International Banking

Summary

"International Banking" includes at lease three distinct types of activities:

foreign currency and capital transactions by US persons and entities including, but not limited to, financial institutions
international activities of domestic financial institutions
US activities of foreign financial institutions

In general, the relevant statutes authorize a federal branch or agency of a foreign bank to operate under the same rights and privileges and subject to the same duties, etc. that would apply to a national bank in the same location

Regulations by Agency

Treasury - regulates foreign currency and capital transactions by US persons and entities including, but not limited to, financial institutions

31 CFR 128 - Reporting of International Capital and
Foreign Currency Transactions and
Positions

Subpart A - General Information

128.1 General reporting requirements
128.2 Manner of reporting
128.3 Use of information reported
128.4 Penalties
128.5 Recordkeeping requirements

Subpart B - Reports on International Capital
Transactions and Positions

128.11 Purpose of reports
128.12 Periodic reports
128.13 Special survey reports

Subpart C - Reports on Foreign Currency Positions

128.21 Purpose of reports
128.22 Periodic reports
128.23 Special survey reports

Appendix A to Part 128--Determination Made by
National Advisory Council Pursuant to
Section 2 (a) and (b) of E.O. 10033

OCC - OCC's regulation of the foreign operations of US national banks is relatively simple, consisting of a notice requirement when a bank makes application to the FRB for permission to engage in foreign activities.

national banks may generally engage in any activities in a foreign country that they can engage in in the US and that are customary for banks in that country
generally defers to FRB Reg K with respect to non-banking activities
If a foreign bank wishes to open a federal branch or agency, it is regulated in the same manner as a domestic national bank
It should be noted that foreign banks can also apply for state bank charters in many states. See, for example, the NY State Department of Banking's extensive report on the subject

Part 5, Subpart F - Federal Branches and Agencies

5.70 Federal branches and agencies

Subpart A to Part 28 - Foreign Operations of National
Banks

28.1 Authority, purpose, and scope
28.2 Definitions
28.3 Filing requirements for foreign operations
28.4 Permissible activities
28.5 Filing of notice

Subpart B to Part 28 - Federal Branches and Agencies
of Foreign Banks

28.10 Authority, purpose, and scope
28.11 Definitions
28.12 Approval of a Federal branch or agency
28.13 Permissible activities
28.14 Limitations based upon capital
28.15 Capital equivalency deposits
28.16 Deposit-taking
28.17 Notice of change in activity or operations
28.18 Recordkeeping and reporting
28.19 Enforcement
28.20 Maintenance of assets
28.21 Service of process
28.22 Voluntary liquidation
28.23 Procedures for closing
28.24 Termination of a Federal branch or agency
28.25 Change in control
28.26 Loan production offices

Subpart C to Part 28 - International Lending Supervision

28.50 Authority, purpose, and scope
28.51 Definitions
28.52 Allocated transfer risk reserve
28.53 Accounting for fees on international loans
28.54 Reporting and disclosure

FRB - has overall regulatory authority for the international banking operations of all US financial institutions. By regulation the FRB has made Sections 23A and 23B of the Federal Reserve Act applicable to the US operations of foreign banks in the same manner and to the same extent as it applies to FRB member banks

Reg D 12 CFR 204 Reserve Requirements of Financial Institutions - §§ 204.8 & 204.122 foreign bank related

204.8 - Reserve Requirements
204.122 - Secondary market activities of international
banking facilities

Reg K 12 CFR 211 - International Banking Operations

Reg N 12 CFR 214 - Relations with Foreign Banks
and Bankers
Reg W - 12 CFR 223, Subpart G
12 CFR 223.61 Application of Sections 23A and 23B to
US branches and agencies of foreign banks
Reg Y - 12 CFR Part 225, Subpart C
12 CFR 225.21 Nonbanking activities by foreign banking
organizations

FDIC - regulates the foreign activities of insured state nonmember banks, the U.S. activities of insured branches of foreign banks, and certain foreign mergers of insured depository institutions

Subpart J to Part 303 - International Banking

303.180 Scope
303.181 Definitions
303.182 Establishing, moving or closing
303.183 Investment by insured state nonmember
303.184 Moving an insured branch of a foreign bank
303.185 Merger transactions
303.186 Exemptions from insurance requirement
303.187 Approval for an insured state branch

Subpart A to Part 347 - Foreign Banking and
Investment by Insured State
Nonmember Banks

347.101 Purpose, authority, and scope
347.102 Definitions
347.103 Foreign branches
347.104 Investment by insured State nonmember
347.105 Underwriting and dealing limits
347.106 Restrictions on certain activities
347.107 US activities of foreign organizations
347.108 Obtaining FDIC approval to invest
347.109 Extensions of credit to foreign organizations
347.110 Supervision and recordkeeping

Subpart B to Part 347 - Foreign Banks

347.201 Scope
347.202 Definitions
347.203 Restriction on operation
347.204 Insurance requirement
347.205 Branches established under section 5
347.206 Exemptions from the insurance requirement
347.207 Notification to depositors
347.208 Agreement to provide information
347.209 Records
347.210 Pledge of assets
347.211 Asset maintenance
347.212 Deductions from the assessment base
347.213 FDIC approval to conduct activities

Subpart C to Part 347 - International Lending

347.301 Purpose, authority, and scope
347.302 Definitions
347.303 Allocated transfer risk reserve
347.304 Accounting for fees on international loans
347.305 Reporting and disclosure

OTS - The OTS does not have any regulations dealing
with international banking operations

NCUA - regulates the foreign branches of credit unions

12 CFR Part 741, Section 741.11 - Foreign branching

Statutes, Commentary and Related Topics

See the "Federal Branches and Agencies" booklet of the Comptroller's Licensing Manual for a detailed description of policies and procedures

Federal Reserve Act, Sections 25, 25A, 25B and 25C - 12 USC §§601 et seq

International Banking Act of 1978 - 12 USC §§3101 et seq

International Lending Supervision Act - 12 USC §§3901 et seq

Edge Act - 12 USC §§611 et seq

GAO Report to Congress - "Foreign Banks: Assessing Their Role in the US Banking System"

See also the Basel II Capital Accords topic page for materials regarding international standards for bank capital

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