Interest on Deposits; Deposit Insurance Coverage, 21265-21266 [2011-9210]

Download as PDF Federal Register / Vol. 76, No. 73 / Friday, April 15, 2011 / Proposed Rules e. Using additional risk information, including qualitative information, to determine the magnitude of adjustment to an institution’s total score that would be necessary to bring its total score into better alignment with institutions with similar risk profiles. 2. Are there additional guidelines that should govern the analytical process to ensure fairness and consistency in deposit insurance pricing determinations? 3. What qualitative information should the FDIC use to best evaluate loss severity? 4. Are the proposed guidelines for controlling the assessment rate adjustment process sufficient to ensure that adjustment decisions are justified, fully supported, and take into account the views of the primary Federal regulator and the institution? jlentini on DSKJ8SOYB1PROD with PROPOSALS VI. Paperwork Reduction Act A. Request for Comment on Proposed Information Collection 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 is being submitted to OMB for review. Interested parties may submit written comments to the FDIC concerning the Paperwork Reduction Act (PRA) implications of this proposal. Commenters should refer to ‘‘PRA Comments—Adjustment Guidelines’’ in the subject line. Comments may be submitted by any of the following methods: • Agency Web site: http:// www.fdic.gov/regulations/laws/federal/ propose.html. Follow instructions for submitting comments on the Agency Web site. • E-mail: Comments@FDIC.gov. Include ‘‘PRA Comments—Adjustment Guidelines, 3064–ADXX’’ in the subject line of the message. • Mail: Gary A. Kuiper, Counsel, F– 1086, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429. • Hand Delivery/Courier: 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. A copy of the comments may also be submitted to the OMB desk officer for the FDIC, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Washington, DC 20503. VerDate Mar<15>2010 16:22 Apr 14, 2011 Jkt 223001 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; (4) Ways to minimize the burden of the collection of information on those who are to respond, including through 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; and (5) Estimates of capital or start-up costs and costs of operation, maintenance, and purchases of services to provide information. B. Proposed Information Collection An information collection would occur when a large or highly complex insured depository institution makes a written request that the FDIC make an adjustment to its total score. An institution’s request for adjustment would be considered only if it is supported by evidence of a material risk or risk-mitigating factor that is not adequately accounted for in the scorecard. Respondents: Large and Highly Complex insured depository institutions. Number of responses: 0–11 per year. Frequency of response: Occasional. Average number of hours to prepare a response: 8 hours. Total annual burden: 0–88 hours. Dated at Washington, DC, this 12th day of April 2011. By order of the Board of Directors. Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary. [FR Doc. 2011–9209 Filed 4–14–11; 8:45 am] BILLING CODE 6714–01–P FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Parts 329 and 330 RIN 3064–AD78 Interest on Deposits; Deposit Insurance Coverage Federal Deposit Insurance Corporation (FDIC). Notice of proposed rulemaking (NPR) and request for comment. ACTION: Effective July 21, 2011, the statutory prohibition against the payment of interest on demand deposits will be repealed pursuant to the DoddFrank Wall Street Reform and Consumer Protection Act (the DFA).1 In light of this, the FDIC proposes to rescind regulations that have implemented this prohibition with respect to statechartered nonmember (SNM) banks. Because the regulations include a definition of ‘‘interest’’ that may assist the FDIC in interpreting a recent statutory amendment that provides temporary, unlimited deposit insurance coverage for noninterest-bearing transaction accounts, the FDIC also proposes to retain and move the definition of ‘‘interest’’ into the deposit insurance regulations. DATES: Comments must be received on or before May 16, 2011. ADDRESSES: You may submit comments on the notice of proposed rulemaking, identified by RIN number and the words ‘‘Interest on Deposits; Deposit Insurance Coverage NPRM,’’ by any of the following methods: • Agency Web site: http:// www.fdic.gov/regulations/laws/federal/ propose.html. Follow the instructions for submitting comments on the Agency Web site. • E-mail: Comments@fdic.gov. Include the RIN number in the subject line of the message. • Mail: Robert E. Feldman, Executive Secretary, Attention: Comments, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429. • Hand Delivery: 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. • Instructions: All submissions received must include the agency name and RIN for this rulemaking. • Public Inspection: All comments received will be posted without change to http://www.fdic.gov/regulations/laws/ federal/propose.html including any personal information provided. Paper copies of public comments may be ordered from the Public Information Center by telephone at 1–877–275–3342 or 703–562–2200. FOR FURTHER INFORMATION CONTACT: Martin Becker, Senior Consumer Affairs Specialist, Division of Consumer and Depositor Protection (703) 254–2233, Mark Mellon, Counsel, Legal Division, (202) 898–3884, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429. SUMMARY: AGENCY: PO 00000 Frm 00010 Fmt 4702 Sfmt 4702 21265 1 Public E:\FR\FM\15APP1.SGM Law 111–203, 124 Stat. 1376. 15APP1 21266 Federal Register / Vol. 76, No. 73 / Friday, April 15, 2011 / Proposed Rules SUPPLEMENTARY INFORMATION: I. Background Section 343 of the DFA amended section 11(a)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1821(a)(1), to provide full insurance coverage for depository institution noninterestbearing transaction accounts from December 31, 2010, through December 31, 2012. Section 627 of the DFA repealed the statutory prohibition against the payment of interest on demand deposits, effective one year from the date of the DFA’s enactment, July 21, 2011. In light of the prospective repeal of the demand deposit interest prohibition, the FDIC proposes to rescind 12 CFR Part 329, the regulation which implements that prohibition with respect to SNM banks, to be effective on the same date as the statutory repeal, July 21, 2011. At the same time, however, a regulatory definition of the term ‘‘interest’’ will still be useful in interpreting the requirements of section 343 of the DFA providing temporary, unlimited deposit insurance coverage for noninterest-bearing transaction accounts. For this reason, the FDIC proposes, as part of this same rulemaking, to transfer the definition of ‘‘interest’’ currently found at 12 CFR 329.1(c) to Part 330, specifically the definitions section at 12 CFR 330.1. The FDIC also specifically solicits comment on whether other parts of Part 329 could also prove useful and therefore should be moved into Part 330 as well. For example, section 329.103 provides an interpretive rule that defines what constitutes a ‘‘premium’’ which may prove useful in determining whether an account qualifies as a noninterestbearing transaction account. The FDIC seeks comment on every aspect of this proposed rule. jlentini on DSKJ8SOYB1PROD with PROPOSALS II. Regulatory Analysis and Procedure A. Solicitation of Comments on Use of Plain Language Section 722 of the Gramm-LeachBliley Act, 1471 (Nov. 12, 1999), requires the Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. We invite your comments on how to make this proposal easier to understand. For example: • Have we organized the material to suit your needs? If not, how could this material be better organized? • Are the requirements in the proposed regulation clearly stated? If not, how could the regulation be more clearly stated? • Does the proposed regulation contain language or jargon that is not VerDate Mar<15>2010 16:22 Apr 14, 2011 Jkt 223001 clear? If so, which language requires clarification? • Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes to the format would make the regulation easier to understand? • What else could we do to make the regulation easier to understand? B. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) requires that each federal agency either certify that a proposed rule would not, if adopted in final form, have a significant economic impact on a substantial number of small entities or prepare an initial regulatory flexibility analysis of the rule and publish the analysis for comment. For purposes of the RFA analysis or certification, financial institutions with total assets of $175 million or less are considered to be ‘‘small entities.’’ The FDIC hereby certifies pursuant to 5 U.S.C. 605(b) that the NPR, if adopted, will not have a significant economic impact on a substantial number of small entities. This is because the FDIC already applies the Part 329 definition of ‘‘interest’’ for purposes of determining whether an account qualifies for full deposit insurance coverage as a noninterestbearing transaction account. The FDIC is only proposing to transfer the definition from Part 329 to Part 330 because the former regulation will become moot on July 21, 2011, pursuant to section 627 of the DFA and its repeal of the statutory ban on the payment of interest on demand deposits. There will therefore be no significant economic impact on a substantial number of small entities as a result of this change. C. Paperwork Reduction Act No collections of information pursuant to the Paperwork Reduction Act (44 U.S.C. Ch. 3501 et seq.) are contained in the proposed rule. D. The Treasury and General Government Appropriations Act, 1999— Assessment of Federal Regulations and Policies on Families The FDIC has determined that the proposed rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (). List of Subjects 12 CFR Part 329 Banks, banking, interest rates. PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 12 CFR Part 330 Bank deposit insurance, Banks, Banking, Reporting and recordkeeping requirements, Savings and loan associations, Trusts and trustees. For the reasons set forth in the preamble, and under the authority of 12 U.S.C. 1813, the FDIC proposes to amend chapter III of title 12 of the Code of Federal Regulations as follows: PART 329—[REMOVED] 1. Part 329 is removed and reserved. PART 330—DEPOSIT INSURANCE COVERAGE 2. The authority for part 330 continues to read as follows: 12 U.S.C. 1813(l), 1813(m), 1817(i), 1818(q), 1819(Tenth), 1820(f), 1821(a), 1822(c). 3. In § 330.1, paragraphs (k) through (r) are redesignated as paragraphs (l) through (s), respectively, and new paragraph (k) is added to read as follows: § 330.1 Definitions. * * * * * (k) Interest, with respect to a deposit, means any payment to or for the account of any depositor as compensation for the use of funds constituting a deposit. A bank’s absorption of expenses incident to providing a normal banking function or its forbearance from charging a fee in connection with such a service is not considered a payment of interest. * * * * * By order of the Board of Directors. Dated at Washington, DC, this 12th day of April 2011. Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary. [FR Doc. 2011–9210 Filed 4–14–11; 8:45 am] BILLING CODE 6714–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA–2011–0070; Airspace Docket No. 10–ASO–43] Proposed Amendment of Class E Airspace; Cocoa, FL Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). AGENCY: This action proposes to amend Class E Airspace at Cocoa, FL, as SUMMARY: E:\FR\FM\15APP1.SGM 15APP1

Agencies

[Federal Register Volume 76, Number 73 (Friday, April 15, 2011)]
[Proposed Rules]
[Pages 21265-21266]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-9210]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 329 and 330

RIN 3064-AD78


Interest on Deposits; Deposit Insurance Coverage

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Notice of proposed rulemaking (NPR) and request for comment.

-----------------------------------------------------------------------

SUMMARY: Effective July 21, 2011, the statutory prohibition against the 
payment of interest on demand deposits will be repealed pursuant to the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (the DFA).\1\ 
In light of this, the FDIC proposes to rescind regulations that have 
implemented this prohibition with respect to state-chartered nonmember 
(SNM) banks. Because the regulations include a definition of 
``interest'' that may assist the FDIC in interpreting a recent 
statutory amendment that provides temporary, unlimited deposit 
insurance coverage for noninterest-bearing transaction accounts, the 
FDIC also proposes to retain and move the definition of ``interest'' 
into the deposit insurance regulations.
---------------------------------------------------------------------------

    \1\ Public Law 111-203, 124 Stat. 1376.

---------------------------------------------------------------------------
DATES: Comments must be received on or before May 16, 2011.

ADDRESSES: You may submit comments on the notice of proposed 
rulemaking, identified by RIN number and the words ``Interest on 
Deposits; Deposit Insurance Coverage NPRM,'' by any of the following 
methods:
     Agency Web site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow the instructions for submitting comments 
on the Agency Web site.
     E-mail: Comments@fdic.gov. Include the RIN number in the 
subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, Federal Deposit Insurance Corporation, 550 17th Street, NW., 
Washington, DC 20429.
     Hand Delivery: 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.
     Instructions: All submissions received must include the 
agency name and RIN for this rulemaking.
     Public Inspection: All comments received will be posted 
without change to http://www.fdic.gov/regulations/laws/federal/propose.html including any personal information provided. Paper copies 
of public comments may be ordered from the Public Information Center by 
telephone at 1-877-275-3342 or 703-562-2200.

FOR FURTHER INFORMATION CONTACT: Martin Becker, Senior Consumer Affairs 
Specialist, Division of Consumer and Depositor Protection (703) 254-
2233, Mark Mellon, Counsel, Legal Division, (202) 898-3884, Federal 
Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 
20429.

[[Page 21266]]


SUPPLEMENTARY INFORMATION: 

I. Background

    Section 343 of the DFA amended section 11(a)(1) of the Federal 
Deposit Insurance Act, 12 U.S.C. 1821(a)(1), to provide full insurance 
coverage for depository institution noninterest-bearing transaction 
accounts from December 31, 2010, through December 31, 2012. Section 627 
of the DFA repealed the statutory prohibition against the payment of 
interest on demand deposits, effective one year from the date of the 
DFA's enactment, July 21, 2011.
    In light of the prospective repeal of the demand deposit interest 
prohibition, the FDIC proposes to rescind 12 CFR Part 329, the 
regulation which implements that prohibition with respect to SNM banks, 
to be effective on the same date as the statutory repeal, July 21, 
2011. At the same time, however, a regulatory definition of the term 
``interest'' will still be useful in interpreting the requirements of 
section 343 of the DFA providing temporary, unlimited deposit insurance 
coverage for noninterest-bearing transaction accounts. For this reason, 
the FDIC proposes, as part of this same rulemaking, to transfer the 
definition of ``interest'' currently found at 12 CFR 329.1(c) to Part 
330, specifically the definitions section at 12 CFR 330.1. The FDIC 
also specifically solicits comment on whether other parts of Part 329 
could also prove useful and therefore should be moved into Part 330 as 
well. For example, section 329.103 provides an interpretive rule that 
defines what constitutes a ``premium'' which may prove useful in 
determining whether an account qualifies as a noninterest-bearing 
transaction account. The FDIC seeks comment on every aspect of this 
proposed rule.

II. Regulatory Analysis and Procedure

A. Solicitation of Comments on Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act, 1471 (Nov. 12, 1999), 
requires the Federal banking agencies to use plain language in all 
proposed and final rules published after January 1, 2000. We invite 
your comments on how to make this proposal easier to understand. For 
example:
     Have we organized the material to suit your needs? If not, 
how could this material be better organized?
     Are the requirements in the proposed regulation clearly 
stated? If not, how could the regulation be more clearly stated?
     Does the proposed regulation contain language or jargon 
that is not clear? If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the regulation easier to 
understand? If so, what changes to the format would make the regulation 
easier to understand?
     What else could we do to make the regulation easier to 
understand?

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires that each federal 
agency either certify that a proposed rule would not, if adopted in 
final form, have a significant economic impact on a substantial number 
of small entities or prepare an initial regulatory flexibility analysis 
of the rule and publish the analysis for comment. For purposes of the 
RFA analysis or certification, financial institutions with total assets 
of $175 million or less are considered to be ``small entities.'' The 
FDIC hereby certifies pursuant to 5 U.S.C. 605(b) that the NPR, if 
adopted, will not have a significant economic impact on a substantial 
number of small entities. This is because the FDIC already applies the 
Part 329 definition of ``interest'' for purposes of determining whether 
an account qualifies for full deposit insurance coverage as a 
noninterest-bearing transaction account. The FDIC is only proposing to 
transfer the definition from Part 329 to Part 330 because the former 
regulation will become moot on July 21, 2011, pursuant to section 627 
of the DFA and its repeal of the statutory ban on the payment of 
interest on demand deposits. There will therefore be no significant 
economic impact on a substantial number of small entities as a result 
of this change.

C. Paperwork Reduction Act

    No collections of information pursuant to the Paperwork Reduction 
Act (44 U.S.C. Ch. 3501 et seq.) are contained in the proposed rule.

D. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that the proposed rule will not affect 
family well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, enacted as part of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act of 1999 ().

List of Subjects

12 CFR Part 329

    Banks, banking, interest rates.

12 CFR Part 330

    Bank deposit insurance, Banks, Banking, Reporting and recordkeeping 
requirements, Savings and loan associations, Trusts and trustees.

    For the reasons set forth in the preamble, and under the authority 
of 12 U.S.C. 1813, the FDIC proposes to amend chapter III of title 12 
of the Code of Federal Regulations as follows:

PART 329--[REMOVED]

    1. Part 329 is removed and reserved.

PART 330--DEPOSIT INSURANCE COVERAGE

    2. The authority for part 330 continues to read as follows: 12 
U.S.C. 1813(l), 1813(m), 1817(i), 1818(q), 1819(Tenth), 1820(f), 
1821(a), 1822(c).
    3. In Sec.  330.1, paragraphs (k) through (r) are redesignated as 
paragraphs (l) through (s), respectively, and new paragraph (k) is 
added to read as follows:


Sec.  330.1  Definitions.

* * * * *
    (k) Interest, with respect to a deposit, means any payment to or 
for the account of any depositor as compensation for the use of funds 
constituting a deposit. A bank's absorption of expenses incident to 
providing a normal banking function or its forbearance from charging a 
fee in connection with such a service is not considered a payment of 
interest.
* * * * *

    By order of the Board of Directors.

    Dated at Washington, DC, this 12th day of April 2011.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2011-9210 Filed 4-14-11; 8:45 am]
BILLING CODE 6714-01-P