Information Requirements: New Business Plans and Personal Information
Applications Filing Tips - December 2011
Published December 1, 2011 | December 2011 issue
This column—which will run frequently in this newsletter—focuses on current events in applications. The objective of the column is to provide information that speeds and facilitates the processing of applications ﬁled with the Federal Reserve. The last column focused on requests for conﬁdential treatment of certain information submitted in an application and E-Apps, the Federal Reserve’s online system for submitting applications electronically. This quarter, we focus on two cases in which applicants sometimes provide us with too little information. The ﬁrst case concerns business plans associated with a change in control of a bank. The second concerns the Interagency Biographical and Financial report, a form required with many application ﬁlings.
Change in Business Plan at Target Acquisition
We receive many applications in which an existing or proposed bank holding company or an individual seeks to acquire control of a bank. The Federal Reserve’s review of such applications covers many features of the transaction, including the banking organization’s ﬁnancial condition, managerial resources and future prospects. One key element of the review involves the proposed business plan for the organization to be acquired. However, we ﬁnd that some applicants do not provide the Federal Reserve with suffcient information for us to complete our analysis. A ﬁling should fully describe the business plan, including a discussion of the business lines to be focused on by management, a description of any changes resulting from the proposed acquisition and identiﬁcation of the proposed senior management offcials of the target and their principal responsibilities. With regard to the latter component, the discussion must be suffciently detailed to demonstrate that the proposed management team has the competence and experience to successfully implement the proposed business plan. We expect the applicant to provide résumés or similar discussion for proposed senior management offcials that describe their experience, past responsibilities and education that have prepared them for their proposed responsibilities.
Interagency Biographical and Financial Reports
Individuals complete IBFRs. Applicants ﬁle an IBFR to provide supporting ﬁnancial and employment data, typically with a notice of a change in control or a notice of a change in director or senior executive oﬃcer. Our experience has shown that individuals, with some frequency, provide ﬁnancial statements that are too dated or do not provide requested ﬁnancial information on business interests representing signiﬁcant portions of their net worth. Not providing the requested information can result in delays in processing related notices and applications. The instructions for the IBFR state that the ﬁnancial statements from individuals must have “as of ” dates of not more than 90 days prior to the date the IBFR is submitted. Please note that Schedule D of the ﬁnancial statement portion of the IBFR directs individuals to submit year-end ﬁnancial statements, including proﬁt and loss and cash ﬂow statements for the last two years for each business interest in which the individual has an interest equal to 10 percent or more of the individual’s net worth.