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1.5.8 Preemption Rules Regarding Establishment of Bank Branches and Other Facilities

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (“Riegle-Neal Act”) gave states a role in determining how out-of-state banks can branch into the state, either through mergers or acquisitions of existing banks or through de novo branches.184

The OCC has issued a regulation stating that “remote service units” (RSUs) are not “branches” within the meaning of the Riegle-Neal Act and are not subject to state geographic or operational restrictions or licensing laws.185 The regulation gives national banks the ability to establish and operate RSUs. An RSU is defined as an automated facility, operated by a customer of a bank, that conducts banking functions such as receiving deposits, paying withdrawals, or lending money.186 The definition includes automated teller machines, automated loan machines, and automated devices for receiving deposits. The regulation states that an RSU may be equipped with a telephone or televideo device that allows contact with bank personnel.

The Ninth Circuit relied in part on the RSU regulation to hold that local governments could not prohibit national banks from charging non-customers fees to use the banks’ ATMs.187


  • 184 {174} 12 U.S.C. § 36.

  • 185 {175} 12 C.F.R. § 7.4003. See also 12 C.F.R. §§ 7.4004, 7.4005 (specifying other functions that do not result in the location becoming a branch).

  • 186 {176} 12 C.F.R. § 7.4003.

  • 187 {177} Bank of Am. v. City & Cty. of San Francisco, 309 F.3d 551 (9th Cir. 2002).