FRK2_20210721_omb

Supporting Statement for the
International Applications and Prior Notifications under Subpart B of Regulation K
(FR K-2; OMB No. 7100-0284)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years,
without revision, the International Applications and Prior Notifications under Subpart B of
Regulation K (FR K-2; OMB No. 7100-0284). Under the International Banking Act of 1978
(IBA), foreign banks are required to obtain the prior approval of the Board to establish a branch,
agency, or representative office in the United States; to establish or acquire ownership or control
of a commercial lending company in the United States; or to change the status of an agency or
limited branch to a branch in the United States. The Board uses the information from the FR K-2
in connection with these applications and to supervise foreign banks with offices1 in the United
States.
The FR K-2 reporting form consists of a cover sheet and the following five attachments
for the application and notification requirements embodied in Subpart B of Regulation K International Banking Operations (12 CFR Part 211):
• Attachment A Information Requested in Connection with Applications by Foreign Banks
to Establish Branches, Agencies, or Commercial Lending Companies in
the United States (Section 211.24(a)(1) of Regulation K)
• Attachment B Information Requested in Connection with Applications by Foreign Banks
to Establish Representative Offices in the United States (Section
211.24(a)(1) of Regulation K)
• Attachment C Information Requested in Connection with Notifications by Foreign Banks
to Establish Branches, Agencies, or Commercial Lending Companies in
the United States (Section 211.24(a)(2)(i)(A) of Regulation K)
• Attachment D Information Requested in Connection with Notifications by Foreign Banks
to Establish Representative Offices in the United States (Section
211.24(a)(2)(i)(B)(1) – (3) of Regulation K)
• Attachment E
Commitments Required in Connection with Applications and
Notifications by Foreign Banks to Establish Branches, Agencies,
Commercial Lending Companies, or Representative Offices in the United
States.
The estimated total annual burden for the FR K-2 is 468 hours. The form and instructions
are available on the Board’s public website at
https://www.federalreserve.gov/apps/reportforms/default.aspx.

The term “office” means any branch, agency, or representative office, or a commercial lending company
subsidiary.
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Background and Justification
Subpart B of Regulation K governs the U.S. activities of foreign banking organizations. It
implements the IBA and provisions of the Bank Holding Company Act of 1956 and sets forth
rules under which foreign banks establish and operate U.S. offices and certain foreign banking
organizations have U.S. commercial and industrial holdings. Generally, the IBA and
Regulation K provide that a foreign bank may not establish a branch, agency, or representative
office in the United States or acquire ownership or control of a commercial lending company in
the United States unless the Board finds that the foreign bank is subject to comprehensive
supervision on a consolidated basis by the bank’s home country supervisor and engages directly
in the business of banking outside of the United States. Even if these conditions are not met, the
Board may, however, approve an application by a foreign bank to establish a U.S. branch or
agency if (1) the appropriate authorities in the home country of such foreign bank are working to
establish arrangements for the consolidated supervision of such bank and (2) all other factors are
consistent with approval. 2
The various attachments to the FR K-2 instructions specify the information a foreign
bank must include when submitting an application or prior notice under subpart B of
Regulation K. The information required in the instructions pertains only to the specific activity
proposed. The information reported on the FR K-2 is not available from any other source.
Description of Information Collection
The applicant foreign bank must describe the proposed office or commercial lending
company subsidiary, including the types of business to be conducted and the types of services to
be offered. The applicant must also describe the home country bank regulatory and supervisory
framework and any secrecy laws or other impediments that would restrict the ability of the
applicant and its ultimate parent(s) to provide information to the Federal Reserve as needed. In
addition, the applicant must describe any relevant home-country laws or regulations or measures
adopted by the applicant to deter money laundering, terrorist financing, or other illicit activ ities.
Finally, the applicant must provide information about its operations, structure, and ownership,
including a complete organization chart, financial information, and information regarding certain
of the bank’s senior officers, major shareholders, and proposed management of the U.S. office.
Applicants are also required to publish a notice in a newspaper of general circulation in
the community where the office is proposed to be located. 3 The newspaper notice must state the
name and address of the applicant/notificant and the proposed office, and it must invite the
public to submit written comments to the appropriate Reserve Bank. The newspaper notice must
be published no more than fifteen calendar days before and no later than seven calendar days
after the date that an application is filed with the appropriate Reserve Bank.

2

In deciding whether to approve an application under this lesser standard, the Federal Reserve also considers
whether the foreign bank has a dopted and implemented procedures to combat money laundering, and whether the
home country supervisor is developing a legal regime to address money laundering.
3
12 CFR 211.24(b)(2).

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A foreign bank and its ultimate parent(s) submitting an application to establish branches,
agencies, and commercial lending companies in the United States (Attachment A) or a
notification to establish representative offices in the United States (Attachment D) must also
provide commitments to (1) generally make available to the Board such information on the
operations of the bank and any of its affiliates that the Board deems necessary to enforce
applicable law and (2) consent to jurisdiction in the United States in any manner arising under
U.S. banking law (Attachment E). Information already provided in applications filed with state
or federal bank regulatory authorities or otherwise previously provided to the Federal Reserve
may be used to meet the information requirements of the FR K-2.
Respondent Panel
The FR K-2 panel comprises foreign banks, which are required to obtain the prior
approval of the Board to establish a branch, agency, or representative office in the United States;
to establish or acquire ownership or control of a commercial lending company in the United
States; or to change the status of any existing office in the United States.
Time Schedule for Information Collection
These applications and notifications are event-generated. The applying or notifying
organization submits the FR K-2 information collection in accordance with the application and
notification requirements embodied in Subpart B of Regulation K to the Federal Reserve Bank
with supervisory responsibility for that foreign bank.4 Applicants are strongly encouraged to
submit their applications electronically through the Federal Reserve System’s web-based
application, E-Apps (https://www.federalreserve.gov/supervisionreg/afi/afi.htm).5
Public Availability of Data
With regard to the FR K-2, the Board publishes certain information regarding the parties
to and structure of the associated transaction in its H.2 release. The Board does not routinely
publicly release information collected through the FR K-2. The Board may release nonconfidential information included in the FR K-2 upon request, pursuant to the Freedom of
Information Act (FOIA).
Legal Status
The FR K-2 is authorized pursuant to section sections 7, 10, and 13 of the IBA (12 U.S.C.
§§ 3105, 3107, and 3108.). The applications and notifications comprising FR K-2 are required to
obtain a benefit.
The Board does not routinely publicly release information collected through the FR K-2.
To the extent a respondent submits nonpublic commercial or financial information in connection
with the FR K-2, which is both customarily and actually treated as private by the respondent, the
4

If the foreign bank does not currently operate in the United States, the application is submitted to the Federal
Reserve Bank in whose district the proposed office will be located.
5
The FR K-2 application may alternatively be submitted in paper form.

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respondent may request confidential treatment pursuant to exemption 4 of the FOIA (5 U.S.C. §
552(b)(4)). To the extent a respondent submits personal, medical, or similar files, the disclosure
of which would constitute an unwarranted invasion of privacy, the respondent may request
confidential treatment pursuant to exemption 6 of the FOIA (5 U.S.C. § 552(b)(6)). If a
respondent requests confidential treatment, the Board will determine whether the information is
entitled to confidential treatment on a case-by-case basis. The entity should separately designate
any such information as “confidential commercial information” or “confidential financial
information” and the Board will treat such designated information as confidential to the extent
permitted by law, including the FOIA. To the extent a respondent submits information related to
examination, operating, or condition reports prepared by, on behalf of, or for the use of a
financial supervisory agency, the information may be treated as confidential pursuant to
exemption 8 of the FOIA (5 U.S.C. § 552(b)(8)).
Consultation Outside the Agency
There has been no consultation outside the Federal Reserve System.
Public Comments
On March 8, 2021, the Board published an initial notice in the Federal Register
(86 FR 13382) requesting public comment for 60 days on the extension, without revision, of the
FR K-2. The comment period for this notice expired on May 7, 2021. The Board did not receive
any comments. The Board adopted the extension, without revision, of the FR K-2 as originally
proposed. On June 9, 2021, the Board published a final notice in the Federal Register
(86 FR 30604).
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR K-2 is 468
hours. The reporting burden is based on the number of responses received during a typical year.
The disclosure burden reflects the amount of time required to fulfill the newspaper publication
requirement. These reporting and disclosure requirements represent less than 1 percent of the
Board’s total paperwork burden.

Reporting

Estimated
number of
respondents6
13

Disclosure

13

FR K-2

Annual
frequency
1
1

Total

6

Estimated
Estimated
average hours annual burden
per response
hours
35
455
1

13
468

Of these respondents, none are considered small entities as defined by the Small Business Administration (i.e.,
entities with less than $600 million in total assets), https://www.sba.gov/document/support--table-size-standards.

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The estimated total annual cost to the public for the FR K-2 is $27,682.7
Sensitive Questions
These collections of information contain no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The estimated cost to the Federal Reserve System of collecting and processing the
FR K-2 is negligible.

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Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $20, 45% Financial Managers at
$73, 15% Lawyers at $72, and 10% Chief Executives at $95). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2020, published March 31, 2021, https://www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined
using the BLS Standard Occupational Classification System, https://www.bls.gov/soc/.

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