PART 212—MANAGEMENT OFFICIAL INTERLOCKS Authority: 12 U.S.C. 3201-3208; 15 U.S.C. 19. Source: 61 FR 40302, Aug. 2, 1996, unless otherwise noted. § 212.1 Authority, purpose, and scope. (a) Authority. et seq. (b) Purpose. (c) Scope. § 212.2 Definitions. For purposes of this part, the following definitions apply: (a) Affiliate. affiliate (2) For purposes of section 202(3)(B) of the Interlocks Act (12 U.S.C. 3201(3)(B)), an affiliate relationship based on common ownership does not exist if the Board determines, after giving the affected persons the opportunity to respond, that the asserted affiliation was established in order to avoid the prohibitions of the Interlocks Act and does not represent a true commonality of interest between the depository organizations. In making this determination, the Board considers, among other things, whether a person, including members of his or her immediate family, whose shares are necessary to constitute the group owns a nominal percentage of the shares of one of the organizations and the percentage is substantially disproportionate to that person's ownership of shares in the other organization. (b) Area median income (1) The median family income for the metropolitan statistical area (MSA), if a depository organization is located in an MSA; or (2) The statewide nonmetropolitan median family income, if a depository organization is located outside an MSA. (c) Community (d) Contiguous or adjacent cities, towns, or villages (e) Depository holding company (f) Depository institution (g) Depository institution affiliate (h) Depository organization (i) Low- and moderate-income areas (j) Management official. management official (i) A director; (ii) An advisory or honorary director of a depository institution with total assets of $100 million or more; (iii) A senior executive officer as that term is defined in 12 CFR 225.71(c); (iv) A branch manager; (v) A trustee of a depository organization under the control of trustees; and (vi) Any person who has a representative or nominee, as defined in paragraph (n) of this section, serving in any of the capacities in this paragraph (j)(1). (2) The term management official (i) A person whose management functions relate exclusively to the business of retail merchandising or manufacturing; (ii) A person whose management functions relate principally to a foreign commercial bank's business outside the United States; or (iii) A person described in the provisos of section 202(4) of the Interlocks Act (referring to an officer of a State-chartered savings bank, cooperative bank, or trust company that neither makes real estate mortgage loans nor accepts savings). (k) Office Office (l) Person (m) Relevant metropolitan statistical area (RMSA) (n) Representative or nominee representative or nominee. (o) Total assets. total assets (2) The term total assets (i) Assets of a diversified savings and loan holding company as defined by section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C. 1467a(a)(1)(F)) other than the assets of its depository institution affiliate; (ii) Assets of a bank holding company that is exempt from the prohibitions of section 4 of the Bank Holding Company Act of 1956 pursuant to an order issued under section 4(d) of that Act (12 U.S.C. 1843(d)) other than the assets of its depository institution affiliate; or (iii) Assets of offices of a foreign commercial bank other than the assets of its United States branch or agency. (3)(i) Notwithstanding paragraph (o)(1) of this section, and except as provided in paragraph (o)(3)(ii) of this section, from December 2, 2020, through December 31, 2021, the term total assets, (ii) The relief provided under paragraph (o)(3)(i) of this section does not apply to a depository organization if the Board determines that permitting the depository organization to determine its assets in accordance with that paragraph would not be commensurate with the risk profile of the depository organization. When making this determination, the Board will consider all relevant factors, including the extent of asset growth of the depository organization since December 31, 2019; the causes of such growth, including whether growth occurred as a result of mergers or acquisitions; whether such growth is likely to be temporary or permanent; whether the depository organization has become involved in any additional activities since December 31, 2019; the asset size of any parent companies; and the type of assets held by the depository organization. In making a determination pursuant to this paragraph (o)(3)(ii), the Board will apply notice and response procedures in the same manner and to the same extent as the notice and response procedures in 12 CFR 263.202. (p) United States [61 FR 40302, Aug. 2, 1996, as amended at 64 FR 51679, Sept. 24, 1999; Reg. L, 72 FR 1276, Jan. 11, 2007; 85 FR 77361, Dec. 2, 2020] § 212.3 Prohibitions. (a) Community. (b) RMSA. (c) Major assets. Federal Register. [61 FR 40302, Aug. 2, 1996, as amended at 64 FR 51679, Sept. 24, 1999; Reg. L, 72 FR 1276, Jan. 11, 2007; 84 FR 54471, Oct. 10, 2019] § 212.4 Interlocking relationships permitted by statute. The prohibitions of § 212.3 do not apply in the case of any one or more of the following organizations or to a subsidiary thereof: (a) A depository organization that has been placed formally in liquidation, or which is in the hands of a receiver, conservator, or other official exercising a similar function; (b) A corporation operating under section 25 or section 25A of the Federal Reserve Act (12 U.S.C. 601 et seq. et seq., (c) A credit union being served by a management official of another credit union; (d) A depository organization that does not do business within the United States except as an incident to its activities outside the United States; (e) A State-chartered savings and loan guaranty corporation; (f) A Federal Home Loan Bank or any other bank organized solely to serve depository institutions (a bankers' bank) or solely for the purpose of providing securities clearing services and services related thereto for depository institutions and securities companies; (g) A depository organization that is closed or is in danger of closing as determined by the appropriate Federal depository institution's regulatory agency and is acquired by another depository organization. This exemption lasts for five years, beginning on the date the depository organization is acquired; and (h)(1) A diversified savings and loan holding company (as defined in section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C. 1467a(a)(1)(F)) with respect to the service of a director of such company who also is a director of an unaffiliated depository organization if: (i) Both the diversified savings and loan holding company and the unaffiliated depository organization notify their appropriate Federal depository institutions regulatory agency at least 60 days before the dual service is proposed to begin; and (ii) The appropriate regulatory agency does not disapprove the dual service before the end of the 60-day period. (2) The Board may disapprove a notice of proposed service if it finds that: (i) The service cannot be structured or limited so as to preclude an anticompetitive effect in financial services in any part of the United States; (ii) The service would lead to substantial conflicts of interest or unsafe or unsound practices; or (iii) The notificant failed to furnish all the information required by the Board. (3) The Board may require that any interlock permitted under this paragraph (h) be terminated if a change in circumstances occurs with respect to one of the interlocked depository organizations that would have provided a basis for disapproval of the interlock during the notice period. § 212.5 Small market share exemption. (a) Exemption. (1) The interlock is not prohibited by § 212.3(c); and (2) The depository organizations (and their depository institution affiliates) hold, in the aggregate, no more than 20 percent of the deposits in each RMSA or community in which both depository organizations (or their depository institution affiliates) have offices. The amount of deposits shall be determined by reference to the most recent annual Summary of Deposits published by the FDIC for the RMSA or community. (b) Confirmation and records. [64 FR 51679, Sept. 24, 1999] § 212.6 General exemption. (a) Exemption. (b) Presumptions. (1) Primarily serves low- and moderate-income areas; (2) Is controlled or managed by persons who are members of a minority group, or women; (3) Is a depository institution that has been chartered for less than two years; or (4) Is deemed to be in “troubled condition” as defined in 12 CFR 225.71. (c) Duration. [64 FR 51679, Sept. 24, 1999] § 212.7 Change in circumstances. (a) Termination. (b) Transition period. [61 FR 40302, Aug. 2, 1996, as amended at 64 FR 51679, Sept. 24, 1999] § 212.8 Enforcement. Except as provided in this section, the Board administers and enforces the Interlocks Act with respect to state member banks, bank holding companies, and affiliates of either, and may refer any case of a prohibited interlocking relationship involving these entities to the Attorney General of the United States to enforce compliance with the Interlocks Act and this part. If an affiliate of a state member bank or a bank holding company is subject to the primary regulation of another Federal depository organization supervisory agency, then the Board does not administer and enforce the Interlocks Act with respect to that affiliate. § 212.9 Effect of Interlocks Act on Clayton Act. The Board regards the provisions of the first three paragraphs of section 8 of the Clayton Act (15 U.S.C. 19) to have been supplanted by the revised and more comprehensive prohibitions on management official interlocks between depository organizations in the Interlocks Act.