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Question & Answer
Question: We are completing our program for compliance with the Bank Protection Act and are considering whether a loan center is considered to be a "branch." The Minimum Security Procedures Regulation says we have to have a written security program for the "…main office and branches…" FDIC has defined a branch as a place "…at which deposits are received or checks paid or money lent." Is a loan center a branch?
Anwer: We called two experts for this answer-The regulatory officer of a very large institution that has loan centers, and the office of Special Activities at FDIC.
What we learned is that if loans are not approved and disbursed at the loan center, it is not considered to be a "branch" of the institution. It is simply a loan production or expediting office, where applications are received for processing.
Another criteria is whether or not you had to have regulatory approval to open the loan center, or simply notified your regulator that you had done so. If no approval was necessary, it is not considered to be a "branch" of your institution.
The FDIC office indicated you should evaluate these facts and then take "appropriate" action.
Copyright © 1992 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 3, No. 1, 5/92
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