---
kind: "section"
citation: "12 U.S.C. § 3105"
title: "12"
title_heading: "Banks and Banking"
number: "3105"
heading: "Authority of Federal Reserve System"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/3105"
units:
  - "Chapter 32 — Foreign Bank Participation in Domestic Markets"
---

# §3105. Authority of Federal Reserve System

- (a) **Bank reserves—**
  - (1)
    - (A) Except as provided in paragraph (2) of this subsection, sections 371a,[^1] 371b, 371b–1,[^1] 374, 374a, 461, 464, and [465](/usc/12/465.md) of this title shall apply to every [Federal branch](/usc/12/3101.md?p=6) and [Federal agency](/usc/12/3101.md?p=5) of a [foreign bank](/usc/12/3101.md?p=7) in the same manner and to the same extent as if the [Federal branch](/usc/12/3101.md?p=6) or [Federal agency](/usc/12/3101.md?p=5) were a member bank as that term is defined in [section 221 of this title](/usc/12/221.md); but the [Board](/usc/12/3101.md?p=2) either by general or specific regulation or ruling may waive the minimum and maximum reserve ratios prescribed under sections [461](/usc/12/461.md), [463](/usc/12/463.md), [464](/usc/12/464.md), [465](/usc/12/465.md), and [466](/usc/12/466.md) of this title and may prescribe any ratio, not more than 22 per centum, for any obligation of any such [Federal branch](/usc/12/3101.md?p=6) or [Federal agency](/usc/12/3101.md?p=5) that the [Board](/usc/12/3101.md?p=2) may deem reasonable and appropriate, taking into consideration the character of business conducted by such institutions and the need to maintain vigorous and fair competition between and among such institutions and member banks. The [Board](/usc/12/3101.md?p=2) may impose reserve requirements on [Federal branches](/usc/12/3101.md?p=6) and [Federal agencies](/usc/12/3101.md?p=5) in such graduated manner as it deems reasonable and appropriate.
    - (B) After consultation and in cooperation with the State bank supervisory authorities, the [Board](/usc/12/3101.md?p=2) may make applicable to any [State branch](/usc/12/3101.md?p=12) or [State agency](/usc/12/3101.md?p=11) any requirement made applicable to, or which the [Board](/usc/12/3101.md?p=2) has authority to impose upon, any [Federal branch](/usc/12/3101.md?p=6) or [agency](/usc/12/3101.md?p=1) under subparagraph (A) of this paragraph.
  - (2) A [branch](/usc/12/3101.md?p=3) or [agency](/usc/12/3101.md?p=1) shall be subject to this subsection only if (A) its parent [foreign bank](/usc/12/3101.md?p=7) has total worldwide [consolidated](/usc/12/3101.md?p=14) bank assets in excess of $1,000,000,000; (B) its parent [foreign bank](/usc/12/3101.md?p=7) is [controlled](/usc/12/3101.md?p=13) by a foreign [company](/usc/12/3101.md?p=13) which owns or [controls](/usc/12/3101.md?p=13) [foreign banks](/usc/12/3101.md?p=7) that in the aggregate have total worldwide [consolidated](/usc/12/3101.md?p=14) bank assets in excess of $1,000,000,000; or (C) its parent [foreign bank](/usc/12/3101.md?p=7) is [controlled](/usc/12/3101.md?p=13) by a group of foreign [companies](/usc/12/3101.md?p=13) that own or [control](/usc/12/3101.md?p=13) [foreign banks](/usc/12/3101.md?p=7) that in the aggregate have total worldwide [consolidated](/usc/12/3101.md?p=14) bank assets in excess of $1,000,000,000.
- (b) **Omitted—**
- (c) **Foreign bank examinations and reporting—**
  - (1) **Examination of branches, agencies, and affiliates—**
    - (A) **In general—** The [Board](/usc/12/3101.md?p=2) may examine each [branch](/usc/12/3101.md?p=3) or [agency](/usc/12/3101.md?p=1) of a [foreign bank](/usc/12/3101.md?p=7), each [commercial lending company](/usc/12/3101.md?p=9) or bank [controlled](/usc/12/3101.md?p=13) by 1 or more [foreign banks](/usc/12/3101.md?p=7) or 1 or more foreign [companies](/usc/12/3101.md?p=13) that [control](/usc/12/3101.md?p=13) a [foreign bank](/usc/12/3101.md?p=7), and other [office](/usc/12/3101.md?p=16) or [affiliate](/usc/12/3101.md?p=13) of a [foreign bank](/usc/12/3101.md?p=7) conducting business in any [State](/usc/12/3101.md?p=10).
    - (B) **Coordination of examinations—**
      - (i) **In general—** The [Board](/usc/12/3101.md?p=2) shall coordinate examinations under this paragraph with the [Comptroller](/usc/12/3101.md?p=4) of the Currency, the Federal Deposit Insurance Corporation, and appropriate [State bank supervisors](/usc/12/3101.md?p=17) to the extent such coordination is possible.
      - (ii) **Simultaneous examinations—** The [Board](/usc/12/3101.md?p=2) may request simultaneous examinations of each [office](/usc/12/3101.md?p=16) of a [foreign bank](/usc/12/3101.md?p=7) and each [affiliate](/usc/12/3101.md?p=13) of such bank operating in the United States.
      - (iii) **Avoidance of duplication—** In exercising its authority under this paragraph, the [Board](/usc/12/3101.md?p=2) shall take all reasonable measures to reduce burden and avoid unnecessary duplication of examinations.
    - (C) **On-site examination—** Each [Federal branch](/usc/12/3101.md?p=6) or [agency](/usc/12/3101.md?p=1), and each [State branch](/usc/12/3101.md?p=12) or [agency](/usc/12/3101.md?p=1), of a [foreign bank](/usc/12/3101.md?p=7) shall be subject to on-site examination by an [appropriate Federal banking agency](/usc/12/1861.md?p=b-1) or [State bank supervisor](/usc/12/3101.md?p=17) as frequently as would a national bank or a [State](/usc/12/3101.md?p=10) bank, respectively, by the [appropriate Federal banking agency](/usc/12/1861.md?p=b-1).
    - (D) **Cost of examinations—** The cost of any examination under [subparagraph (A)](#c-1-A) shall be assessed against and collected from the [foreign bank](/usc/12/3101.md?p=7) or the foreign [company](/usc/12/3101.md?p=13) that [controls](/usc/12/3101.md?p=13) the [foreign bank](/usc/12/3101.md?p=7), as the case may be, only to the same extent that fees are collected by the [Board](/usc/12/3101.md?p=2) for examination of any [State](/usc/12/3101.md?p=10) member bank.
  - (2) **Reporting requirements—** Each [branch](/usc/12/3101.md?p=3) or [agency](/usc/12/3101.md?p=1) of a [foreign bank](/usc/12/3101.md?p=7), other than a [Federal branch](/usc/12/3101.md?p=6) or [agency](/usc/12/3101.md?p=1), shall be subject to [section 335 of this title](/usc/12/335.md) and the provision requiring the reports of condition contained in [section 324 of this title](/usc/12/324.md) to the same extent and in the same manner as if the [branch](/usc/12/3101.md?p=3) or [agency](/usc/12/3101.md?p=1) were a [State](/usc/12/3101.md?p=10) member bank. In addition to any requirements imposed under [section 3102 of this title](/usc/12/3102.md), each [Federal branch](/usc/12/3101.md?p=6) and [agency](/usc/12/3101.md?p=1) shall be subject to [section 248(a) of this title](/usc/12/248.md?p=a) and to [section 483 of this title](/usc/12/483.md) to the same extent and in the same manner as if it were a member bank.
- (d) **Establishment of foreign bank offices in United States—**
  - (1) **Prior approval required—** No [foreign bank](/usc/12/3101.md?p=7) may establish a [branch](/usc/12/3101.md?p=3) or an [agency](/usc/12/3101.md?p=1), or acquire ownership or [control](/usc/12/3101.md?p=13) of a [commercial lending company](/usc/12/3101.md?p=9), without the prior approval of the [Board](/usc/12/3101.md?p=2).
  - (2) **Required standards for approval—** Except as provided in [paragraph (6)](#d-6), the [Board](/usc/12/3101.md?p=2) may not approve an application under [paragraph (1)](#d-1) unless it determines that—
    - (A) the [foreign bank](/usc/12/3101.md?p=7) engages directly in the business of banking outside of the United States and is subject to comprehensive supervision or regulation on a [consolidated](/usc/12/3101.md?p=14) basis by the appropriate authorities in its home country; and
    - (B) the [foreign bank](/usc/12/3101.md?p=7) has furnished to the [Board](/usc/12/3101.md?p=2) the information it needs to adequately assess the application.
  - (3) **Standards for approval—** In acting on any application under [paragraph (1)](#d-1), the [Board](/usc/12/3101.md?p=2) may take into account—
    - (A) whether the appropriate authorities in the home country of the [foreign bank](/usc/12/3101.md?p=7) have consented to the proposed establishment of a [branch](/usc/12/3101.md?p=3), [agency](/usc/12/3101.md?p=1) or [commercial lending company](/usc/12/3101.md?p=9) in the United States by the [foreign bank](/usc/12/3101.md?p=7);
    - (B) the financial and managerial resources of the [foreign bank](/usc/12/3101.md?p=7), including the bank’s experience and capacity to engage in international banking;
    - (C) whether the [foreign bank](/usc/12/3101.md?p=7) has provided the [Board](/usc/12/3101.md?p=2) with adequate assurances that the bank will make available to the [Board](/usc/12/3101.md?p=2) such information on the operations or activities of the [foreign bank](/usc/12/3101.md?p=7) and any [affiliate](/usc/12/3101.md?p=13) of the bank that the [Board](/usc/12/3101.md?p=2) deems necessary to determine and enforce compliance with this chapter, the Bank Holding Company Act of 1956 [[12 U.S.C. 1841](/usc/12/1841.md) et seq.], and other applicable Federal law;
    - (D) whether the [foreign bank](/usc/12/3101.md?p=7) and the United States [affiliates](/usc/12/3101.md?p=13) of the bank are in compliance with applicable United States law; and
    - (E) for a [foreign bank](/usc/12/3101.md?p=7) that presents a risk to the stability of United States financial system, whether the home country of the [foreign bank](/usc/12/3101.md?p=7) has adopted, or is making demonstrable progress toward adopting, an appropriate system of financial regulation for the financial system of such home country to mitigate such risk.
  - (4) **Factor—** In acting on an application under [paragraph (1)](#d-1), the [Board](/usc/12/3101.md?p=2) shall not make the size of the [foreign bank](/usc/12/3101.md?p=7) the sole determinant factor, and may take into account the needs of the community as well as the length of operation of the [foreign bank](/usc/12/3101.md?p=7) and its relative size in its home country. Nothing in this paragraph shall affect the ability of the [Board](/usc/12/3101.md?p=2) to order a [State branch](/usc/12/3101.md?p=12), [agency](/usc/12/3101.md?p=1), or [commercial lending company](/usc/12/3101.md?p=9) [subsidiary](/usc/12/3101.md?p=13) to terminate its activities in the United States pursuant to any standard set forth in this chapter.
  - (5) **Establishment of conditions—** The [Board](/usc/12/3101.md?p=2) may impose such conditions on its approval under this subsection as it deems necessary.
  - (6) **Exception—**
    - (A) **In general—** If the [Board](/usc/12/3101.md?p=2) is unable to find, under [paragraph (2)](#d-2), that a [foreign bank](/usc/12/3101.md?p=7) is subject to comprehensive supervision or regulation on a [consolidated](/usc/12/3101.md?p=14) basis by the appropriate authorities in its home country, the [Board](/usc/12/3101.md?p=2) may nevertheless approve an application by such [foreign bank](/usc/12/3101.md?p=7) under [paragraph (1)](#d-1) if—
      - (i) the appropriate authorities in the home country of the [foreign bank](/usc/12/3101.md?p=7) are actively working to establish arrangements for the [consolidated](/usc/12/3101.md?p=14) supervision of such bank; and
      - (ii) all other factors are consistent with approval.
    - (B) **Other considerations—** In deciding whether to use its discretion under [subparagraph (A)](#d-6-A), the [Board](/usc/12/3101.md?p=2) shall also consider whether the [foreign bank](/usc/12/3101.md?p=7) has adopted and implements procedures to combat money laundering. The [Board](/usc/12/3101.md?p=2) may also take into account whether the home country of the [foreign bank](/usc/12/3101.md?p=7) is developing a legal regime to address money laundering or is participating in multilateral efforts to combat money laundering.
    - (C) **Additional conditions—** In approving an application under this paragraph, the [Board](/usc/12/3101.md?p=2), after requesting and taking into consideration the views of the appropriate [State bank supervisor](/usc/12/3101.md?p=17) or the [Comptroller](/usc/12/3101.md?p=4) of the Currency, as the case may be, may impose such conditions or restrictions relating to the activities or business operations of the proposed [branch](/usc/12/3101.md?p=3), [agency](/usc/12/3101.md?p=1), or [commercial lending company](/usc/12/3101.md?p=9) [subsidiary](/usc/12/3101.md?p=13), including restrictions on sources of funding, as are considered appropriate. The [Board](/usc/12/3101.md?p=2) shall coordinate with the appropriate [State bank supervisor](/usc/12/3101.md?p=17) or the [Comptroller](/usc/12/3101.md?p=4) of the Currency, as appropriate, in the implementation of such conditions or restrictions.
    - (D) **Modification of conditions—** Any condition or restriction imposed by the [Board](/usc/12/3101.md?p=2) in connection with the approval of an application under authority of this paragraph may be modified or withdrawn.
  - (7) **Time period for Board action—**
    - (A) **Final action—** The [Board](/usc/12/3101.md?p=2) shall take final action on any application under [paragraph (1)](#d-1) not later than 180 days after receipt of the application, except that the [Board](/usc/12/3101.md?p=2) may extend for an additional 180 days the period within which to take final action on such application after providing notice of, and the reasons for, the extension to the applicant [foreign bank](/usc/12/3101.md?p=7) and any appropriate [State bank supervisor](/usc/12/3101.md?p=17) or the [Comptroller](/usc/12/3101.md?p=4) of the Currency, as appropriate.
    - (B) **Failure to submit information—** The [Board](/usc/12/3101.md?p=2) may deny any application if it does not receive information requested from the applicant [foreign bank](/usc/12/3101.md?p=7) or appropriate authorities in the home country of the [foreign bank](/usc/12/3101.md?p=7) in sufficient time to permit the [Board](/usc/12/3101.md?p=2) to evaluate such information adequately within the time periods for final action set forth in [subparagraph (A)](#d-7-A).
    - (C) **Waiver—** A [foreign bank](/usc/12/3101.md?p=7) may waive the applicability of this paragraph with respect to any application under [paragraph (1)](#d-1).
- (e) **Termination of foreign bank offices in United States—**
  - (1) **Standards for termination—** The [Board](/usc/12/3101.md?p=2), after notice and opportunity for hearing and notice to any appropriate [State bank supervisor](/usc/12/3101.md?p=17), may order a [foreign bank](/usc/12/3101.md?p=7) that operates a [State branch](/usc/12/3101.md?p=12) or [agency](/usc/12/3101.md?p=1) or [commercial lending company](/usc/12/3101.md?p=9) [subsidiary](/usc/12/3101.md?p=13) in the United States to terminate the activities of such [branch](/usc/12/3101.md?p=3), [agency](/usc/12/3101.md?p=1), or [subsidiary](/usc/12/3101.md?p=13) if the [Board](/usc/12/3101.md?p=2) finds that—
    - (A)
      - (i) the [foreign bank](/usc/12/3101.md?p=7) is not subject to comprehensive supervision or regulation on a [consolidated](/usc/12/3101.md?p=14) basis by the appropriate authorities in its home country; and
      - (ii) the appropriate authorities in the home country of the [foreign bank](/usc/12/3101.md?p=7) are not making demonstrable progress in establishing arrangements for the comprehensive supervision or regulation of such [foreign bank](/usc/12/3101.md?p=7) on a [consolidated](/usc/12/3101.md?p=14) basis;
    - (B)
      - (i) there is reasonable cause to believe that such [foreign bank](/usc/12/3101.md?p=7), or any [affiliate](/usc/12/3101.md?p=13) of such [foreign bank](/usc/12/3101.md?p=7), has committed a violation of law or engaged in an unsafe or unsound banking practice in the United States; and
      - (ii) as a result of such violation or practice, the continued operation of the [foreign bank](/usc/12/3101.md?p=7)’s [branch](/usc/12/3101.md?p=3), [agency](/usc/12/3101.md?p=1) or [commercial lending company](/usc/12/3101.md?p=9) [subsidiary](/usc/12/3101.md?p=13) in the United States would not be consistent with the public interest or with the purposes of this chapter, the Bank Holding Company Act of 1956 [[12 U.S.C. 1841](/usc/12/1841.md) et seq.], or the Federal Deposit Insurance Act [[12 U.S.C. 1811](/usc/12/1811.md) et seq.]; or
    - (C) for a [foreign bank](/usc/12/3101.md?p=7) that presents a risk to the stability of the United States financial system, the home country of the [foreign bank](/usc/12/3101.md?p=7) has not adopted, or made demonstrable progress toward adopting, an appropriate system of financial regulation to mitigate such risk.

    However, in making findings under this paragraph, the [Board](/usc/12/3101.md?p=2) shall not make size the sole determinant factor, and may take into account the needs of the community as well as the length of operation of the [foreign bank](/usc/12/3101.md?p=7) and its relative size in its home country. Nothing in this paragraph shall affect the ability of the [Board](/usc/12/3101.md?p=2) to order a [State branch](/usc/12/3101.md?p=12), [agency](/usc/12/3101.md?p=1), or [commercial lending company](/usc/12/3101.md?p=9) [subsidiary](/usc/12/3101.md?p=13) to terminate its activities in the United States pursuant to any standard set forth in this chapter.

  - (2) **Discretion to deny hearing—** The [Board](/usc/12/3101.md?p=2) may issue an order under [paragraph (1)](#e-1) without providing for an opportunity for a hearing if the [Board](/usc/12/3101.md?p=2) determines that expeditious action is necessary in order to protect the public interest.
  - (3) **Effective date of termination order—** An order issued under [paragraph (1)](#e-1) shall take effect before the end of the 120-day period beginning on the date such order is issued unless the [Board](/usc/12/3101.md?p=2) extends such period.
  - (4) **Compliance with State and Federal law—** Any [foreign bank](/usc/12/3101.md?p=7) required to terminate activities conducted at [offices](/usc/12/3101.md?p=16) or [subsidiaries](/usc/12/3101.md?p=13) in the United States pursuant to this subsection shall comply with the requirements of applicable Federal and [State](/usc/12/3101.md?p=10) law with respect to procedures for the closure or dissolution of such [offices](/usc/12/3101.md?p=16) or [subsidiaries](/usc/12/3101.md?p=13).
  - (5) **Recommendation to agency for termination of a Federal branch or agency—** The [Board](/usc/12/3101.md?p=2) may transmit to the [Comptroller](/usc/12/3101.md?p=4) of the Currency a recommendation that the license of any [Federal branch](/usc/12/3101.md?p=6) or [Federal agency](/usc/12/3101.md?p=5) of a [foreign bank](/usc/12/3101.md?p=7) be terminated in accordance with [section 3102(i) of this title](/usc/12/3102.md?p=i) if the [Board](/usc/12/3101.md?p=2) has reasonable cause to believe that such [foreign bank](/usc/12/3101.md?p=7) or any [affiliate](/usc/12/3101.md?p=13) of such [foreign bank](/usc/12/3101.md?p=7) has engaged in conduct for which the activities of any [State branch](/usc/12/3101.md?p=12) or [agency](/usc/12/3101.md?p=1) may be terminated under [paragraph (1)](#e-1).
  - (6) **Enforcement of orders—**
    - (A) **In general—** In the case of contumacy of any [office](/usc/12/3101.md?p=16) or [subsidiary](/usc/12/3101.md?p=13) of the [foreign bank](/usc/12/3101.md?p=7) against which—
      - (i) the [Board](/usc/12/3101.md?p=2) has issued an order under [paragraph (1)](#e-1); or
      - (ii) the [Comptroller](/usc/12/3101.md?p=4) of the Currency has issued an order under [section 3102(i) of this title](/usc/12/3102.md?p=i),

      or a refusal by such [office](/usc/12/3101.md?p=16) or [subsidiary](/usc/12/3101.md?p=13) to comply with such order, the [Board](/usc/12/3101.md?p=2) or the [Comptroller](/usc/12/3101.md?p=4) of the Currency may invoke the aid of the district court of the United States within the jurisdiction of which the [office](/usc/12/3101.md?p=16) or [subsidiary](/usc/12/3101.md?p=13) is located.

    - (B) **Court order—** Any court referred to in [subparagraph (A)](#e-6-A) may issue an order requiring compliance with an order referred to in [subparagraph (A)](#e-6-A).
  - (7) **Criteria relating to foreign supervision—** Not later than 1 year after December 19, 1991, the [Board](/usc/12/3101.md?p=2), in consultation with the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury, shall develop and publish criteria to be used in evaluating the operation of any [foreign bank](/usc/12/3101.md?p=7) in the United States that the [Board](/usc/12/3101.md?p=2) has determined is not subject to comprehensive supervision or regulation on a [consolidated](/usc/12/3101.md?p=14) basis. In developing such criteria, the [Board](/usc/12/3101.md?p=2) shall allow reasonable opportunity for public review and comment.
- (f) **Judicial review—**
  - (1) **Jurisdiction of United States courts of appeals—** Any [foreign bank](/usc/12/3101.md?p=7)—
    - (A) whose application under [subsection (d)](#d) or [section 3107(a) of this title](/usc/12/3107.md?p=a) has been disapproved by the [Board](/usc/12/3101.md?p=2);
    - (B) against which the [Board](/usc/12/3101.md?p=2) has issued an order under [subsection (e)](#e) or [section 3107(b) of this title](/usc/12/3107.md?p=b); or
    - (C) against which the [Comptroller](/usc/12/3101.md?p=4) of the Currency has issued an order under [section 3102(i) of this title](/usc/12/3102.md?p=i),

    may obtain a review of such order in the United States court of appeals for any circuit in which such [foreign bank](/usc/12/3101.md?p=7) operates a [branch](/usc/12/3101.md?p=3), [agency](/usc/12/3101.md?p=1), or [commercial lending company](/usc/12/3101.md?p=9) that has been required by such order to terminate its activities, or in the United States Court of Appeals for the District of Columbia Circuit, by filing a petition for review in the court before the end of the 30-day period beginning on the date the order was issued.

  - (2) **Scope of judicial review—** [Section 706 of title 5](/usc/5/706.md) (other than [paragraph (2)(F)](/usc/5/706.md?p=2-F) of such section) shall apply with respect to any review under [paragraph (1)](#f-1).
- (g) **Consultation with State bank supervisor—** The [Board](/usc/12/3101.md?p=2) shall request and consider any views of the appropriate [State bank supervisor](/usc/12/3101.md?p=17) with respect to any application or action under subsection [(d)](#d) or [(e)](#e).
- (h) **Limitations on powers of State branches and agencies—**
  - (1) **In general—** After the end of the 1-year period beginning on December 19, 1991, a [State branch](/usc/12/3101.md?p=12) or [State agency](/usc/12/3101.md?p=11) may not engage in any type of activity that is not permissible for a [Federal branch](/usc/12/3101.md?p=6) unless—
    - (A) the [Board](/usc/12/3101.md?p=2) has determined that such activity is consistent with sound banking practice; and
    - (B) in the case of an insured [branch](/usc/12/3101.md?p=3), the Federal Deposit Insurance Corporation has determined that the activity would pose no significant risk to the deposit insurance fund.
  - (2) **Single borrower lending limit—** A [State branch](/usc/12/3101.md?p=12) or [State agency](/usc/12/3101.md?p=11) shall be subject to the same limitations with respect to loans made to a single borrower as are applicable to a [Federal branch](/usc/12/3101.md?p=6) or [Federal agency](/usc/12/3101.md?p=5) under [section 3102(b) of this title](/usc/12/3102.md?p=b).
  - (3) **Other authority not affected—** This section does not limit the authority of the [Board](/usc/12/3101.md?p=2) or any [State](/usc/12/3101.md?p=10) supervisory authority to impose more stringent restrictions.
- (i) **Proceedings related to conviction for money laundering offenses—**
  - (1) **Notice of intention to issue order—** If the [Board](/usc/12/3101.md?p=2) finds or receives written notice from the Attorney General that—
    - (A) any [foreign bank](/usc/12/3101.md?p=7) which operates a [State agency](/usc/12/3101.md?p=11), a [State branch](/usc/12/3101.md?p=12) which is not an insured [branch](/usc/12/3101.md?p=3), or a [State](/usc/12/3101.md?p=10) [commercial lending company](/usc/12/3101.md?p=9) [subsidiary](/usc/12/3101.md?p=13);
    - (B) any [State agency](/usc/12/3101.md?p=11);
    - (C) any [State branch](/usc/12/3101.md?p=12) which is not an insured [branch](/usc/12/3101.md?p=3); or
    - (D) any [State](/usc/12/3101.md?p=10) commercial lending [subsidiary](/usc/12/3101.md?p=13),

    has been found guilty of any money laundering offense, the [Board](/usc/12/3101.md?p=2) shall issue a notice to the [agency](/usc/12/3101.md?p=1), [branch](/usc/12/3101.md?p=3), or [subsidiary](/usc/12/3101.md?p=13) of the [Board](/usc/12/3101.md?p=2)’s intention to commence a termination proceeding under [subsection (e)](#e).

  - (2) **Definitions—** For purposes of this subsection—
    - (A) **Insured branch—** The term “insured [branch](/usc/12/3101.md?p=3)” has the meaning given such term in section 3(s) of the Federal Deposit Insurance Act [[12 U.S.C. 1813(s)](/usc/12/1813.md?p=s)].
    - (B) **Money laundering offense defined—** The term “money laundering offense” means any criminal offense under section [1956](/usc/18/1956.md) or [1957](/usc/18/1957.md) of title 18 or under [section 5322 of title 31](/usc/31/5322.md).
- (j) **Study on equivalence of foreign bank capital—** Not later than 180 days after December 19, 1991, the [Board](/usc/12/3101.md?p=2) and the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury shall jointly submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives a report—
  - (1) analyzing the capital standards contained in the framework for measurement of capital adequacy established by the Supervisory Committee of the Bank for International Settlements, foreign regulatory capital standards that apply to [foreign banks](/usc/12/3101.md?p=7) conducting banking operations in the United States, and the relationship of the Basle and foreign standards to risk-based capital and leverage requirements for United States banks; and
  - (2) establishing guidelines for the adjustments to be used by the [Board](/usc/12/3101.md?p=2) in converting data on the capital of such [foreign banks](/usc/12/3101.md?p=7) to the equivalent risk-based capital and leverage requirements for United States banks for purposes of determining whether a [foreign bank](/usc/12/3101.md?p=7)’s capital level is equivalent to that imposed on United States banks for purposes of determinations under this section and sections 3 and 4 of the Bank Holding Company Act of 1956 [[12 U.S.C. 1842](/usc/12/1842.md), 1843].

  An update shall be prepared annually explaining any changes in the analysis under [paragraph (1)](#j-1) and resulting changes in the guidelines pursuant to [paragraph (2)](#j-2).

- (k) **Management of shell branches—**
  - (1) **Transactions prohibited—** A [branch](/usc/12/3101.md?p=3) or [agency](/usc/12/3101.md?p=1) of a [foreign bank](/usc/12/3101.md?p=7) shall not manage, through an [office](/usc/12/3101.md?p=16) of the [foreign bank](/usc/12/3101.md?p=7) which is located outside the United States and is managed or [controlled](/usc/12/3101.md?p=13) by such [branch](/usc/12/3101.md?p=3) or [agency](/usc/12/3101.md?p=1), any type of activity that a bank organized under the laws of the United States, any [State](/usc/12/3101.md?p=10), or the District of Columbia is not permitted to manage at any [branch](/usc/12/3101.md?p=3) or [subsidiary](/usc/12/3101.md?p=13) of such bank which is located outside the United States.
  - (2) **Regulations—** Any regulations promulgated to carry out this section—
    - (A) shall be promulgated in accordance with [section 3108 of this title](/usc/12/3108.md); and
    - (B) shall be uniform, to the extent practicable.

## Footnotes

[^1]: See References in Text note below.

## Source credit

(Pub. L. 95–369, § 7, Sept. 17, 1978, 92 Stat. 620; Pub. L. 102–242, title II, §§ 202(a), 203(a), 214(b), Dec. 19, 1991, 105 Stat. 2286, 2291, 2304; Pub. L. 102–550, title XV, § 1507, title XVI, § 1604(a)(1), (2), (12), (13), Oct. 28, 1992, 106 Stat. 4056, 4081–4083; Pub. L. 103–328, title I, § 107(e)(1), Sept. 29, 1994, 108 Stat. 2360; Pub. L. 104–208, div. A, title II, § 2214, Sept. 30, 1996, 110 Stat. 3009–411; Pub. L. 111–203, title I, § 173(a), (b), July 21, 2010, 124 Stat. 1440.)

## Notes

### Editorial Notes

### References in Text

Section 371a of this title, referred to in subsec. (a)(1)(A), was repealed by Pub. L. 111–203, title VI, § 627(a)(1), July 21, 2010, 124 Stat. 1640.

Section 371b–1 of this title, referred to in subsec. (a)(1)(A), was repealed by Pub. L. 96–221, title V, § 529, Mar. 31, 1980, 94 Stat. 168, subject to a savings provision.

Sections 461, 463, 464, 465, and 466 of this title, referred to in subsec. (a)(1)(A), was in the original “section 19 of the Federal Reserve Act.” Provisions of section 19 relating to minimum and maximum reserve ratios are classified to the cited sections. For complete classification of section 19 to the Code, see References in Text note set out under section 461 of this title.

For definition of “this chapter”, referred to in subsecs. (d)(3)(C), (4) and (e)(1), see References in Text note set out under section 3101 of this title.

The Bank Holding Company Act of 1956, referred to in subsecs. (d)(3)(C) and (e)(1)(B)(ii), is act May 9, 1956, ch. 240, 70 Stat. 133, which is classified principally to chapter 17 (§ 1841 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 1841 of this title and Tables.

The Federal Deposit Insurance Act, referred to in subsec. (e)(1)(B)(ii), is act Sept. 21, 1950, ch. 967, § 2, 64 Stat. 873, which is classified generally to chapter 16 (§ 1811 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 1811 of this title and Tables.

### Codification

Section is comprised of section 7 of Pub. L. 95–369. Subsec. (b) of section 7 of Pub. L. 95–369 enacted section 347d of this title.

### Amendments

2010—Subsec. (d)(3)(E). Pub. L. 111–203, § 173(a), added subpar. (E).

Subsec. (e)(1)(C). Pub. L. 111–203, § 173(b), added subpar. (C).

1996—Subsec. (c). Pub. L. 104–208, § 2214(a)(1), inserted heading.

Subsec. (c)(1)(B)(iii). Pub. L. 104–208, § 2214(a)(2), added cl. (iii).

Subsec. (c)(1)(C). Pub. L. 104–208, § 2214(a)(3), added subpar. (C) and struck out heading and text of former subpar. (C). Text read as follows: “Each branch or agency of a foreign bank shall be examined at least once during each 12-month period (beginning on the date the most recent examination of such branch or agency ended) in an on-site examination.”

Subsec. (c)(1)(D). Pub. L. 104–208, § 2214(a)(4), inserted “, only to the same extent that fees are collected by the Board for examination of any State member bank” before period at end.

Subsec. (d)(2). Pub. L. 104–208, § 2214(b)(1), substituted “Except as provided in paragraph (6), the Board” for “The Board”.

Subsec. (d)(5). Pub. L. 104–208, § 2214(b)(2), substituted “The Board” for “Consistent with the standards for approval in paragraph (2), the Board”.

Subsec. (d)(6), (7). Pub. L. 104–208, § 2214(b)(3), added pars. (6) and (7).

Subsec. (e)(1)(A). Pub. L. 104–208, § 2214(c), designated existing provisions as cl. (i), substituted “and” for “or” at end, and added cl. (ii).

1994—Subsec. (k). Pub. L. 103–328 added subsec. (k).

1992—Subsec. (e)(6)(A). Pub. L. 102–550, § 1604(a)(1)(A), substituted “against which—

“(i) the Board has issued an order under paragraph (1); or

“(ii) the Comptroller of the Currency has issued an order under section 3102(i) of this title,

or a refusal by such office or subsidiary” for “against which the Board or, in the case of an order issued under section 3102(i) of this title, the Comptroller of the Currency has issued an order under paragraph (1) or a refusal by such office or subsidiary”.

Subsec. (e)(6)(B). Pub. L. 102–550, § 1604(a)(1)(B), substituted “order referred to in subparagraph (A)” for “order issued under paragraph (1)”.

Subsec. (e)(7). Pub. L. 102–550, § 1604(a)(2), substituted “public” for “publc”.

Subsec. (i). Pub. L. 102–550, § 1507, added subsec. (i).

Subsec. (j). Pub. L. 102–550, § 1604(a)(12), made technical amendment to directory language of Pub. L. 102–242, § 214(b). See 1991 Amendment note below.

Subsec. (j)(1). Pub. L. 102–550, § 1604(a)(13), substituted “Supervisory Committee” for “Supervisory committee”.

1991—Subsec. (c). Pub. L. 102–242, § 203(a), added par. (1), inserted heading for par. (2), and struck out former par. (1) which read as follows: “The Board may make examinations of each branch or agency of a foreign bank, and of each commercial lending company or bank controlled by one or more foreign banks or by one or more foreign companies that control a foreign bank, the cost of which shall be assessed against and paid by such foreign bank or company, as the case may be. The Board shall, insofar as possible, use the reports of examinations made by the Comptroller, the Federal Deposit Insurance Corporation, or the appropriate State bank supervisory authority for the purposes of this subsection.”

Subsecs. (d) to (h). Pub. L. 102–242, § 202(a), added subsecs. (d) to (h) and struck out former subsec. (d) which read as follows: “On or before two years after September 17, 1978, the Board after consultation with the appropriate State bank supervisory authorities shall report to the Committee on Banking, Finance and Urban Affairs of the United States House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the United States Senate its recommendations with respect to the implementation of this chapter, including any recommended requirements such as limitations on loans to affiliates or capital adequacy requirements which should be imposed on foreign banks to carry out the purposes of this chapter. Not later than one hundred and eighty days after September 17, 1978, the Board shall report to such Committees the steps which have been taken to consult and cooperate with State bank supervisory authorities as required by subsection (a)(1)(B) of this section.”

Subsec. (j). Pub. L. 102–242, § 214(b), as amended by Pub. L. 102–550, § 1604(a)(12), added subsec. (j).

### Statutory Notes and Related Subsidiaries

### Change of Name

Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress. Committee on Banking and Financial Services of House of Representatives abolished and replaced by Committee on Financial Services of House of Representatives, and jurisdiction over matters relating to securities and exchanges and insurance generally transferred from Committee on Energy and Commerce of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001.

### Effective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of this title.

### Effective Date of 1994 Amendment

Pub. L. 103–328, title I, § 107(e)(2), Sept. 29, 1994, 108 Stat. 2361, provided that: “The amendment made by paragraph (1) [amending this section] shall become effective at the end of the 180-day period beginning on the date of enactment of this Act [Sept. 29, 1994].”

### Effective Date of 1992 Amendment

Amendment by section 1604(a)(1), (2), (12), (13) of Pub. L. 102–550 effective as if included in the Federal Deposit Insurance Corporation Improvement Act of 1991, Pub. L. 102–242, as of Dec. 19, 1991, see section 1609(a) of Pub. L. 102–550, set out as a note under section 191 of this title.

### Moratorium on Examination Fees Under This Chapter

Pub. L. 103–328, title I, § 115(a), Sept. 29, 1994, 108 Stat. 2368, provided that: “Section 7(c)(1)(D) of the International Banking Act of 1978 [12 U.S.C. 3105(c)(1)(D)] shall not apply with respect to any examination under section 7(c)(1)(A) of such Act which begins before or during the 3-year period beginning on July 25, 1994.”