WASHINGTON - The Federal Reserve Board on Wednesday requested public comment on a proposal to amend its Regulation H, which interprets the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.
To ensure that deposits made in a particular community are used to meet the credit needs there, Riegle-Neal prohibits banks from engaging in interstate banking for the sole purpose of gaining deposits. The Gramm-Leach-Bliley Act of 1999 extends that regulation to any branch of a bank that is controlled by an out-of-state bank holding company, including any bank that consists only of a main office.
The proposal, which would amend Reg H to include that extension, is necessary to bring the Fed's rules governing the membership of state banks in the Federal Reserve system into agreement with Gramm-Leach-Bliley.
The Fed's proposal was published Monday in the Federal Register. Comments are due June 8.