Continued Application of Regulations to Savings and Loan Holding Companies, 43953-43957 [2011-18100]

Download as PDF Federal Register / Vol. 76, No. 141 / Friday, July 22, 2011 / Proposed Rules srobinson on DSK4SPTVN1PROD with PROPOSALS secured, that are written in English, and that are free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author. Campaign form letters. Please submit campaign form letters by the originating organization in batches of between 50 to 500 form letters per PDF or as one form letter with a list of supporters’ names compiled into one or more PDFs. This reduces comment processing and posting time. Confidential Business Information. Pursuant to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via e-mail, postal mail, or hand delivery/courier two well-marked copies: one copy of the document marked confidential including all the information believed to be confidential, and one copy of the document marked non-confidential with the information believed to be confidential deleted. Submit these documents via e-mail or on a CD, if feasible. DOE will make its own determination about the confidential status of the information and treat it according to its determination. Factors of interest to DOE when evaluating requests to treat submitted information as confidential include: (1) A description of the items; (2) whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sources; (4) whether the information has previously been made available to others without obligation concerning its confidentiality; (5) an explanation of the competitive injury to the submitting person which would result from public disclosure; (6) when such information might lose its confidential character due to the passage of time; and (7) why disclosure of the information would be contrary to the public interest. It is DOE’s policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure). E. Issues on Which DOE Seeks Comment Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues: 1. Given the lack of a statutory definition for ‘‘direct heating VerDate Mar<15>2010 17:15 Jul 21, 2011 Jkt 223001 equipment,’’ whether DOE’s interpretation that decorative vented hearth products and vented gas log sets are types of direct heating equipment is reasonable. 2. The proposed compliance date for vented gas hearth products and vented gas log sets, including specific rationales and accompanying data as to why a different timeline for eliminating standing pilots or other continuouslyburning ignition sources from decorative gas hearth products may or may not be warranted. 3. The proposed exclusion as a decorative vented hearth product or vented gas log set from the energy conservation standard. 4. Impacts of the proposed amended definition of ‘‘vented hearth heater’’ on small business manufacturers of decorative vented hearth products or vented gas log sets. VI. Approval of the Office of the Secretary The Secretary of Energy has approved publication of today’s proposed rule. List of Subjects in 10 CFR Part 430 Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Imports, Intergovernmental relations, Reporting and recordkeeping requirements, and Small businesses. Issued in Washington, DC, on July 14, 2011. Kathleen Hogan, Deputy Assistant Secretary for Energy Efficiency, Office of Technology Development, Energy Efficiency and Renewable Energy. For the reasons set forth in the preamble, DOE proposes to amend Part 430 of Chapter II, Subchapter D, of Title 10 of the Code of Federal Regulations, to read as set forth below: PART 430—ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS 1. The authority citation for part 430 continues to read as follows: Authority: 42 U.S.C. 6291–6309; 28 U.S.C. 2461 note. 2. Section 430.2 is amended by revising the definition for ‘‘vented hearth heater’’ to read as follows: § 430.2 Definitions. * * * * * Vented hearth heater means a vented appliance which simulates a solid fuel fireplace and is designed to furnish warm air, with or without duct connections, to the space in which it is PO 00000 Frm 00018 Fmt 4702 Sfmt 4702 43953 installed. The circulation of heated room air may be by gravity or mechanical means. A vented hearth heater may be freestanding, recessed, zero clearance, or a gas fireplace insert or stove. The following products are not subject to the energy conservation standards for vented hearth heaters: (1) Vented gas log sets that meet all of the following four criteria: (i) Certified to ANSI Standard Z21.60; (ii) Sold without a thermostat and with a warranty provision expressly voiding all manufacturer warranties in the event the product is used with a thermostat; (iii) Expressly and conspicuously identified on its rating plate and in all manufacturer’s advertising and product literature as a ‘‘Decorative Product: Not For Use As A Heating Appliance’’; and (iv) With respect to products sold after July 1, 2014, not equipped with a standing pilot light or other continuously-burning ignition source; and (2) Vented gas hearth products that meet all of the following four criteria: (i) Certified to ANSI Standard Z21.50 and not to ANSI Standard Z21.88; (ii) Sold without a thermostat and with a warranty provision expressly voiding all manufacturer warranties in the event the product is used with a thermostat; (iii) Expressly and conspicuously identified on its rating plate and in all manufacturer’s advertising and product literature as a ‘‘Decorative Product: Not For Use As A Heating Appliance’’; and (iv) With respect to products sold after July 1, 2014, not equipped with a standing pilot light or other continuously-burning ignition source. * * * * * [FR Doc. 2011–18310 Filed 7–21–11; 8:45 am] BILLING CODE 6450–01–P FEDERAL RESERVE SYSTEM 12 CFR Chapter II [Docket No. OP–1427] Continued Application of Regulations to Savings and Loan Holding Companies Board of Governors of the Federal Reserve System. ACTION: Notice of intent and request for comment. AGENCY: The Board of Governors of the Federal Reserve System (‘‘Board’’) is issuing this notice of its intention to continue to enforce certain regulations previously issued by the Office of Thrift Supervision (‘‘OTS’’) after assuming supervisory responsibility for savings and loan holding companies (‘‘SLHCs’’) SUMMARY: E:\FR\FM\22JYP1.SGM 22JYP1 43954 Federal Register / Vol. 76, No. 141 / Friday, July 22, 2011 / Proposed Rules srobinson on DSK4SPTVN1PROD with PROPOSALS and their non-depository subsidiaries from the OTS in July 2011. The DoddFrank Wall Street Reform and Consumer Protection Act (the ‘‘Dodd-Frank Act’’ or ‘‘Act’’) transfers supervisory functions related to SLHCs and their nondepository subsidiaries to the Board on July 21, 2011 (‘‘transfer date’’). DATES: Comments must be submitted on or before August 31, 2011. ADDRESSES: You may submit comments by any of the following methods: • Agency Web Site: http:// www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/ generalinfo/foia/ProposedRegs.cfm. • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. • E-mail: regs.comments@federalreserve.gov. Include docket number OP–1427 in the subject line of the message. • FAX: 202/452–3819 or 202/452– 3102. • Mail: Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW., Washington, DC 20551. All public comments are available from the Board’s Web site at http:// www.federalreserve.gov/generalinfo/ foia/ProposedRegs.cfm as submitted, unless modified for technical reasons. Accordingly, your comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper form in Room MP–500 of the Board’s Martin Building (20th and C Streets, NW.) between 9 a.m. and 5 p.m. on weekdays. FOR FURTHER INFORMATION CONTACT: Amanda K. Allexon, Counsel, (202) 452–3818 or Kathleen O’Day, Deputy General Counsel, (202) 452–3786, Legal Division; Anna Lee Hewko, Assistant Director, (202) 530–6260, or Michael Sexton, Manager, (202) 452–3009, Division of Banking Supervision and Regulation, Board of Governors of the Federal Reserve System, 20th and C Streets, NW., Washington, DC 20551. Telecommunications Device for the Deaf (TDD) users may contact (202–263– 4869). SUPPLEMENTARY INFORMATION: Background The Dodd-Frank Act was enacted on July 21, 2010. Title III of the Dodd-Frank Act transfers to the Board supervisory functions of the OTS related to SLHCs and their non-depository subsidiaries. The Act transfers supervisory functions related to Federal savings associations VerDate Mar<15>2010 17:15 Jul 21, 2011 Jkt 223001 and state savings associations to the Office of the Comptroller of the Currency (‘‘OCC’’) and the Federal Deposit Insurance Corporation (‘‘FDIC’’), respectively. With respect to the supervision of SLHCs and their non-depository subsidiaries, section 312 of the DoddFrank Act (12 U.S.C. 5412) provides that all functions of the OTS and the Director of the OTS (including authority to issue orders) will transfer to the Board on July 21, 2011. All rulemaking authority related to SLHCs also will transfer to the Board on that date pursuant to section 312 of the Act. Section 316 of the Dodd-Frank Act provides that all orders, resolutions, determinations, agreements, and regulations, interpretive rules, other interpretations, guidelines, and other advisory materials issued, made, prescribed, or allowed to become effective by the OTS on or before the transfer date with respect to SLHCs and their non-depository subsidiaries will remain in effect and shall be enforceable until modified, terminated, set aside, or superseded in accordance with applicable law by the Board, by any court of competent jurisdiction, or by operation of law. The Act includes parallel provisions applicable to the OCC and the FDIC with respect to Federal savings associations and state savings associations, respectively. Given the extensive transfer of authority to multiple agencies, section 316 of the Dodd-Frank Act (12 U.S.C. 5414(c)) requires the Board, OCC, and FDIC to identify and publish in the Federal Register separate lists of the current OTS regulations that each agency will continue to enforce after the transfer date. The Board is, therefore, issuing this notice in accordance with section 316 of the Dodd-Frank Act. This notice identifies all OTS regulations applicable to SLHCs and their nondepository subsidiaries that the Board currently intends to enforce after the transfer date. On or immediately after the transfer date, the Board intends to issue an interim final rule to effectuate the transition of OTS regulations to the Board. That rule will include technical, nomenclature, and other changes to certain OTS regulations to accommodate the transfer of supervisory authority from the OTS to the Board and address modifications made by the Dodd-Frank Act. The Board also expects to modify its own rules related to agency administration and procedure, where necessary, to account for the transfer of authority on or after the transfer date. When finalizing that rulemaking, the Board will take into consideration any PO 00000 Frm 00019 Fmt 4702 Sfmt 4702 comments received on this notice as well as those received on the interim final rule. In the future, the Board may propose substantive modifications to rules regarding SLHCs and their nondepository subsidiaries in order to address other modifications made by the Dodd-Frank Act and consolidate rules within the Board’s regulatory structure. Continuing Regulations The regulations currently applicable to SLHCs and their non-depository subsidiaries are found in Chapter V of Title 12 of the Code of Federal Regulations. The following narrative provides a description of the parts of Chapter V that the Board expects to continue to enforce after July 21, 2011. Following the narrative, a chart is provided that lists each OTS part and the Board’s current intention regarding enforcement of such part. The Board notes that failure to transfer an OTS regulation does not relieve any entity of the obligation to comply with all statutory requirements. Parts 574 though 585 include many of the rules that relate to the supervision of SLHCs, including those concerning the acquisition of savings associations, mutual holding companies, permissible activities, and prohibited service by certain individuals. The Board intends to enforce the substantive provisions of parts 574 through 585 after the transfer date, including the requirements for filing applications and the factors for reviewing such applications. The Board, however, does not expect to transfer provisions in parts 574 though 585 regarding the processing of applications and notices, such as agency review periods, publication requirements, and hearing procedures (including those applicable as a result of cross-references to part 516). Instead, beginning on the transfer date, the Board anticipates adopting the application procedures currently used by bank holding companies (‘‘BHCs’’) to equivalent applications and notices submitted by SLHCs. Additionally, the Board anticipates eliminating the current OTS regulations relating to control determinations and rebuttals, including the rebuttable control factors and process in § 574.4, the certification of ownership in § 574.5, and the rebuttal agreement in § 574.100. In its place, the Board expects to insert provisions equivalent to those applicable to BHCs and, beginning on the transfer date, review investments and relationships with SLHCs using the current practices and policies applicable to BHCs, including the Board’s policy statement on noncontrolling equity investments issued on September 22, 2008. The E:\FR\FM\22JYP1.SGM 22JYP1 Federal Register / Vol. 76, No. 141 / Friday, July 22, 2011 / Proposed Rules Board does not anticipate revisiting OTS determinations with respect to existing investments and ownership structures. In the near future, the Board anticipates proposing rules that would update and streamline regulations related to control determinations for both BHCs and SLHCs. The Board intends to enforce certain definitional provisions (parts 541, 561, and 583), as well as parts 533 and 563f to the extent they are directly or indirectly applicable to the supervision of SLHCs and their non-depository subsidiaries. Additionally, the Board expects to enforce certain relevant provisions of part 562 that provide regulatory reporting requirements. The Board, however, issued a notice on February 8, 2011, indicating that it is considering transitioning SLHCs to the Board’s current reporting system as soon as practicable.1 Currently, the Board is reviewing comments received on that notice and is considering issuing a notice of proposed rulemaking on or after the transfer date outlining a proposal on SLHC reporting that may affect part 562 and part 584. Current OTS rules often integrate regulatory requirements and supervision for both SLHCs and savings associations. As a result, certain regulations that only reference savings associations also may apply to SLHCs (and in particular to mutual holding companies) and their non-depository subsidiaries through cross-references. The Board, therefore, anticipates enforcing parts 546, 552, 559, 563, 563b, 563c, 563e, and 563g, and §§ 543.1(b), 544.2, 544.5, 544.8, 545.95, 545.121, and 565.4. The Board anticipates enforcing part 512 regarding investigative and formal examination proceedings because the Board does not have similar rules currently in place for BHCs. The Board does not anticipate enforcing parts 500, 503 through 510, 513, 516, 517, and 528 after the transfer date. These parts include agencyspecific administrative provisions and, as noted above, the Board anticipates modifying its own rules in this area on or after the transfer date to account for the transfer of authority. Part 502 itemizes the current assessment fee schedule for OTSsupervised institutions. The Board does not currently charge BHCs or state member banks (‘‘SMBs’’) for examinations or inspections. However, 43955 section 318 of the Dodd-Frank Act (12 U.S.C. 248) requires the Board to charge fees to offset the cost of regular or special examinations of BHCs, SLHCs and other nonbanking financial companies over $50 billion. As a result, the Board does not anticipate enforcing part 502 and, instead, plans to issue comprehensive guidance with respect to assessment fees on or after the transfer date. Additionally, the Board does not expect to enforce parts 535, 536, 550, 551, 555, 557, 558, 560, 563d, 564, 567, 568, 569, 570, 571, 572, 573, 590, and 591. The Board believes these provisions only apply to the supervision of savings associations and are not applicable to SLHCs or their nondepository institutions. The Board reserves the right to continue to enforce any regulation or policy of the OTS if it determines after further review that the rule or policy was applied by the OTS to SLHCs or is otherwise required by law. The following chart summarizes which parts and sections of Chapter V the Board currently expects to continue to enforce after July 21, 2011. OTS Part Subject Continuing provisions Basis for decision 500 .......... 502 .......... Agency organization and function ............. Assessments and fees .............................. None .......................................................... None .......................................................... 503 .......... 505 .......... 506 .......... Privacy Act ................................................. Freedom of Information Act ....................... Information collection requirements under the Paperwork Reduction Act. Restrictions on post-employment activities of senior examiners. Removals, suspensions, and prohibitions where a crime is charged or proven. Rules of practice and procedure in adjudicatory proceedings. Miscellaneous Organizational Regulations Rules for investigative proceedings and formal examination proceedings. Practice before the Office .......................... Application processing procedures ........... None .......................................................... None .......................................................... None .......................................................... Internal agency administration. Internal agency administration and modifications required by the Dodd-Frank Act. Internal agency administration. Internal agency administration. Internal agency administration. None .......................................................... Internal agency administration. None .......................................................... Internal agency administration. None .......................................................... Internal agency administration. None .......................................................... All of part ................................................... Internal agency administration. Applies directly to SLHCs. None .......................................................... None .......................................................... Contracting outreach programs ................. Nondiscrimination requirements ................ Disclosure and reporting of CRA-related agreements. Unfair or deceptive acts or practices ........ Consumer protection in sales of insurance Definitions for regulations affecting Federal savings associations. Federal mutual savings associations—Incorporation, organization, and conversion. None .......................................................... None .......................................................... All of part ................................................... Internal agency administration. Replacing with Board processes within specific regulations. Internal agency administration. Internal agency administration. Applies directly to SLHCs. None .......................................................... None .......................................................... Some of part .............................................. Applies to savings associations only. Applies through the savings association. Relevant to SLHC provisions. Some of part (Section 543.1(b) (resulting from cross-reference in part 575)). Applicable to SLHC as a result of a crossreference. 507 .......... 508 .......... 509 .......... 510 .......... 512 .......... 513 .......... 516 .......... srobinson on DSK4SPTVN1PROD with PROPOSALS 517 .......... 528 .......... 533 .......... 535 .......... 536 .......... 541 .......... 543 .......... 1 Notice of Intent to Require Reporting Forms for Savings and Loan Holding Companies, 76 Fed. Reg. 7091 (Feb. 8, 2011). VerDate Mar<15>2010 17:15 Jul 21, 2011 Jkt 223001 PO 00000 Frm 00020 Fmt 4702 Sfmt 4702 E:\FR\FM\22JYP1.SGM 22JYP1 43956 Federal Register / Vol. 76, No. 141 / Friday, July 22, 2011 / Proposed Rules OTS Part Subject Continuing provisions Basis for decision 544 .......... Federal mutual savings associations— Charter and bylaws. Applicable to SLHC as a result of a crossreference. 545 .......... Federal savings associations—Operations 546 .......... Federal mutual savings associations— Merger, dissolution, reorganization, and conversion. Fiduciary powers of savings associations Recordkeeping and confirmation requirements for securities transactions. Federal stock associations—Incorporation, organization, and conversion. Electronic operations ................................. Deposits ..................................................... Possession by conservators and receivers for Federal and State savings associations. Subordinate organizations ......................... Some of part (Sections 544.2, 544.5, and 544.8 (resulting from cross-reference in part 575)). Some of part (Sections 545.95 and 545.121 (resulting from cross-reference in part 575)). All of part (resulting from cross-reference in part 575). None of part ............................................... None .......................................................... Applies to savings associations only. Applies to savings associations only. All of part (resulting from cross-reference in part 575 and others). None .......................................................... None .......................................................... None .......................................................... Applicable to SLHC as a result of a crossreference. Applies to savings associations only. Applies to savings associations only. Applies to savings associations only. All of part (resulting from cross-reference in part 575). None .......................................................... Some of part .............................................. Applicable to SLHC as a result of a crossreference. Applies to savings associations only. Relevant to SLHC provisions. 550 .......... 551 .......... 552 .......... 555 .......... 557 .......... 558 .......... 559 .......... 560 .......... 561 .......... Applicable to SLHC as a result of a crossreference. Applicable to SLHC as a result of a crossreference. 562 .......... 563 .......... Lending and investment ............................ Definitions for regulations affecting all savings associations. Regulatory reporting standards ................. Savings Associations—Operations ........... 563b ........ Conversions from mutual to stock form .... 563c ........ Accounting requirements ........................... Some of part .............................................. All of part (resulting from cross-reference in part 575 and others). All of part (resulting from cross-reference in part 575). All of part ................................................... 563d ........ 563e ........ Securities of savings associations ............ Community reinvestment ........................... None .......................................................... Some of part .............................................. 563f ......... 563g ........ Management official interlocks .................. Securities offerings .................................... 564 .......... 565 .......... Appraisals .................................................. Prompt corrective action ............................ 567 568 569 570 Capital ........................................................ Security procedures ................................... Proxies ....................................................... Safety and soundness guidelines and compliance procedures. Fair Credit Reporting ................................. Loans in areas having special flood hazards. Privacy of consumer financial information Acquisition of control of savings associations. All of part ................................................... All of part (resulting from cross-reference in part 575). None .......................................................... Some of part (Section 565.4 (resulting from cross-reference in part 575)). None .......................................................... None .......................................................... None .......................................................... None .......................................................... Applies directly to SLHCs. Applicable to SLHC as a result of a crossreference. Applicable to SLHC as a result of a crossreference. Applicable to SLHC as a result of a crossreference. Applies to savings associations only. Applicable to SLHC as a result of a crossreference. Applies directly to SLHCs. Applicable to SLHC as a result of a crossreference. Applies to savings associations only. Applicable to SLHC as a result of a crossreference. Applies to savings associations only. Applies to savings associations only. Applies to savings associations only. Applies to savings associations only. None .......................................................... None of part ............................................... Transferred to new agency.. Applies to savings associations only. None of part ............................................... Some of part .............................................. Applies to savings associations only. Applies directly to SLHCs. The Board will replace current OTS application processing procedures. The Board also will replace provisions related to control determinations and rebuttals. Applies directly to SLHCs. The Board will replace current OTS application processing procedures. Relevant to SLHC provisions. .......... .......... .......... .......... 571 .......... 572 .......... 573 .......... 574 .......... 575 .......... Mutual holding companies ......................... Some of part .............................................. 583 .......... Definitions for regulations affecting savings and loan holding companies. Savings and loan holding companies ....... All of part ................................................... Prohibited service at savings and loan holding companies. Preemption of State usury laws ................ Preemption of State due-on-sale laws ...... All of part ................................................... Applies directly to SLHCs. The Board will replace current OTS application processing procedures. Applies directly to SLHCs. None .......................................................... None .......................................................... Applies to savings associations only. Applies to savings associations only srobinson on DSK4SPTVN1PROD with PROPOSALS 584 .......... 585 .......... 590 .......... 591 .......... By this notice, the Board seeks to inform interested persons, including VerDate Mar<15>2010 17:15 Jul 21, 2011 Jkt 223001 All of part ................................................... SLHCs and their non-depository subsidiaries, of the Board’s approach to PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 enforcement of certain OTS regulations and invites comment on its intended E:\FR\FM\22JYP1.SGM 22JYP1 Federal Register / Vol. 76, No. 141 / Friday, July 22, 2011 / Proposed Rules By order of the Board of Governors of the Federal Reserve System, July 14, 2011. Robert deV. Frierson, Deputy Secretary of the Board. eRulemaking Portal at http:// www.regulations.gov (IRS REG–109006– 11). The public hearing will be held in the IRS Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Andrea Hoffenson, (202) 622–3920; concerning submissions of comments, the hearing, and/or to be placed on the building access list to attend the hearing, Oluwafunmilayo (Funmi) Taylor, (202) 622–7180 (not toll-free numbers). [FR Doc. 2011–18100 Filed 7–21–11; 8:45 am] SUPPLEMENTARY INFORMATION: BILLING CODE 6210–01–P Background and Explanation of Provisions DEPARTMENT OF THE TREASURY Temporary regulations in the Rules and Regulations section of this issue of the Federal Register amend the Income Tax Regulations (26 CFR part 1) relating to section 1001. The temporary regulations provide that the transfer or assignment of a derivative contract in certain situations is not an exchange to the nonassigning counterparty for purposes of § 1.1001–1(a). The text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the amendments. approach in order to help identify issues and matters that may require special attention. The Board requests specific comment with respect to whether all regulations relating to the supervision of SLHCs are included in the listing above. Alternatively, does this notice indicate continued enforcement of regulatory provisions that currently do not apply to SLHCs or their non-depository subsidiaries? Internal Revenue Service 26 CFR Part 1 [REG–109006–11] RIN 1545–BK13 Modifications of Certain Derivative Contracts Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking by cross-reference to temporary regulations and notice of public hearing. AGENCY: In the Rules and Regulations section of this issue of the Federal Register, the IRS is issuing temporary regulations relating to whether an exchange for purposes of § 1.1001–1(a) occurs for the nonassigning counterparty when there is an assignment of certain derivative contracts. The text of those regulations also serves as the text of these proposed regulations. This document also provides notice of a public hearing on these proposed regulations. DATES: Written or electronic comments must be received by October 20, 2011. Outlines of topics to be discussed at the public hearing scheduled for Thursday, October 27, 2011, must be received by Thursday, October 20, 2011. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–109006–11), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be handdelivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG–109006–11), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC, or sent electronically, via the Federal srobinson on DSK4SPTVN1PROD with PROPOSALS SUMMARY: VerDate Mar<15>2010 17:15 Jul 21, 2011 Jkt 223001 Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small businesses. Comments and Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. The IRS and the Treasury Department specifically request comments on the clarity of the proposed rule and how it may be made easier to understand. All comments will be available for public inspection and copying. PO 00000 Frm 00022 Fmt 4702 Sfmt 4702 43957 A public hearing has been scheduled for Thursday, October 27, 2011, beginning at 10 a.m. in the IRS Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. Due to building security procedures, visitors must enter through the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this preamble. The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit written or electronic comments and an outline of the topics to be discussed and the time to be devoted to each topic (signed original and eight (8) copies) by Thursday, October 20, 2011. A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing. Drafting Information The principal author of these regulations is Andrea M. Hoffenson, Office of Associate Chief Council (Financial Institutions and Products). However, other personnel from the IRS and the Treasury Department participated in their development. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 1 is proposed to be amended as follows: PART 1—INCOME TAXES Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * Par. 2. Section 1.1001–4 is revised to read as follows: § 1.1001–4 Modifications of certain derivative contracts. [The text of the proposed amendments to § 1.1001–4 is the same as the text for § 1.1001–4T(a) through (d) E:\FR\FM\22JYP1.SGM 22JYP1

Agencies

[Federal Register Volume 76, Number 141 (Friday, July 22, 2011)]
[Proposed Rules]
[Pages 43953-43957]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-18100]


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FEDERAL RESERVE SYSTEM

12 CFR Chapter II

[Docket No. OP-1427]


Continued Application of Regulations to Savings and Loan Holding 
Companies

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice of intent and request for comment.

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

SUMMARY: The Board of Governors of the Federal Reserve System 
(``Board'') is issuing this notice of its intention to continue to 
enforce certain regulations previously issued by the Office of Thrift 
Supervision (``OTS'') after assuming supervisory responsibility for 
savings and loan holding companies (``SLHCs'')

[[Page 43954]]

and their non-depository subsidiaries from the OTS in July 2011. The 
Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-
Frank Act'' or ``Act'') transfers supervisory functions related to 
SLHCs and their non-depository subsidiaries to the Board on July 21, 
2011 (``transfer date'').

DATES: Comments must be submitted on or before August 31, 2011.

ADDRESSES: You may submit comments by any of the following methods:
     Agency Web Site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: regs.comments@federalreserve.gov. Include docket 
number OP-1427 in the subject line of the message.
     FAX: 202/452-3819 or 202/452-3102.
     Mail: Jennifer J. Johnson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue, 
NW., Washington, DC 20551.
    All public comments are available from the Board's Web site at 
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 
submitted, unless modified for technical reasons. Accordingly, your 
comments will not be edited to remove any identifying or contact 
information. Public comments may also be viewed electronically or in 
paper form in Room MP-500 of the Board's Martin Building (20th and C 
Streets, NW.) between 9 a.m. and 5 p.m. on weekdays.

FOR FURTHER INFORMATION CONTACT: Amanda K. Allexon, Counsel, (202) 452-
3818 or Kathleen O'Day, Deputy General Counsel, (202) 452-3786, Legal 
Division; Anna Lee Hewko, Assistant Director, (202) 530-6260, or 
Michael Sexton, Manager, (202) 452-3009, Division of Banking 
Supervision and Regulation, Board of Governors of the Federal Reserve 
System, 20th and C Streets, NW., Washington, DC 20551. 
Telecommunications Device for the Deaf (TDD) users may contact (202-
263-4869).

SUPPLEMENTARY INFORMATION: 

Background

    The Dodd-Frank Act was enacted on July 21, 2010. Title III of the 
Dodd-Frank Act transfers to the Board supervisory functions of the OTS 
related to SLHCs and their non-depository subsidiaries. The Act 
transfers supervisory functions related to Federal savings associations 
and state savings associations to the Office of the Comptroller of the 
Currency (``OCC'') and the Federal Deposit Insurance Corporation 
(``FDIC''), respectively.
    With respect to the supervision of SLHCs and their non-depository 
subsidiaries, section 312 of the Dodd-Frank Act (12 U.S.C. 5412) 
provides that all functions of the OTS and the Director of the OTS 
(including authority to issue orders) will transfer to the Board on 
July 21, 2011. All rulemaking authority related to SLHCs also will 
transfer to the Board on that date pursuant to section 312 of the Act. 
Section 316 of the Dodd-Frank Act provides that all orders, 
resolutions, determinations, agreements, and regulations, interpretive 
rules, other interpretations, guidelines, and other advisory materials 
issued, made, prescribed, or allowed to become effective by the OTS on 
or before the transfer date with respect to SLHCs and their non-
depository subsidiaries will remain in effect and shall be enforceable 
until modified, terminated, set aside, or superseded in accordance with 
applicable law by the Board, by any court of competent jurisdiction, or 
by operation of law. The Act includes parallel provisions applicable to 
the OCC and the FDIC with respect to Federal savings associations and 
state savings associations, respectively.
    Given the extensive transfer of authority to multiple agencies, 
section 316 of the Dodd-Frank Act (12 U.S.C. 5414(c)) requires the 
Board, OCC, and FDIC to identify and publish in the Federal Register 
separate lists of the current OTS regulations that each agency will 
continue to enforce after the transfer date. The Board is, therefore, 
issuing this notice in accordance with section 316 of the Dodd-Frank 
Act. This notice identifies all OTS regulations applicable to SLHCs and 
their non-depository subsidiaries that the Board currently intends to 
enforce after the transfer date.
    On or immediately after the transfer date, the Board intends to 
issue an interim final rule to effectuate the transition of OTS 
regulations to the Board. That rule will include technical, 
nomenclature, and other changes to certain OTS regulations to 
accommodate the transfer of supervisory authority from the OTS to the 
Board and address modifications made by the Dodd-Frank Act. The Board 
also expects to modify its own rules related to agency administration 
and procedure, where necessary, to account for the transfer of 
authority on or after the transfer date. When finalizing that 
rulemaking, the Board will take into consideration any comments 
received on this notice as well as those received on the interim final 
rule. In the future, the Board may propose substantive modifications to 
rules regarding SLHCs and their non-depository subsidiaries in order to 
address other modifications made by the Dodd-Frank Act and consolidate 
rules within the Board's regulatory structure.

Continuing Regulations

    The regulations currently applicable to SLHCs and their non-
depository subsidiaries are found in Chapter V of Title 12 of the Code 
of Federal Regulations. The following narrative provides a description 
of the parts of Chapter V that the Board expects to continue to enforce 
after July 21, 2011. Following the narrative, a chart is provided that 
lists each OTS part and the Board's current intention regarding 
enforcement of such part. The Board notes that failure to transfer an 
OTS regulation does not relieve any entity of the obligation to comply 
with all statutory requirements.
    Parts 574 though 585 include many of the rules that relate to the 
supervision of SLHCs, including those concerning the acquisition of 
savings associations, mutual holding companies, permissible activities, 
and prohibited service by certain individuals. The Board intends to 
enforce the substantive provisions of parts 574 through 585 after the 
transfer date, including the requirements for filing applications and 
the factors for reviewing such applications. The Board, however, does 
not expect to transfer provisions in parts 574 though 585 regarding the 
processing of applications and notices, such as agency review periods, 
publication requirements, and hearing procedures (including those 
applicable as a result of cross-references to part 516). Instead, 
beginning on the transfer date, the Board anticipates adopting the 
application procedures currently used by bank holding companies 
(``BHCs'') to equivalent applications and notices submitted by SLHCs. 
Additionally, the Board anticipates eliminating the current OTS 
regulations relating to control determinations and rebuttals, including 
the rebuttable control factors and process in Sec.  574.4, the 
certification of ownership in Sec.  574.5, and the rebuttal agreement 
in Sec.  574.100. In its place, the Board expects to insert provisions 
equivalent to those applicable to BHCs and, beginning on the transfer 
date, review investments and relationships with SLHCs using the current 
practices and policies applicable to BHCs, including the Board's policy 
statement on noncontrolling equity investments issued on September 22, 
2008. The

[[Page 43955]]

Board does not anticipate revisiting OTS determinations with respect to 
existing investments and ownership structures. In the near future, the 
Board anticipates proposing rules that would update and streamline 
regulations related to control determinations for both BHCs and SLHCs.
    The Board intends to enforce certain definitional provisions (parts 
541, 561, and 583), as well as parts 533 and 563f to the extent they 
are directly or indirectly applicable to the supervision of SLHCs and 
their non-depository subsidiaries. Additionally, the Board expects to 
enforce certain relevant provisions of part 562 that provide regulatory 
reporting requirements. The Board, however, issued a notice on February 
8, 2011, indicating that it is considering transitioning SLHCs to the 
Board's current reporting system as soon as practicable.\1\ Currently, 
the Board is reviewing comments received on that notice and is 
considering issuing a notice of proposed rulemaking on or after the 
transfer date outlining a proposal on SLHC reporting that may affect 
part 562 and part 584.
---------------------------------------------------------------------------

    \1\ Notice of Intent to Require Reporting Forms for Savings and 
Loan Holding Companies, 76 Fed. Reg. 7091 (Feb. 8, 2011).
---------------------------------------------------------------------------

    Current OTS rules often integrate regulatory requirements and 
supervision for both SLHCs and savings associations. As a result, 
certain regulations that only reference savings associations also may 
apply to SLHCs (and in particular to mutual holding companies) and 
their non-depository subsidiaries through cross-references. The Board, 
therefore, anticipates enforcing parts 546, 552, 559, 563, 563b, 563c, 
563e, and 563g, and Sec. Sec.  543.1(b), 544.2, 544.5, 544.8, 545.95, 
545.121, and 565.4. The Board anticipates enforcing part 512 regarding 
investigative and formal examination proceedings because the Board does 
not have similar rules currently in place for BHCs.
    The Board does not anticipate enforcing parts 500, 503 through 510, 
513, 516, 517, and 528 after the transfer date. These parts include 
agency-specific administrative provisions and, as noted above, the 
Board anticipates modifying its own rules in this area on or after the 
transfer date to account for the transfer of authority.
    Part 502 itemizes the current assessment fee schedule for OTS-
supervised institutions. The Board does not currently charge BHCs or 
state member banks (``SMBs'') for examinations or inspections. However, 
section 318 of the Dodd-Frank Act (12 U.S.C. 248) requires the Board to 
charge fees to offset the cost of regular or special examinations of 
BHCs, SLHCs and other nonbanking financial companies over $50 billion. 
As a result, the Board does not anticipate enforcing part 502 and, 
instead, plans to issue comprehensive guidance with respect to 
assessment fees on or after the transfer date.
    Additionally, the Board does not expect to enforce parts 535, 536, 
550, 551, 555, 557, 558, 560, 563d, 564, 567, 568, 569, 570, 571, 572, 
573, 590, and 591. The Board believes these provisions only apply to 
the supervision of savings associations and are not applicable to SLHCs 
or their non-depository institutions.
    The Board reserves the right to continue to enforce any regulation 
or policy of the OTS if it determines after further review that the 
rule or policy was applied by the OTS to SLHCs or is otherwise required 
by law.
    The following chart summarizes which parts and sections of Chapter 
V the Board currently expects to continue to enforce after July 21, 
2011.

 
----------------------------------------------------------------------------------------------------------------
       OTS Part                   Subject                 Continuing provisions          Basis for decision
----------------------------------------------------------------------------------------------------------------
500..................  Agency organization and        None........................  Internal agency
                        function.                                                    administration.
502..................  Assessments and fees.........  None........................  Internal agency
                                                                                     administration and
                                                                                     modifications required by
                                                                                     the Dodd-Frank Act.
503..................  Privacy Act..................  None........................  Internal agency
                                                                                     administration.
505..................  Freedom of Information Act...  None........................  Internal agency
                                                                                     administration.
506..................  Information collection         None........................  Internal agency
                        requirements under the                                       administration.
                        Paperwork Reduction Act.
507..................  Restrictions on post-          None........................  Internal agency
                        employment activities of                                     administration.
                        senior examiners.
508..................  Removals, suspensions, and     None........................  Internal agency
                        prohibitions where a crime                                   administration.
                        is charged or proven.
509..................  Rules of practice and          None........................  Internal agency
                        procedure in adjudicatory                                    administration.
                        proceedings.
510..................  Miscellaneous Organizational   None........................  Internal agency
                        Regulations.                                                 administration.
512..................  Rules for investigative        All of part.................  Applies directly to SLHCs.
                        proceedings and formal
                        examination proceedings.
513..................  Practice before the Office...  None........................  Internal agency
                                                                                     administration.
516..................  Application processing         None........................  Replacing with Board
                        procedures.                                                  processes within specific
                                                                                     regulations.
517..................  Contracting outreach programs  None........................  Internal agency
                                                                                     administration.
528..................  Nondiscrimination              None........................  Internal agency
                        requirements.                                                administration.
533..................  Disclosure and reporting of    All of part.................  Applies directly to SLHCs.
                        CRA-related agreements.
535..................  Unfair or deceptive acts or    None........................  Applies to savings
                        practices.                                                   associations only.
536..................  Consumer protection in sales   None........................  Applies through the savings
                        of insurance.                                                association.
541..................  Definitions for regulations    Some of part................  Relevant to SLHC provisions.
                        affecting Federal savings
                        associations.
543..................  Federal mutual savings         Some of part (Section         Applicable to SLHC as a
                        associations--Incorporation,   543.1(b) (resulting from      result of a cross-
                        organization, and conversion.  cross-reference in part       reference.
                                                       575)).

[[Page 43956]]

 
544..................  Federal mutual savings         Some of part (Sections        Applicable to SLHC as a
                        associations--Charter and      544.2, 544.5, and 544.8       result of a cross-
                        bylaws.                        (resulting from cross-        reference.
                                                       reference in part 575)).
545..................  Federal savings associations-- Some of part (Sections        Applicable to SLHC as a
                        Operations.                    545.95 and 545.121            result of a cross-
                                                       (resulting from cross-        reference.
                                                       reference in part 575)).
546..................  Federal mutual savings         All of part (resulting from   Applicable to SLHC as a
                        associations--Merger,          cross-reference in part       result of a cross-
                        dissolution, reorganization,   575).                         reference.
                        and conversion.
550..................  Fiduciary powers of savings    None of part................  Applies to savings
                        associations.                                                associations only.
551..................  Recordkeeping and              None........................  Applies to savings
                        confirmation requirements                                    associations only.
                        for securities transactions.
552..................  Federal stock associations--   All of part (resulting from   Applicable to SLHC as a
                        Incorporation, organization,   cross-reference in part 575   result of a cross-
                        and conversion.                and others).                  reference.
555..................  Electronic operations........  None........................  Applies to savings
                                                                                     associations only.
557..................  Deposits.....................  None........................  Applies to savings
                                                                                     associations only.
558..................  Possession by conservators     None........................  Applies to savings
                        and receivers for Federal                                    associations only.
                        and State savings
                        associations.
559..................  Subordinate organizations....  All of part (resulting from   Applicable to SLHC as a
                                                       cross-reference in part       result of a cross-
                                                       575).                         reference.
560..................  Lending and investment.......  None........................  Applies to savings
                                                                                     associations only.
561..................  Definitions for regulations    Some of part................  Relevant to SLHC provisions.
                        affecting all savings
                        associations.
562..................  Regulatory reporting           Some of part................  Applies directly to SLHCs.
                        standards.
563..................  Savings Associations--         All of part (resulting from   Applicable to SLHC as a
                        Operations.                    cross-reference in part 575   result of a cross-
                                                       and others).                  reference.
563b.................  Conversions from mutual to     All of part (resulting from   Applicable to SLHC as a
                        stock form.                    cross-reference in part       result of a cross-
                                                       575).                         reference.
563c.................  Accounting requirements......  All of part.................  Applicable to SLHC as a
                                                                                     result of a cross-
                                                                                     reference.
563d.................  Securities of savings          None........................  Applies to savings
                        associations.                                                associations only.
563e.................  Community reinvestment.......  Some of part................  Applicable to SLHC as a
                                                                                     result of a cross-
                                                                                     reference.
563f.................  Management official            All of part.................  Applies directly to SLHCs.
                        interlocks.
563g.................  Securities offerings.........  All of part (resulting from   Applicable to SLHC as a
                                                       cross-reference in part       result of a cross-
                                                       575).                         reference.
564..................  Appraisals...................  None........................  Applies to savings
                                                                                     associations only.
565..................  Prompt corrective action.....  Some of part (Section 565.4   Applicable to SLHC as a
                                                       (resulting from cross-        result of a cross-
                                                       reference in part 575)).      reference.
567..................  Capital......................  None........................  Applies to savings
                                                                                     associations only.
568..................  Security procedures..........  None........................  Applies to savings
                                                                                     associations only.
569..................  Proxies......................  None........................  Applies to savings
                                                                                     associations only.
570..................  Safety and soundness           None........................  Applies to savings
                        guidelines and compliance                                    associations only.
                        procedures.
571..................  Fair Credit Reporting........  None........................  Transferred to new agency..
572..................  Loans in areas having special  None of part................  Applies to savings
                        flood hazards.                                               associations only.
573..................  Privacy of consumer financial  None of part................  Applies to savings
                        information.                                                 associations only.
574..................  Acquisition of control of      Some of part................  Applies directly to SLHCs.
                        savings associations.                                        The Board will replace
                                                                                     current OTS application
                                                                                     processing procedures. The
                                                                                     Board also will replace
                                                                                     provisions related to
                                                                                     control determinations and
                                                                                     rebuttals.
575..................  Mutual holding companies.....  Some of part................  Applies directly to SLHCs.
                                                                                     The Board will replace
                                                                                     current OTS application
                                                                                     processing procedures.
583..................  Definitions for regulations    All of part.................  Relevant to SLHC provisions.
                        affecting savings and loan
                        holding companies.
584..................  Savings and loan holding       All of part.................  Applies directly to SLHCs.
                        companies.                                                   The Board will replace
                                                                                     current OTS application
                                                                                     processing procedures.
585..................  Prohibited service at savings  All of part.................  Applies directly to SLHCs.
                        and loan holding companies.
590..................  Preemption of State usury      None........................  Applies to savings
                        laws.                                                        associations only.
591..................  Preemption of State due-on-    None........................  Applies to savings
                        sale laws.                                                   associations only
----------------------------------------------------------------------------------------------------------------

    By this notice, the Board seeks to inform interested persons, 
including SLHCs and their non-depository subsidiaries, of the Board's 
approach to enforcement of certain OTS regulations and invites comment 
on its intended

[[Page 43957]]

approach in order to help identify issues and matters that may require 
special attention. The Board requests specific comment with respect to 
whether all regulations relating to the supervision of SLHCs are 
included in the listing above. Alternatively, does this notice indicate 
continued enforcement of regulatory provisions that currently do not 
apply to SLHCs or their non-depository subsidiaries?

    By order of the Board of Governors of the Federal Reserve 
System, July 14, 2011.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. 2011-18100 Filed 7-21-11; 8:45 am]
BILLING CODE 6210-01-P