Notification of Changes of Insured Status, 60015-60019 [05-20590]
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60015
Proposed Rules
Federal Register
Vol. 70, No. 198
Friday, October 14, 2005
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 307
RIN 3064–AC93
Notification of Changes of Insured
Status
Federal Deposit Insurance
Corporation (FDIC).
ACTION: Notice of proposed rulemaking.
AGENCY:
SUMMARY: The FDIC is proposing to
revise its regulation addressing the
certification to the FDIC of the
assumption of deposits and the
notification to depositors of a change in
insured status. The proposed revision
would clarify that a certification is
required only when all of an insured
institution’s deposit liabilities have
been assumed and that no certification
is required for partial deposit
assumptions. The proposal would
require the institution whose deposits
are transferred, or its legal successor, to
provide the notification rather than the
institution assuming the deposits.
Finally, the proposal would also clarify
the circumstances in which the FDIC
would issue orders reflecting that an
institution’s insured status has been
terminated under section 8(q) of the
Federal Deposit Insurance Act.
Generally, no orders would be issued
when an insured institution transfers all
of its deposits and its authority to
engage in banking is contemporaneously
cancelled, nor when the FDIC has been
appointed receiver for an insured
institution in default.
DATES: Written comments on the
Proposal must be received by the FDIC
on or before December 13, 2005 for
consideration.
Interested parties are
invited to submit written comments to
the FDIC by any of the following
methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
ADDRESSES:
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• Agency Web Site: https://
www.fdic.gov/regulations/laws/federal/
propose.html. Follow the instructions
for submitting comments.
• E-mail: comments@fdic.gov.
Include ‘‘Part 307—Notification of
Changes of Insured Status’’ in the
subject line of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments/Legal
ESS, Federal Deposit Insurance
Corporation, 550 17th Street, NW.,
Washington, DC 20429.
• Hand Delivery: Comments may be
hand-delivered to the guard station
located at the rear of the FDIC’s 550
17th Street building (accessible from F
Street) on business days between 7 a.m.
and 5 p.m.
Instructions: All submissions must
include the agency name and use the
title ‘‘Part 307—Notification of Changes
of Insured Status.’’
All comments received will be posted
without change to, https://www.fdic.gov/
regulations/laws/federal/propose.html,
including any personal information
provided.
Comments may be inspected and
photocopied in the FDIC Public
Information Center, Room 100, 801 17th
Street, NW., Washington, DC, between 9
a.m. and 4:30 p.m. on business days.
FOR FURTHER INFORMATION CONTACT:
Kevin W. Hodson, Chief, Risk
Management and Applications Section
II, Division of Supervision and
Consumer Protection, (202) 898–6919;
Donald R. Hamm, Review Examiner,
Division of Supervision and Consumer
Protection, (202) 898–3528; Thomas
Nixon, Counsel, Legal Division, (202)
898–8766; Federal Deposit Insurance
Corporation, 550 17th Street, NW.,
Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
The FDIC’s Part 307 contains two
sections. Section 307.1 implements
section 8(q) of the Federal Deposit
Insurance Act (FDI Act) (12 U.S.C.
1818(q)), which states:
Whenever the liabilities of an insured
depository institution for deposits shall have
been assumed by another insured depository
institution or depository institutions,
whether by way of merger, consolidation, or
other statutory assumption, or pursuant to
contract
(1) the insured status of the depository
institution whose liabilities are so assumed
shall terminate on the date of receipt by the
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Corporation of satisfactory evidence of such
assumption;
(2) the separate insurance of all deposits so
assumed shall terminate at the end of six
months from the date such assumption takes
effect or, in the case of any time deposit, the
earliest maturity date after the six-month
period. * * *
All assumptions of insured deposit
liabilities, whether a ‘‘total’’ assumption
of all the transferring institution’s
deposits or an assumption of only a
portion of its deposits (a ‘‘partial’’
assumption), by an insured institution
are subject to the Bank Merger Act and
require the prior written approval of the
‘‘responsible agency.’’ 1 The responsible
agency is the primary Federal regulator
of the assuming institution.
The current section 307.1 was last
revised in 1983. It requires an assuming
institution to provide a certification to
the FDIC ‘‘[w]henever the deposit
liabilities of an insured bank * * * are
assumed by another insured bank.
* * * ’’ In 1997, the FDIC published a
notice of proposed rulemaking
concerning Part 307 which was not
made final.2 The preamble to that
proposed rulemaking indicated that the
FDIC’s view of the current text of
section 307.1 was that certifications
should be made for both partial and
total assumptions. Since the text of
section 307.1 does not clearly
distinguish between partial and total
assumptions, institutions may be unsure
whether a certification is required for
partial deposit assumptions.
An insured depository institution that
proposes to voluntarily terminate its
insured status without transferring all of
its deposits to an FDIC insured
institution must obtain the FDIC’s
permission. (FDI Act section 18(i)(3), 12
U.S.C. 1828(i)(3)).3 Section 307.2
1 FDI Act section 18(c)(2), (12 U.S.C. 1828(c)(2)),
reads as follows:
No insured depository institution shall merge or
consolidate with any other insured depository
institution or, either directly or indirectly, acquire
the assets of, or assume liability to pay any deposits
made in, any other insured depository institution
except with the prior written approval of the
responsible agency. * * *
2 62 FR 26431, May 14, 1997. That proposal is
withdrawn.
3 This proposal would not affect the requirements
for FDIC approval of voluntary deposit insurance
terminations under sections 8(a) and 8(p) of the FDI
Act and for prior written consent for the conversion
of an insured depository institution into a
noninsured bank or institution as required by
section 18(i)(3).
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applies section 8(a)(6) of the FDI Act 4
to voluntary terminations of insured
status. Under section 307.2, an insured
bank or insured branch of a foreign bank
seeking to voluntarily terminate its
insured status, but whose deposits will
not be assumed by another insured
depository institution, must provide
notice to its depositors of the date its
insured status will terminate. The
regulation authorizes the appropriate
FDIC Regional Director of the Division
of Supervision and Consumer Protection
to approve the form, manner, and timing
of the notice to depositors and provides
authority to the FDIC to take such other
steps as may be deemed necessary for
the protection of the institution’s
depositors.
II. The Proposed Rule
A. Revised Caption of the Part
The caption of the Part would be
changed from ‘‘Notification of Changes
of Insured Status’’ to ‘‘Certification of
Assumption of Deposits and
Notification of Changes of Insured
Status.’’ This would make the caption
more descriptive of the content of the
Part and alert institutions that the Part
addresses deposit assumptions as well
as changes in insured status.
B. Section 307.1—Scope and Purpose
The current Part 307 does not have a
scope and purpose section. In addition,
since Part 307 has not been revised
since 1983, sections 307.1 and 307 .2
continue to refer to an ‘‘insured bank’’
rather than to an ‘‘insured depository
institution,’’ consistent with the changes
made to the FDIC’s responsibilities and
terminology by sections 201 and 202 of
the Financial Institutions Reform,
Recovery, and Enforcement Act of
1989.5 The proposed rule would add a
new section 307.1 to indicate that the
Part applies to insured depository
institutions as defined in section 3(c)(2)
of the FDI Act,6 and to describe the
purpose of the Part. The existing
sections 307.1 and 307.2 would be
4 12 U.S.C. 1818(a)(6). Section 8(a)(6) reads as
follows:
PUBLICATION OF NOTICE OF
TERMINATION.—The Corporation may publish
notice of such termination and the depository
institution shall give notice of such termination to
each of its depositors at his last address of record
on the books of the depository institution, in such
manner and at such time as the Board of Directors
may find to be necessary and may order for the
protection of depositors.
5 Public Law 101–73, 103 Stat. 103.
6 12 U.S.C. 1813(c)(2). An ‘‘insured depository
institution’’ is defined as ‘‘any bank or savings
association the deposits of which are insured by the
Corporation pursuant to this [the FDI] Act.’’ Federal
branches and insured branches are included in the
definition of ‘‘bank’’ in section 3(a)(1)(A) (12U.S.C.
1813(a)(1)(A)).
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redesignated as sections 307.2 and
307.3, respectively.
C. Section 307.2—Certification of
Assumption of Deposit Liabilities
When certification is required. As
noted, there may be some ambiguity
whether the current certification
requirement applies only to total
deposit assumptions, or also to partial
assumptions. Today’s proposed rule
would clarify that a certification is
required only when there has been a
total assumption of deposits. No
certification would be required in the
case of a partial transfer of deposits, for
example when a single branch of an
institution is sold. Clarifying that no
certification is necessary for a partial
assumption is consistent with the
FDIC’s goal of reducing regulatory
burden pursuant to Section 2222 of the
Economic Growth and Regulatory
Paperwork Reduction Act of 1996 7
while obtaining sufficient information
for the proper implementation of section
8(q) of the FDI Act.8
There may be situations in which an
insured depository institution disposes
of all of its deposits through a series of
simultaneous partial deposit
assumptions involving multiple
assuming institutions, rather than
through a single total deposit
assumption by one assuming institution.
An example of this would be where all
of the deposits of a transferring
institution were assumed through a
series of branch acquisitions by different
assuming institutions that occurred on
the same day. Viewed cumulatively,
these partial assumptions would
amount to a total assumption of the
deposits of the transferring institution
making certification necessary. In this
situation, today’s proposal would
require that the transferring institution
file a certification.
The current section 307.1 also does
not distinguish between a deposit
assumption involving operating
institutions versus an assumption
involving an institution in default and
in FDIC receivership. The FDIC plays an
integral role in the transfer and
assumption of deposit liabilities when it
is appointed as receiver for an insured
7 Public Law 104–208, Sept. 30, 1996, 12 U.S.C.
3311.
8 The 1997 proposed rule had envisioned that the
certification of partial assumption could be used by
the FDIC to determine when the separate deposit
insurance coverage provided by section 8(q) on the
assumed deposits ended. However, the FDIC can
rely on other sources of information to make a
separate deposit insurance coverage determination
when necessary (for example, from information
provided directly to the FDIC by insured depository
institutions or by other Federal banking agencies, as
well from the underlying transactional documents).
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depository institution in default, and
has in its possession information
regarding the deposit transfer and
assumption transaction. Section 307.2(a)
of today’s proposal would create an
explicit exception from the certification
requirement when the deposit liabilities
are being transferred from an insured
depository institution in default and the
FDIC has been appointed as receiver.
Who must make the certification. The
proposed rule would require the
transferring institution, or its legal
successor (‘‘transferring institution’’),
rather than the assuming institution, to
provide certification to the FDIC.
Generally, an institution transferring
deposit liabilities will be in a better
position than the assuming institution
to know whether the transfer constitutes
all of its deposits, thus triggering
application of Part 307 and FDI Act
section 8(q). This would be particularly
true in the case of an institution that
transfers all of its deposit liabilities
through multiple transfers to a variety of
assuming institutions. In such a
situation, it may be difficult for the
assuming institutions to have sufficient
knowledge of key facts in order to make
accurate certifications. In a merger or
consolidation there may be only one
surviving entity which is the legal
successor to both the transferring and
assuming institutions. In such instances,
that surviving entity would provide any
required certification.
Content and form of the certification.
Proposed section 307.2(b) would
establish the certification’s content. The
requirements are similar to the current
section 307.1 but clarify certain issues,
such as where certifications should be
filed with the FDIC, and the need for the
certification to be on the letterhead of
the transferring institution or its legal
successor and to be signed by an
authorized official. In addition, the
proposal would require an institution
that is contemporaneously relinquishing
its authority to engage in the business of
receiving deposits to provide the date
that its authority terminated (or will
terminate) as well as the method of
termination (e.g., whether by the
surrender of its charter, the cancellation
of its charter or license to conduct a
banking business, or otherwise). As
discussed below, this information
would be used by the FDIC to evaluate
the need to issue an order terminating
insurance. To assist the industry with
compliance, the proposed rule provides
a template (Appendix A) that may be
used to satisfy with proposed section
307.2 certification requirements.
Evidence of Assumption. The current
section 307.1 states that a certification
made pursuant to section 307.1 ‘‘shall
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be considered satisfactory evidence of
the assumption.’’ Proposed section
307.2(d) makes a similar statement for
accurate certifications that have been
made consistent with the requirements
of proposed section 307.2 (a), (b) and
(c). The term ‘‘accurate’’ has been added
to indicate that a materially inaccurate
certification would not trigger the
automatic termination of the
transferring institution’s insured status.
The proposed section 307.2(d) would
also allow the FDIC to consider other
evidence, in addition to a certification,
of a total deposit assumption to
constitute satisfactory evidence of an
assumption for the purposes of section
8(q).
Issuance of an Order. Section 8(q) can
be construed as automatically
terminating an institution’s insured
status upon the FDIC’s receipt of
satisfactory evidence of a total
assumption. The FDIC did not generally
issue orders terminating the insured
status of transferring institutions before
1983 when the rule was last revised,
and the current section 307.1 does not
discuss the issuance of such orders.9 In
most cases of total deposit assumptions,
the transferring institution’s authority to
engage in banking is contemporaneously
cancelled. In such a situation, an FDIC
order confirming the termination of
insurance has no practical effect and is
unnecessary. Accordingly, under the
proposed rule no order confirming the
termination of an institution’s insured
status would generally be issued when
the transferring institution’s authority to
engage in banking is cancelled
contemporaneously (i.e., generally
within five business days after all
deposits have been assumed). The
proposed rule also would not require
orders when deposits are transferred
and assumed after a default when the
FDIC has been appointed as receiver.
The proposed rule would provide for
the issuance of an FDIC order
confirming the termination of the
insured status of a transferring
institution in the relatively limited
circumstance in which a total transfer of
deposit liabilities has occurred but the
transferring institution’s charter is not
contemporaneously cancelled. Absent
the entry of an order confirming the
termination of insured status, an
institution in such a situation might
attempt to resume accepting deposits
sometime after the assumption
transaction occurs; an institution might
also attempt to sell its charter, which
9 The 1997 proposed rule would have provided
that the FDIC would generally issue an order
terminating the insured status of an institution that
transferred all of its deposits.
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could allow what is in fact a new entity
to conduct banking operations without
always requiring FDIC review and
approval.10
D. Section 307.3—Notice to Depositors
When Insurance Is Voluntarily
Terminated and Deposits Are Not
Assumed
As noted earlier, a bank that has
obtained the FDIC’s permission under
sections 8(a), 8(p) or 18(i)(3) of the FDI
Act to terminate its insured status
without transferring all of its deposits to
an FDIC insured institution is required
by the current section 307.2 to provide
notice to each of its depositors. A copy
of this notice must be provided to and
approved by the appropriate Regional
Director of the Division of Supervision
and Consumer Protection prior to the
notice being distributed to the
institution’s depositors. The proposed
rule would clarify that the notice must
be on the institution’s letterhead, signed
by a duly authorized officer and sent to
the depositor’s last known address on
the institution’s books. To assist the
industry with compliance, the proposed
rule provides a template (Appendix B)
that may be used to satisfy with
proposed section 307.3 certification
requirements.
III. Regulatory Analysis and Procedure
A. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act (44 U.S.C. 3501 et seq.)
the FDIC may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless it
displays a currently valid Office of
Management and Budget (OMB) control
number. The collection of information
contained in this proposed rule has
been submitted to OMB for review.
ADDRESSES: Interested parties are
invited to submit written comments to
the FDIC concerning the Paperwork
Reduction Act implications of this
proposal. Such comments should refer
to ‘‘Notification of Changes of Insured
Status, 3064–0124.’’ Comments on
Paperwork Reduction Act issues may be
submitted by any of the following
methods:
• https://www.FDIC.gov/regulations/
laws/federal/propose.html.
• E-mail: comments@FDIC.gov.
Include ‘‘Notification of Changes of
Insured Status, 3064–0124’’ in the
subject line of the message.
• Mail: Thomas Nixon (202–898–
8766), Counsel, Federal Deposit
10 The transfer of the charter would require prior
approval under the Bank Merger Act or the Change
in Bank Control Act.
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Insurance Corporation, 550 17th Street,
NW., Washington, DC 20429.
• Hand Delivery: Comments may be
hand-delivered to the guard station at
the rear of the 17th Street Building
(located on F Street), on business days
between 7 a.m. and 5 p.m.
• A copy of the comments may also
be submitted to the OMB desk officer for
the FDIC: Mark Menchik, Office of
Information and Regulatory Affairs,
Office of Management and Budget, New
Executive Office Building, Room 3208,
Washington, DC 20503, or by electronic
mail to mmenchik@omb.eop.gov.
Comment is solicited on:
(1) Whether the proposed collection
of information is necessary for the
proper performance of the functions of
the agency, including whether the
information will have practical utility;
(2) The accuracy of the agency’s
estimate of the burden of the proposed
collection of information, including the
validity of the methodology and
assumptions used;
(3) The quality, utility, and clarity of
the information to be collected; and
(4) Ways to minimize the burden of
the collection of information on those
who are to respond, including the use
of appropriate automated, electronic,
mechanical, or other technological
collection techniques or other forms of
information technology; e.g., permitting
electronic submission of responses.
(5) Estimates of capital or start-up
costs and costs of operation,
maintenance, and purchases of services
to provide information.
Title of the collection: The proposed
rule will modify an information
collection previously approved by OMB
titled ‘‘Notification of Changes of
Insured Status’’ under control number
3064–0124. The collection’s title would
be changed to ‘‘Certification of
Assumption of Deposits and
Notification of Changes of Insured
Status.’’
Summary of the current collection:
The collection consists of two parts: a
certification that an insured depository
institution provides when it has
assumed the deposit liabilities of
another insured institution; and a
notification to depositors that an
insured institution provides if it has
obtained FDIC approval to voluntarily
terminate its insured status without an
assumption of deposits.
Need and use of the information: The
certification is required to implement
section 8(q) of the FDI Act to determine
when the insured status of an institution
is terminated based on an assumption of
its deposits. The depositor notification,
required by Part 307 informs depositors
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that the insured status of their deposits
in the institution will terminate.
Proposed changes to the collection:
The proposed rule will modify the
collection by eliminating certifications
of assumption for partial assumptions of
deposits and will require certifications
to be made by the transferring
institution rather than the assuming
institution. No changes are proposed in
the notice to depositors.
Respondents: Insured depository
institutions.
Frequency of response: Occasional.
Annual burden estimate: Number of
certifications: 280; number of depositor
notices: 5. Average time to prepare a
certification: one quarter hour; depositor
notice: 1 hour. Total annual burden: 75
hours.
B. Regulatory Flexibility Act
Pursuant to section 605(b) of the
Regulatory Flexibility Act (5 U.S.C. 601
et seq.) the FDIC certifies that this
proposed rule will not have a significant
economic impact on a substantial
number of small entities. The proposed
rule would reduce regulatory burden by
eliminating the need for a certification
to be filed with the FDIC when the
liability for some, but not all, of the
deposits of an insured institution are
transferred to another institution. A
certification requires a minimal amount
of time and resources since it reports
information readily available to the
institution making the certification.
List of Subject in 12 CFR Part 307
Bank deposit insurance, Reporting
and recordkeeping requirements.
The Board of Directors of the Federal
Deposit Insurance Corporation hereby
proposes to revise Part 307 of Title 12
of the Code of Federal Regulations to
read as follows:
PART 307—CERTIFICATION OF
ASSUMPTION OF DEPOSITS AND
NOTIFICATION OF CHANGES OF
INSURED STATUS
Sec.
307.1 Scope and purpose.
307.2 Certification of assumption of deposit
liabilities.
307.3 Notice to depositor when insured
status is voluntarily terminated and
deposits are not assumed.
Appendix A to Part 307—[Transferring
Institution Letterhead]
Appendix B to Part 307—[Institution
Letterhead]
Authority: 12 U.S.C. 1818(a)(6); 1818(q);
and 1819(a) [Tenth].
§ 307.1
Scope and purpose.
(a) Scope. This Part applies to all
insured depository institutions, as
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defined in section 3(c)(2) of the Federal
Deposit Insurance Act (FDI Act) (12
U.S.C. 1813(c)(2)).
(b) Purpose. This Part sets forth the
rules governing: (1) The time and
manner for providing certification to the
FDIC regarding the assumption of all of
the deposit liabilities of an insured
depository institution by one or more
insured depository institutions; and (2)
The notification that an insured
depository institution shall provide its
depositors when a depository
institution’s insured status is being
voluntarily terminated without its
deposits being assumed by one or more
insured depository institutions.
§ 307.2 Certification of assumption of
deposit liabilities.
(a) When certification is required.
Whenever all of the deposit liabilities of
an insured depository institution are
assumed by one or more insured
depository institutions by merger,
consolidation, other statutory
assumption, or by contract, the
transferring insured depository
institution, or its legal successor, shall
provide an accurate written certification
to the FDIC that its deposit liabilities
have been assumed. No certification
shall be required when deposit
liabilities are assumed by an operating
insured depository institution from an
insured depository institution in
default, as defined in section 3(x)(1) of
the FDI Act (12 U.S.C. 1813(x)(1)), and
that has been placed under FDIC
receivership.
(b) Certification requirements. The
certification required by paragraph (a) of
this section shall be provided on official
letterhead of the transferring insured
depository institution or its legal
successor, signed by a duly authorized
official, and state the date the
assumption took effect. The certification
shall indicate the date on which the
transferring institution’s authority to
engage in banking has terminated or
will terminate as well as the method of
termination (e.g., whether by the
surrender of its charter, by the
cancellation of its charter or license to
conduct a banking business, or
otherwise). The certification may follow
the form contained in appendix A of
this part. In a merger or consolidation
where there is only one surviving entity
which is the legal successor to both the
transferring and assuming institutions,
the surviving entity shall provide any
required certification.
(c) Filing. The certification required
by paragraph (a) of this section shall be
provided within 30 calendar days after
the assumption takes effect, and shall be
submitted to the appropriate Regional
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Director of the FDIC’s Division of
Supervision and Consumer Protection,
as defined in 12 CFR 303.2(g).
(d) Evidence of assumption. The
receipt by the FDIC of an accurate
certification for a total assumption as
required by paragraphs (a), (b) and (c) of
this section shall constitute satisfactory
evidence of such deposit assumption, as
required by section 8(q) of the FDI Act
(12 U.S.C. 1818(q)), and the insured
status of the transferring institution
shall terminate on the date of the receipt
of the certification. In appropriate
circumstances, the FDIC, in its sole
discretion, may require additional
information, or may consider other
evidence of a deposit assumption to
constitute satisfactory evidence of such
assumption for purposes of section 8(q).
(e) Issuance of an order. The
Executive Secretary, upon request from
the Director of the Division of
Supervision and Consumer Protection
and with the concurrence of the General
Counsel, or their respective designees,
shall issue an order confirming that the
insured status of the transferring
insured depository institution has been
terminated as of the date of receipt by
the FDIC of satisfactory evidence of
such assumption, pursuant to section
8(q) of the FDI Act and this regulation.
Generally, no order shall be issued,
under this paragraph, and insured status
shall be cancelled by operation of law:
(1) If the charter of the transferring
institution has been cancelled, revoked,
rescinded, or otherwise terminated by
operation of applicable state or federal
statutes or regulations, or by action of
the chartering authority for the
transferring institution essentially
contemporaneously, that is, generally
within five business days after all
deposits have been assumed; or
(2) If the transferring institution is an
insured depository institution in default
and for which the FDIC has been
appointed receiver.
§ 307.3 Notice to depositors when insured
status is voluntarily terminated and
deposits are not assumed.
(a) Notice required. An insured
depository institution that has obtained
authority from the FDIC to terminate its
insured status under sections 8(a), 8(p)
or 18(i)(3) of the FDI Act without its
deposit liabilities being assumed by one
or more insured depository institutions,
shall provide to each of its depositors,
at the depositor’s last known address of
record on the books of the institution,
prior written notification of the date the
institution’s insured status shall
terminate.
(b) Prior approval of notice. The
insured depository institution shall
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provide the appropriate Regional
Director of the FDIC’s Division of
Supervision and Consumer Protection,
as defined in 12 CFR 303.2(g), a copy of
the proposed notice for approval. After
being approved, the notice shall be
provided to depositors by the insured
depository institution at the time and in
the manner specified by the appropriate
Regional Director.
(c) Form of notice. The notice to
depositors required by paragraph (a) of
this section shall be provided on the
official letterhead of the insured
depository institution, shall bear the
signature of a duly authorized officer,
and, unless otherwise specified by the
appropriate Regional Director, may
follow the form of the notice contained
in appendix B of this part.
(d) Other requirements possible. The
FDIC may require the insured
depository institution to take such other
actions as the FDIC considers necessary
and appropriate for the protection of
depositors.
Appendix A to Part 307—[Transferring
Institution Letterhead]
[Date]
[Name and Address of appropriate FDIC
Regional Director]
SUBJECT: Certification of Total Assumption
of Deposits
This certification is being provided
pursuant to 12 U.S.C. 1818(q) and 12 CFR
307.2. On [state the date the deposit
assumption took effect], [state the name of
the depository institution assuming the
deposit liabilities] assumed all of the deposits
of [state the name and location of the
Transferring Institution whose deposits were
assumed]. [If applicable, state the date and
method by which the transferring
institution’s authority to engage in banking
was or will be terminated.] Please contact the
undersigned, at [telephone number], if
additional information is needed.
Sincerely,
By:
[Name and Title of Authorized
Representative]
Appendix B to Part 307—[Institution
Letterhead]
[Date]
[Name and Address of Depositor]
SUBJECT: Notice to Depositor of Voluntary
Termination of Insured Status
The insured status of [name of insured
depository institution] under the provisions
of the Federal Deposit Insurance Act, will
terminate as of the close of business on [state
the date] (‘‘termination date’’). Insured
deposits in the [name of insured depository
institution] on the termination date, less all
withdrawals from such deposits made
subsequent to that date, will continue to be
insured by the Federal Deposit Insurance
Corporation, to the extent provided by law,
until [state the date]. The Federal Deposit
VerDate Aug<31>2005
15:37 Oct 13, 2005
Jkt 208001
Insurance Corporation will not insure any
new deposits or additions to existing
deposits made by you after the termination
date.
This Notice is being provided pursuant to
12 U.S.C. 1818(a)(6) and 12 CFR 307.3.
Please contact [name of institution official
in charge of depositor inquiries], at [name
and address of insured depository
institution] if additional information is
needed regarding this Notice or the insured
status of your account(s).
Sincerely,
By: [Name and Title of Authorized
Representative]
By order of the Board of Directors, at
Washington DC on this 6th day of October,
2005.
Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. 05–20590 Filed 10–13–05; 8:45 am]
BILLING CODE 6714–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 331 and 362
RIN 3064–AC95
Interstate Banking; Federal Interest
Rate Authority
Federal Deposit Insurance
Corporation (FDIC).
ACTION: Notice of proposed rulemaking.
AGENCY:
The FDIC received a petition
for rulemaking to preempt certain state
laws with the stated purpose of
establishing parity between national
banks and state-chartered banks in
interstate activities and operations. The
petition also requested rulemaking to
implement the interest rate authority
contained in the Federal Deposit
Insurance Act. Generally, the requested
rules would provide that the home state
law of a state bank applies to the
interstate activities of the bank and its
operating subsidiaries to the same
extent that the National Bank Act
applies to the interstate activities of a
national bank and its operating
subsidiaries. They would also
implement the federal statutory
provisions addressing interest charged
by FDIC-insured state banks and insured
U.S. branches of foreign banks. The
FDIC is requesting comments on a
proposed rule to amend the FDIC’s
regulations in response to the
rulemaking petition. Issuance of the
proposed rules would serve as the
FDIC’s response to the rulemaking
petition.
DATES: Comments must be submitted on
or before December 13, 2005.
SUMMARY:
PO 00000
Frm 00005
Fmt 4702
Sfmt 4702
60019
You may submit comments
by any of the following methods:
• Agency Web site: https://
www.FDIC.gov/regulations/laws/
federal/propose.html. Follow the
instructions for submitting comments.
• E-mail: comments@FDIC.gov.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments/Legal
ESS, Federal Deposit Insurance
Corporation, 550 17th Street, NW.,
Washington, DC 20429.
• Hand Delivered/Courier: The guard
station at the rear of the 550 17th Street
Building (located on F Street), on
business days between 7 a.m. and 5 p.m.
• Public Inspection: Comments may
be inspected and photocopied in the
FDIC Public Information Center, Room
100, 801 17th Street, NW., Washington,
DC, between 9 a.m. and 4:30 p.m. on
business days.
• Internet Posting: Comments
received will be posted without change
to https://www.FDIC.gov/regulations/
laws/federal/propose.html, including
any personal information provided.
FOR FURTHER INFORMATION CONTACT:
Robert C. Fick, Counsel, (202) 898–8962;
Rodney D. Ray, Counsel, (202) 898–
3556; or Joseph A. DiNuzzo, Counsel,
(202) 898–7349; Legal Division, Federal
Deposit Insurance Corporation,
Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
ADDRESSES:
I. The Petition
The Financial Services Roundtable, a
trade association for integrated financial
services companies (‘‘Petitioner’’), has
petitioned the FDIC to adopt rules
concerning the interstate activities of
insured state banks and their
subsidiaries that are intended to provide
parity between state banks and national
banks. Generally, the requested rules
would provide that a state bank’s home
state law governs the interstate activities
of state banks and their operating
subsidiaries (‘‘Op Subs’’) 1 to the same
extent that the National Bank Act
(‘‘NBA’’) governs a national bank’s
interstate business. The Petitioner
requests that the FDIC adopt rules with
respect to the following areas:
• The law applicable to activities
conducted in a host state by a state bank
that has a branch in that state,
• The law applicable to activities
conducted by a state bank in a state in
which the state bank does not have a
branch,
• The law applicable to activities
conducted by an Op Sub of a state bank,
1 Generally, an operating subsidiary is a majorityowned subsidiary of a bank or savings association
that engages only in activities that its parent bank
or savings association may engage in.
E:\FR\FM\14OCP1.SGM
14OCP1
Agencies
[Federal Register Volume 70, Number 198 (Friday, October 14, 2005)]
[Proposed Rules]
[Pages 60015-60019]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-20590]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 70, No. 198 / Friday, October 14, 2005 /
Proposed Rules
[[Page 60015]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 307
RIN 3064-AC93
Notification of Changes of Insured Status
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The FDIC is proposing to revise its regulation addressing the
certification to the FDIC of the assumption of deposits and the
notification to depositors of a change in insured status. The proposed
revision would clarify that a certification is required only when all
of an insured institution's deposit liabilities have been assumed and
that no certification is required for partial deposit assumptions. The
proposal would require the institution whose deposits are transferred,
or its legal successor, to provide the notification rather than the
institution assuming the deposits. Finally, the proposal would also
clarify the circumstances in which the FDIC would issue orders
reflecting that an institution's insured status has been terminated
under section 8(q) of the Federal Deposit Insurance Act. Generally, no
orders would be issued when an insured institution transfers all of its
deposits and its authority to engage in banking is contemporaneously
cancelled, nor when the FDIC has been appointed receiver for an insured
institution in default.
DATES: Written comments on the Proposal must be received by the FDIC on
or before December 13, 2005 for consideration.
ADDRESSES: Interested parties are invited to submit written comments to
the FDIC by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Agency Web Site: https://www.fdic.gov/regulations/laws/
federal/propose.html. Follow the instructions for submitting comments.
E-mail: comments@fdic.gov. Include ``Part 307--
Notification of Changes of Insured Status'' in the subject line of the
message.
Mail: Robert E. Feldman, Executive Secretary, Attention:
Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
Hand Delivery: Comments may be hand-delivered to the guard
station located at the rear of the FDIC's 550 17th Street building
(accessible from F Street) on business days between 7 a.m. and 5 p.m.
Instructions: All submissions must include the agency name and use
the title ``Part 307--Notification of Changes of Insured Status.''
All comments received will be posted without change to, https://
www.fdic.gov/regulations/laws/federal/propose.html, including any
personal information provided.
Comments may be inspected and photocopied in the FDIC Public
Information Center, Room 100, 801 17th Street, NW., Washington, DC,
between 9 a.m. and 4:30 p.m. on business days.
FOR FURTHER INFORMATION CONTACT: Kevin W. Hodson, Chief, Risk
Management and Applications Section II, Division of Supervision and
Consumer Protection, (202) 898-6919; Donald R. Hamm, Review Examiner,
Division of Supervision and Consumer Protection, (202) 898-3528; Thomas
Nixon, Counsel, Legal Division, (202) 898-8766; Federal Deposit
Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
The FDIC's Part 307 contains two sections. Section 307.1 implements
section 8(q) of the Federal Deposit Insurance Act (FDI Act) (12 U.S.C.
1818(q)), which states:
Whenever the liabilities of an insured depository institution
for deposits shall have been assumed by another insured depository
institution or depository institutions, whether by way of merger,
consolidation, or other statutory assumption, or pursuant to
contract
(1) the insured status of the depository institution whose
liabilities are so assumed shall terminate on the date of receipt by
the Corporation of satisfactory evidence of such assumption;
(2) the separate insurance of all deposits so assumed shall
terminate at the end of six months from the date such assumption
takes effect or, in the case of any time deposit, the earliest
maturity date after the six-month period. * * *
All assumptions of insured deposit liabilities, whether a ``total''
assumption of all the transferring institution's deposits or an
assumption of only a portion of its deposits (a ``partial''
assumption), by an insured institution are subject to the Bank Merger
Act and require the prior written approval of the ``responsible
agency.'' \1\ The responsible agency is the primary Federal regulator
of the assuming institution.
---------------------------------------------------------------------------
\1\ FDI Act section 18(c)(2), (12 U.S.C. 1828(c)(2)), reads as
follows:
No insured depository institution shall merge or consolidate
with any other insured depository institution or, either directly or
indirectly, acquire the assets of, or assume liability to pay any
deposits made in, any other insured depository institution except
with the prior written approval of the responsible agency. * * *
---------------------------------------------------------------------------
The current section 307.1 was last revised in 1983. It requires an
assuming institution to provide a certification to the FDIC
``[w]henever the deposit liabilities of an insured bank * * * are
assumed by another insured bank. * * * '' In 1997, the FDIC published a
notice of proposed rulemaking concerning Part 307 which was not made
final.\2\ The preamble to that proposed rulemaking indicated that the
FDIC's view of the current text of section 307.1 was that
certifications should be made for both partial and total assumptions.
Since the text of section 307.1 does not clearly distinguish between
partial and total assumptions, institutions may be unsure whether a
certification is required for partial deposit assumptions.
---------------------------------------------------------------------------
\2\ 62 FR 26431, May 14, 1997. That proposal is withdrawn.
---------------------------------------------------------------------------
An insured depository institution that proposes to voluntarily
terminate its insured status without transferring all of its deposits
to an FDIC insured institution must obtain the FDIC's permission. (FDI
Act section 18(i)(3), 12 U.S.C. 1828(i)(3)).\3\ Section 307.2
[[Page 60016]]
applies section 8(a)(6) of the FDI Act \4\ to voluntary terminations of
insured status. Under section 307.2, an insured bank or insured branch
of a foreign bank seeking to voluntarily terminate its insured status,
but whose deposits will not be assumed by another insured depository
institution, must provide notice to its depositors of the date its
insured status will terminate. The regulation authorizes the
appropriate FDIC Regional Director of the Division of Supervision and
Consumer Protection to approve the form, manner, and timing of the
notice to depositors and provides authority to the FDIC to take such
other steps as may be deemed necessary for the protection of the
institution's depositors.
---------------------------------------------------------------------------
\3\ This proposal would not affect the requirements for FDIC
approval of voluntary deposit insurance terminations under sections
8(a) and 8(p) of the FDI Act and for prior written consent for the
conversion of an insured depository institution into a noninsured
bank or institution as required by section 18(i)(3).
\4\ 12 U.S.C. 1818(a)(6). Section 8(a)(6) reads as follows:
PUBLICATION OF NOTICE OF TERMINATION.--The Corporation may
publish notice of such termination and the depository institution
shall give notice of such termination to each of its depositors at
his last address of record on the books of the depository
institution, in such manner and at such time as the Board of
Directors may find to be necessary and may order for the protection
of depositors.
---------------------------------------------------------------------------
II. The Proposed Rule
A. Revised Caption of the Part
The caption of the Part would be changed from ``Notification of
Changes of Insured Status'' to ``Certification of Assumption of
Deposits and Notification of Changes of Insured Status.'' This would
make the caption more descriptive of the content of the Part and alert
institutions that the Part addresses deposit assumptions as well as
changes in insured status.
B. Section 307.1--Scope and Purpose
The current Part 307 does not have a scope and purpose section. In
addition, since Part 307 has not been revised since 1983, sections
307.1 and 307 .2 continue to refer to an ``insured bank'' rather than
to an ``insured depository institution,'' consistent with the changes
made to the FDIC's responsibilities and terminology by sections 201 and
202 of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989.\5\ The proposed rule would add a new section 307.1 to indicate
that the Part applies to insured depository institutions as defined in
section 3(c)(2) of the FDI Act,\6\ and to describe the purpose of the
Part. The existing sections 307.1 and 307.2 would be redesignated as
sections 307.2 and 307.3, respectively.
---------------------------------------------------------------------------
\5\ Public Law 101-73, 103 Stat. 103.
\6\ 12 U.S.C. 1813(c)(2). An ``insured depository institution''
is defined as ``any bank or savings association the deposits of
which are insured by the Corporation pursuant to this [the FDI]
Act.'' Federal branches and insured branches are included in the
definition of ``bank'' in section 3(a)(1)(A) (12U.S.C.
1813(a)(1)(A)).
---------------------------------------------------------------------------
C. Section 307.2--Certification of Assumption of Deposit Liabilities
When certification is required. As noted, there may be some
ambiguity whether the current certification requirement applies only to
total deposit assumptions, or also to partial assumptions. Today's
proposed rule would clarify that a certification is required only when
there has been a total assumption of deposits. No certification would
be required in the case of a partial transfer of deposits, for example
when a single branch of an institution is sold. Clarifying that no
certification is necessary for a partial assumption is consistent with
the FDIC's goal of reducing regulatory burden pursuant to Section 2222
of the Economic Growth and Regulatory Paperwork Reduction Act of 1996
\7\ while obtaining sufficient information for the proper
implementation of section 8(q) of the FDI Act.\8\
---------------------------------------------------------------------------
\7\ Public Law 104-208, Sept. 30, 1996, 12 U.S.C. 3311.
\8\ The 1997 proposed rule had envisioned that the certification
of partial assumption could be used by the FDIC to determine when
the separate deposit insurance coverage provided by section 8(q) on
the assumed deposits ended. However, the FDIC can rely on other
sources of information to make a separate deposit insurance coverage
determination when necessary (for example, from information provided
directly to the FDIC by insured depository institutions or by other
Federal banking agencies, as well from the underlying transactional
documents).
---------------------------------------------------------------------------
There may be situations in which an insured depository institution
disposes of all of its deposits through a series of simultaneous
partial deposit assumptions involving multiple assuming institutions,
rather than through a single total deposit assumption by one assuming
institution. An example of this would be where all of the deposits of a
transferring institution were assumed through a series of branch
acquisitions by different assuming institutions that occurred on the
same day. Viewed cumulatively, these partial assumptions would amount
to a total assumption of the deposits of the transferring institution
making certification necessary. In this situation, today's proposal
would require that the transferring institution file a certification.
The current section 307.1 also does not distinguish between a
deposit assumption involving operating institutions versus an
assumption involving an institution in default and in FDIC
receivership. The FDIC plays an integral role in the transfer and
assumption of deposit liabilities when it is appointed as receiver for
an insured depository institution in default, and has in its possession
information regarding the deposit transfer and assumption transaction.
Section 307.2(a) of today's proposal would create an explicit exception
from the certification requirement when the deposit liabilities are
being transferred from an insured depository institution in default and
the FDIC has been appointed as receiver.
Who must make the certification. The proposed rule would require
the transferring institution, or its legal successor (``transferring
institution''), rather than the assuming institution, to provide
certification to the FDIC. Generally, an institution transferring
deposit liabilities will be in a better position than the assuming
institution to know whether the transfer constitutes all of its
deposits, thus triggering application of Part 307 and FDI Act section
8(q). This would be particularly true in the case of an institution
that transfers all of its deposit liabilities through multiple
transfers to a variety of assuming institutions. In such a situation,
it may be difficult for the assuming institutions to have sufficient
knowledge of key facts in order to make accurate certifications. In a
merger or consolidation there may be only one surviving entity which is
the legal successor to both the transferring and assuming institutions.
In such instances, that surviving entity would provide any required
certification.
Content and form of the certification. Proposed section 307.2(b)
would establish the certification's content. The requirements are
similar to the current section 307.1 but clarify certain issues, such
as where certifications should be filed with the FDIC, and the need for
the certification to be on the letterhead of the transferring
institution or its legal successor and to be signed by an authorized
official. In addition, the proposal would require an institution that
is contemporaneously relinquishing its authority to engage in the
business of receiving deposits to provide the date that its authority
terminated (or will terminate) as well as the method of termination
(e.g., whether by the surrender of its charter, the cancellation of its
charter or license to conduct a banking business, or otherwise). As
discussed below, this information would be used by the FDIC to evaluate
the need to issue an order terminating insurance. To assist the
industry with compliance, the proposed rule provides a template
(Appendix A) that may be used to satisfy with proposed section 307.2
certification requirements.
Evidence of Assumption. The current section 307.1 states that a
certification made pursuant to section 307.1 ``shall
[[Page 60017]]
be considered satisfactory evidence of the assumption.'' Proposed
section 307.2(d) makes a similar statement for accurate certifications
that have been made consistent with the requirements of proposed
section 307.2 (a), (b) and (c). The term ``accurate'' has been added to
indicate that a materially inaccurate certification would not trigger
the automatic termination of the transferring institution's insured
status. The proposed section 307.2(d) would also allow the FDIC to
consider other evidence, in addition to a certification, of a total
deposit assumption to constitute satisfactory evidence of an assumption
for the purposes of section 8(q).
Issuance of an Order. Section 8(q) can be construed as
automatically terminating an institution's insured status upon the
FDIC's receipt of satisfactory evidence of a total assumption. The FDIC
did not generally issue orders terminating the insured status of
transferring institutions before 1983 when the rule was last revised,
and the current section 307.1 does not discuss the issuance of such
orders.\9\ In most cases of total deposit assumptions, the transferring
institution's authority to engage in banking is contemporaneously
cancelled. In such a situation, an FDIC order confirming the
termination of insurance has no practical effect and is unnecessary.
Accordingly, under the proposed rule no order confirming the
termination of an institution's insured status would generally be
issued when the transferring institution's authority to engage in
banking is cancelled contemporaneously (i.e., generally within five
business days after all deposits have been assumed). The proposed rule
also would not require orders when deposits are transferred and assumed
after a default when the FDIC has been appointed as receiver.
---------------------------------------------------------------------------
\9\ The 1997 proposed rule would have provided that the FDIC
would generally issue an order terminating the insured status of an
institution that transferred all of its deposits.
---------------------------------------------------------------------------
The proposed rule would provide for the issuance of an FDIC order
confirming the termination of the insured status of a transferring
institution in the relatively limited circumstance in which a total
transfer of deposit liabilities has occurred but the transferring
institution's charter is not contemporaneously cancelled. Absent the
entry of an order confirming the termination of insured status, an
institution in such a situation might attempt to resume accepting
deposits sometime after the assumption transaction occurs; an
institution might also attempt to sell its charter, which could allow
what is in fact a new entity to conduct banking operations without
always requiring FDIC review and approval.\10\
---------------------------------------------------------------------------
\10\ The transfer of the charter would require prior approval
under the Bank Merger Act or the Change in Bank Control Act.
---------------------------------------------------------------------------
D. Section 307.3--Notice to Depositors When Insurance Is Voluntarily
Terminated and Deposits Are Not Assumed
As noted earlier, a bank that has obtained the FDIC's permission
under sections 8(a), 8(p) or 18(i)(3) of the FDI Act to terminate its
insured status without transferring all of its deposits to an FDIC
insured institution is required by the current section 307.2 to provide
notice to each of its depositors. A copy of this notice must be
provided to and approved by the appropriate Regional Director of the
Division of Supervision and Consumer Protection prior to the notice
being distributed to the institution's depositors. The proposed rule
would clarify that the notice must be on the institution's letterhead,
signed by a duly authorized officer and sent to the depositor's last
known address on the institution's books. To assist the industry with
compliance, the proposed rule provides a template (Appendix B) that may
be used to satisfy with proposed section 307.3 certification
requirements.
III. Regulatory Analysis and Procedure
A. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act (44 U.S.C. 3501 et
seq.) the FDIC may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid Office of Management and Budget (OMB) control number.
The collection of information contained in this proposed rule has been
submitted to OMB for review.
ADDRESSES: Interested parties are invited to submit written comments to
the FDIC concerning the Paperwork Reduction Act implications of this
proposal. Such comments should refer to ``Notification of Changes of
Insured Status, 3064-0124.'' Comments on Paperwork Reduction Act issues
may be submitted by any of the following methods:
https://www.FDIC.gov/regulations/laws/federal/propose.html.
E-mail: comments@FDIC.gov. Include ``Notification of
Changes of Insured Status, 3064-0124'' in the subject line of the
message.
Mail: Thomas Nixon (202-898-8766), Counsel, Federal
Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC
20429.
Hand Delivery: Comments may be hand-delivered to the guard
station at the rear of the 17th Street Building (located on F Street),
on business days between 7 a.m. and 5 p.m.
A copy of the comments may also be submitted to the OMB
desk officer for the FDIC: Mark Menchik, Office of Information and
Regulatory Affairs, Office of Management and Budget, New Executive
Office Building, Room 3208, Washington, DC 20503, or by electronic mail
to mmenchik@omb.eop.gov.
Comment is solicited on:
(1) Whether the proposed collection of information is necessary for
the proper performance of the functions of the agency, including
whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used;
(3) The quality, utility, and clarity of the information to be
collected; and
(4) Ways to minimize the burden of the collection of information on
those who are to respond, including the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology; e.g., permitting electronic
submission of responses.
(5) Estimates of capital or start-up costs and costs of operation,
maintenance, and purchases of services to provide information.
Title of the collection: The proposed rule will modify an
information collection previously approved by OMB titled ``Notification
of Changes of Insured Status'' under control number 3064-0124. The
collection's title would be changed to ``Certification of Assumption of
Deposits and Notification of Changes of Insured Status.''
Summary of the current collection: The collection consists of two
parts: a certification that an insured depository institution provides
when it has assumed the deposit liabilities of another insured
institution; and a notification to depositors that an insured
institution provides if it has obtained FDIC approval to voluntarily
terminate its insured status without an assumption of deposits.
Need and use of the information: The certification is required to
implement section 8(q) of the FDI Act to determine when the insured
status of an institution is terminated based on an assumption of its
deposits. The depositor notification, required by Part 307 informs
depositors
[[Page 60018]]
that the insured status of their deposits in the institution will
terminate.
Proposed changes to the collection: The proposed rule will modify
the collection by eliminating certifications of assumption for partial
assumptions of deposits and will require certifications to be made by
the transferring institution rather than the assuming institution. No
changes are proposed in the notice to depositors.
Respondents: Insured depository institutions.
Frequency of response: Occasional.
Annual burden estimate: Number of certifications: 280; number of
depositor notices: 5. Average time to prepare a certification: one
quarter hour; depositor notice: 1 hour. Total annual burden: 75 hours.
B. Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.) the FDIC certifies that this proposed rule will not
have a significant economic impact on a substantial number of small
entities. The proposed rule would reduce regulatory burden by
eliminating the need for a certification to be filed with the FDIC when
the liability for some, but not all, of the deposits of an insured
institution are transferred to another institution. A certification
requires a minimal amount of time and resources since it reports
information readily available to the institution making the
certification.
List of Subject in 12 CFR Part 307
Bank deposit insurance, Reporting and recordkeeping requirements.
The Board of Directors of the Federal Deposit Insurance Corporation
hereby proposes to revise Part 307 of Title 12 of the Code of Federal
Regulations to read as follows:
PART 307--CERTIFICATION OF ASSUMPTION OF DEPOSITS AND NOTIFICATION
OF CHANGES OF INSURED STATUS
Sec.
307.1 Scope and purpose.
307.2 Certification of assumption of deposit liabilities.
307.3 Notice to depositor when insured status is voluntarily
terminated and deposits are not assumed.
Appendix A to Part 307--[Transferring Institution Letterhead]
Appendix B to Part 307--[Institution Letterhead]
Authority: 12 U.S.C. 1818(a)(6); 1818(q); and 1819(a) [Tenth].
Sec. 307.1 Scope and purpose.
(a) Scope. This Part applies to all insured depository
institutions, as defined in section 3(c)(2) of the Federal Deposit
Insurance Act (FDI Act) (12 U.S.C. 1813(c)(2)).
(b) Purpose. This Part sets forth the rules governing: (1) The time
and manner for providing certification to the FDIC regarding the
assumption of all of the deposit liabilities of an insured depository
institution by one or more insured depository institutions; and (2) The
notification that an insured depository institution shall provide its
depositors when a depository institution's insured status is being
voluntarily terminated without its deposits being assumed by one or
more insured depository institutions.
Sec. 307.2 Certification of assumption of deposit liabilities.
(a) When certification is required. Whenever all of the deposit
liabilities of an insured depository institution are assumed by one or
more insured depository institutions by merger, consolidation, other
statutory assumption, or by contract, the transferring insured
depository institution, or its legal successor, shall provide an
accurate written certification to the FDIC that its deposit liabilities
have been assumed. No certification shall be required when deposit
liabilities are assumed by an operating insured depository institution
from an insured depository institution in default, as defined in
section 3(x)(1) of the FDI Act (12 U.S.C. 1813(x)(1)), and that has
been placed under FDIC receivership.
(b) Certification requirements. The certification required by
paragraph (a) of this section shall be provided on official letterhead
of the transferring insured depository institution or its legal
successor, signed by a duly authorized official, and state the date the
assumption took effect. The certification shall indicate the date on
which the transferring institution's authority to engage in banking has
terminated or will terminate as well as the method of termination
(e.g., whether by the surrender of its charter, by the cancellation of
its charter or license to conduct a banking business, or otherwise).
The certification may follow the form contained in appendix A of this
part. In a merger or consolidation where there is only one surviving
entity which is the legal successor to both the transferring and
assuming institutions, the surviving entity shall provide any required
certification.
(c) Filing. The certification required by paragraph (a) of this
section shall be provided within 30 calendar days after the assumption
takes effect, and shall be submitted to the appropriate Regional
Director of the FDIC's Division of Supervision and Consumer Protection,
as defined in 12 CFR 303.2(g).
(d) Evidence of assumption. The receipt by the FDIC of an accurate
certification for a total assumption as required by paragraphs (a), (b)
and (c) of this section shall constitute satisfactory evidence of such
deposit assumption, as required by section 8(q) of the FDI Act (12
U.S.C. 1818(q)), and the insured status of the transferring institution
shall terminate on the date of the receipt of the certification. In
appropriate circumstances, the FDIC, in its sole discretion, may
require additional information, or may consider other evidence of a
deposit assumption to constitute satisfactory evidence of such
assumption for purposes of section 8(q).
(e) Issuance of an order. The Executive Secretary, upon request
from the Director of the Division of Supervision and Consumer
Protection and with the concurrence of the General Counsel, or their
respective designees, shall issue an order confirming that the insured
status of the transferring insured depository institution has been
terminated as of the date of receipt by the FDIC of satisfactory
evidence of such assumption, pursuant to section 8(q) of the FDI Act
and this regulation. Generally, no order shall be issued, under this
paragraph, and insured status shall be cancelled by operation of law:
(1) If the charter of the transferring institution has been
cancelled, revoked, rescinded, or otherwise terminated by operation of
applicable state or federal statutes or regulations, or by action of
the chartering authority for the transferring institution essentially
contemporaneously, that is, generally within five business days after
all deposits have been assumed; or
(2) If the transferring institution is an insured depository
institution in default and for which the FDIC has been appointed
receiver.
Sec. 307.3 Notice to depositors when insured status is voluntarily
terminated and deposits are not assumed.
(a) Notice required. An insured depository institution that has
obtained authority from the FDIC to terminate its insured status under
sections 8(a), 8(p) or 18(i)(3) of the FDI Act without its deposit
liabilities being assumed by one or more insured depository
institutions, shall provide to each of its depositors, at the
depositor's last known address of record on the books of the
institution, prior written notification of the date the institution's
insured status shall terminate.
(b) Prior approval of notice. The insured depository institution
shall
[[Page 60019]]
provide the appropriate Regional Director of the FDIC's Division of
Supervision and Consumer Protection, as defined in 12 CFR 303.2(g), a
copy of the proposed notice for approval. After being approved, the
notice shall be provided to depositors by the insured depository
institution at the time and in the manner specified by the appropriate
Regional Director.
(c) Form of notice. The notice to depositors required by paragraph
(a) of this section shall be provided on the official letterhead of the
insured depository institution, shall bear the signature of a duly
authorized officer, and, unless otherwise specified by the appropriate
Regional Director, may follow the form of the notice contained in
appendix B of this part.
(d) Other requirements possible. The FDIC may require the insured
depository institution to take such other actions as the FDIC considers
necessary and appropriate for the protection of depositors.
Appendix A to Part 307--[Transferring Institution Letterhead]
[Date]
[Name and Address of appropriate FDIC Regional Director]
SUBJECT: Certification of Total Assumption of Deposits
This certification is being provided pursuant to 12 U.S.C.
1818(q) and 12 CFR 307.2. On [state the date the deposit assumption
took effect], [state the name of the depository institution assuming
the deposit liabilities] assumed all of the deposits of [state the
name and location of the Transferring Institution whose deposits
were assumed]. [If applicable, state the date and method by which
the transferring institution's authority to engage in banking was or
will be terminated.] Please contact the undersigned, at [telephone
number], if additional information is needed.
Sincerely,
By:
[Name and Title of Authorized Representative]
Appendix B to Part 307--[Institution Letterhead]
[Date]
[Name and Address of Depositor]
SUBJECT: Notice to Depositor of Voluntary Termination of Insured
Status
The insured status of [name of insured depository institution]
under the provisions of the Federal Deposit Insurance Act, will
terminate as of the close of business on [state the date]
(``termination date''). Insured deposits in the [name of insured
depository institution] on the termination date, less all
withdrawals from such deposits made subsequent to that date, will
continue to be insured by the Federal Deposit Insurance Corporation,
to the extent provided by law, until [state the date]. The Federal
Deposit Insurance Corporation will not insure any new deposits or
additions to existing deposits made by you after the termination
date.
This Notice is being provided pursuant to 12 U.S.C. 1818(a)(6)
and 12 CFR 307.3.
Please contact [name of institution official in charge of
depositor inquiries], at [name and address of insured depository
institution] if additional information is needed regarding this
Notice or the insured status of your account(s).
Sincerely,
By: [Name and Title of Authorized Representative]
By order of the Board of Directors, at Washington DC on this 6th
day of October, 2005.
Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. 05-20590 Filed 10-13-05; 8:45 am]
BILLING CODE 6714-01-P