Legal developments

Federal Reserve Bulletin, Oct, 2003

FINAL RULE--AMENDMENT TO REGULATION Z

The Board of Governors of the Federal Reserve System (Board) is amending 12 C.F.R. Part 226, the staff commentary that interprets the requirements of Regulation Z (Truth in Lending). The Board is required to adjust annually the dollar amount that triggers requirements for certain home mortgage loans bearing fees above a certain amount. The Home Ownership and Equity Protection Act of 1994 (HOEPA) sets forth rules for home-secured loans in which the total points and fees payable by the consumer at or before loan consummation exceed the greater of $400 or 8 percent of the total loan amount. In keeping with the statute, the Board has annually adjusted the $400 amount based on the annual percentage change reflected in the Consumer Price Index that is in effect on June 1. The adjusted dollar amount for 2004 is $499.

Effective January 1, 2004, 12 C.F.R. Part 226 is amended as follows:

Part 226--Truth in Lending (Regulation Z)

1. The authority citation for Part 226 continues to read as follows:

Authority: 12 U.S.C. 3806; 15 U.S.C. 1604 and 1637(c)(5).

2. In Supplement I to Part 226, under Section 226.32--Requirements for Certain Closed-End Home Mortages, under Paragraph 32(a)(l)(ii), paragraph 2. ix. is added.

Supplement I to Part 226--Official Staff Interpretations

Subpart E--Special Rules for Certain Home Mortgage Transactions

Section 226.32--Requirements for Certain Closed-End Home Mortgages

32(a) Coverage

Paragraph 32(a)(1)(ii)

2. Annual adjustment of $400 amount.

ix. For 2004, $499, reflecting a 2.22 percent increase in the CPI-U from June 2002 to June 2003, rounded to the nearest whole dollar.

FINAL RULE--AMENDMENT TO REGULATION CC

The Board of Governors is amending 12 C.F.R. Part 229, Appendix A of its Regulation CC (Availability of Funds and Collection of Checks). The Board of Governors is amending Appendix A of Regulation CC to delete the reference to the Pittsburgh check processing office of the Federal Reserve Bank of Cleveland and reassign the Federal Reserve routing symbols currently listed under that office to the head office of the Federal Reserve Bank of Cleveland. These amendments reflect the restructuring of check processing operations within the Federal Reserve System. The Board also is amending appendices A and E of Regulation CC to replace all references to Thomson Financial Publishing Inc. with more general references to "an agent of the American Bankers Association."

Effective November 1, 2003, 12 C.F.R. Part 229 is amended as follows:

Part 229--Availability of Funds and Collection of Checks (Regulation CC)

1. The authority citation for Part 229 continues to read as follows:

Authority: 12 U.S.C. 4001 et seq.

2. The first sentence of A. and the Fourth Federal Reserve District routing symbol list in Appendix A are revised to read as follows:

Appendix A to Part 229--Routing Number Guide to Next-Day Availability Checks and Local Checks.

A. Each bank is assigned a routing number by an agent of the American Bankers Association.

3. Appendix E is amended by removing the phrase "Thomson Financial Publishing Inc." in sections II.DD., XVIII.A.2.b.ii., and XXII.B.2.b.i. and adding the phrase "an agent of the American Bankers Association" in its place.

ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT

Orders Issued Under Section 3 of the Bank Holding Company Act

Woori Finance Holdings Co., Ltd. Seoul, Korea

Woori Bank Seoul, Korea

Order Approving the Formation of a Bank Holding Company and the Acquisition of a Bank

Woori Finance Holdings Co., Ltd. ("WFH") has requested the Board's approval under section 3 of the Bank Holding Company Act ("BHC Act") (12 U.S.C. [section] 1842) to become a bank holding company and acquire indirectly all the voting shares of Panasia Bank, National Association, Fort Lee, New Jersey ("Panasia"). Woori and ("Woori"), a wholly owned subsidiary of WFH and a bank holding company within the meaning of the BHC Act, has also requested the Board's approval under section 3 to acquire indirectly all the voting shares of Panasia. (1)

Notice of the proposals, affording interested persons an opportunity to submit comments, has been published (68 Federal Register 14,658 and 17,808 (2003)). The time for filing comments has expired, and the Board has considered the proposal in light of the factors set forth in section 3 of the BHC Act.

WFH is a Korean financial holding company controlled by the Korea Deposit Insurance Company ("KDIC"). (25) With total consolidated assets of $97 billion, WFH is the second largest banking organization in Korea. (3) Woori, with total consolidated assets of $74 billion, is WFH's lead subsidiary bank and the third largest bank in Korea. In the United States, Woori operates agencies in New York City and Los Angeles. Woori America, with total assets of $354 million, controls approximately $319 million in deposits, representing less than 1 percent of total deposits in insured depository institutions in the United States ("total U.S. insured deposits"). (4) Woori America operates branches in New York and New Jersey. (5)