Prohibited Service at Savings and Loan Holding Companies; Reinstitution of Expiration Date of Temporary Exemption, 81377-81378 [2010-32637]
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Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Rules and Regulations
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 585
[Docket No. OTS–2010–0036]
RIN 1550–AC14
Prohibited Service at Savings and
Loan Holding Companies;
Reinstitution of Expiration Date of
Temporary Exemption
Office of Thrift Supervision
(OTS), Treasury.
ACTION: Final rule.
AGENCY:
OTS is revising its rules
implementing section 19(e) of the
Federal Deposit Insurance Act (FDIA),
which prohibits any person who has
been convicted of any criminal offense
involving dishonesty, breach of trust, or
money laundering (or who has agreed to
enter into a pretrial diversion or similar
program in connection with a
prosecution for such an offense) from
holding certain positions with respect to
a savings and loan holding company
(SLHC). Specifically, OTS is
reinstituting and extending the
expiration date of a temporary
exemption granted to persons who held
positions with respect to a SLHC as of
the date of the enactment of section
19(e). The reinstituted and revised
expiration date for the temporary
exemption is December 31, 2012.
DATES: Effective Date: The final rule is
effective on December 28, 2010.
FOR FURTHER INFORMATION CONTACT:
Donna Deale, Director, Holding
Companies and International Activities,
Examinations, Supervision and
Consumer Protection, (202) 906–7488,
Marvin Shaw, Senior Attorney,
Regulations and Legislation Division,
(202) 906–6639, Office of Thrift
Supervision, 1700 G Street, NW.,
Washington, DC 20552.
SUPPLEMENTARY INFORMATION: On May 8,
2007, OTS published an interim final
rule adding 12 CFR part 585. This new
part implemented section 19(e) of the
FDIA, which prohibits any person who
has been convicted of any criminal
offense involving dishonesty, breach of
trust, or money laundering (or who has
agreed to enter into a pretrial diversion
or similar program in connection with a
prosecution for such an offense) from
holding certain positions with a SLHC.
Section 19(e) also authorizes the
Director of OTS to provide exemptions
from the prohibitions, by regulation or
order, if the exemption is consistent
with the purposes of the statute.
srobinson on DSKHWCL6B1PROD with RULES
SUMMARY:
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20:48 Dec 27, 2010
Jkt 223001
The interim final rule described the
actions that are prohibited under the
statute and prescribed procedures for
applying for an OTS order granting a
case-by-case exemption from the
prohibition. The rule also provided
regulatory exemptions to the
prohibitions, including a temporary
exemption for persons who held
positions with respect to a SLHC on
October 13, 2006, the date of enactment
of section 19(e). This temporary
exemption expired on September 30,
2010, unless a case-by-case exemption
was filed prior to that expiration date.1
OTS has decided to reinstitute the
temporary regulatory exemption, with a
new expiration date of December 31,
2012. OTS notes that the reinstituted
regulatory exemption applies from
October 13, 2006 until December 31,
2012 and includes the period after
October 1, 2010 until today. Given that
this reinstitution of the temporary
exemption will reduce needless
disruptions of SLHC operations, OTS
has concluded that reinstituting the
exemption is consistent with the
purposes of section 19(e) of the FDIA.
Regulatory Findings
Notice and Comment and Effective Date
For the reasons set out in the interim
final rule,2 OTS has concluded that:
notice and comment on this extension
are unnecessary and contrary to the
public interest under section 552(b)(B)
of the Administrative Procedure Act
(APA); there is good cause for making
the extension effective immediately
under section 553(d) of the APA; and
the delayed effective date requirements
of section 302 of the Riegle Community
Development and Regulatory
Improvement Act of 1994 (CDRIA) do
not apply.
Regulatory Flexibility Act
For the reasons stated in the interim
final rule,3 OTS has concluded that this
rule does not require an initial
regulatory flexibility analysis under the
Regulatory Flexibility Act (RFA) (5
U.S.C. 601 et seq.), and that this rule
should not have a significant impact on
a substantial number of small entities,
as defined in the RFA.
Paperwork Reduction Act
OTS has determined that this rule
does not involve a change to collections
of information previously approved
1 This temporary exemption originally was
initially scheduled to expire on September 5, 2007.
OTS has extended the expiration date several times,
most recently to September 30, 2010 (74 FR 14457).
2 72 FR at 25953.
3 72 FR at 25953–54.
PO 00000
Frm 00007
Fmt 4700
Sfmt 4700
81377
under the Paperwork Reduction Act (44
U.S.C. 3501 et seq.)
Unfunded Mandates Act of 1995
For the reasons stated in the interim
final rule,4 OTS has determined that
this rule will not result in expenditures
by state, local, and tribal governments,
in the aggregate, or by the private sector,
of more than $100 million in any one
year.
Executive Order 12866
OTS has determined that this rule is
not a significant regulatory action under
Executive Order 12866.
Plain Language
Section 722 of the Gramm-LeachBliley Act (12 U.S.C. 4809) requires the
Agencies to use ‘‘plain language’’ in all
final rules published after January 1,
2000. OTS believes that the final rule is
presented in a clear and straightforward
manner.
List of Subjects in 12 CFR Part 585
Administrative practice and
procedure, Holding companies,
Reporting and recordkeeping
requirements, Savings associations.
Authority and Issuance
For the reasons in the preamble, OTS
is amending part 585 of chapter V of
title 12 of the Code of Federal
Regulations as set forth below:
■
PART 585—PROHIBITED SERVICE AT
SAVINGS AND LOAN HOLDING
COMPANIES
1. The authority citation for 12 CFR
part 585 continues to read as follows:
■
Authority: 12 U.S.C. 1462, 1462a, 1463,
1464, 1467a, and 1829(e).
2. Amend § 585.100(b)(2) introductory
text to read as follows:
■
§ 585.100 Who is exempt from the
prohibition under this part?
*
*
*
*
*
(b) Temporary exemption. * * *
(2) This exemption expires on
December 31, 2012, unless the savings
and loan holding company or the person
files an application seeking a case-bycase exemption for the person under
§ 585.110 by that date. If the savings and
loan holding company or the person
files such an application, the temporary
exemption expires on:
*
*
*
*
*
Dated: December 21, 2010.
4 72
E:\FR\FM\28DER1.SGM
FR at 25954.
28DER1
81378
Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Rules and Regulations
By the Office of Thrift Supervision.
John E. Bowman,
Acting Director.
[FR Doc. 2010–32637 Filed 12–27–10; 8:45 am]
BILLING CODE P
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Parts 701, 708a, and 708b
RIN 3133–AD40
Fiduciary Duties at Federal Credit
Unions; Mergers and Conversions of
Insured Credit Unions
National Credit Union
Administration (NCUA).
ACTION: Final rule.
AGENCY:
NCUA is issuing final
amendments to its regulations covering
several related subjects. The final rule
documents and clarifies the fiduciary
duties and responsibilities of Federal
credit union (FCU) directors. The final
rule amends NCUA’s indemnification
regulation limiting indemnification of
FCU officials and employees for liability
arising from improper decisions that
affect the fundamental rights of credit
union members, and makes conforming
changes to the standard FCU and
corporate credit union bylaws. In
addition, the final rule adds new
provisions establishing the procedures
for insured credit unions merging into
banks. The final rule also amends some
of NCUA’s existing regulatory
procedures applicable to insured credit
union mergers with other credit unions,
conversions to mutual savings banks
(MSBs), and termination of share
insurance.
SUMMARY:
DATES:
This rule is effective January 27,
2011.
Paul
Peterson, Associate General Counsel;
Elizabeth Wirick, Staff Attorney; or
Jacqueline Lussier, Staff Attorney;
Office of General Counsel, at the
National Credit Union Administration,
1775 Duke Street, Alexandria, Virginia
22314–3428 or telephone (703) 518–
6540.
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
srobinson on DSKHWCL6B1PROD with RULES
I. Background
On March 18, 2010, the NCUA Board
issued a Notice of Proposed Rulemaking
(NPR or Proposal) to amend parts 701,
708a, and 708b of NCUA’s rules. 75 FR
15574 (March 29, 2010).
The Proposal would have:
• Added a new § 701.4 clarifying the
authorities and duties of FCU directors
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18:14 Dec 27, 2010
Jkt 223001
II. Section-by-Section Analysis
credit union, this responsibility does
not include day-to-day management.
One commenter said that NCUA should
withdraw the language in the second
sentence of proposed paragraph (a)
making the board’s ultimate
responsibility for the credit union’s
management non-delegable. This
commenter stated the FCU Act vests the
management of each FCU in the board
of directors, but it does not prohibit the
board from delegating the management
of the credit union. The commenter
further stated that since an FCU’s board
is composed primarily of unpaid
volunteers the board of directors should
be allowed to delegate the management
to compensated executives. The
commenter recommended NCUA
substitute language that the board of
directors provides the general direction
for the credit union, which would better
reflect the policy-making role of the
board.
The NCUA Board agrees that
paragraph (a) should more closely track
the language of section 113 of the FCU
Act, which employs the language
‘‘general direction and control.’’
Accordingly, the final rule substitutes
‘‘general direction and control’’ for
‘‘management.’’ This amendment clarify
that the directors do not actually
manage the credit union. The board of
directors, however, may not and cannot
delegate its ultimate statutory
responsibility for the proper
management of the credit union.
A. Duties of Federal Credit Union
Boards of Directors (§ 701.4)
Sec. 701.4(b) Duties of Federal Credit
Union Directors
The Proposal included a new § 701.4,
titled ‘‘General authorities and duties of
Federal credit union boards of
directors.’’
Proposed paragraph (b) set forth the
fiduciary duties of FCU directors. It
charged each director to:
• Carry out his or her duties as a
director in good faith, in a manner
reasonably believed to be in the best
interests of the membership of the FCU,
and with such care, including
reasonable inquiry, as an ordinarily
prudent person in a like position would
use under similar circumstances
(paragraph (b)(1));
• Administer the affairs of the FCU
fairly and impartially and without
discrimination in favor of or against any
particular member (paragraph (b)(2));
• Understand the FCU’s balance sheet
and income statement and ask, as
appropriate, substantive questions of
management and the internal and
external auditors (paragraph (b)(3)); and
• Direct the operations of the FCU in
conformity with the requirements set
forth in the Federal Credit Union Act,
the NCUA’s regulations, other
applicable law, and sound business
practices (paragraph (b)(4)).
in managing the affairs of their credit
unions and revising § 701.33 limiting
indemnification of FCU officials and
employees for liability arising from
improper decisions that affect the
fundamental rights of credit union
members.
• Revised the existing provisions of
Part 708a on insured credit union to
MSB conversions.
• Added a new subpart C to Part 708a
setting forth procedural and substantive
requirements for converting an insured
credit union to a bank by merger.
• Revised the existing provisions of
Part 708b on insured credit union
mergers with other credit unions and
the termination of Federal share
insurance.
The public comment period for the
NPR closed on May 28, 2010. NCUA
received comments from 40 commenters
including ten Federal and State credit
unions, 16 credit union trade
organizations (which included 13 State
credit union leagues), one State credit
union regulators’ association, six law
firms, two credit union consultants, an
individual credit union member, an
election teller, a private deposit insurer,
an association representing the interests
of converting credit union members,
and one bank trade association. The
most significant comments on each part
of the Proposal are discussed in the
following section-by-section analysis of
the revisions in this final rule.
Sec. 701.4(a) Management of a Federal
Credit Union
Proposed paragraph (a) provided that
the management of each Federal credit
union is vested in its board of directors,
and that while a Federal credit union
board of directors may delegate the
execution of operational functions to
Federal credit union personnel, the
ultimate responsibility of each Federal
credit union’s board of directors for that
Federal credit union’s management is
non-delegable. The language of the
proposal mirrors the duties of the
Federal Home Loan Bank directors, as
expressed in a rule promulgated by the
Federal Housing Finance Agency
(FHFA). 12 CFR 917.2(b)(1).
Some commenters stated that NCUA
should clarify that while an FCU’s board
of directors has the ultimate
responsibility for the management of the
PO 00000
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E:\FR\FM\28DER1.SGM
28DER1
]]>Agencies
[Federal Register Volume 75, Number 248 (Tuesday, December 28, 2010)]
[Rules and Regulations]
[Pages 81377-81378]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32637]
[[Page 81377]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 585
[Docket No. OTS-2010-0036]
RIN 1550-AC14
Prohibited Service at Savings and Loan Holding Companies;
Reinstitution of Expiration Date of Temporary Exemption
AGENCY: Office of Thrift Supervision (OTS), Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: OTS is revising its rules implementing section 19(e) of the
Federal Deposit Insurance Act (FDIA), which prohibits any person who
has been convicted of any criminal offense involving dishonesty, breach
of trust, or money laundering (or who has agreed to enter into a
pretrial diversion or similar program in connection with a prosecution
for such an offense) from holding certain positions with respect to a
savings and loan holding company (SLHC). Specifically, OTS is
reinstituting and extending the expiration date of a temporary
exemption granted to persons who held positions with respect to a SLHC
as of the date of the enactment of section 19(e). The reinstituted and
revised expiration date for the temporary exemption is December 31,
2012.
DATES: Effective Date: The final rule is effective on December 28,
2010.
FOR FURTHER INFORMATION CONTACT: Donna Deale, Director, Holding
Companies and International Activities, Examinations, Supervision and
Consumer Protection, (202) 906-7488, Marvin Shaw, Senior Attorney,
Regulations and Legislation Division, (202) 906-6639, Office of Thrift
Supervision, 1700 G Street, NW., Washington, DC 20552.
SUPPLEMENTARY INFORMATION: On May 8, 2007, OTS published an interim
final rule adding 12 CFR part 585. This new part implemented section
19(e) of the FDIA, which prohibits any person who has been convicted of
any criminal offense involving dishonesty, breach of trust, or money
laundering (or who has agreed to enter into a pretrial diversion or
similar program in connection with a prosecution for such an offense)
from holding certain positions with a SLHC. Section 19(e) also
authorizes the Director of OTS to provide exemptions from the
prohibitions, by regulation or order, if the exemption is consistent
with the purposes of the statute.
The interim final rule described the actions that are prohibited
under the statute and prescribed procedures for applying for an OTS
order granting a case-by-case exemption from the prohibition. The rule
also provided regulatory exemptions to the prohibitions, including a
temporary exemption for persons who held positions with respect to a
SLHC on October 13, 2006, the date of enactment of section 19(e). This
temporary exemption expired on September 30, 2010, unless a case-by-
case exemption was filed prior to that expiration date.\1\
---------------------------------------------------------------------------
\1\ This temporary exemption originally was initially scheduled
to expire on September 5, 2007. OTS has extended the expiration date
several times, most recently to September 30, 2010 (74 FR 14457).
---------------------------------------------------------------------------
OTS has decided to reinstitute the temporary regulatory exemption,
with a new expiration date of December 31, 2012. OTS notes that the
reinstituted regulatory exemption applies from October 13, 2006 until
December 31, 2012 and includes the period after October 1, 2010 until
today. Given that this reinstitution of the temporary exemption will
reduce needless disruptions of SLHC operations, OTS has concluded that
reinstituting the exemption is consistent with the purposes of section
19(e) of the FDIA.
Regulatory Findings
Notice and Comment and Effective Date
For the reasons set out in the interim final rule,\2\ OTS has
concluded that: notice and comment on this extension are unnecessary
and contrary to the public interest under section 552(b)(B) of the
Administrative Procedure Act (APA); there is good cause for making the
extension effective immediately under section 553(d) of the APA; and
the delayed effective date requirements of section 302 of the Riegle
Community Development and Regulatory Improvement Act of 1994 (CDRIA) do
not apply.
---------------------------------------------------------------------------
\2\ 72 FR at 25953.
---------------------------------------------------------------------------
Regulatory Flexibility Act
For the reasons stated in the interim final rule,\3\ OTS has
concluded that this rule does not require an initial regulatory
flexibility analysis under the Regulatory Flexibility Act (RFA) (5
U.S.C. 601 et seq.), and that this rule should not have a significant
impact on a substantial number of small entities, as defined in the
RFA.
---------------------------------------------------------------------------
\3\ 72 FR at 25953-54.
---------------------------------------------------------------------------
Paperwork Reduction Act
OTS has determined that this rule does not involve a change to
collections of information previously approved under the Paperwork
Reduction Act (44 U.S.C. 3501 et seq.)
Unfunded Mandates Act of 1995
For the reasons stated in the interim final rule,\4\ OTS has
determined that this rule will not result in expenditures by state,
local, and tribal governments, in the aggregate, or by the private
sector, of more than $100 million in any one year.
---------------------------------------------------------------------------
\4\ 72 FR at 25954.
---------------------------------------------------------------------------
Executive Order 12866
OTS has determined that this rule is not a significant regulatory
action under Executive Order 12866.
Plain Language
Section 722 of the Gramm-Leach-Bliley Act (12 U.S.C. 4809) requires
the Agencies to use ``plain language'' in all final rules published
after January 1, 2000. OTS believes that the final rule is presented in
a clear and straightforward manner.
List of Subjects in 12 CFR Part 585
Administrative practice and procedure, Holding companies, Reporting
and recordkeeping requirements, Savings associations.
Authority and Issuance
0
For the reasons in the preamble, OTS is amending part 585 of chapter V
of title 12 of the Code of Federal Regulations as set forth below:
PART 585--PROHIBITED SERVICE AT SAVINGS AND LOAN HOLDING COMPANIES
0
1. The authority citation for 12 CFR part 585 continues to read as
follows:
Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, and
1829(e).
0
2. Amend Sec. 585.100(b)(2) introductory text to read as follows:
Sec. 585.100 Who is exempt from the prohibition under this part?
* * * * *
(b) Temporary exemption. * * *
(2) This exemption expires on December 31, 2012, unless the savings
and loan holding company or the person files an application seeking a
case-by-case exemption for the person under Sec. 585.110 by that date.
If the savings and loan holding company or the person files such an
application, the temporary exemption expires on:
* * * * *
Dated: December 21, 2010.
[[Page 81378]]
By the Office of Thrift Supervision.
John E. Bowman,
Acting Director.
[FR Doc. 2010-32637 Filed 12-27-10; 8:45 am]
BILLING CODE P
