Transferred OTS Regulations Regarding Electronic Operations, 42231-42235 [2014-16975]
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Federal Register / Vol. 79, No. 139 / Monday, July 21, 2014 / Proposed Rules
General of the United States to enforce
compliance with the Interlocks Act and
this part. If an affiliate of an FDICsupervised institution is subject to the
primary regulation of another federal
depository organization supervisory
agency, then the FDIC does not
administer and enforce the Interlocks
Act with respect to that affiliate.
PART 390—REGULATIONS
TRANSFERRED FROM THE OFFICE OF
THRIFT SUPERVISION
Subpart V —Management Official
Interlocks
2. The authority citation for part 390
is revised to read as follows:
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■
Authority: 12 U.S.C. 1819.
Subpart A also issued under 12 U.S.C.
1820.
Subpart B also issued under 12 U.S.C.
1818.
Subpart C also issued under 5 U.S.C. 504;
554–557; 12 U.S.C. 1464; 1467; 1468; 1817;
1818; 1820; 1829; 3349, 4717; 15 U.S.C. 78l;
78o–5; 78u–2; 28 U.S.C. 2461 note; 31 U.S.C.
5321; 42 U.S.C. 4012a.
Subpart D also issued under 12 U.S.C.
1817; 1818; 1820; 15 U.S.C. 78l.
Subpart E also issued under 12 U.S.C.
1813; 1831m; 15 U.S.C. 78.
Subpart F also issued under 5 U.S.C. 552;
559; 12 U.S.C. 2901 et seq.
Subpart G also issued under 12 U.S.C. 2810
et seq., 2901 et seq.; 15 U.S.C. 1691; 42 U.S.C.
1981, 1982, 3601–3619.
Subpart I also issued under 12 U.S.C.
1831x.
Subpart J also issued under 12 U.S.C.
1831p–1.
Subpart K also issued under 12 U.S.C.
1817; 1818; 15 U.S.C. 78c; 78l.
Subpart L also issued under 12 U.S.C.
1831p–1.
Subpart M also issued under 12 U.S.C.
1818.
Subpart N also issued under 12 U.S.C.
1821.
Subpart O also issued under 12 U.S.C.
1828.
Subpart P also issued under 12 U.S.C.
1470; 1831e; 1831n; 1831p–1; 3339.
Subpart Q also issued under 12 U.S.C.
1462; 1462a; 1463; 1464.
Subpart R also issued under 12 U.S.C.
1463; 1464; 1831m; 1831n; 1831p–1.
Subpart S also issued under 12 U.S.C.
1462; 1462a; 1463; 1464; 1468a; 1817; 1820;
1828; 1831e; 1831o; 1831p–1; 1881–1884;
3207; 3339; 15 U.S.C. 78b; 78l; 78m; 78n;
78p; 78q; 78w; 31 U.S.C. 5318; 42 U.S.C.
4106.
Subpart T also issued under 12 U.S.C.
1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m;
78n; 78w.
Subpart U also issued under 12 U.S.C.
1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m;
78n; 78p; 78w; 78d–1; 7241; 7242; 7243;
7244; 7261; 7264; 7265.
Subpart W also issued under 12 U.S.C.
1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m;
78n; 78p; 78w.
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Subpart X also issued under 12 U.S.C.
1462; 1462a; 1463; 1464; 1828; 3331 et seq.
Subpart Y also issued under 12 U.S.C.
1831o.
Subpart Z also issued under 12 U.S.C.
1462; 1462a; 1463; 1464; 1828 (note).
Remove from the authority citation for
part 390, the sentence ‘‘Subpart V also
issued under 12 U.S.C. 3201–3208.’’
■ 3. Subpart V—[Removed and
reserved]
■ Remove and reserve Subpart V
consisting of §§ 390.400 through
390.408.
■
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. 2014–16976 Filed 7–18–14; 8:45 a.m.]
BILLING CODE 6714–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 390
Transferred OTS Regulations
Regarding Electronic Operations
Federal Deposit Insurance
Corporation.
ACTION: Notice of proposed rulemaking.
AGENCY:
In this notice of proposed
rulemaking, the Federal Deposit
Insurance Corporation (‘‘FDIC’’)
proposes to rescind and remove
regarding electronic operations which
were 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’’). There is no
corresponding FDIC Electronic
Operations rule and the rule is deemed
obsolete and unnecessary. Therefore,
the FDIC proposes to rescind and
remove the regulations.
DATES: Comments must be received on
or before September 19, 2014.
ADDRESSES: You may submit comments
by any of the following methods:
• FDIC Web site: https://www.fdic.gov/
regulations/laws/federal/. Follow
instructions for submitting comments
on the agency Web site.
• FDIC Email: Comments@fdic.gov.
Include RIN 3064–AE19 on the subject
line of the message.
• FDIC Mail: Robert E. Feldman,
Executive Secretary, Attention:
Comments, Federal Deposit Insurance
SUMMARY:
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Corporation, 550 17th Street NW.,
Washington, DC 20429.
• Hand Delivery to FDIC: Comments
may be hand-delivered to the guard
station at the rear of the 550 17th Street
building (located on F Street) on
business days between 7 a.m. and 5 p.m.
Please include your name, affiliation,
address, email address, and telephone
number(s) in your comment. Where
appropriate, comments should include a
short Executive Summary consisting of
no more than five single-spaced pages.
All statements received, including
attachments and other supporting
materials, are part of the public record
and are subject to public disclosure.
You should submit only information
that you wish to make publicly
available.
Please note: All comments received will be
posted generally without change to https://
www.fdic.gov/regulations/laws/federal/,
including any personal information
provided. Paper copies of public comments
may be requested from the Public
Information Center by telephone at 1–877–
275–3342 or 1–703–562–2200.
FOR FURTHER INFORMATION CONTACT:
RIN 3064–AE19
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Frederick Coleman, Division of Risk
Management Supervision, (703) 254–
0452; Martha L. Ellett, Legal Division,
(202) 898–6765; Jennifer Maree, Legal
Division, (202) 898–6543.
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Act
Title III of 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
1 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 124 Stat. 1376
(2010).
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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.
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
which would be enforced by the FDIC
and 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
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, operating
pursuant to this authority, the FDIC’s
Board of Directors reissued and
redesignated certain transferring OTS
regulations. 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
2 76
3 76
FR 39247 (July 6, 2011).
FR 47652 (Aug. 5, 2011).
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FDIC rules, amending them, or
rescinding them, as appropriate.
One of the OTS rules transferred to
the FDIC requires State savings
associations to notify the FDIC at least
30 days before establishing a
transactional Web site. The OTS rule,
formerly found at 12 CFR part 555,
subpart B (‘‘part 555, subpart B’’), was
transferred to the FDIC with only
technical changes and is now found in
the FDIC’s rules at part 390, subpart L,
entitled ‘‘Electronic Operations.’’ The
FDIC has no such corresponding rule.
After careful review of part 390, subpart
L, the FDIC proposes to rescind part
390, subpart L, because, as discussed
below, it is obsolete, unnecessary, and
burdensome.
Former OTS Part 555, Subpart B
(Transferred to FDIC Part 390,
Subpart L)
On January 1, 1999, part 555, subpart
B became effective and was among the
regulations that were transferred to the
FDIC from the OTS on July 21, 2011,
pursuant to the Dodd-Frank Act. This
rule required savings associations to file
a written notice with the OTS at least 30
days before establishing a transactional
Web site. The OTS enacted the
Electronic Operations rule unilaterally.
Neither the FDIC, nor the Office of the
Comptroller of the Currency (‘‘OCC’’),4
nor the Board of Governors of the
Federal Reserve System (‘‘FRB’’) has a
regulatory notice requirement similar to
the Electronic Operations rule that
requires insured depository institutions
(‘‘IDIs’’) to notify the FDIC if they intend
to establish transactional Web sites.
In issuing its Electronic Operations
rule, the OTS sought to ‘‘monitor
adequately savings associations’
technological innovations and to assess
security, compliance, and privacy
risks.’’ 5 The OTS reasoned that the
notice requirement would aid the
agency in assisting savings associations
‘‘that are contemplating or already
conducting Internet operations to
identify and address the risks that
accompany such activities’’ and would
‘‘help institutions avoid problems and
protect consumers.’’ 6 At the time, the
4 The OCC has an Electronic Activities rule that
‘‘identifies the criteria that the OCC uses to
determine whether an electronic activity is
authorized as part of, or incidental to, the business
of banking under 12 U.S.C. 24 (Seventh) or other
statutory authority.’’ 12 CFR 7.5000. However, this
rule does not contain a prior notice requirement
before establishing a transactional Web site.
5 63 FR 65673, 65678 (Nov. 30, 1998).
6 63 FR 43327, 43328 (Aug. 13, 1998). The OTS
articulated concerns about ‘‘protecting the privacy
of individuals’’ and ‘‘other operational and
compliance risks presented by Internet banking’’
and noted its intent to ‘‘increase its monitoring of
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OTS concluded that a requirement that
each savings association must provide
advance notice to the OTS of the
association’s intent to establish a
transactional Web site would assist the
OTS in evaluating safety and soundness,
compliance, and other risks.
Significantly, the OTS noted that ‘‘[a]s
technologies mature and the industry
and OTS gain additional experience, the
OTS may revise the rule to no longer
require notice before establishing a
transactional Web site.’’ 7 In a 2001
review of its regulations regarding
electronic delivery of financial products
and services, the OTS suggested that a
goal of the Electronic Operations rule
was to impose a notice requirement in
lieu of specific operational standards as
the least burdensome way to regulate
savings associations. The OTS also
stated that it ‘‘designed its regulations to
help ensure that it would have sufficient
information to understand developing
technologies, to provide appropriate
guidance on these technologies, and to
supervise electronic operations
effectively.’’ 8
After careful consideration of the
former OTS’s general prior notice
requirement, the FDIC has reached the
same conclusion it has in the past,
particularly in light of continuing
advancements in electronic banking and
related technology. Specifically, the
FDIC concludes there is no supervisory
value in a requirement that an IDI give
prior notification to the FDIC about its
establishment of a transactional Web
site. Given the rapid evolution,
innovation and current state of
technological products and interfaces
with customers, the FDIC relies on
dynamic, in-depth supervisory means to
evaluate an IDI’s information technology
(‘‘IT’’) systems. Instead of a general
notice requirement for the establishment
of a transactional Web site, the FDIC has
developed and relies upon more useful
and ongoing sources of information to
evaluate the financial condition, risks
and regulatory compliance by FDICsupervised institutions. Prior
notification that an institution is
establishing a transactional Web site is
an outdated and unnecessary
requirement.
Currently, the FDIC receives
information about an IDI’s IT systems,
including its transactional Web sites,
from various examinations and other
sources of information that render a
general prior notice requirement such as
the former OTS rule for savings
Web sites for compliance with disclosure laws and
regulations.’’ Id.
7 63 FR 43327, 43329 (Aug. 13, 1998).
8 66 FR 31186, 31187 (June 11, 2001).
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associations, outdated and unnecessary
for the FDIC’s supervisory purposes of
risk management and compliance. For
example, the FDIC’s IT pre-examination
questionnaire to IDIs requires
information about the IDI’s
technological developments, including
whether there were any changes in
technology that were implemented since
the previous FDIC examination.
Changes in technology include, for
example, any ‘‘new service provider
relationships, new software applications
and/or service offerings.’’ 9 The IT preexamination questionnaire also asks
whether the IDI plans to ‘‘deploy new
technology within the next 12 months,’’
which would include the
implementation of a transactional Web
site. If the answer is ‘‘yes,’’ the
questionnaire asks whether the risks
associated with the new technology
were reviewed by the IDI during the
institution’s most recent risk
assessment.10 The FDIC then reviews
the IDI’s risk assessment at each
examination. The questionnaire also
asks whether the IDI has ‘‘identified and
reported its service provider
relationships (both domestic and
foreign-based) to the FDIC,’’ 11 which
would include those with Technology
Service Providers (‘‘TSPs’’). This
information is also required to be
reported by the IDI to the FDIC pursuant
to the Bank Service Company Act
(‘‘BSCA’’).12
As part of its examination process, the
FDIC also monitors technology
developments and TSPs. In periodic onsite IT examinations, FDIC examiners
obtain information regarding the
establishment of transactional Web sites
and any other technological
developments the institution has
implemented. Through the Federal
Financial Institutions Examination
Council (‘‘FFIEC’’), the FDIC, jointly
with other Federal banking agencies,
also participates in examinations of all
of the major TSPs. In these
examinations, the FDIC obtains
customer lists of all financial
institutions that have contracted for
services from the particular service
provider, including TSPs. These lists are
more up to date than a point-in-time
notice that the Electronic Operations
rule offers and they also provide the
FDIC with notice of any changes in
TSPs.
During the FDIC’s compliance
examinations, IDIs are also routinely
examined for compliance with
applicable consumer protection laws
and regulations, such as the Truth in
Lending Act, Regulation Z; the
Electronic Funds Transfer Act,
Regulation E; the Equal Credit
Opportunity Act, Regulation B; the
Truth in Savings Act, Regulation DD;
and Section 5 of the Federal Trade
Commission Act that prohibits unfair or
deceptive acts or practices. These
examinations address any problems IDIs
may have with the adequacy of
consumer disclosures, among other
things.
In addition, the BSCA requires IDIs to
provide written notice to the FDIC (or
other appropriate Federal banking
agency) of the existence of third-party
service relationships ‘‘within thirty days
after the making of such service contract
or the performance of the service,
whichever occurs first.’’ 13 The BSCA
covers services performed by third
parties, including TSPs and the FDIC
has long interpreted the BSCA to
include within its scope Internet
banking service providers.14
Specific and ongoing information
obtained and evaluated by the FDIC
through the IT pre-examination
questionnaire, on-site IT examinations,
TSP examinations and compliance
examinations as well as the BSCA
notice better enables the FDIC to
evaluate existing or potential safety and
soundness and compliance concerns.
The FDIC’s IT examination process
renders a general, point-in-time notice
such as that required by the OTS’s
Electronic Operations rule, to be
unnecessary. The rule is inefficient and
unnecessarily burdensome, and it
should be eliminated.
In its supplemental notice of
proposed rulemaking, the OTS
expressed concerns regarding the safety
of Internet banking and protecting
customers’ privacy in support of its
rule.15 However, these supervisory
concerns have been addressed
elsewhere, rendering the Electronic
Operations rule superfluous. For
example, in 2005 and most recently
updated in 2011, the FDIC, with the
other FFIEC agencies, issued guidance
that describes supervisory expectations
regarding customer authentication for
high-risk transactions, layered security
13 12
9 Information
Technology Officer’s Questionnaire,
Part 1(h) (Dec. 2007).
10 Information Technology Officer’s
Questionnaire, Part 1(k) (Dec. 2007).
11 Information Technology Officer’s
Questionnaire, Part 5(b) (Dec. 2007).
12 12 U.S.C. 1861 et seq.
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U.S.C. 1867(c)(2). Although the BSCA notice
does not require a prior notification like the
Electronic Operations notice requirement, it is
supplemented by other, ongoing and detailed
sources of supervisory information.
14 See Bank Service Company Act, FDIC, FIL–49–
99 (June 3, 1999).
15 63 FR 43327 (Aug. 13, 1998).
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programs, and other controls related to
Internet banking.16 The guidance
includes regulatory expectations about
enhanced authentication methods banks
must use when authenticating the
identity of customers using on-line
products and services, the need for
layered security, and minimum control
expectations for certain online banking
activities.
In addition, 12 CFR part 364,
appendix B (‘‘part 364, appendix B’’) to
the FDIC regulations, which implements
the Graham-Leach-Bliley Act, addresses
the bank’s requirements for safeguarding
customer information, which includes
transactional Web sites.17 An
institution’s compliance with part 364,
appendix B is assessed at every FDIC IT
examination and specifically addressed
in each Report of Examination.
After careful review of the OTS’s
transferred rule in part 390, subpart L,
and the former OTS’s stated rationale
for the rule, the FDIC, as the appropriate
Federal banking agency for State savings
associations, proposes to rescind and
remove the former OTS rule in its
entirety. Rescinding part 390, subpart L
also will serve to streamline the FDIC’s
rules and eliminate obsolete and
superfluous regulations. If the proposal
is adopted in final form, all IDIs
regulated by the FDIC—including State
savings associations—will be regulated
in a uniform manner.
II. The Proposal
Regarding the functions of the former
OTS that were transferred to the FDIC,
section 316(b)(3) of the Dodd-Frank Act,
12 U.S.C. 5414(b)(3), in pertinent part,
provides that the former OTS
regulations will be enforceable by the
FDIC until they are modified,
terminated, set aside, or superseded in
accordance with applicable law. After
reviewing the Electronic Operations rule
currently found in part 390, subpart L,
the FDIC, as the appropriate Federal
banking agency for State savings
associations, proposes to rescind part
390, subpart L in its entirety. Rescinding
part 390, subpart L will serve to
streamline the FDIC’s rules and
eliminate obsolete and unnecessary
regulations. It will also facilitate
uniform supervision regarding
notification requirements for electronic
operation for all FDIC-supervised IDIs.
16 The guidance was first issued in 2005, see
Authentication in an Internet Banking
Environment, FDIC, FIL–103–2005 (Oct. 12, 2005),
and was updated in 2011, see FFIEC Supplement
to Authentication in an Internet Banking
Environment, FDIC, FIL–50–2011 (June 29, 2011).
17 Interagency Guidelines Establishing
Information Security Standards, 12 CFR Part 364,
Appendix B.
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III. Request for Comments
The FDIC invites comments on all
aspects of this proposed rulemaking,
and specifically requests comments on
the following:
(1) What impacts, positive or negative,
can you foresee in the FDIC’s proposal
to rescind part 390, subpart L?
Written comments must be received
by the FDIC no later than September 19,
2014.
IV. Regulatory Analysis and Procedure
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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 Proposed Rule would rescind and
remove from FDIC regulations part 390,
subpart L because it is obsolete and
unnecessary. In republishing this rule,
the FDIC made only technical changes
to existing OTS regulations, such as
nomenclature changes. The FDIC does
not have a regulatory notice requirement
similar to the Electronic Operations rule
that requires IDIs to notify the FDIC if
they intend to set up transactional Web
sites and, therefore, never established an
information collection to account for the
paperwork burden imposed on the
public.
This Proposed Rule will neither create
any paperwork information collection
nor modify any of the FDIC’s existing
paperwork information collections.
Accordingly, the FDIC need not submit
any Information Collection Request to
OMB.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act
(‘‘RFA’’),18 requires that, in connection
with a notice of proposed rulemaking,
an agency prepare and make available
for public comment an initial regulatory
flexibility analysis that describes the
impact of the proposed rule on 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).19
However, a 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
18 5
U.S.C. 601 et seq.
FR 37409, 37411 (June 20, 2013).
19 78
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short explanatory statement in the
Federal Register together with the rule.
For the reasons provided below, the
FDIC certifies that the Proposed Rule, if
adopted in final form, would not have
a significant economic impact on a
substantial number of small entities.
Accordingly, a regulatory flexibility
analysis is not required. The Proposed
Rule does not impose any additional
burdens or requirements on small
entities. Rather, because the Electronic
Operations rule is being rescinded, the
Proposed Rule reduces the paperwork
and other regulatory burdens on State
savings associations by eliminating the
requirement to provide the FDIC with
notice before establishing a
transactional Web site.
As discussed in this notice of
proposed rulemaking, part 390, subpart
L was transferred from part 555, subpart
B, which governed notification
provisions for savings associations that
intended to establish transactional Web
sites. Part 555, subpart B became
effective on January 1, 1999, and all
savings associations were required to
comply with it. Because it is obsolete
and unnecessary, the FDIC proposes
rescinding and removing part 390,
subpart L. Therefore, today’s Proposed
Rule would have no significant
economic impact on any State savings
association.
C. Plain Language
Section 722 of the Gramm-LeachBliley Act, codified at 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. The FDIC invites comments on
whether the Proposed Rule is clearly
stated and effectively organized, and
how the FDIC might make it easier to
understand. For example:
• Has the FDIC organized the material
to suit your needs? If not, how could it
present the rule more clearly?
• Have we clearly stated the
requirements of the rule? If not, how
could the rule be more clearly stated?
• Does the rule contain technical
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 would make the regulation
easier to understand?
• What else could we do to make the
regulation easier to understand?
D. The Economic Growth and
Regulatory Paperwork Reduction Act
Under section 2222 of the Economic
Growth and Regulatory Paperwork
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Fmt 4702
Sfmt 4702
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 institutions.20 The
FDIC completed the last comprehensive
review of its regulations under EGRPRA
in 2006 and is commencing the next
decennial review. The action taken on
this rule will be included as part of the
EGRPRA review that is currently in
progress.
List of Subjects in 12 CFR Part 390
Banks and banking, Electronic
operations, Savings associations.
Authority and Issuance
For the reasons stated in the
preamble, the Board of Directors of the
FDIC proposes to amend 12 CFR part
390 as follows:
PART 390—REGULATIONS
TRANSFERRED FROM THE OFFICE OF
THRIFT SUPERVISION
1. The authority citation for part 390
is revised to read as follows:
■
Authority: 12 U.S.C. 1819.
Subpart A also issued under 12 U.S.C.
1820.
Subpart B also issued under 12 U.S.C.
1818.
Subpart C also issued under 5 U.S.C. 504;
554–557; 12 U.S.C. 1464; 1467; 1468; 1817;
1818; 1820; 1829; 3349, 4717; 15 U.S.C. 78l;
78o–5; 78u–2; 28 U.S.C. 2461 note; 31 U.S.C.
5321; 42 U.S.C. 4012a.
Subpart D also issued under 12 U.S.C.
1817; 1818; 1820; 15 U.S.C. 78l.
Subpart E also issued under 12 U.S.C.
1813; 1831m; 15 U.S.C. 78.
Subpart F also issued under 5 U.S.C. 552;
559; 12 U.S.C. 2901 et seq.
Subpart G also issued under 12 U.S.C. 2810
et seq., 2901 et seq.; 15 U.S.C. 1691; 42 U.S.C.
1981, 1982, 3601–3619.
Subpart H also issued under 12 U.S.C.
1464; 1831y.
Subpart I also issued under 12 U.S.C.
1831x.
Subpart J also issued under 12 U.S.C.
1831p–1.
Subpart M also issued under 12 U.S.C.
1818.
Subpart N also issued under 12 U.S.C.
1821.
Subpart O also issued under 12 U.S.C.
1828.
Subpart P also issued under 12 U.S.C.
1470; 1831e; 1831n; 1831p–1; 3339.
Subpart Q also issued under 12 U.S.C.
1462; 1462a; 1463; 1464.
Subpart R also issued under 12 U.S.C.
1463; 1464; 1831m; 1831n; 1831p–1.
Subpart S also issued under 12 U.S.C.
1462; 1462a; 1463; 1464; 1468a; 1817; 1820;
1828; 1831e; 1831o; 1831p–1; 1881–1884;
3207; 3339; 15 U.S.C. 78b; 78l; 78m; 78n;
20 Public
E:\FR\FM\21JYP1.SGM
Law 104–208, 110 Stat. 3009 (1996).
21JYP1
Federal Register / Vol. 79, No. 139 / Monday, July 21, 2014 / Proposed Rules
78p; 78q; 78w; 31 U.S.C. 5318; 42 U.S.C.
4106.
Subpart T also issued under 12 U.S.C.
1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m;
78n; 78w.
Subpart U also issued under 12 U.S.C.
1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m;
78n; 78p; 78w; 78d–1; 7241; 7242; 7243;
7244; 7261; 7264; 7265.
Subpart V also issued under 12 U.S.C.
3201–3208.
Subpart W also issued under 12 U.S.C.
1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m;
78n; 78p; 78w.
Subpart X also issued under 12 U.S.C.
1462; 1462a; 1463; 1464; 1828; 3331 et seq.
Subpart Y also issued under 12
U.S.C.1831o.
Subpart Z also issued under 12 U.S.C.
1462; 1462a; 1463; 1464; 1828 (note).
Subpart L—[Removed and Reserved]
2. Remove and reserve subpart L,
consisting of §§ 390.220 through
390.222.
■
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. 2014–16975 Filed 7–18–14; 8:45 am]
12 CFR Part 390
RIN 3064–AE17
Transferred OTS Regulations
Regarding Possession by
Conservators and Receivers for
Federal and State Savings
Associations.
I. Background
Federal Deposit Insurance
Corporation.
ACTION: Notice of proposed rulemaking.
AGENCY:
The Federal Deposit
Insurance Corporation (FDIC) proposes
to rescind and remove regulations
regarding possession by conservators
and receivers for federal and state
savings associations, which are no
longer necessary in light of or contradict
provisions of the Federal Deposit
Insurance Act and are not in accordance
with FDIC practice and procedures. The
regulations were included in the
regulations that were 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. Rescinding
these regulations will eliminate
tkelley on DSK3SPTVN1PROD with PROPOSALS
16:47 Jul 18, 2014
Jkt 232001
R.
Penfield Starke, Assistant General
Counsel, Legal Division (703) 562–2422
or rstarke@fdic.gov; Thomas Bolt,
Senior Counsel, Legal Division (703)
562–2046 or tbolt@fdic.gov; or Manuel
E. Cabeza, Counsel, Legal Division (703)
562–2434 or mcabeza@fdic.gov.
SUPPLEMENTARY INFORMATION:
FEDERAL DEPOSIT INSURANCE
CORPORATION
VerDate Mar<15>2010
Please note: All comments received will be
posted generally without change to https://
www.fdic.gov/regulations/laws/federal/,
including any personal information
provided.
FOR FURTHER INFORMATION CONTACT:
BILLING CODE 6714–01–P
SUMMARY:
confusion that may arise from
duplicative or inconsistent rules and
procedures and will eliminate
unnecessary regulations.
DATES: Comments must be received on
or before September 19, 2014.
ADDRESSES: You may submit comments
by any of the following methods:
• FDIC Web site: https://www.fdic.gov/
regulations/laws/federal/. Follow
instructions for submitting comments
on the agency Web site.
• FDIC Email: Comments@fdic.gov.
Include RIN 3064–AE17 in the subject
line of the message.
• FDIC Mail: Robert E. Feldman,
Executive Secretary, Attention:
Comments, Federal Deposit Insurance
Corporation, 550 17th Street NW.,
Washington, DC 20429.
• Hand Delivery to FDIC: Comments
may be hand-delivered to the guard
station at the rear of the 550 17th Street
Building (located on F Street) on
business days between 7 a.m. and 5 p.m.
The Dodd-Frank Act
The Dodd-Frank Wall Street Reform
and Consumer Protection Act (‘‘DoddFrank Act’’) 1, signed into law on July
21, 2010, 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,2
the powers, duties, and functions
formerly performed by the OTS were
divided among the FDIC as to State
savings associations, the Office of
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 3 provides the
manner of treatment for all orders,
resolutions, determinations, regulations,
and other advisory materials, that were
issued, made, prescribed, or allowed to
become effective by the OTS. The
section provides that if such advisory
materials were in effect on the day
before the transfer date, they continue 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.
Section 316(c) of the Dodd-Frank
Act 4 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 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 DoddFrank 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, 2011.5
FDIC’s Authority To Regulate
Although section 312(b)(2)(B)(i)(II) of
the Dodd-Frank Act 6 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 (the ‘‘FDI Act’’) 7 and
other laws as the ‘‘appropriate Federal
banking agency’’ or under similar
statutory terminology. Section 312(c) of
the Dodd-Frank Act amended section
3(q) of the FDI Act 8 and designated the
FDIC as the ‘‘appropriate Federal
banking agency’’ for State savings
associations. 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 noted, on June 14, 2011 the FDIC’s
Board of Directors reissued and
redesignated certain transferring
regulations of the former OTS. These
transferred OTS regulations were
published as FDIC interim rules in the
Federal Register on August 5, 2011.9
When it republished the transferred
OTS regulations as new FDIC
4 12
Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 12 U.S.C. 5301
et seq. (2010).
2 12 U.S.C. 5411.
3 12 U.S.C. 5414(b).
PO 00000
1 Dodd-Frank
Frm 00012
Fmt 4702
Sfmt 4702
42235
U.S.C. 5414(c).
FR 39247 (July 6, 2011).
6 12 U.S.C. 5412(b)(2)(B)(i)(II).
7 12 U.S.C. 1811 et seq.
8 12 U.S.C. 1813(q).
9 76 FR 47652 (August 5, 2011).
5 76
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21JYP1
]]>Agencies
[Federal Register Volume 79, Number 139 (Monday, July 21, 2014)]
[Proposed Rules]
[Pages 42231-42235]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-16975]
-----------------------------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 390
RIN 3064-AE19
Transferred OTS Regulations Regarding Electronic Operations
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: In this notice of proposed rulemaking, the Federal Deposit
Insurance Corporation (``FDIC'') proposes to rescind and remove
regarding electronic operations which were 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''). There is no corresponding FDIC Electronic
Operations rule and the rule is deemed obsolete and unnecessary.
Therefore, the FDIC proposes to rescind and remove the regulations.
DATES: Comments must be received on or before September 19, 2014.
ADDRESSES: You may submit comments by any of the following methods:
FDIC Web site: https://www.fdic.gov/regulations/laws/federal/. Follow instructions for submitting comments on the agency Web
site.
FDIC Email: Comments@fdic.gov. Include RIN 3064-AE19 on
the subject line of the message.
FDIC Mail: Robert E. Feldman, Executive Secretary,
Attention: Comments, Federal Deposit Insurance Corporation, 550 17th
Street NW., Washington, DC 20429.
Hand Delivery to FDIC: Comments may be hand-delivered to
the guard station at the rear of the 550 17th Street building (located
on F Street) on business days between 7 a.m. and 5 p.m.
Please include your name, affiliation, address, email address, and
telephone number(s) in your comment. Where appropriate, comments should
include a short Executive Summary consisting of no more than five
single-spaced pages. All statements received, including attachments and
other supporting materials, are part of the public record and are
subject to public disclosure. You should submit only information that
you wish to make publicly available.
Please note: All comments received will be posted generally
without change to https://www.fdic.gov/regulations/laws/federal/,
including any personal information provided. Paper copies of public
comments may be requested from the Public Information Center by
telephone at 1-877-275-3342 or 1-703-562-2200.
FOR FURTHER INFORMATION CONTACT: Frederick Coleman, Division of Risk
Management Supervision, (703) 254-0452; Martha L. Ellett, Legal
Division, (202) 898-6765; Jennifer Maree, Legal Division, (202) 898-
6543.
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Act
Title III of 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
[[Page 42232]]
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.
---------------------------------------------------------------------------
\1\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, 124 Stat. 1376 (2010).
---------------------------------------------------------------------------
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 which
would be enforced by the FDIC and 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\
---------------------------------------------------------------------------
\2\ 76 FR 39247 (July 6, 2011).
---------------------------------------------------------------------------
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, operating pursuant to this authority,
the FDIC's Board of Directors reissued and redesignated certain
transferring OTS regulations. 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.
---------------------------------------------------------------------------
\3\ 76 FR 47652 (Aug. 5, 2011).
---------------------------------------------------------------------------
One of the OTS rules transferred to the FDIC requires State savings
associations to notify the FDIC at least 30 days before establishing a
transactional Web site. The OTS rule, formerly found at 12 CFR part
555, subpart B (``part 555, subpart B''), was transferred to the FDIC
with only technical changes and is now found in the FDIC's rules at
part 390, subpart L, entitled ``Electronic Operations.'' The FDIC has
no such corresponding rule. After careful review of part 390, subpart
L, the FDIC proposes to rescind part 390, subpart L, because, as
discussed below, it is obsolete, unnecessary, and burdensome.
Former OTS Part 555, Subpart B (Transferred to FDIC Part 390, Subpart
L)
On January 1, 1999, part 555, subpart B became effective and was
among the regulations that were transferred to the FDIC from the OTS on
July 21, 2011, pursuant to the Dodd-Frank Act. This rule required
savings associations to file a written notice with the OTS at least 30
days before establishing a transactional Web site. The OTS enacted the
Electronic Operations rule unilaterally. Neither the FDIC, nor the
Office of the Comptroller of the Currency (``OCC''),\4\ nor the Board
of Governors of the Federal Reserve System (``FRB'') has a regulatory
notice requirement similar to the Electronic Operations rule that
requires insured depository institutions (``IDIs'') to notify the FDIC
if they intend to establish transactional Web sites.
---------------------------------------------------------------------------
\4\ The OCC has an Electronic Activities rule that ``identifies
the criteria that the OCC uses to determine whether an electronic
activity is authorized as part of, or incidental to, the business of
banking under 12 U.S.C. 24 (Seventh) or other statutory authority.''
12 CFR 7.5000. However, this rule does not contain a prior notice
requirement before establishing a transactional Web site.
---------------------------------------------------------------------------
In issuing its Electronic Operations rule, the OTS sought to
``monitor adequately savings associations' technological innovations
and to assess security, compliance, and privacy risks.'' \5\ The OTS
reasoned that the notice requirement would aid the agency in assisting
savings associations ``that are contemplating or already conducting
Internet operations to identify and address the risks that accompany
such activities'' and would ``help institutions avoid problems and
protect consumers.'' \6\ At the time, the OTS concluded that a
requirement that each savings association must provide advance notice
to the OTS of the association's intent to establish a transactional Web
site would assist the OTS in evaluating safety and soundness,
compliance, and other risks.
---------------------------------------------------------------------------
\5\ 63 FR 65673, 65678 (Nov. 30, 1998).
\6\ 63 FR 43327, 43328 (Aug. 13, 1998). The OTS articulated
concerns about ``protecting the privacy of individuals'' and ``other
operational and compliance risks presented by Internet banking'' and
noted its intent to ``increase its monitoring of Web sites for
compliance with disclosure laws and regulations.'' Id.
---------------------------------------------------------------------------
Significantly, the OTS noted that ``[a]s technologies mature and
the industry and OTS gain additional experience, the OTS may revise the
rule to no longer require notice before establishing a transactional
Web site.'' \7\ In a 2001 review of its regulations regarding
electronic delivery of financial products and services, the OTS
suggested that a goal of the Electronic Operations rule was to impose a
notice requirement in lieu of specific operational standards as the
least burdensome way to regulate savings associations. The OTS also
stated that it ``designed its regulations to help ensure that it would
have sufficient information to understand developing technologies, to
provide appropriate guidance on these technologies, and to supervise
electronic operations effectively.'' \8\
---------------------------------------------------------------------------
\7\ 63 FR 43327, 43329 (Aug. 13, 1998).
\8\ 66 FR 31186, 31187 (June 11, 2001).
---------------------------------------------------------------------------
After careful consideration of the former OTS's general prior
notice requirement, the FDIC has reached the same conclusion it has in
the past, particularly in light of continuing advancements in
electronic banking and related technology. Specifically, the FDIC
concludes there is no supervisory value in a requirement that an IDI
give prior notification to the FDIC about its establishment of a
transactional Web site. Given the rapid evolution, innovation and
current state of technological products and interfaces with customers,
the FDIC relies on dynamic, in-depth supervisory means to evaluate an
IDI's information technology (``IT'') systems. Instead of a general
notice requirement for the establishment of a transactional Web site,
the FDIC has developed and relies upon more useful and ongoing sources
of information to evaluate the financial condition, risks and
regulatory compliance by FDIC-supervised institutions. Prior
notification that an institution is establishing a transactional Web
site is an outdated and unnecessary requirement.
Currently, the FDIC receives information about an IDI's IT systems,
including its transactional Web sites, from various examinations and
other sources of information that render a general prior notice
requirement such as the former OTS rule for savings
[[Page 42233]]
associations, outdated and unnecessary for the FDIC's supervisory
purposes of risk management and compliance. For example, the FDIC's IT
pre-examination questionnaire to IDIs requires information about the
IDI's technological developments, including whether there were any
changes in technology that were implemented since the previous FDIC
examination.
Changes in technology include, for example, any ``new service
provider relationships, new software applications and/or service
offerings.'' \9\ The IT pre-examination questionnaire also asks whether
the IDI plans to ``deploy new technology within the next 12 months,''
which would include the implementation of a transactional Web site. If
the answer is ``yes,'' the questionnaire asks whether the risks
associated with the new technology were reviewed by the IDI during the
institution's most recent risk assessment.\10\ The FDIC then reviews
the IDI's risk assessment at each examination. The questionnaire also
asks whether the IDI has ``identified and reported its service provider
relationships (both domestic and foreign-based) to the FDIC,'' \11\
which would include those with Technology Service Providers (``TSPs'').
This information is also required to be reported by the IDI to the FDIC
pursuant to the Bank Service Company Act (``BSCA'').\12\
---------------------------------------------------------------------------
\9\ Information Technology Officer's Questionnaire, Part 1(h)
(Dec. 2007).
\10\ Information Technology Officer's Questionnaire, Part 1(k)
(Dec. 2007).
\11\ Information Technology Officer's Questionnaire, Part 5(b)
(Dec. 2007).
\12\ 12 U.S.C. 1861 et seq.
---------------------------------------------------------------------------
As part of its examination process, the FDIC also monitors
technology developments and TSPs. In periodic on-site IT examinations,
FDIC examiners obtain information regarding the establishment of
transactional Web sites and any other technological developments the
institution has implemented. Through the Federal Financial Institutions
Examination Council (``FFIEC''), the FDIC, jointly with other Federal
banking agencies, also participates in examinations of all of the major
TSPs. In these examinations, the FDIC obtains customer lists of all
financial institutions that have contracted for services from the
particular service provider, including TSPs. These lists are more up to
date than a point-in-time notice that the Electronic Operations rule
offers and they also provide the FDIC with notice of any changes in
TSPs.
During the FDIC's compliance examinations, IDIs are also routinely
examined for compliance with applicable consumer protection laws and
regulations, such as the Truth in Lending Act, Regulation Z; the
Electronic Funds Transfer Act, Regulation E; the Equal Credit
Opportunity Act, Regulation B; the Truth in Savings Act, Regulation DD;
and Section 5 of the Federal Trade Commission Act that prohibits unfair
or deceptive acts or practices. These examinations address any problems
IDIs may have with the adequacy of consumer disclosures, among other
things.
In addition, the BSCA requires IDIs to provide written notice to
the FDIC (or other appropriate Federal banking agency) of the existence
of third-party service relationships ``within thirty days after the
making of such service contract or the performance of the service,
whichever occurs first.'' \13\ The BSCA covers services performed by
third parties, including TSPs and the FDIC has long interpreted the
BSCA to include within its scope Internet banking service
providers.\14\
---------------------------------------------------------------------------
\13\ 12 U.S.C. 1867(c)(2). Although the BSCA notice does not
require a prior notification like the Electronic Operations notice
requirement, it is supplemented by other, ongoing and detailed
sources of supervisory information.
\14\ See Bank Service Company Act, FDIC, FIL-49-99 (June 3,
1999).
---------------------------------------------------------------------------
Specific and ongoing information obtained and evaluated by the FDIC
through the IT pre-examination questionnaire, on-site IT examinations,
TSP examinations and compliance examinations as well as the BSCA notice
better enables the FDIC to evaluate existing or potential safety and
soundness and compliance concerns. The FDIC's IT examination process
renders a general, point-in-time notice such as that required by the
OTS's Electronic Operations rule, to be unnecessary. The rule is
inefficient and unnecessarily burdensome, and it should be eliminated.
In its supplemental notice of proposed rulemaking, the OTS
expressed concerns regarding the safety of Internet banking and
protecting customers' privacy in support of its rule.\15\ However,
these supervisory concerns have been addressed elsewhere, rendering the
Electronic Operations rule superfluous. For example, in 2005 and most
recently updated in 2011, the FDIC, with the other FFIEC agencies,
issued guidance that describes supervisory expectations regarding
customer authentication for high-risk transactions, layered security
programs, and other controls related to Internet banking.\16\ The
guidance includes regulatory expectations about enhanced authentication
methods banks must use when authenticating the identity of customers
using on-line products and services, the need for layered security, and
minimum control expectations for certain online banking activities.
---------------------------------------------------------------------------
\15\ 63 FR 43327 (Aug. 13, 1998).
\16\ The guidance was first issued in 2005, see Authentication
in an Internet Banking Environment, FDIC, FIL-103-2005 (Oct. 12,
2005), and was updated in 2011, see FFIEC Supplement to
Authentication in an Internet Banking Environment, FDIC, FIL-50-2011
(June 29, 2011).
---------------------------------------------------------------------------
In addition, 12 CFR part 364, appendix B (``part 364, appendix B'')
to the FDIC regulations, which implements the Graham-Leach-Bliley Act,
addresses the bank's requirements for safeguarding customer
information, which includes transactional Web sites.\17\ An
institution's compliance with part 364, appendix B is assessed at every
FDIC IT examination and specifically addressed in each Report of
Examination.
---------------------------------------------------------------------------
\17\ Interagency Guidelines Establishing Information Security
Standards, 12 CFR Part 364, Appendix B.
---------------------------------------------------------------------------
After careful review of the OTS's transferred rule in part 390,
subpart L, and the former OTS's stated rationale for the rule, the
FDIC, as the appropriate Federal banking agency for State savings
associations, proposes to rescind and remove the former OTS rule in its
entirety. Rescinding part 390, subpart L also will serve to streamline
the FDIC's rules and eliminate obsolete and superfluous regulations. If
the proposal is adopted in final form, all IDIs regulated by the FDIC--
including State savings associations--will be regulated in a uniform
manner.
II. The Proposal
Regarding the functions of the former OTS that were transferred to
the FDIC, section 316(b)(3) of the Dodd-Frank Act, 12 U.S.C.
5414(b)(3), in pertinent part, provides that the former OTS regulations
will be enforceable by the FDIC until they are modified, terminated,
set aside, or superseded in accordance with applicable law. After
reviewing the Electronic Operations rule currently found in part 390,
subpart L, the FDIC, as the appropriate Federal banking agency for
State savings associations, proposes to rescind part 390, subpart L in
its entirety. Rescinding part 390, subpart L will serve to streamline
the FDIC's rules and eliminate obsolete and unnecessary regulations. It
will also facilitate uniform supervision regarding notification
requirements for electronic operation for all FDIC-supervised IDIs.
[[Page 42234]]
III. Request for Comments
The FDIC invites comments on all aspects of this proposed
rulemaking, and specifically requests comments on the following:
(1) What impacts, positive or negative, can you foresee in the
FDIC's proposal to rescind part 390, subpart L?
Written comments must be received by the FDIC no later than
September 19, 2014.
IV. Regulatory Analysis and Procedure
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 Proposed Rule would rescind and remove from FDIC regulations
part 390, subpart L because it is obsolete and unnecessary. In
republishing this rule, the FDIC made only technical changes to
existing OTS regulations, such as nomenclature changes. The FDIC does
not have a regulatory notice requirement similar to the Electronic
Operations rule that requires IDIs to notify the FDIC if they intend to
set up transactional Web sites and, therefore, never established an
information collection to account for the paperwork burden imposed on
the public.
This Proposed Rule will neither create any paperwork information
collection nor modify any of the FDIC's existing paperwork information
collections. Accordingly, the FDIC need not submit any Information
Collection Request to OMB.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA''),\18\ requires that, in
connection with a notice of proposed rulemaking, an agency prepare and
make available for public comment an initial regulatory flexibility
analysis that describes the impact of the proposed rule on 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).\19\ However, a 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 Proposed
Rule, if adopted in final form, would not have a significant economic
impact on a substantial number of small entities. Accordingly, a
regulatory flexibility analysis is not required. The Proposed Rule does
not impose any additional burdens or requirements on small entities.
Rather, because the Electronic Operations rule is being rescinded, the
Proposed Rule reduces the paperwork and other regulatory burdens on
State savings associations by eliminating the requirement to provide
the FDIC with notice before establishing a transactional Web site.
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\18\ 5 U.S.C. 601 et seq.
\19\ 78 FR 37409, 37411 (June 20, 2013).
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As discussed in this notice of proposed rulemaking, part 390,
subpart L was transferred from part 555, subpart B, which governed
notification provisions for savings associations that intended to
establish transactional Web sites. Part 555, subpart B became effective
on January 1, 1999, and all savings associations were required to
comply with it. Because it is obsolete and unnecessary, the FDIC
proposes rescinding and removing part 390, subpart L. Therefore,
today's Proposed Rule would have no significant economic impact on any
State savings association.
C. Plain Language
Section 722 of the Gramm-Leach-Bliley Act, codified at 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. The
FDIC invites comments on whether the Proposed Rule is clearly stated
and effectively organized, and how the FDIC might make it easier to
understand. For example:
Has the FDIC organized the material to suit your needs? If
not, how could it present the rule more clearly?
Have we clearly stated the requirements of the rule? If
not, how could the rule be more clearly stated?
Does the rule contain technical 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 would make the regulation easier to
understand?
What else could we do to make the regulation easier to
understand?
D. 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
institutions.\20\ The FDIC completed the last comprehensive review of
its regulations under EGRPRA in 2006 and is commencing the next
decennial review. The action taken on this rule will be included as
part of the EGRPRA review that is currently in progress.
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\20\ Public Law 104-208, 110 Stat. 3009 (1996).
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List of Subjects in 12 CFR Part 390
Banks and banking, Electronic operations, Savings associations.
Authority and Issuance
For the reasons stated in the preamble, the Board of Directors of
the FDIC proposes to amend 12 CFR part 390 as follows:
PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT
SUPERVISION
0
1. The authority citation for part 390 is revised to read as follows:
Authority: 12 U.S.C. 1819.
Subpart A also issued under 12 U.S.C. 1820.
Subpart B also issued under 12 U.S.C. 1818.
Subpart C also issued under 5 U.S.C. 504; 554-557; 12 U.S.C.
1464; 1467; 1468; 1817; 1818; 1820; 1829; 3349, 4717; 15 U.S.C. 78l;
78o-5; 78u-2; 28 U.S.C. 2461 note; 31 U.S.C. 5321; 42 U.S.C. 4012a.
Subpart D also issued under 12 U.S.C. 1817; 1818; 1820; 15
U.S.C. 78l.
Subpart E also issued under 12 U.S.C. 1813; 1831m; 15 U.S.C. 78.
Subpart F also issued under 5 U.S.C. 552; 559; 12 U.S.C. 2901 et
seq.
Subpart G also issued under 12 U.S.C. 2810 et seq., 2901 et
seq.; 15 U.S.C. 1691; 42 U.S.C. 1981, 1982, 3601-3619.
Subpart H also issued under 12 U.S.C. 1464; 1831y.
Subpart I also issued under 12 U.S.C. 1831x.
Subpart J also issued under 12 U.S.C. 1831p-1.
Subpart M also issued under 12 U.S.C. 1818.
Subpart N also issued under 12 U.S.C. 1821.
Subpart O also issued under 12 U.S.C. 1828.
Subpart P also issued under 12 U.S.C. 1470; 1831e; 1831n; 1831p-
1; 3339.
Subpart Q also issued under 12 U.S.C. 1462; 1462a; 1463; 1464.
Subpart R also issued under 12 U.S.C. 1463; 1464; 1831m; 1831n;
1831p-1.
Subpart S also issued under 12 U.S.C. 1462; 1462a; 1463; 1464;
1468a; 1817; 1820; 1828; 1831e; 1831o; 1831p-1; 1881-1884; 3207;
3339; 15 U.S.C. 78b; 78l; 78m; 78n;
[[Page 42235]]
78p; 78q; 78w; 31 U.S.C. 5318; 42 U.S.C. 4106.
Subpart T also issued under 12 U.S.C. 1462a; 1463; 1464; 15
U.S.C. 78c; 78l; 78m; 78n; 78w.
Subpart U also issued under 12 U.S.C. 1462a; 1463; 1464; 15
U.S.C. 78c; 78l; 78m; 78n; 78p; 78w; 78d-1; 7241; 7242; 7243; 7244;
7261; 7264; 7265.
Subpart V also issued under 12 U.S.C. 3201-3208.
Subpart W also issued under 12 U.S.C. 1462a; 1463; 1464; 15
U.S.C. 78c; 78l; 78m; 78n; 78p; 78w.
Subpart X also issued under 12 U.S.C. 1462; 1462a; 1463; 1464;
1828; 3331 et seq.
Subpart Y also issued under 12 U.S.C.1831o.
Subpart Z also issued under 12 U.S.C. 1462; 1462a; 1463; 1464;
1828 (note).
Subpart L--[Removed and Reserved]
0
2. Remove and reserve subpart L, consisting of Sec. Sec. 390.220
through 390.222.
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. 2014-16975 Filed 7-18-14; 8:45 am]
BILLING CODE 6714-01-P
