DI-03-2004 Interstate Banking

# STATE OF LOUISIANA  
OFFICE OF FINANCIAL INSTITUTIONS  
BATON ROUGE, LOUISIANA  

September 10, 2004  
POLICY NO. DI-03-2004  
(B,SB,SL)  

## INTERSTATE BANKING

### I. PURPOSE:  
To define procedures for the proper supervision of out-of-state, state-chartered financial institutions with branches in Louisiana (OSFIs) and Louisiana state-chartered financial institutions with branches in other states (ISFIs).

### II. APPLICABILITY:  
OSFIs, ISFIs, and OFI’s depository personnel.

### III. GENERAL:  
The regulation and supervision of interstate financial institutions will be governed by the November 13, 1996, Nationwide Cooperative Agreement (NCA), the November 14, 1996, Nationwide State/Federal Supervisory Agreement (NSA), and the 1999 Nationwide Cooperative Agreement for Supervision and Examination of Multi-State Trust Institutions (NTA).

#### A. PROCEDURES FOR OSFIs

1. Once it has been determined that an OSFI will be entering Louisiana, the Deputy Chief Examiner (DCE) will assign a Review Examiner (RE) as the primary contact person (PCP) for the institution. The DCE will be assigned as the alternate contact person.

2. The PCP will stay abreast of the level and type of activity conducted in Louisiana and will contact the central point of contact (CPC) from the home state if he/she becomes aware of a problem, deficiency, or complaint.

3. The PCP will contact the CPC at least semi-annually to discuss common areas of concern and to keep the lines of communication between the two offices open. Documentation of each communication will be placed in OFI’s correspondence file.

#### B. PROCEDURES FOR ISFIs CONDUCTING BUSINESS IN ANOTHER STATE

1. Once it has been determined that an ISFI will be entering another state, the DCE will send the state banking department a Host State Questionnaire (attached) to ascertain the host state’s desired level of involvement in the supervision and examination of the institution. Based on the results of the questionnaire, the DCE will draft a Cooperative Agreement for the Supervision and Examination of Multi-State Entities to be signed by the lead state regulators from both banking departments.

2. The RE already assigned to that institution will be the CPC for the institution, and the DCE will act as the alternate CPC.

3. Information that will automatically be shared by the CPC with the contact person in the other state is listed below:  
   a. Examination findings  
   b. Response to the examination findings, if a response was requested  
   c. Proposed enforcement action  
   d. Final enforcement action  
   e. Status of compliance with enforcement action  
   f. Advanced notice of any new activity that will be conducted within the borders of the host state  
   g. Notice of decisions regarding applications, notices, etc., within host state  
   h. Quarterly information summarizing the volume, nature, and resolution of consumer complaints  
   i. Off-site monitoring reports  
   j. Annual directors’ examination or external audit report  

4. The CPC will give the PCP reasonable notice of any upcoming examination of a multi-state institution and request the host state’s participation if the host state indicates a desire to participate in the examination on the Host State Questionnaire. The host state will also be given the option of attending specific meetings, such as the exit, board, or other management meetings.

#### C. HOST STATE PARTICIPATION ON EXAMINATIONS

1. When OFI requests the use of host state examiners on a multi-state examination, the host state will be compensated for the examiners’ time and travel expenses in accordance with the cooperative agreement between the states.

2. When Louisiana is the host state, a periodic examination of the institution to ascertain its level of compliance with applicable Louisiana Consumer Credit Law (LCCl) or trust laws will be conducted. The findings will be sent to the home state to be incorporated into the final examination report.

#### D. SHARING ASSESSMENTS

1. By June 30th, using the preceding year’s branch figures, this office will share assessments with other host states who would agree to share assessments in accordance with the formula developed by CSBS’ District III. The DCE will calculate the amount of assessments that should be shared with each host state. The Administrative Specialist (AS) in-charge of depository institutions’ assessments will send the calculation to the host state and request an invoice for the amount of the shared assessment. The DCE and Accounting Manager should be copied on the correspondence requesting the invoice.

2. When a home state submits a calculation to share assessments to this office, the DCE will check the amounts and request that the AS submit an invoice for the amount of the shared assessment. The DCE and Accounting Manager should be copied on the invoice.

#### E. EXCEPTIONS—Any exception to this policy requires the prior written approval of the Commissioner.

John Ducrest  
Commissioner of Financial Institutions  

Date: 9/10/04  
KLM

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# LOUISIANA OFFICE OF FINANCIAL INSTITUTIONS  
## QUESTIONNAIRE FOR HOST STATE PARTICIPATION IN THE EXAMINATION AND SUPERVISION OF A LOUISIANA STATE-CHARTERED BANK

Please complete this initial questionnaire so that this office can determine the degree to which you desire to participate in the supervision and regulation of the branches of this Louisiana state-chartered financial institution which operates branches in your state. Once completed, please return the questionnaire to Ms. Kerry Morris, Deputy Chief Examiner, Office of Financial Institutions, 8660 United Plaza Blvd., 2nd Floor, Baton Rouge, LA 70809.

Host State Banking Department: ________________________  
Bank: _____________________________________________  
Contact person for host state banking department: _______  
Contact person’s phone number: ________________________  
Contact person’s e-mail address: _______________________  
Total assets of bank: _______________ As of date: ________  
Total deposits of bank: _____________ As of date: ________  
Total deposits of branches in host state: _______________ As of date: ________

(1) Please check all of the following that describe the extent of **inclusion** that your department is interested regarding the examination and regulatory supervision of the branches located in your state.  
____ Participation in pre-planning of examination activities  
____ Participation in the examination activities, with up to ___ examiners working ___ loans, ___ operations, ___ state consumer compliance, and ___ other ________________ (describe)  
____ Participation in management and Board meeting wrap-ups  
____ Advance notice of any targeted examination activities  
____ Participation in drafting report  
____ Participation in resolution of consumer complaints related to the bank  
____ Inclusion of specific information requested through the examination process  
____ Willing to travel out of state for examination duties  
____ Other (describe) ________________________________  
____ Other (describe) ________________________________  
____ Other (describe) ________________________________

(2) Please check all of the following that describe the extent of **information** that your department is interested in receiving regarding the examination and regulatory supervision of the branches located in your state.  
____ Notice of all corporate activities filings related to the Host State as they occur  
____ Copies of all corporate activities filings related to the Host State as they occur  
____ Copies of all consumer complaints filed and resolution data related to them  
____ Copies of all significant consumer complaints filed and resolution data related to them  
____ Provision of a contact point on questions of consumer complaints  
____ Recaps of all consumer complaints related to the bank  
____ Copies of all major correspondence related to the bank: ___ as it occurs, ___ other frequency ________________ (describe)  
____ Copies of all examinations, target examinations, management responses, as developed  
____ Access to review all supervisory material and work papers retained  
____ Advance notice of ___ days prior to scheduled entry date  
____ Advance notice on any potential enforcement actions  
____ Advance opportunity to comment and possibly participate on potential enforcement actions  
____ Other (describe) ________________________________  
____ Other (describe) ________________________________  
____ Other (describe) ________________________________

(All costs related to providing information will be borne by the Home State.)

(3) Please check all of the following that describe the extent of **income** that your department wishes to receive from the Host State regarding the examination and regulatory supervision of the branches located in your state.  
____ Examination activity rate for the following levels of examiners:  
____ ______ per ___ hour or ___ day for Certified Operations Examiners  
____ ______ per ___ hour or ___ day for Certified Credit Examiners  
____ ______ per ___ hour or ___ day for Certified Examiners-in-Charge  
____ Examination activity rate at the actual rate of pay for the examiner(s) performing the examination duties (within range of ___ to ___ per ___ hour or ___ day)  
____ Per diem/meal allowance of ________ per day  
____ Meal allowance of ______ for breakfast, ______ for lunch, and ______ for dinner  
____ Travel costs of a reasonable amount, with a ______ cap for lodging, ______ for mileage, ______ for other transportation costs, and ______ for other ________________ (describe)  
____ Charges for time outside of actual examination activities but related to the institution  
____ Assessment sharing based on volume of bank operating in the Host State (which commits the Host State to 15 percent of the host state’s share of deposits in this institution)  
This income shall be payable by the following method: ___ bill to the Home State; ___ bill to the bank, but given to the Home State department to provide to the bank; ___ direct payment of actual transportation and lodging bills to the vendor by the Home State; ___ combination of the above, being ________________________________ (describe)

(4) Please check all of the following that describe the extent of a **future relationship** that your department is interested in maintaining with the Home State banking department with regard to the supervision and regulation of this institution.  
____ Participation in annual visits by the home state banking department to discuss all areas of concern that have transpired over the year involving the institution as well as the cooperative program  
____ Completion of an annual questionnaire provided by the home state’s banking department to adjust the host state’s level of participation in the institution’s supervision and regulation  
____ No additional visits are necessary