Transferred OTS Regulations and FDIC Regulations Regarding Disclosure and Reporting of CRA-Related Agreements, 42183-42186 [2014-16973]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION

[Federal Register Volume 79, Number 139 (Monday, July 21, 2014)]
[Rules and Regulations]
[Pages 42183-42186]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-16973]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 346 and 390

RIN 3064-AE09


Transferred OTS Regulations and FDIC Regulations Regarding 
Disclosure and Reporting of CRA-Related Agreements

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Final rule.

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SUMMARY: The Federal Deposit Insurance Corporation (``FDIC'') is 
adopting a final rule (``Final Rule'') to rescind and remove certain 
regulations transferred to the FDIC from the Office of Thrift 
Supervision (``OTS'') on July 21, 2011, in connection with the 
implementation of applicable provisions of Title III of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act''). 
The Dodd-Frank Act provided that the former OTS rules that were 
transferred to the FDIC would be enforceable by or against the FDIC 
until they were modified, terminated, set aside, or superseded in 
accordance with applicable law by the FDIC, by any court of competent 
jurisdiction, or by operation of law. The requirements for State 
savings associations are substantively similar to existing FDIC 
regulations.

DATES: The Final Rule is effective on August 20, 2014.

FOR FURTHER INFORMATION CONTACT: Patience Singleton, Senior Policy 
Analyst, Division of Depositor and Consumer Protection, (202) 898-6859; 
Jennifer Maree, Counsel, Legal Division, (202) 898-6543; Richard M. 
Schwartz, Counsel, Legal Division, (202) 898-7424.

SUPPLEMENTARY INFORMATION:

I. Background

A. The Dodd-Frank Act

    The Dodd-Frank Act \1\ provided for a substantial reorganization of 
the regulation of State and Federal savings associations and their 
holding companies. Beginning July 21, 2011, the transfer date 
established by section 311 of the Dodd-Frank Act, codified at 12 U.S.C. 
5411, the powers, duties, and functions formerly performed by the OTS 
were divided among the FDIC, as to State savings associations, the 
Office of the Comptroller of the Currency (``OCC''), as to Federal 
savings associations, and the Board of Governors of the Federal Reserve 
System (``FRB''), as to savings and loan holding companies. Section 
316(b) of the Dodd-Frank Act, codified at 12 U.S.C. 5414(b), provides 
the manner of treatment for all orders, resolutions, determinations, 
regulations, and advisory materials that had been issued, made, 
prescribed, or allowed to become effective by the OTS. The section 
provides that if such materials were in effect on the day before the 
transfer date, they continue to be in effect and are enforceable by or 
against the appropriate successor agency until they are modified, 
terminated, set aside, or superseded in accordance with applicable law 
by such successor agency, by any court of competent jurisdiction, or by 
operation of law.
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    \1\ Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Public Law 111-203, 124 Stat. 1376 (2010).
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    Section 316(c) of the Dodd-Frank Act, codified at 12 U.S.C. 
5414(c), further directed the FDIC and the OCC to consult with one 
another and to publish a list of the continued OTS regulations that 
would be enforced by the FDIC and

[[Page 42184]]

the OCC, respectively. On June 14, 2011, the FDIC's Board of Directors 
approved a ``List of OTS Regulations to be Enforced by the OCC and the 
FDIC Pursuant to the Dodd-Frank Wall Street Reform and Consumer 
Protection Act.'' This list was published by the FDIC and the OCC as a 
Joint Notice in the Federal Register on July 6, 2011.\2\
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    \2\ 76 FR 39247 (July 6, 2011).
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    Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act, 
codified at 12 U.S.C. 5412(b)(2)(B)(i)(II), granted the OCC rulemaking 
authority relating to both State and Federal savings associations, 
nothing in the Dodd-Frank Act affected the FDIC's existing authority to 
issue regulations under the Federal Deposit Insurance Act (``FDI Act'') 
and other laws as the ``appropriate Federal banking agency'' or under 
similar statutory terminology. Section 312(c) of the Dodd-Frank Act 
amended the definition of ``appropriate Federal banking agency'' 
contained in section 3(q) of the FDI Act, 12 U.S.C. 1813(q), to add 
State savings associations to the list of entities for which the FDIC 
is designated as the ``appropriate Federal banking agency.'' As a 
result, when the FDIC acts as the designated ``appropriate Federal 
banking agency'' (or under similar terminology) for State savings 
associations, as it does here, the FDIC is authorized to issue, modify 
and rescind regulations involving such associations, as well as for 
State nonmember banks and insured branches of foreign banks.
    As noted, on June 14, 2011, pursuant to this authority, the FDIC's 
Board of Directors reissued and redesignated certain transferring 
regulations of the former OTS. These transferred OTS regulations were 
published as new FDIC regulations in the Federal Register on August 5, 
2011.\3\ When it republished the transferred OTS regulations as new 
FDIC regulations, the FDIC specifically noted that its staff would 
evaluate the transferred OTS rules and might later recommend 
incorporating the transferred OTS regulations into other FDIC rules, 
amending them, or rescinding them, as appropriate.
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    \3\ 76 FR 47652 (Aug. 5, 2011).
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    One of the OTS rules transferred to the FDIC governs OTS oversight 
of disclosure and reporting of CRA-related agreements in the context of 
State savings associations. The OTS rule, formerly found at 12 CFR part 
533, was transferred to the FDIC with only minor nonsubstantive changes 
and is now found in the FDIC's rules at part 390, subpart H, entitled 
``Disclosure and Reporting of CRA-Related Agreements.'' Before the 
transfer of the OTS rules and continuing today, the FDIC's rules 
contained part 346, also entitled ``Disclosure and Reporting of CRA-
Related Agreements,'' a rule governing FDIC oversight of disclosure and 
reporting of CRA-related agreements with respect to IDIs for which the 
FDIC has been designated the appropriate Federal banking agency. After 
careful review and comparison of part 390, subpart H and part 346, the 
FDIC proposes to rescind part 390, subpart H, because, as discussed 
below, it is substantively redundant to existing part 346 and 
simultaneously we propose to make technical conforming edits to our 
existing rule.

II. Proposed Rule

A. Removal of Part 390, Subpart H (Former OTS 12 CFR Part 533)

    The FDIC issued a Notice of Proposed Rulemaking (``NPR'' or 
``Proposed Rule''), which was published in the Federal Register on 
December 19, 2013, regarding the removal of part 390, subpart H, which 
governs disclosure and reporting of all CRA-related agreements for 
State savings associations.\4\ The former OTS rule was transferred to 
the FDIC with only nominal changes. The NPR proposed removing part 390, 
subpart H from the CFR in an effort to streamline FDIC regulations for 
all FDIC-supervised institutions. As discussed in the Proposed Rule, 
the FDIC carefully reviewed the transferred rule, part 390, subpart H, 
and compared it with part 346, an FDIC regulation that existed before 
the transfer of part 390, subpart H and that continues to remain in 
effect today. Like the transferred rule, part 346 governs disclosure 
and reporting of all CRA-related agreements for State nonmember insured 
banks and their subsidiaries. Although the two rules were substantively 
the same, minor technical and conforming amendments were proposed.\5\
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    \4\ 78 FR 76768 (Dec. 19, 2013).
    \5\ 78 FR 76770.
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B. Amendments to Part 346

    The Proposed Rule proposed to modify the scope of part 346 to 
include State savings associations and their subsidiaries to conform to 
and reflect the scope of the FDIC's current supervisory 
responsibilities as the appropriate Federal banking agency. The 
Proposed Rule also proposed to add a new subsection (m), which would 
define ``State savings association'' as having ``the same meaning as in 
section 3(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 
1813(b)(3)).'' In finalizing these proposals, oversight of disclosure 
and reporting of CRA-related agreements in part 346 would apply to all 
FDIC-supervised institutions, including State savings associations, and 
part 390, subpart H would be removed because it is largely redundant of 
those rules found in part 346. Rescinding part 390, subpart H will 
serve to streamline the FDIC's rules and eliminate unnecessary 
regulations.

III. Comments

    The FDIC issued the NPR with a 60-day comment period, which closed 
on February 18, 2014. The FDIC received no comments on its Proposed 
Rule, and consequently the Final Rule is adopted as proposed without 
any changes.

IV. Explanation of the Final Rule

    As discussed in the NPR, Part 390, Subpart H is substantively 
similar to Part 346, and the designation of Part 346 as a single 
authority of disclosure and reporting of CRA-related agreements for all 
FDIC-supervised institutions will serve to streamline the FDIC's rules 
and eliminate unnecessary regulations. To that effect, the Final Rule 
removes and rescinds 12 CFR Part 390, Subpart H in its entirety.
    Consistent with the Proposed Rule, the Final Rule also amends 
section 346.1 to modify the scope of Part 346 to include State savings 
associations and their subsidiaries to conform to and reflect the scope 
of the FDIC's current supervisory responsibilities as the appropriate 
Federal banking agency. The Final Rule also adds a new subsection (m), 
which would define ``State savings association'' as having ``the same 
meaning as in section 3(b)(3) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(b)(3)).'' The current definition occupying subsection (m) 
(``Term of Agreement''), will be moved to a newly created subsection 
(n) within section 346.11.

V. Administrative Law Matters

A. The Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
(``PRA'') of 1995, 44 U.S.C. 3501-3521, the FDIC may not conduct or 
sponsor, and the respondent is not required to respond to, an 
information collection unless it displays a currently valid Office of 
Management and Budget (``OMB'') control number. The information 
collections contained in Part 346 are cleared by OMB under the FDIC's 
``CRA Sunshine'' information collection (OMB No. 3064-0139). The FDIC's 
burden estimates were updated in connection with the collection's 2012

[[Page 42185]]

renewal to include State savings associations transferred from the OTS 
to the FDIC. The FDIC reviewed its burden estimates for the collection 
at the time it assumed responsibility for supervision of State savings 
associations transferred from the OTS and determined that no changes to 
the burden estimates were necessary. This Final Rule does not modify 
the FDIC's existing collection and does not involve any new collections 
of information pursuant to the PRA.
    The Final Rule rescinds and removes from FDIC regulations Part 390, 
Subpart H. This rule was transferred with only nominal changes to the 
FDIC from the OTS when the OTS was abolished by Title III of the Dodd-
Frank Act. Part 390, Subpart H is largely redundant of the FDIC's 
existing Part 346 regarding disclosure and reporting of CRA-related 
agreements. The Final Rule amends sections 346.1 and 346.11 to include 
State savings associations and their subsidiaries within the scope of 
Part 346 and to define ``State savings association,'' respectively. 
These measures clarify that State savings associations, as well as 
State nonmember banks are subject to Part 346. Since these State 
savings associations were already covered by the OTS rule, these 
provisions of the Final Rule will not involve any new collections of 
information under the PRA or impact current burden estimates. Based on 
the foregoing, no information collection request has been submitted to 
the OMB for review.

B. The Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601 et seq., 
generally requires an agency to consider whether a final rule will have 
a significant economic impact on a substantial number of small entities 
(defined in regulations promulgated by the Small Business 
Administration to include banking organizations with total assets of 
less than or equal to $500 million).\6\ Pursuant to section 605(b) of 
the RFA, a final regulatory flexibility analysis is not required if the 
agency certifies that the rule will not have a significant economic 
impact on a substantial number of small entities, and publishes its 
certification and a short explanatory statement in the Federal Register 
together with the rule. For the reasons provided below, the FDIC 
certifies that the Final Rule does not have a significant economic 
impact on a substantial number of small entities. Accordingly, a 
regulatory flexibility analysis is not required.
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    \6\ 5 U.S.C. 601 et seq.
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    As discussed in the notice of proposed rulemaking, Part 390, 
Subpart H was transferred from OTS Part 533, which governed disclosure 
and reporting of CRA-related agreements. OTS Part 533 had been in 
effect since 2001, and all State savings associations were required to 
comply with it. Because it is redundant of existing Part 346 of the 
FDIC's rules, the FDIC proposes rescinding and removing Part 390, 
Subpart H. As a result, all FDIC-supervised institutions--including 
State savings associations and their subsidiaries--would be required to 
comply with Part 346 if they are in CRA-related agreements. Because all 
State savings associations and their subsidiaries have been required to 
comply with substantially similar disclosure and reporting rules if 
they engaged in CRA-related agreements since 2001, today's Final Rule 
has no significant economic impact on any State savings association.

C. Small Business Regulatory Enforcement Fairness Act

    The Office of Management and Budget has determined that the Final 
Rule is not a ``major rule'' within the meaning of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (``SBREFA''), 5 U.S.C. 801 
et seq.

D. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act, 12 U.S.C. 4809, requires 
each Federal banking agency to use plain language in all of its 
proposed and final rules published after January 1, 2000. In the NPR, 
the FDIC invited comments on whether the Proposed Rule was clearly 
stated and effectively organized, and how the FDIC might make it easier 
to understand. Although the FDIC did not receive any comments, the FDIC 
sought to present the Final Rule is a simple and straightforward 
manner.

E. The Economic Growth and Regulatory Paperwork Reduction Act

    Under section 2222 of the Economic Growth and Regulatory Paperwork 
Reduction Act of 1996 (``EGRPRA''), the FDIC is required to review all 
of its regulations, at least once every 10 years, in order to identify 
any outdated or otherwise unnecessary regulations imposed on insured 
depository institutions.\7\ The FDIC completed the last comprehensive 
review of its regulations under EGRPRA in 2006 and is commencing the 
next decennial review, which is expected to be completed by 2016. The 
NPR solicited comments on whether the proposed rescission of Part 390, 
Subpart H and amendments to Part 346 would impose any outdated or 
unnecessary regulatory requirements on insured depository institutions. 
No comments on this issue were received. Upon review, the FDIC does not 
believe that Part 346, as amended by the Final Rule, imposes any 
outdated or unnecessary regulatory requirements on any insured 
depository institutions.
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    \7\ Public Law 104-208, 110 Stat. 3009 (Sept. 30, 1996).
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List of Subjects

12 CFR Part 346

    Banks and banking, Disclosure and reporting of CRA-related 
agreements, Savings associations.

12 CFR Part 390

    Disclosure and reporting of CRA-related agreements.

Authority and Issuance

    For the reasons stated in the preamble, the Board of Directors of 
the Federal Deposit Insurance Corporation amends 12 CFR parts 346 and 
390 as set forth below:

0
1. Revise part 346 to read as follows:

PART 346--DISCLOSURE AND REPORTING OF CRA-RELATED AGREEMENTS

Sec.
346.1 Purpose and scope of this part.
346.11 Other definitions and rules of construction used in this 
part.

    Authority:  12 U.S.C. 1831y.

PART 346--DISCLOSURE AND REPORTING OF CRA-RELATED AGREEMENTS


Sec.  346.1  Purpose and scope of this part.

    (a) General. This part implements section 711 of the Gramm-Leach-
Bliley Act (12 U.S.C. 1831y). That section requires any nongovernmental 
entity or person, insured depository institution, or affiliate of an 
insured depository institution that enters into a covered agreement 
to--
    (1) Make the covered agreement available to the public and the 
appropriate Federal banking agency; and
    (2) File an annual report with the appropriate Federal banking 
agency concerning the covered agreement.
    (b) Scope of this part. The provisions of this part apply to--
    (1) State nonmember insured banks;
    (2) Subsidiaries of state nonmember insured banks;
    (3) Nongovernmental entities or persons that enter into covered

[[Page 42186]]

agreements with any company listed in paragraphs (b)(1), (2), (4) and 
(5) of this section.
    (4) State savings associations; and
    (5) Subsidiaries of State savings associations.
    (c) Relation to Community Reinvestment Act. This part does not 
affect in any way the Community Reinvestment Act of 1977 (12 U.S.C. 
2901 et seq.) or the FDIC's Community Reinvestment regulation found at 
12 CFR part 345, or the FDIC's interpretations or administration of 
that Act or regulation.
    (d) Examples. (1) The examples in this part are not exclusive. 
Compliance with an example, to the extent applicable, constitutes 
compliance with this part.
    (2) Examples in a paragraph illustrate only the issue described in 
the paragraph and do not illustrate any other issues that may arise in 
this part.


Sec.  346.11  Other definitions and rules of construction used in this 
part.

    (a) Affiliate. ``Affiliate'' means--
    (1) Any company that controls, is controlled by, or is under common 
control with another company; and
    (2) For the purpose of determining whether an agreement is a 
covered agreement under Sec.  346.2, an ``affiliate'' includes any 
company that would be under common control or merged with another 
company on consummation of any transaction pending before a Federal 
banking agency at the time--
    (i) The parties enter into the agreement; and
    (ii) The NGEP that is a party to the agreement makes a CRA 
communication, as described in Sec.  346.3.
    (b) Control. ``Control'' is defined in section 2(a) of the Bank 
Holding Company Act (12 U.S.C. 1841(a)).
    (c) CRA affiliate. A ``CRA affiliate'' of an insured depository 
institution is any company that is an affiliate of an insured 
depository institution to the extent, and only to the extent, that the 
activities of the affiliate were considered by the appropriate Federal 
banking agency when evaluating the CRA performance of the institution 
at its most recent CRA examination prior to the agreement. An insured 
depository institution or affiliate also may designate any company as a 
CRA affiliate at any time prior to the time a covered agreement is 
entered into by informing the NGEP that is a party to the agreement of 
such designation.
    (d) CRA public file. ``CRA public file'' means the public file 
maintained by an insured depository institution and described in 12 CFR 
345.43.
    (e) Executive officer. The term ``executive officer'' has the same 
meaning as in Sec.  215.2(e)(1) of the Board of Governors of the 
Federal Reserve System's Regulation O (12 CFR 215.2(e)(1)).
    (f) Federal banking agency; appropriate Federal banking agency. The 
terms ``Federal banking agency'' and ``appropriate Federal banking 
agency'' have the same meanings as in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813).
    (g) Fiscal year. (1) The fiscal year for a NGEP that does not have 
a fiscal year shall be the calendar year.
    (2) Any NGEP, insured depository institution, or affiliate that has 
a fiscal year may elect to have the calendar year be its fiscal year 
for purposes of this part.
    (h) Insured depository institution. ``Insured depository 
institution'' has the same meaning as in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813).
    (i) NGEP. ``NGEP'' means a nongovernmental entity or person.
    (j) Nongovernmental entity or person --(1) General. A 
``nongovernmental entity or person'' is any partnership, association, 
trust, joint venture, joint stock company, corporation, limited 
liability corporation, company, firm, society, other organization, or 
individual.
    (2) Exclusions. A nongovernmental entity or person does not 
include--
    (i) The United States government, a state government, a unit of 
local government (including a county, city, town, township, parish, 
village, or other general-purpose subdivision of a state) or an Indian 
tribe or tribal organization established under Federal, state or Indian 
tribal law (including the Department of Hawaiian Home Lands), or a 
department, agency, or instrumentality of any such entity;
    (ii) A federally-chartered public corporation that receives Federal 
funds appropriated specifically for that corporation;
    (iii) An insured depository institution or affiliate of an insured 
depository institution; or
    (iv) An officer, director, employee, or representative (acting in 
his or her capacity as an officer, director, employee, or 
representative) of an entity listed in paragraphs (j)(2)(i) through 
(iii) of this section.
    (k) Party. The term ``party''. The authority citation for part 405 
continues to read as follows: With respect to a covered agreement means 
each NGEP and each insured depository institution or affiliate that 
entered into the agreement.
    (l) Relevant supervisory agency. The ``relevant supervisory 
agency'' for a covered agreement means the appropriate Federal banking 
agency for--
    (1) Each insured depository institution (or subsidiary thereof) 
that is a party to the covered agreement;
    (2) Each insured depository institution (or subsidiary thereof) or 
CRA affiliate that makes payments or loans or provides services that 
are subject to the covered agreement; and
    (3) Any company (other than an insured depository institution or 
subsidiary thereof) that is a party to the covered agreement.
    (m) State savings association. ``State savings association'' has 
the same meaning as in section 3(b)(3) of the Federal Deposit Insurance 
Act (12 U.S.C. 1813(b)(3)).
    (n) Term of agreement. An agreement that does not have a fixed 
termination date is considered to terminate on the last date on which 
any party to the agreement makes any payment or provides any loan or 
other resources under the agreement, unless the relevant supervisory 
agency for the agreement otherwise notifies each party in writing.

PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT 
SUPERVISION

Subpart H--Disclosure and Reporting of CRA-Related Agreements

0
2. The authority citation for part 390 continues to read as follows:

    Authority:  12 U.S.C. 1831y.

Subpart H--[Removed and Reserved]

0
3. Remove and reserve subpart H consisting of Sec. Sec.  390.160 
through 390.170.

    Dated at Washington, DC, this 15th day of July 2014.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2014-16973 Filed 7-18-14; 8:45 am]
BILLING CODE 6714-01-P