Circular
Banking Agencies Issue Host State
Loan-to-Deposit Ratios
June 29, 2009
Circular No. 12113

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency have issued the host state loan-to-deposit ratios that the banking agencies will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. These ratios update data released on June 26, 2008.

In general, section 109 prohibits a bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. Section 109 also prohibits branches of banks controlled by out-of-state bank holding companies from operating primarily for the purpose of deposit production.

A bank that fails both steps is in violation of section 109 and is subject to sanctions by the appropriate banking agency.

See press release for details.

Press release offsite