In your memorandum dated August 13, 1991, to Alan Kaplan, you asked that we provide guidance on whether the exemption in section 345.101 of the FDIC's regulations (12 C.F.R. § 345.101) ("Interpretive Rule'') to the Community Reinvestment Act ("Act'') would apply to *** ("Company").
Because it is engaged in lending and deposit activities that are not incidental to its trust operations, the Company does not qualify for the exemption from the Act provided by the Interpretive Rule.
A fair reading of the Interpretive Rule, with the recognition of its stated purpose, supports the conclusion that this exemption from the Act was intended to apply to entities who are engaged in the above-mentioned activities but who also may be engaged in other activities incidental to the "specialized operations" of those activities.1 Thus, for example, a trust company that makes certain loans to its trust customers related to the trust services provided to those customers likely would come within the exemption provided by the Interpretive Rule.2 This factual determination, however, would have to be made on a case-by-case basis.
Deposit Activity. As also indicated in the materials provided to us, the Company does not acquire deposits from the "general public," but does accept deposits (other than trust funds) from trust customers and employees of its parent company. These deposits, as of June 30, 1991, totalled approximately $*** million, or 89.2% of the Company's total assets. Because the deposits in issue are not funds either awaiting investment or otherwise held in connection with the "specialized operations" in which the Company is engaged, it cannot be said that this deposit activity is incidental to the Company's trust business. Thus, irrespective of whether the loan activity discussed above would disqualify the Company from the exemption provided by the Interpretive Rule, this deposit activity would alone place the Company outside the intended scope of the Interpretive Rule. Therefore, the exemption would not be available to the Company.