12 U.S.C. § 1835a — Prohibition against deposit production offices

**(a) Regulations** The appropriate Federal banking agencies shall prescribe uniform regulations effective June 1, 1997, which prohibit any out-of-State bank from using any authority to engage in interstate branching pursuant to this title,11 See References in Text note below. or any amendment made by this title 1 to any other provision of law, primarily for the purpose of deposit production. **(b) Guidelines for meeting credit needs** Regulations issued under subsection (a) shall include guidelines to ensure that interstate branches operated by an out-of-State bank in a host State are reasonably helping to meet the credit needs of the communities which the branches serve. **(c) Limitation on out-of-State loans** (1) **Limitation** — Regulations issued under subsection (a) shall require that, beginning no earlier than 1 year after establishment or acquisition of an interstate branch or branches in a host State by an out-of-State bank, if the appropriate Federal banking agency for the out-of-State bank determines that the bank’s level of lending in the host State relative to the deposits from the host State (as reasonably determinable from available information including the agency’s sampling of the bank’s loan files during an examination or such data as is otherwise available) is less than half the average of total loans in the host State relative to total deposits from the host State (as determinable from relevant sources) for all banks the home State of which is such State— (A) the appropriate Federal banking agency for the out-of-State bank shall review the loan portfolio of the bank and determine whether the bank is reasonably helping to meet the credit needs of the communities served by the bank in the host State; and (B) if the agency determines that the out-of-State bank is not reasonably helping to meet those needs— (i) the agency may order that an interstate branch or branches of such bank in the host State be closed unless the bank provides reasonable assurances to the satisfaction of the appropriate Federal banking agency that the bank has an acceptable plan that will reasonably help to meet the credit needs of the communities served by the bank in the host State, and (ii) the out-of-State bank may not open a new interstate branch in the host State unless the bank provides reasonable assurances to the satisfaction of the appropriate Federal banking agency that the bank will reasonably help to meet the credit needs of the community that the new branch will serve. (2) **Considerations** — In making a determination under paragraph (1)(A), the appropriate Federal banking agency shall consider— (A) whether the interstate branch or branches of the out-of-State bank were formerly part of a failed or failing depository institution; (B) whether the interstate branch was acquired under circumstances where there was a low loan-to-deposit ratio because of the nature of the acquired institution’s business or loan portfolio; (C) whether the interstate branch or branches of the out-of-State bank have a higher concentration of commercial or credit card lending, trust services, or other specialized activities; (D) the ratings received by the out-of-State bank under the Community Reinvestment Act of 1977 [[12 U.S.C. 2901](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2901&num=0&edition=prelim) et seq.]; (E) economic conditions, including the level of loan demand, within the communities served by the interstate branch or branches of the out-of-State bank; and (F) the safe and sound operation and condition of the out-of-State bank. (3) **Branch closing procedure** (A) *Notice required* — Before exercising any authority under paragraph (1)(B)(i), the appropriate Federal banking agency shall issue to the bank a notice of the agency’s intention to close an interstate branch or branches and shall schedule a hearing. (B) *Hearing* — [Section 1818(h) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1818/h&num=0&edition=prelim) shall apply to any proceeding brought under this paragraph. **(d) Application** This section shall apply with respect to any interstate branch established or acquired in a host State pursuant to this title 1 or any amendment made by this title 1 to any other provision of law. **(e) Definitions** For the purposes of this section, the following definitions shall apply: (1) **Appropriate Federal banking agency, bank, State, and State bank** — The terms “appropriate Federal banking agency”, “bank”, “State”, and “State bank” have the same meanings as in [section 1813 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813&num=0&edition=prelim). (2) **Home State** — The term “home State” means— (A) in the case of a national bank, the State in which the main office of the bank is located; and (B) in the case of a State bank, the State by which the bank is chartered. (3) **Host State** — The term “host State” means a State in which a bank establishes a branch other than the home State of the bank. (4) **Interstate branch** — The term “interstate branch” means a branch established pursuant to this title 1 or any amendment made by this title 1 to any other provision of law and any branch of a bank controlled by an out-of-State bank holding company (as defined in section 1841(o)(7) of this title). (5) **Out-of-State bank** — The term “out-of-State bank” means, with respect to any State, a bank the home State of which is another State and, for purposes of this section, includes a foreign bank, the home State of which is another State.