The Federal Deposit Insurance Corp. has made it easier for state nonmember banks to set up automated loan machines.

Automated loan machines are not considered a "domestic branch" under federal law, the agency said in a July 8 letter to Washington lawyer Ross S. Delston. As a result, state-chartered banks that are not members of the Federal Reserve System are not required to file an application with the FDIC to establish these machines. However, state regulators may still require applications for these units.

"This will make automated loan machines more attractive, and encourage state banking regulators to reach the same conclusion as federal regulators," Mr. Delston said Thursday. Mr. Delston represents Affinity Technology Group, a Columbia, S.C., firm that makes automated loan machines.

The Economic Growth and Regulatory Paperwork Reduction Act, enacted Sept. 20, excluded "remote service units" from the definition of a branch. The FDIC letter took that a step further by stating that automated loan machines are remote service units.

The Office of the Comptroller of the Currency made the same distinction in March and said national banks may establish automated teller or loan machines anywhere, regardless of state law.

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