TO: All Tennessee State Chartered Banks

SUBJECT: Closing of Bank Offices - TCA §45-2-603 and §45-2-604

DATE: August 5, 2009

This bulletin is intended to address specifically the issue of suspending bank

office activity in response to possible H1N1 (swine flu) outbreaks and more
generally to emergency powers of banks in response to disasters. Additionally,
this bulletin provides certain guidance should a Tennessee state bank close
certain offices under the authority of TCA §45-2-603 and §45-2-604 in the
discretion of its directorate and management.

Banks organized under the laws of the State of Tennessee may, at their discretion,
temporarily close offices or operations in areas affected by an emergency
resulting from fire, act of God, attack by a foreign nation, riot, insurrection,
civil disorder or any similar disaster without prior approval of the commissioner
in accordance with TCA §45-2-603 and §45-2-604.

The Department of Financial Institutions considers bank determinations that H1N1

outbreaks pose legitimate health risks to the general public or significantly
impacts the ability of a banking institution to maintain an appropriate level of
personnel on site to meet customer needs to be included among any “similar
disaster” as referenced in TCA §45-2-603. Other events may also be included among
any similar disaster, and the directorate and executive management are encouraged
to use reasonable discretion in applying TCA §45-2-603 and §45-2-604. However,
the safety of institution personnel and local citizens are of paramount importance
when evaluating the appropriateness of closing offices.

We encourage institutions to carefully monitor and consider any guidance issued by

state and federal government authorities regarding such events. While TCA §45-2-
603 and §45-2-604 do not require the Department’s prior approval for office
closings in certain events, we do encourage institutions to notify both the
Department as well as their primary federal regulator in as timely a manner as
reasonably possible in the event of such a closing. Additionally, institutions
should make a reasonable effort, in consideration of the public safety, to notify
and accommodate customers.

This bulletin shall serve as notice that no specific prior approval from the
Department is required for Tennessee state-chartered banks to be closed more than
two consecutive business days should a Tennessee state-chartered bank, in its
discretion, determine it is necessary to temporarily close the bank or an office
of the bank in accordance with TCA §45-2-603 and §45-2-604, pursuant to an H1N1
outbreak or similar disaster.

Banks should be advised; however, that if the Federal Reserve is open that the
Federal Reserve may continue to present cash items to banks even if a particular
bank has exercised its discretion to close the bank or one of its offices in
accordance with TCA §45-2-603 and §45-2-604. Please contact your respective
Federal Reserve branch for further guidance.

Questions regarding this Bulletin should be addressed to Tod K. Trulove, Assistant

Commissioner – Bank Division, at 615/741-6013 or Tina G. Miller, General Counsel,
at 615/532-1030.
Greg Gonzales
Commissioner