office, the nearest banking facilities, the convenience and needs of the community to be served by the new branch, the nature of the potential clientele and possible business available, including an estimate of contemplated volume within a reasonable period of time and the prospects of successful operation of the branch, together with any other pertinent factors.

(2) The examiner's report is submitted to the District Chief Examiner who forwards it to this office with his own comments and recommendation. The information and data is analyzed, briefed and routed in the same way as an application for a charter.

(3) If the decision is unfavorable the applicant bank is so notified. If the decision is favorable the Comptroller issues a formal certificate evidencing his approval and consent to the establishment

and operation of a branch bank at the designated location.

(b) Removal of branch banks or branch offices. A branch of a national banking association may not be moved from one location to another without first obtaining the consent and approval of the Comptroller. The procedure for obtaining consent to such a moving of the location of a branch follows the same general course as that of the application for a branch, although the information required on any investigation made will vary with the circumstances and reasons given for the proposed move. If the approval is granted the Comptroller executes a formal statement to that effect, which is forwarded to the bank applying therefor.

$5.6 Changes in capital structure. Under the provisions of R.S. 5142, as amended, 24 Stat. 18, R.S. 5143, as amended; 12 U.S.C. 57-59, increases and decreases in the capital stock of banks under the Comptroller's jurisdiction are subject to his approval.

(a) Increases and decreases in capital. Upon receipt of an application to increase or decrease capital stock, the Organization Division prepares an analysis of the condition of the bank, which is routed through the staff as in the case of an application for a charter. If the proposed capital change is disapproved, the bank is so notified. If the plan is approved, the bank is furnished with the necessary forms and instructions, including the notice to shareholders, proxies, resolution, and, in the case of issuance of new stock, the form of certificate. If new stock is to be sold for cash, the bank is also furnished with a form of certificate of payment, which is in substance a letter addressed to the Comptroller, signed by the president or cashier of the bank, certifying that the specified amount of the increase in capital stock has been paid in at the specified purchase price and reciting the aggregate par value of the common capital stock outstanding, including the increase. If the increase is to be achieved by the declaration of a stock dividend, the certification form to be signed by the president or cashier varies accordingly. In the case of reductions of capital stock, the disposition to be made of the capital released by the reduction is subject to the approval of the Comptroller, under the provisions of R.S. 5143, as amended; 12 U.S.C. 59.