November 13, 1996
TABLE OF CONTENTS
Article 1. Definitions
Article 2. Statement of Purpose
Section 2.1. Intent
Section 2.2. Goals
Section 2.3. Responsibilities
Article 3. Information Sharing
Section 3.1. Request for Information
Section 3.2. Providing Information
Section 3.3. Confidentiality
Section 3.4. Subpoenas
Article 4. Responsibility for Examination
Section 4.1. Role of Home State Supervisors
Section 4.2. Role of Host State Supervisors
Section 4.3. Planning and Scheduling
Section 4.4. Efficient Use of State
Article 5. Enforcement Actions
Section 5.1. Home State Notification
Section 5.2. Emergency Actions by Host
Article 6. Applicable Laws
Section 6.1. Host State Law
Section 6.2. Home State Law
Section 6.3. List of State Laws
Article 7. Applications
Section 7.1. Approval Authority
Section 7.2. Notification to Host State
Article 8. Complaints
Section 8.1. Responsibilities
Section 8.2. Enforcement Actions
Article 9. Parties
Section 9.1. Representations and Warranties
Section 9.2. Change in Power or Authority
Article 10. Execution, Enforceability, Other Agreements and Termination
Section 10.1. Execution
Section 10.2. Binding and Enforceable
Section 10.3. Other Agreements
Section 10.4. Amendment and Termination
Article 11. Miscellaneous
Section 11.1. Captions
Section 11.2. Waiver
Section 11.3. Survival
Section 11.4. Severability
ARTICLE 1. DEFINITIONS
For the purposes of this Agreement:
- "An emergency" shall include, but not be limited to, the existence
of conditions or circumstances which, if allowed to continue, will
likely result in harm to the public.
- "Enforcement action" means any action whether civil, criminal,
administrative, or equivalent action, to enforce the banking or
any other applicable laws.
- "Federal bank regulatory agency" means the Federal Reserve System
in the case of a bank which is a member of the Federal Reserve System
or the Federal Deposit Insurance Corporation in the case of a bank
which is not a member of the Federal Reserve System.
- "Home state" means the state where a state-chartered multi-state
bank is chartered.
- "Home state supervisor" means the bank supervisory agency of the
home state of a multi-state bank.
- "Host state" means a state other than the home state of a multi-state
bank where the bank maintains or seeks to establish a branch.
- "Host state supervisor" means the bank supervisory agency of the
host state of a multi-state bank.
- "Multi-state bank" means a bank that maintains branches in one
or more host states.
- "Originating authority" means the bank supervisory agency that
originally compiles or drafts an item of supervisory information.
- "Supervisory information" means all information and reports compiled
or drafted in the ordinary course of supervising and examining a
multi-state bank, including reports of examination and information
relating to applications, complaints, and enforcement actions, or
ARTICLE 2. STATEMENT OF PURPOSE
Section 2.1. Intent.
On April 20, 1995, the CSBS members unanimously adopted "The Protocol",
the supervision guidelines for state banking departments in an interstate
banking and branching environment. These guidelines were designed
to assist states in their efforts to maintain competitive, responsive,
safe and sound banking services for the citizens of their states.
To achieve these guidelines, The Protocol called for the states to
enter into cooperative agreements tailored to the unique corporate
structure and business strategy of the multi-state banks or institutions
involved; hence, a model cooperative agreement, which provided the
basis for this "Agreement", was developed by the CSBS Interstate Task
Force to assist state banking departments.
Section 2.2. Goals.
The goals of the parties of this Agreement are to promote a comprehensive
nationwide system for safety and soundness of financial institutions,
to supervise and examine multi-state banks in cooperation with other
states, to foster effective coordination and communication among the
parties to facilitate the process of supervision and examination with
the least burden to multi-state banks, and to enhance responsiveness
to local needs and interests in an interstate banking and branching
Section 2.3. Responsibilities.
The parties recognize that the home state supervisor is the primary
regulator and will act as the single point of contact. The home state
supervisor is primarily responsible for supervising its state-chartered
banks, including branches that may be established in various host
states. In addition, the parties recognize that host state supervisors
have a legitimate interest in monitoring the safety and soundness
of out-of-state banks that operate branches in their states and in
making sure those branches are operated in compliance with host state
Overall, the parties will cooperate to assure that each of their
material interests, authorities and responsibilities is fulfilled.
ARTICLE 3. INFORMATION SHARING
Section 3.1. Request for Information.
A state supervisor may at any time request from another state supervisor
supervisory information regarding a state bank operating branches
in both states. The request shall be made in writing by the state
supervisor or the supervisor's designee.
A request by a state supervisor should be reasonably specific as
to the documents or information sought. The state supervisor may request
items relating to a particular event, such as a specific examination
report, or may make a standing request for all items of a particular
nature or relating to a specific bank.
The state supervisor shall limit its use of information obtained
under this Agreement to purposes directly related to its supervisory
When a federal bank regulatory agency requests information from
a host state, the host state should defer the request for information
to the home state.
Section 3.2. Providing Information.
The state supervisors shall comply with a request for supervisory
information within a reasonable time to the fullest extent permitted
by state law. Supervisory information protected by federal law shall
not be provided until the permission of the appropriate federal bank
regulatory agency is obtained.
Section 3.3. Confidentiality.
Supervisory information shared under this Agreement shall be presumed
to be confidential unless otherwise specified by the originating authority.
To the fullest extent permitted by law, the parties will treat information
obtained under this Agreement with the same degree of confidentiality
that applies to the information in the hands of the originating authority.
Supervisory information shared under this Agreement remains the
property of the originating authority and shall not be further disclosed
by the recipient without the written permission of the originating
authority, except as otherwise required by applicable law or order
of a court of competent jurisdiction. Supervisory information obtained
under this Agreement should be returned or destroyed.
Section 3.4. Subpoenas.
Before disclosing any supervisory information, a state supervisor
shall notify the originating authority immediately on receipt of a
subpoena or other legal process by any court, legislative body, governmental
agency, or any request from another person or entity not a party to
this Agreement seeking disclosure of supervisory information supplied
by the originating authority so that the originating authority may
have an opportunity to challenge the release of the information. Home
state and host state supervisors shall cooperate in the preparation
of any memoranda, request for protective order or pleadings deemed
desirable by the originating authority to protect the confidentiality
of supervisory information.
ARTICLE 4. RESPONSIBILITY FOR EXAMINATION
Section 4.1. Role of Home State Supervisors.
To promote a single point of contact, the home state supervisor
shall be responsible for examining its multi-state banks for safety
and soundness and compliance with applicable laws, including coordination
with the host state supervisors, the appropriate federal bank regulatory
agency and bank management. The home state supervisor may use host
state examiners to examine for safety and soundness, trust and electronic
data processing. Also, the home state supervisor shall consult with
the host state and should use host state examiners to examine for
compliance with host state laws regarding community reinvestment,
consumer protection and fair lending, in those states that have enacted
The home state supervisor shall give reasonable notice to each host
state supervisor of the time and scope of an upcoming multi-state
bank examination. The home state supervisor may request the host state
supervisors' participation in a multi-state bank examination for safety
and soundness, trust and electronic data processing. In determining
when to request the assistance of the host state supervisors for such
examinations, the home state supervisor shall consider the efficiency
of the examination and the interests of the state banking system.
The home state supervisor should use host state examiners to examine
for compliance with host state laws regarding community reinvestment,
consumer protection and fair lending, in those states that have enacted
The home state supervisor shall designate the examiner-in-charge
of an examination of a multi-state bank. If the home state supervisor
participates in an examination program with the federal bank regulatory
agencies, the examiner-in-charge may be an examiner employed and selected
by a federal bank regulatory agency. The examiner-in-charge shall
designate the examination responsibilities of each examiner involved
in the examination. Each examiner involved in an examination shall
perform the responsibilities designated and promptly report the findings
to the examiner-in-charge in the form requested, together with supporting
work papers. The home state supervisor shall rely on the guidance
of the host state supervisors in applying host state laws.
The home state supervisor shall compile the examination findings
and advise the host state supervisors of the findings, any follow-up
required and any enforcement actions proposed. The home state supervisor
may request the participation of host state supervisors before, during
and after an examination.
Section 4.2. Role of Host State Supervisors.
The host state supervisors shall provide the home state supervisor
with guidance on the application of state laws and should participate
in examinations for compliance with applicable state community reinvestment,
consumer protection and fair lending laws.
When requested by the home state supervisor, the host state examiners
may assist in the safety and soundness, trust and electronic data
processing examinations of multi-state banks and participate in discussions
with management and directors to the extent practicable.
The host state supervisors may keep copies of examination findings
and supporting work papers they create while participating in the
home state supervisor's examination. Before disclosing any supervisory
information, the host state supervisors shall immediately notify the
home state supervisor of any subpoena, legal process or other requests
for supervisory information created while participating in the examinations.
To provide the home state supervisor with the opportunity to challenge
the release of such supervisory information, the parties shall proceed
in accordance with Section 3.4 of this Agreement.
A host state supervisor shall advise the home state supervisor whenever
the host state supervisor has reasonable cause to believe an examination
of a branch of a multi-state bank is necessary due to an emergency.
If the home state supervisor is unable to undertake the examination
in a reasonable time, the host state supervisor may conduct the examination.
A host state supervisor who conducts an examination under this provision
shall observe the provisions of this Agreement otherwise governing
a home state supervisor conducting an examination.
Section 4.3. Planning and Scheduling.
Annually, each home state supervisor, in consultation with host
state supervisors and the appropriate federal bank regulatory agency,
shall schedule its regular examinations of home state multi-state
banks. Each home state supervisor shall promptly furnish its schedule
for examinations to each relevant host state supervisor together with
the home state supervisor's anticipated request for host state supervisors'
assistance in conducting the examinations.
Section 4.4. Efficient Use of State Resources.
If the home state supervisor determines to involve the host state
supervisor(s) in an examination, to facilitate efficiencies in the
examination, the supervisors may enter into separate bilateral agreements
governing the sharing of resources and compensation for services rendered
to the extent permitted by the laws of their respective jurisdictions.
ARTICLE 5. ENFORCEMENT ACTIONS
Section 5.1. Home State Notification and Action.
The home state supervisor shall be primarily responsible for initiating
enforcement actions against a multi-state bank. The home state supervisor
shall notify all host state supervisors immediately of any enforcement
action, formal or informal, taken against a multi-state bank. If possible,
notification by the home state supervisor will be given in advance
of the enforcement action. Enforcement actions to address violations
of host state laws where possible shall be taken jointly by home state
and host state supervisors.
Section 5.2. Emergency Actions by Host State.
Notwithstanding Section 5.1., the host state supervisor may in an
emergency, upon reasonable notice to the home state supervisor, take
any enforcement action against a branch of a multi-state bank, permitted
under host state law.
ARTICLE 6. APPLICABLE LAWS
The parties recognize that neither home nor host state supervisors
may be empowered to waive provisions of home or host state law directly
applicable to multi-state banks or their branches in host states.
To the extent it may assist counsel and judicial authorities in resolving
issues of applicable law, however, the parties agree that those issues
may be resolved using the following general principles.
Section 6.1. Host State Law.
Host state law shall apply generally to the operations in the host
state of a branch of a multi-state bank, including: (i) antitrust
law and deposit concentration limits; (ii) community reinvestment
and similar laws; (iii) consumer protection laws, including lending
and usury laws to the extent that laws or court decisions regarding
the exportation of interest rates are inapplicable; (iv) fair lending
or equal credit laws; and (v) other operational matters where competitive
equality with host state banks may be an issue.
Section 6.2. Home State Law.
Home state law shall apply generally to the corporate structure
and procedures and internal policies of a multi-state bank including:
(i) charter and bylaws; (ii) incorporation and dissolution; (iii)
board of directors and management; (iv) capital; (v) loans and investments;
(vi) common trust funds; (vii) dividends; (viii) indemnification of
directors and officers; (ix) stock and debt; and (x) structure of
Section 6.3. List of State Laws.
Each of the parties may, for purposes of general guidance, supply
to the other a list of state (banking) laws that may be applied to
multi-state banks operating within their borders, indicating which
of the parties is responsible for implementing each of the laws.
ARTICLE 7. APPLICATIONS
Section 7.1. Approval Authority.
Unless otherwise expressly provided under host state law, the home
state supervisor shall have approval authority over all applications
from a multi-state bank.
Section 7.2. Notification to Host State.
The home state supervisor shall provide to each host state supervisor
notice of all applications/notifications relating to facilities of
a multi-state bank within their borders and shall take their views
into account in the approval process. Also, when the home state supervisor
reaches a decision in the approval process, the home state supervisor
shall communicate this decision to the host state supervisor. Copies
of the applications/notifications will be provided to host state supervisors
The home state supervisor shall provide to each host state supervisor
notice of all applications/notifications by a multi-state bank to
enter into a corporate transaction such as a merger, acquisition,
or change of control and shall take their views into account in the
consideration process. Copies of the applications/notifications will
be provided to host state supervisors upon request.
ARTICLE 8. COMPLAINTS
Section 8.1. Responsibilities.
The home state supervisor and the host state supervisor will agree
as to which agency shall have the primary responsibility for the processing
and resolution of consumer complaints filed against branches of multi-state
banks by residents of their respective states. Information summarizing
the volume, nature and resolution of consumer complaints will be provided
by the designated supervisor on at least a quarterly basis. Instances
of serious consumer abuse, violations of law and/or patterns of practice
which cause serious supervisory concerns will be promptly reported
and jointly resolved.
Section 8.2. Enforcement Actions.
Any enforcement action resulting from a complaint against a host
state branch shall be taken as provided in Article 5 of this Agreement.
ARTICLE 9. PARTIES
Section 9.1. Representations and Warranties.
Each signatory state supervisor represents and warrants that he
or she has all requisite power and authority to enter into and perform
this Agreement and to the extent consistent with state law, any party
acting within the scope of this Agreement shall be deemed to be acting
within the scope of the signatory state supervisor's statutory authority.
Section 9.2 Change in Power or Authority.
In case there is any material change in the power or authority of
any signatory state supervisor to perform this Agreement, such state
supervisor shall promptly give notice of the change to the other state
ARTICLE 10. EXECUTION, ENFORCEABILITY, OTHER AGREEMENTS AND TERMINATION
Section 10.1 Execution.
The terms of this Agreement shall become effective when a state
supervisor has executed the original or a counterpart signature page.
Also, this Agreement is not intended to be limited to the original
signatories, and other parties may sign after the initial execution
of this document.
Section 10.2. Binding and Enforceable.
This Agreement shall be binding and enforceable on the parties to
the extent allowed by state law.
Section 10.3. Other Agreements.
This Agreement is not intended to prevent the parties from entering
other agreements with individual parties, other bank supervisors,
or individual banks regarding the subject matter of this Agreement.
Section 10.4. Amendment and Termination.
Any party to this Agreement may propose an amendment at any time,
but this Agreement may be amended only by a written instrument signed
by each of the signatory state supervisors.
Any party to this Agreement may withdraw from the Agreement at any
time by giving written notice of withdrawal or termination to all
other parties. The withdrawal of any party shall terminate the participation
of the respective signatory state supervisor 90 days after the date
of withdrawal unless the remaining parties waive the 90 day notice
ARTICLE 11. MISCELLANEOUS
Section 11.1. Captions.
The captions in this Agreement are for convenience of reference
only, do not constitute a part of this Agreement, and shall not affect
the meaning or construction of any provision of this Agreement.
Section 11.2. Waiver.
The waiver by any state supervisor of the performance of any provision
of this Agreement shall not invalidate this Agreement, nor shall it
be considered a waiver of any other provision. The waiver by any state
supervisor of the time for performing any act required by this Agreement
shall not be considered a waiver of the time for performing any other
act or an identical act required to be performed at a later time.
Section 11.3. Survival.
In the absence of state law to the contrary, this Agreement shall
survive any change in the identity of the executive in charge of any
home or host state bank supervisor.
Section 11.4. Severability.
If any provision of this Agreement or the application thereof to
any person or circumstances is held invalid or illegal, such invalidity
or illegality shall not affect other provisions or applications of
this Agreement which can be given effect without the invalid or illegal
provision or application, and to this end, the provisions of this
Agreement are declared to be severable.